Page Range | 38657-38949 | |
FR Document |
Page and Subject | |
---|---|
83 FR 38939 - Reimposing Certain Sanctions With Respect to Iran | |
83 FR 38726 - Sunshine Act Meetings | |
83 FR 38760 - Extension of Public Comment Period Concerning Proposed Modification of Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation | |
83 FR 38759 - Sunshine Act Meetings | |
83 FR 38692 - Deletion of Item From Sunshine Act Meeting | |
83 FR 38727 - Sunshine Act Meeting Notice | |
83 FR 38691 - Problem Formulations for the Risk Evaluations To Be Conducted for the First Ten Chemical Substances Under the Toxic Substances Control Act, and Application of Systematic Review in TSCA Risk Evaluations; Extension of Comment Period | |
83 FR 38720 - Proposed Flood Hazard Determinations | |
83 FR 38686 - Notice of Availability of Government-Owned Inventions; Available for Licensing | |
83 FR 38763 - Notice of OFAC Sanctions Actions | |
83 FR 38738 - New Postal Products | |
83 FR 38694 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
83 FR 38697 - Medicare and Medicaid Programs: National Dialysis Accreditation Commission (NDAC) for Approval of its End Stage Renal Disease (ESRD) Facility Accreditation Program | |
83 FR 38761 - FAA Approval of Noise Compatibility Program 14 CFR Part 150; Jackson Hole Airport, Jackson, WY | |
83 FR 38759 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of Vermont | |
83 FR 38719 - Merchant Mariner Medical Advisory Committee | |
83 FR 38759 - Presidential Declaration Amendment of a Major Disaster for the State of Texas | |
83 FR 38677 - Submission for OMB Review; Comment Request | |
83 FR 38686 - Withdrawal of the Notice of Intent To Prepare an Environmental Impact Statement (EIS) for the City of Abilene, TX, Cedar Ridge Reservoir Water Supply Project | |
83 FR 38686 - Availability of the Final Environmental Impact Statement for the Northern Integrated Supply Project, Larimer and Weld Counties, Colorado | |
83 FR 38700 - Medicare Program; Administrative Law Judge Hearing Program for Medicare Claim and Entitlement Appeals; Quarterly Listing of Program Issuances-April Through June 2018 | |
83 FR 38663 - Schedule for Rating Disabilities: Skin; Correction | |
83 FR 38724 - Notice of Application for a Recordable Disclaimer of Interest for Lands Underlying the Egegik River, Becharof Lake, and Ruth Lake and Outlet, Alaska | |
83 FR 38722 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Desert Land Entry Application | |
83 FR 38701 - Declaration Under the Public Readiness and Emergency Preparedness Act for Zika Virus Vaccines | |
83 FR 38724 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Onshore Geophysical Exploration | |
83 FR 38722 - Notice of Realty Action: Non-Competitive Direct Sale of the Reversionary Interest in a Recreation and Public Purposes Act (R&PP) Patent, in Clark County, Nevada (N-94498) | |
83 FR 38664 - Atlantic Highly Migratory Species; Atlantic Bluefin Tuna Fisheries | |
83 FR 38678 - Notice of Funds Availability (NOFA) for the Conservation Reserve Program (CRP) Forest Inventory Analysis Pilot | |
83 FR 38760 - Advisory Committee for the Study of Eastern Europe and the Independent States of the Former Soviet Union (Title VIII) Public Meeting Notice | |
83 FR 38682 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review | |
83 FR 38660 - Drawbridge Operation Regulation; Lake Washington Ship Canal, Seattle, WA | |
83 FR 38660 - Drawbridge Operation Regulation; Atlantic Intracoastal Waterway (AIWW), Wrightsville Beach, NC and Northeast Cape Fear River, Wilmington, NC | |
83 FR 38692 - Agency Information Collection Activities: Proposed Collection Renewal; Comment Request (OMB No. 3064-0151) | |
83 FR 38661 - Safety Zone; USA Triathlon Age Group National Championships; Lake Erie, Cleveland, OH | |
83 FR 38669 - Reducing Regulation and Public Burden, and Controlling Cost | |
83 FR 38764 - Notice of OFAC Sanctions Actions | |
83 FR 38711 - Government-Owned Inventions; Availability for Licensing | |
83 FR 38712 - Scientific Advisory Committee on Alternative Toxicological Methods; Announcement of Meeting; Request for Comments | |
83 FR 38707 - Government-Owned Inventions; Availability for Licensing | |
83 FR 38710 - Government-Owned Inventions; Availability for Licensing | |
83 FR 38717 - Interagency Coordinating Committee on the Validation of Alternative Methods Biennial Progress Report: 2016-2017; Availability of Report | |
83 FR 38707 - Prospective Grant of Exclusive Patent License: Treatment of Type I Diabetes and its Comorbidities | |
83 FR 38716 - Government-Owned Inventions; Availability for Licensing | |
83 FR 38670 - Special Local Regulation; Battle of the Bridges, Intracoastal Waterway, Venice, FL | |
83 FR 38693 - Notice to All Interested Parties of Intent To Terminate Receivership | |
83 FR 38693 - Notice of Termination of Receiverships | |
83 FR 38728 - Southern Nuclear Operating Company, Inc., Vogtle Electric Generating Plant, Units 3 and 4, Ventilation System Changes | |
83 FR 38729 - Radiation Safety Surveys at Medical Institutions | |
83 FR 38730 - Standard Format and Content of Physical Security Plans, Training and Qualifications Plans and Safeguards Contingency Plans for Nuclear Power Plants | |
83 FR 38687 - Goose River Hydro, Inc.; Notice of Application Accepted for Filing and Soliciting Motions To Intervene and Protests | |
83 FR 38690 - Notice of Request Under Blanket Authorization; Florida Gas Transmission, LLC | |
83 FR 38762 - Petition for Exemption; Summary of Petition Received | |
83 FR 38763 - Petition for Exemption; Summary of Petition Received | |
83 FR 38738 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Amendments No. 1 and 2 To Advance Notice Concerning Enhanced and New Tools for Recovery Scenarios | |
83 FR 38750 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Partial Amendments No. 1, 2, and 3 to Advance Notice Concerning Updates to and Formalization of OCC's Recovery and Orderly Wind-Down Plan | |
83 FR 38689 - NextEra Desert Center Blythe, LLC v. California Independent System Operator Corporation: Notice of Filing | |
83 FR 38696 - Privacy Act of 1974; Matching Program | |
83 FR 38690 - Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization; Minco Wind IV, LLC | |
83 FR 38691 - Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization; Minco Wind V, LLC | |
83 FR 38688 - Combined Notice of Filings #1 | |
83 FR 38681 - Agency Information Collection Activities: Proposed Collection: Comment Request-Summer Food Site Locations for State Agencies | |
83 FR 38682 - Boundary Establishment for Ontonagon National Wild and Scenic River, Ottawa National Forest; Gogebic, Houghton, Iron, and Ontonagon Counties, Michigan | |
83 FR 38727 - Notice of Information Collection | |
83 FR 38699 - Opioid Use Disorder: Endpoints for Demonstrating Effectiveness of Drugs for Medication-Assisted Treatment; Draft Guidance for Industry; Availability | |
83 FR 38684 - Notice of Availability of Draft Programmatic Environmental Assessments for Field Operations at Thirteen National Marine Sanctuaries and Two Marine National Monuments | |
83 FR 38738 - Product Change-Priority Mail Negotiated Service Agreement | |
83 FR 38731 - Digital Instrumentation and Controls-Interim Staff Guidance-06, “Licensing Process” | |
83 FR 38685 - Pacific Fishery Management Council; Public Meeting | |
83 FR 38765 - Change in Burden of Proof | |
83 FR 38666 - Future Format of the National Drug Code; Public Hearing; Request for Comments | |
83 FR 38765 - Proposed Collection; Comment Request for Regulation Project | |
83 FR 38764 - Proposed Collection; Comment Request for Regulation Project | |
83 FR 38753 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Amend Commentary .01 to NYSE Arca Rule 8.600-E Relating to Certain Generic Listing Standards for Managed Fund Shares | |
83 FR 38757 - Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange's Retail Price Improvement Program | |
83 FR 38748 - Order Granting Applications by Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq PHLX LLC for Exemption Pursuant to Section 36(a) of the Exchange Act From the Rule Filing Requirements of Section 19(b) of the Exchange Act With Respect to Certain CAT Rules Incorporated by Reference | |
83 FR 38748 - Self-Regulatory Organization; Cboe BYX Exchange, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program | |
83 FR 38694 - Agency Forms Undergoing Paperwork Reduction Act Review | |
83 FR 38713 - National Institute of Mental Health; Notice of Meeting | |
83 FR 38715 - National Institute of Mental Health; Notice of Workshop | |
83 FR 38714 - Office of the Director, National Institutes of Health; Notice of Meeting | |
83 FR 38714 - National Institute of General Medical Sciences; Notice of Meeting | |
83 FR 38718 - National Institute of Diabetes and Digestive and Kidney Diseases Notice of Meetings | |
83 FR 38709 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meetings | |
83 FR 38716 - National Institute on Aging; Notice of Closed Meeting | |
83 FR 38707 - National Institute on Aging; Notice of Closed Meeting | |
83 FR 38709 - National Institute on Aging; Notice of Closed Meeting | |
83 FR 38709 - National Institute of Aging; Notice of Meeting | |
83 FR 38710 - National Cancer Institute; Notice of Closed Meetings | |
83 FR 38725 - Notice of Intent To Prepare an Environmental Impact Statement for the Willow Master Development Plan Oil and Gas Prospect, Alaska | |
83 FR 38672 - National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Deletion of the Eureka Mills Superfund Site | |
83 FR 38676 - National Flood Insurance Program (NFIP): Conforming Changes To Reflect the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA), and Additional Clarifications for Plain Language; Correction | |
83 FR 38657 - Airworthiness Directives; Honda Aircraft Company LLC Airplanes | |
83 FR 38768 - Regulation of NMS Stock Alternative Trading Systems | |
83 FR 38732 - Applications and Amendments to Facility Operating Licenses and Combined Licenses Involving Proposed No Significant Hazards Considerations and Containing Sensitive Unclassified Non-Safeguards Information and Order Imposing Procedures for Access to Sensitive Unclassified Non-Safeguards Information |
Commodity Credit Corporation
Food and Nutrition Service
Forest Service
International Trade Administration
National Oceanic and Atmospheric Administration
Engineers Corps
Navy Department
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Land Management Bureau
Federal Aviation Administration
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are adopting a new airworthiness directive (AD) for certain Honda Aircraft Company LLC Model HA-420 airplanes. This AD requires incorporating new and revised airworthiness limitations into the airplane's maintenance program. This AD was prompted by a report that several maintenance tasks were omitted from the airworthiness limitations section of the Honda Aircraft Company, Inc. Model HA-420 Airworthiness Limitation and Inspection Manual (ALIM). We are issuing this AD to address the unsafe condition on these products.
This AD is effective August 13, 2018.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of August 13, 2018.
We must receive comments on this AD by September 21, 2018.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact Honda Aircraft Company LLC, 6430 Ballinger Road, Greensboro, North Carolina 27410; telephone (336) 662-0246; internet:
You may examine the AD docket on the internet at
Samuel Kovitch, Aerospace Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: (404) 474-5570; fax: (404) 474-5605; email:
Honda Aircraft Company LLC has informed us that several required maintenance tasks driven by system safety assessment requirements were inadvertently omitted from or listed incorrectly in the airworthiness limitations section of the Honda Aircraft Company, Inc. Model HA-420 ALIM with a revision level prior to Revision C1 and dated earlier than May 1, 2018. Additional airworthiness limitations, additional maintenance tasks for various systems, and reduced compliance times for existing maintenance tasks are necessary to maintain all airplanes in a condition for safe operation.
In addition, we determined that some airplanes may have exceeded the new maintenance intervals once the ALIM was revised, including but not limited to:
1.
2.
These conditions, if not addressed, could result in failures in various airplane systems, including but not limited to the hydraulic and ice protection systems, which could result in loss of control of the airplane.
We reviewed Honda Aircraft Company HA-420 Airworthiness Limitation and Inspection Manual “Airworthiness Limitations—Inspection/Check” (Airworthiness Limitations section 05-60-00), dated May 1, 2018. The service information contains airworthiness limitations, additional maintenance tasks for various
We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This AD requires revising the airworthiness limitations section of the maintenance program by replacing Airworthiness Limitations section 05-60-00 with an issue date earlier than May 1, 2018, with the revised Airworthiness Limitations section 05-60-00, dated May 1, 2018. Incorporating these airworthiness limitations makes them mandatory (reference 14 CFR 43.16 and 14 CFR 91.403(c)). For airplanes that have exceeded the new maintenance intervals, compliance with replacement times or inspection intervals is required before further flight once the limitations are incorporated. Operators have the compliance time period of the AD to plan for any immediate maintenance action required by the new limitations. This includes, but is not limited to the following:
• The 600-hour TIS ice protection system check, AMM Task Reference 30-10-01-700-801, previously located in the Scheduled Inspections section 05-20-00, has been relocated to the Airworthiness Limitations section 05-60-00, and reduced to a 300-hour TIS interval. Airplanes that have exceeded 300 hours TIS since the ice protection system check was last performed must have the ice protection system check within the compliance time specified in paragraph (f) of the AD. This AD allows a credit for airplanes that had the system check at the previous 600-hour TIS interval but have not exceeded 300 hours TIS since the last check and the WAIXV passed the functionality check contained in the procedure.
• The 600-hour TIS hydraulic power system check, AMM Task Reference 29-00-01-700-801, previously located in the Scheduled Inspections section 05-20-00, has been relocated to the Airworthiness Limitations section 05-60-00, and revised to AMM Task Reference 29-00-01-700-802. Airplanes that had the system check per the previous incorrect version of the maintenance task (29-00-01-700-801) at 600 hours TIS must have the inspection done before further flight after incorporating the airworthiness limitations.
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because exceeding certain maintenance intervals and/or limitations could cause failures in various airplane systems, including but not limited to the hydraulic and ice protection systems, which could result in loss of control. Therefore, we find good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reasons stated above, we find that good cause exists for making this amendment effective in less than 30 days.
This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD affects 96 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective August 13, 2018.
None.
This AD applies to Honda Aircraft Company LLC Model HA-420 airplanes with a serial number in the range of 42000011 through 42000112, certificated in any category.
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 05, Time Limits.
This AD was prompted by a report that several required maintenance tasks were omitted from “Airworthiness Limitations—Inspection/Check” (Airworthiness Limitations section 05-60-00), of the Honda Aircraft Company HA-420 Airworthiness Limitation and Inspection Manual (ALIM), with a revision level prior to C1 and dated earlier than May 1, 2018. We are issuing this AD to prevent failures in various airplane systems, including but not limited to the hydraulic and ice protection systems, which could result in loss of control of the airplane.
Comply with the action of this AD within 30 days after August 13, 2018 (the effective date of this AD) or within 15 hours time-in-service (TIS) after August 13, 2018 (the effective date of this AD), whichever occurs first, unless already done. The airworthiness limitations section revision required in paragraph (g) of this AD contains new and reduced inspection intervals. Once you comply with paragraph (g) of this AD, if the hours TIS of your airplane exceed the threshold of any new limitation, you are required to comply with the replacement times or inspection intervals before further flight. This includes, but is not limited to, the following revised inspections:
(1) The 600-hour TIS interval ice protection system check, AMM Task Reference 30-10-01-700-801, previously located in the Scheduled Inspections section 05-20-00, has been relocated to the Airworthiness Limitations section 05-60-00, and reduced to a 300-hour TIS interval.
(2) The 600-hour TIS interval hydraulic power system check (AMM Task Reference 29-00-01-700-801), previously located in the Scheduled Inspections section 05-20-00, has been relocated to the Airworthiness Limitations section 05-60-00 and revised to AMM Task Reference 29-00-01-700-802.
Revise the airworthiness limitations section of the maintenance program by replacing Airworthiness Limitations section 05-60-00 with an issue date earlier than May 1, 2018, with Airworthiness Limitations section 05-60-00, “Airworthiness Limitation—Inspection/Check,” dated May 1, 2018. Incorporating these airworthiness limitations makes them mandatory (reference 14 CFR 43.16 and 14 CFR 91.403(c)).
Airworthiness Limitations section 05-60-00 is contained in the Honda Aircraft Company, Inc. Model HA-420 ALIM.
After revising the airworthiness limitations section as required by paragraph (g) of this AD, no alternative replacement times or inspection intervals may be approved unless the actions and/or intervals are approved as an alternative method of compliance in accordance with the procedures specified in paragraph (k)(1) of this AD.
Actions accomplished before the effective date of this AD in accordance with the 600-hour TIS ice protection system check, AMM Task Reference 30-10-01-700-801 located in the Scheduled Inspections section 05-20-00, is considered acceptable for compliance with the 300-hour TIS interval ice protection system check, AMM Task Reference 30-10-01-700-801 located in the Airworthiness Limitations section 05-60-00, dated May 1, 2018, if:
(1) The wing anti-ice crossflow valve (WAIXV) passed the functionality check contained in the procedure; and
(2) The airplane has not exceeded 300 hours TIS since the ice protection check was last performed.
Special flight permits are prohibited.
(1) The Manager, Atlanta ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (l) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Samuel Kovitch, Aerospace Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: (404) 474-5570; fax: (404) 474-5605; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Honda Aircraft Company, Inc. Model HA-420 Airworthiness Limitation and Inspection Manual “Airworthiness Limitations—Inspection/Check,” (Airworthiness Limitations section (05-60-00)), dated May 1, 2018.
(ii) Reserved.
(3) For Honda Aircraft Company LLC service information identified in this AD, contact Honda Aircraft Company LLC, 6430 Ballinger Road, Greensboro, North Carolina 27410; telephone (336) 662-0246; internet:
(4) You may view this service information at the FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.
(5) You may view the service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedules that govern the S.R. 74 (Wrightsville Beach) Bridge across the Atlantic Intracoastal Waterway (AIWW), mile 283.1, at Wrightsville Beach, NC, and the Isabel S. Holmes Bridge across the Northeast Cape Fear River, mile 1.0, at Wilmington, NC. The deviation is necessary to accommodate the free movement of pedestrians and vehicles during the 2018 PPD IRONMAN North Carolina “Beach2Battleship” Triathlon. This deviation allow these bridges to remain in their closed-to-navigation position.
The deviation is effective from 6:30 a.m. to 3 p.m. on October 13, 2018.
The docket for this deviation, [USCG-2018-0745], is available at
If you have questions on this temporary deviation, call or email Mr. Mickey Sanders, Bridge Administration Branch Fifth District, Coast Guard; telephone 757-398-6587, email
The event director, PPD Ironman North Carolina, with approval from the North Carolina Department of Transportation, who owns and operates the S.R. 74 (Wrightsville Beach) and the Isabel S. Holmes Bridges has requested a temporary deviation from the current operating regulations to accommodate the free movement of pedestrians and vehicles during the 2018 PPD IRONMAN North Carolina “Beach2Battleship” Triathlon. The bridges are double bascule bridges and have vertical clearances in the closed position of 20 feet and 40 feet, respectively, above mean high water.
The current operating schedule is set out in 33 CFR 117.821(a)(4) and 33 CFR 117.829(a), respectively. Under this temporary deviation, the S.R. 74 (Wrightsville Beach) Bridge will be maintained in the closed-to-navigation position from 6:30 a.m. to 10 a.m. on October 13, 2018, and the Isabel S. Holmes Bridge will be maintained in the closed-to-navigation position from 7:30 a.m. to 3 p.m. on October 13, 2018. The Atlantic Intracoastal Waterway is used by a variety of vessels including, small commercial fishing vessels and recreational vessels. The Northeast Cape Fear River is used by a variety of vessels including, small commercial fishing vessels, recreational vessels, and tug and barge traffic. The Coast Guard has carefully considered the nature and volume of vessel traffic on the waterway in publishing this temporary deviation.
Vessels able to pass through these bridges in their closed positions may do so at anytime. These bridges will be able to open for emergencies and there are no immediate alternative routes for vessels unable to pass through the bridges in their closed positions. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedules for these bridges so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), these drawbridges must return to their regular operating schedules immediately at the end of the effective periods of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Montlake Bridge across the Lake Washington Ship Canal, mile 5.2, at Seattle, WA. The deviation is necessary to accommodate vehicular traffic attending football games at Husky Stadium at the University of Washington. This deviation allows the bridge to remain in the closed-to-navigation position.
This deviation is effective from 11:30 a.m. on September 8, 2018 through 11 p.m. on November 17, 2018.
The docket for this deviation, USCG-2018-0702 is available at
If you have questions on this temporary deviation, call or email Mr. Steven Fischer, Bridge Administrator, Thirteenth Coast Guard District; telephone 206-220-7282, email
Washington Department of Transportation (bridge owner), has requested a temporary deviation from the operating schedule for the Montlake Bridge across the Lake Washington Ship Canal, at mile 5.2, at Seattle, WA. The deviation is necessary to manage heavy vehicular traffic expected for University of Washington football games. While all dates have been released, exact game times for five of the six events scheduled for Husky Stadium have not yet been determined by the National Collegiate Athletic Association. The times for TBA (Time to Be Announced) closures on September 22, 2018, September 29, 2018, October 20, 2018, November 3, 2018 and November 17, 2018 will be announced in the Local Notice to Mariners as they become available. The Montlake Bridge in the closed-to-navigation position provides 30 feet of vertical clearance throughout
The normal operating schedule for the Montlake Bridge operates in accordance with 33 CFR 117.1051(e). The deviation period and span operation is described in the table below:
Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft. Vessels able to pass through the bridge in the closed-to-navigation position may do so at anytime. The bridge will be able to open for emergency vessels in route to a call when an hour notice is given to the bridge operator. The Lake Washington Ship Canal has no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for certain waters of Lake Erie during the USA Triathlon Age Group National Championships. This safety zone is intended to restrict vessels from a portion of Lake Erie off of Edgewater Park during the USA Triathlon Age Group National Championships. This temporary safety zone is necessary to protect participants and spectators during the event from the hazards associated with a large scale swimming event. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Buffalo.
This rule is effective from 9:45 a.m. August 10, 2018 until 12:15 p.m. August 12, 2018.
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 LT Ryan Junod, Chief of Waterways Management, U.S. Coast Guard Marine Safety Unit Cleveland; telephone 216-937-0124, email
On June 26, 2018 the Coast Guard published a Notice of Proposed Rulemaking (NPRM) titled USA Triathlon Age Group National Championships; Lake Erie, Cleveland, OH (83 FR 29721). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this swim event. During the comment period that ended July 26, 2018 we received no comments.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Buffalo (COTP) has determined that a large-scale swim event on a navigable waterway will pose a significant risk to participants and the boating public. This rule is necessary to protect participants and spectators during the USA Triathlon Age Group National Championships.
As noted above, we received no comments on our NPRM published June 26, 2018. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.
This rule establishes a safety zone from 10:00 a.m. to 1:30 p.m. on August 10, 2018, from 5:00 a.m. to 5:30 p.m. on August 11, 2018, and from 5:00 a.m. to 12:00 p.m. on August 12, 2018. The safety zone will cover all navigable waters of Lake Erie, off of Edgewater Park, Cleveland OH, inside an area starting on shore at position 41°29′16″ N, 081°44′49″ W then Northwest to 41°29′34″ N, 081°45′02″ W then Northeast to 41°29′43″ N, 081°44′31″ W then Southeast back to shore at position 41°29′28″ N, 081°44′22″ (NAD 83). The duration of the zone is intended to enhance the safety of vessels and swimmers on these navigable waters before, during, and after the scheduled events over the course of the three days.
No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The Captain
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 protestors.
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, this rule 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 regulatory action determination is based on the characteristics of the safety zone. The safety zone created by this rule will be relatively small and is designed to minimize its impact on navigable waters. Furthermore, the safety zone has been designed to allow vessels to transit around it. In addition, the safety zone is located off a beach where there are normally swimmers. Thus, restrictions on vessel movement within that particular area are expected to be minimal. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.
The Regulatory Flexibility Act of 1980, 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 00 comments from the Small Business Administration on this rulemaking. 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 safety zone 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 will not call for a 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 Order13132.
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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishment of a safety zone. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Buffalo or his designated on-scene representative.
(3) The “on-scene representative” of the Captain of the Port Buffalo is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Buffalo to act on his behalf.
(4) Vessel operators desiring to enter or operate within the safety zone must contact the Captain of the Port Buffalo or his on-scene representative to obtain permission to do so. The Captain of the Port Buffalo or his on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Buffalo, or his on-scene representative.
Department of Veterans Affairs.
Final rule; correction.
The Department of Veterans Affairs (VA) published a final rule amending its Schedule for Rating Disabilities regulations pertaining to the skin body system in the
This correction is effective August 13, 2018.
Stephanie Li, Chief, Regulations Staff (211D), Compensation Service, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 461-9700. (This is not a toll-free telephone number.)
On Friday, July 13, 2018, VA published in the
In § 4.118, under the General Rating Formula for the Skin for DCs 7806, 7809, 7813-7816, 7820-7822, AND 7824, the 30 percent criteria published in the final rule, contains a phrase “Characteristic lesions involving
VA notes that the inclusion of the phrase “more than” in the final rule was clearly a technical error. This document corrects this technical error by removing the phrase “more than” from the 30 percent rating criteria under the General Rating Formula for the Skin. This error does not affect any benefits which were previously paid as the final rule for skin will not become effective until August 13, 2018.
In FR Doc. 18-14957, appearing on page 32598 in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; inseason quota transfer.
NMFS is transferring 30 metric tons (mt) of Atlantic bluefin tuna (BFT) quota from the Reserve category to the Harpoon category. With this transfer, the adjusted Harpoon category quota for the 2018 fishing season is 68.6 mt. The 2018 Harpoon category fishery is open until November 15, 2018, or until the Harpoon category quota is reached, whichever comes first. The action is based on consideration of the regulatory determination criteria regarding inseason adjustments, and applies to Atlantic tunas Harpoon category (commercial) permitted vessels.
Effective August 2, 2018, through November 15, 2018.
Sarah McLaughlin or Brad McHale, 978-281-9260.
Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971
The current baseline quotas for the Harpoon and Reserve categories are 38.6 mt and 24.8 mt, respectively. See § 635.27(a). To date for 2018, NMFS has published two actions that have adjusted the available 2018 Reserve category quota, which currently is 108.5 mt (83 FR 9232, March 5, 2018, and 83 FR 17110, April 18, 2018). The 2018 Harpoon category fishery opened June 1 and is open through November 15, 2018, or until the Harpoon category quota is reached, whichever comes first.
Although NMFS has published a proposed rule (83 FR 31517, July 6, 2018) to increase the baseline U.S. bluefin tuna quota from 1,058.79 mt to 1,247.86 mt and subquotas for 2018 (including an expected increase in the Harpoon category quota from 38.6 mt to 46 mt, consistent with the annual bluefin tuna quota calculation process established in § 635.27(a)), NMFS does not anticipate that the final rule will be effective until September 2018.
Under § 635.27(a)(9), NMFS has the authority to transfer quota among fishing categories or subcategories, after considering regulatory determination criteria provided under § 635.27(a)(8). NMFS has considered the relevant determination criteria and their applicability to the Harpoon category fishery. These considerations include, but are not limited to, the following:
Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock (§ 635.27(a)(8)(i)), biological samples collected from BFT landed by Harpoon category fishermen and provided by BFT dealers continue to provide valuable data for ongoing scientific studies of BFT age and growth, migration, and reproductive status. Additional opportunity to land BFT in the Harpoon category would support the continued collection of a broad range of data for these studies and for stock monitoring purposes.
NMFS also considered the catches of the Harpoon category quota to date and the likelihood of closure of that segment of the fishery if no adjustment is made (§ 635.27(a)(8)(ii) and (ix)). As of August 1, 2018, the Harpoon category has landed 26.2 mt. Commercial-size BFT are currently readily available to vessels fishing under the Harpoon category quota. Without a quota transfer at this time, Harpoon category participants would have to stop BFT fishing activities with very short notice, while commercial-sized BFT remain available in the areas Harpoon category permitted vessels operate. Transferring 30 mt of BFT quota from the Reserve category would result in a total of 68.6 mt being available for the Harpoon category for the 2018 Harpoon category fishing season.
Regarding the projected ability of the vessels fishing under the particular category quota (here, the Harpoon category) to harvest the additional amount of BFT before the end of the fishing year (§ 635.27(a)(8)(iii)), NMFS considered Harpoon category landings over the last several years. Landings are highly variable and depend on access to commercial-sized BFT and fishing conditions, among other factors. NMFS anticipates that the Harpoon category could harvest the transferred 30 mt prior to the end of the Harpoon category season, subject to weather conditions and BFT availability. NMFS may transfer unused Harpoon category quota to other quota categories, as appropriate. NMFS also anticipates that some underharvest of the 2017 adjusted U.S. BFT quota will be carried forward to 2018 and placed in the Reserve category, in accordance with the regulations. Thus, this quota transfer would allow fishermen to take advantage of the availability of fish on the fishing grounds, consider the expected increases in available 2018 quota later in the year, and provide a reasonable opportunity to harvest the full U.S. BFT quota.
NMFS also considered the estimated amounts by which quotas for other gear categories of the fishery might be exceeded (§ 635.27(a)(8)(iv)) and the ability to account for all 2018 landings and dead discards. In the last several years, total U.S. BFT landings have been below the available U.S. quota such that the United States has carried forward the maximum amount of underharvest allowed by ICCAT from one year to the next. NMFS will need to account for 2018 landings and dead discards within the adjusted U.S. quota, consistent with ICCAT recommendations, and anticipates having sufficient quota to do that.
This transfer would be consistent with the current quotas, which were established and analyzed in the 2015 BFT quota final rule (80 FR 52198, August 28, 2015), and with objectives of the 2006 Consolidated HMS FMP and amendments (§ 635.27(a)(8)(v) and (vi)). Another principal consideration is the objective of providing opportunities to harvest the full annual U.S. BFT quota without exceeding it based on the goals of the 2006 Consolidated HMS FMP and amendments, including to achieve optimum yield on a continuing basis and to optimize the ability of all permit categories to harvest their full BFT
Based on the considerations above, NMFS is transferring 30 mt of the available 108.5 mt of Reserve category quota to the Harpoon category. Therefore, NMFS adjusts the Harpoon category quota to 68.6 mt for the 2018 Harpoon category fishing season (
NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landing reports within 24 hours of a dealer receiving BFT. Harpoon category vessel owners are required to report their own catch of all BFT retained or discarded dead, within 24 hours of the landing(s) or end of each trip, by accessing
The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:
The regulations implementing the 2006 Consolidated HMS FMP and amendments provide for inseason retention limit adjustments to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Affording prior notice and opportunity for public comment to implement the quota transfer for the remainder of 2018 is also contrary to the public interest as such a delay would likely result in closure of the Harpoon fishery when the baseline quota is met and the need to re-open the fishery, with attendant administrative costs and costs to the fishery. The delay would preclude the fishery from harvesting BFT that are available on the fishing grounds and that might otherwise become unavailable during a delay. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For these reasons, there also is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.
This action is being taken under § 635.27(a)(9), and is exempt from review under Executive Order 12866.
16 U.S.C. 971
Food and Drug Administration, HHS.
Notification of public hearing; request for comments.
The Food and Drug Administration (FDA or the Agency) is announcing a public hearing and an opportunity for public comment on the future format of the National Drug Code (NDC). FDA is seeking input from a variety of stakeholders through comments and responses to FDA questions included in this notice and associated web content to be published ahead of the hearing. The questions are intended to allow FDA to obtain stakeholders' perspectives on the impact of any future changes made to the length and format of the NDC.
The public hearing will be held on November 5, 2018, from 8:30 a.m. to 5 p.m. The hearing may be extended or end early depending on the level of public participation. Persons seeking to attend or present at the public hearing must register by October 15, 2018. Electronic or written comments will be accepted after the public hearing until January 5, 2019.
The public hearing will be held at the FDA White Oak Campus, 10903 New Hampshire Ave., Building 31 Conference Center, the Great Room (Rm. 1503 Section B and C), Silver Spring, MD 20993-0002. Entrance for the public hearing participants (non-FDA employees) is through Building 1, where routine security check procedures will be performed. For parking and security information, please refer to
You may submit comments 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
Leyla Rahjou-Esfandiary, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 2262, Silver Spring, MD 20993, 301-796-3185,
The NDC is an FDA standard for uniquely identifying drugs in the United States. Currently, NDCs assigned by FDA contain 10 digits. As described in § 207.33(b) (21 CFR 207.33(b)), NDCs consist of three segments: the labeler code, the product code, and the package code. At some point in the next 10 to 15 years, NDC formatting will need to be updated to accommodate longer NDCs because new labelers are continually entering the U.S. market. In 2016, when FDA published the “Requirements for Foreign and Domestic Establishment Registration and Listing for Human Drugs, Including Drugs That Are Regulated Under a Biologics License Application, and Animal Drugs, Final Rule” FDA stated that when it runs out of 5-digit labeler codes, it will begin assigning 6-digit labeler codes. (81 FR 60170, August 31, 2016). As a result, FDA will add two new 11-digit NDC formats to accommodate the longer labeler codes. However, FDA acknowledged that some stakeholders expressed an interest in FDA moving to a single, standard format for NDCs and announced that it would initiate a public discussion of future formatting options (81 FR 60170 at 60187). Because of the widespread use and dependency on NDCs in prescribing, dispensing, reimbursement, safety, clinical management, supply chain management, and pharmaceutical manufacturing and labeling systems, the Agency is holding a public hearing and requesting comments from stakeholders on the impact of the transition to 6-digit labeler codes.
Section 510 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360) requires each registered drug establishment to provide FDA with a current list of all drugs manufactured, prepared, propagated, compounded, or processed by the establishment for commercial distribution. Drug products are identified and reported using the NDC.
The NDC for each listed drug in the United States is a unique 10-digit, 3-segment number. The 3 segments of NDC include the labeler code, product code, and package code. A labeler code is a unique 4-, 5-, or (in the future) 6-digit number assigned by FDA that identifies the manufacturer, repacker, relabeler, or private label distributor of the drug. The second segment, the product code, identifies a specific strength, dosage form, and formulation of a drug manufactured, repackaged, relabeled, or distributed by the labeler. The third segment, the package code, identifies package sizes and types. Different package codes only differentiate between different quantitative and qualitative attributes of the product packaging. Both the product and package codes are proposed by persons submitting drug listing information. FDA will assign a proposed NDC if it has not been used previously, is not currently in use, and has not been reserved for future assignment to a different product. The NDC for a given drug is currently in one of the following configurations (with each number representing the number of digits in that segment): 4-4-2, 5-3-2, or 5-4-1.
According to current regulations, labeler codes may consist of 4, 5, or 6 digits (§ 207.33(b)(1)). Currently, 5-digit labeler codes are being assigned by FDA. A 5-digit labeler code format provides FDA with 90,000 labeler codes that could be assigned to drug manufacturers and private label distributors ranging from 10,000 to 99,999. Based on current assignment rates, FDA anticipates that it will run out of 5-digit labeler codes in approximately 15 years. FDA will begin assigning 6-digit labeler codes at some point in the future due to exhaustion of 5-digit labeler codes. Moving up to 6-digit labeler codes will expand NDCs to 11 digits and, per regulation, allows for two additional NDC configurations: 6-3-2 and 6-4-1, for a total of five possible NDC configurations (including the three 10-digit NDC configurations).
The Health Insurance Portability and Accountability Act (HIPAA) (Pub. L. 104-191) contains provisions calling for the administrative simplification “of the national standards for electronic health care transactions and code sets, unique health identifiers, and security”
When FDA moves to a 6-digit labeler code, although these new 11-digit native NDC
The purpose of this public hearing is to obtain and discuss stakeholder feedback on the future format of NDCs. FDA is seeking information on the following topics:
1. The impact of transitioning from a 5-digit labeler code to a 6-digit labeler code, including the business, economic, information technology, and medical/clinical practice impacts, and its impact on the safety and security of drug products.
2. Issues associated with the current lack of NDC uniformity in the marketplace.
3. What should FDA consider as it explores any further changes or expansion to the format or length of the NDC?
4. How to best transition to a new format for the NDC.
To facilitate stakeholder feedback, some options for discussion and questions will be posted in the docket and on FDA's website at
1. How would you describe your business or area of focus (
2. How do you or your members use the NDC?
3. What challenges does your organization or your members face with the current NDC and how do you overcome these challenges?
4. What changes, if any, would you or your members need to make to your systems to accommodate the 6-digit labeler code or other larger NDC formats?
The FDA Conference Center at the White Oak location is a Federal facility with security procedures and limited seating. Attendance is free and early registration is recommended. Individuals who wish to attend must register on or before October 15, 2018, at
This hearing will include public comment sessions. Individuals who wish to present during a public comment session at the public hearing must register as noted at
FDA will do its best to accommodate requests to present during the public comment session and will determine the amount of time allotted for each oral presentation and the approximate time that each oral presentation is scheduled to begin. FDA will notify registered presenters of their scheduled times and make available an agenda and background material at
If you need special accommodations because of a disability, please send an email to
A link to the live webcast of this public hearing will be available at
The Commissioner of Food and Drugs is announcing that the public hearing will be held in accordance with part 15 (21 CFR part 15). The hearing will be conducted by a presiding officer, who will be accompanied by FDA senior management from the Office of the Commissioner and the relevant centers/offices.
Under § 15.30(f), the hearing is informal and the rules of evidence do not apply. No participant may interrupt the presentation of another participant. Only the presiding officer and panel members may question any person during or at the conclusion of each presentation. At their discretion, the presiding officer(s) may permit questions to be submitted from the audience for response by FDA or other persons attending the hearing (§ 15.30(e)). Public hearings under part 15 are subject to FDA's policy and procedures for electronic media coverage of FDA's public administrative proceedings (21 CFR part 10, subpart C). Under § 10.205, representatives of the electronic media may be permitted, subject to certain limitations, to videotape, film, or otherwise record FDA's public administrative proceedings, including presentations by participants. The hearing will be transcribed as stipulated in § 15.30(b) (see
Please be advised that as soon as a transcript is available, it will be accessible at
Department of State.
Request for comments.
As part of its continuing implementation of Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” issued by the President on January 30, 2017, the Department of State (the Department) is seeking comments and information from interested parties to assist the Department in identifying existing regulations, paperwork requirements and other regulatory obligations that can be modified or repealed, consistent with law, to achieve meaningful burden reduction while continuing to achieve the Department's statutory obligations.
Written comments and related material must be received on or before September 6, 2018.
You may submit comments by email to the following address:
Alice Kottmyer, Attorney-Adviser, 202-647-2318; or Janet Freer, Director of the Office of Directives Management. Both can be reached at
On January 30, 2017, President Trump issued Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs. Under that Executive Order, for every one new regulation issued, at least two prior regulations must be identified for elimination, and the cost of planned regulations must be prudently managed and controlled through a budgeting process. On February 24, 2017, the President issued Executive Order 13777, Enforcing the Regulatory Reform Agenda. That Executive Order directs agencies to take specific steps to identify and alleviate unnecessary regulatory burdens placed on the American people. We are seeking comments on Department regulations, guidance documents, and collections of information that you believe should be removed or modified to alleviate unnecessary burdens. The Department is also requesting economic data to support any proposed changes.
Executive Order 13777 directs agencies to designate a Regulatory Reform Officer (RRO) and to establish a Regulatory Reform Task Force (RRTF). The Deputy Secretary of State is the RRO. Other RRTF members include senior officials in the Department's primary regulatory bureaus (Bureaus of Consular Affairs, Educational and Cultural Affairs, Political-Military Affairs, and Administration), as well as other Department officials with expertise in legal requirements, planning and budget.
One of the duties of the RRTF is to evaluate existing regulations and make recommendations to the Secretary regarding their repeal, replacement, or modification. Executive Order 13777 further directs that the RRTF attempt to identify regulations that:
• Eliminate jobs, or inhibit job creation;
• Are outdated, unnecessary, or ineffective;
• Impose costs that exceed benefits;
• Create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;
• Are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision, in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard of reproducibility; or
• Derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.
Section 3(e) of the Executive Order calls on the RRTF to “seek input and other assistance, as permitted by law, from entities significantly affected by Federal regulations, including State, local, and tribal governments, small businesses, consumers, nongovernmental organizations, and trade associations” on regulations that meet some or all of the criteria above. The Department sought input in 2017 (
Existing Department of State regulations can be found in the Code of Federal Regulations (CFR) in two places:
• 22 CFR Chapter I (parts 1 through 199), which contains rules governing Department operations); and
• 48 CFR Chapters VI (part 600), which contains the Department's Acquisition Rules.
In addition, guidance regarding Department grants can be found at 2 CFR chapter VI.
You may view the most up-to-date versions of these authorities in the electronic CFR, located at
Department guidance that relates to the missions of the rulemaking bureaus (identified above) can be found in a number of locations on the state.gov public website. The Department is interested in comments regarding any of the guidance located on its public site. For your convenience, the following sites cover specific missions:
• For Consular Affairs, including passports and visas, please visit
• For Educational and Cultural Affairs, including the Exchange Visitor Program, please visit
• For Defense Trade issues, please visit:
You are invited to provide comment on any guidance published by the Department that you feel should be considered for modification or elimination, in accordance with E.O. 13777.
The Department's most current submission to the Unified Agenda of Regulatory and Deregulatory Actions is located at
You can find the Department's approved collections of information at
Please make your comments as specific as possible, and include any supporting data or other information, such as cost information, that you may have. Please note that all comments are publically available, so do not include any information in your comments that you would not want released to the public. We accept anonymous comments. The Department will not edit your comments to remove personal information; however, in our discretion, we might not post on regulations.gov any comments that contain personal information. If your submission cannot be made using
The Executive Orders are at the following sites:
Although the Department will not respond to individual comments, we value your comments and will give careful consideration to them.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a temporary special local regulation for certain waters of the Intracoastal Waterway. This action is necessary to provide for the safety of life on these navigable waters in Venice, FL, during the Battle of the Bridges on September 15, 2018. This proposed rulemaking would prohibit persons and vessels from being in the race area unless authorized by the Captain of the Port St. Petersburg (COTP) or a designated representative. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before August 22, 2018.
You may submit comments identified by docket number USCG-2018-0608 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Marine Science Technician First Class Michael Shackleford, U.S. Coast Guard; telephone 813-228-2191, email
On November 7, 2017, the Sarasota Scullers Youth Rowing Program notified the Coast Guard that it will be conducting the Battle of the Bridges sculler race from 7 a.m. to 7:30 p.m. on September 15, 2018. The race will take place in portions of the Intracoastal Waterway in Venice, FL. The Captain of the Port St. Petersburg (COTP) has determined that potential hazards associated with the race to be a safety concern for anyone within area where the race is taking place.
The Coast Guard is requesting that interested parties provide comments within a shortened comment period of 15 days instead of a standard 30 days for this notice of proposed rulemaking. The Coast Guard believes a shortened comment period is necessary and reasonable because the special local regulation is necessary to ensure the safety of vessels and the navigable waters within, or near the race area during the scheduled event. Any delay in making this final rule effective by allowing comments for more than 15 days would not be in the best interest of public safety.
The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1233.
The COTP proposes to establish a temporary special local regulation from 7 a.m. to 7:30 p.m. on September 15, 2018. The regulation would cover a race which would take place on approximately 3.5 miles of the Intracoastal Waterway starting near the Shamrock Park & Nature Center and ending near the Tamiami Trail Bridge in Venice, FL. The duration of the regulation is intended to ensure the safety of vessels and these navigable waters during the scheduled 7 a.m. to 7:30 p.m. race. No vessel or person would be permitted to enter the regulated area without obtaining permission from the COTP or a designated representative. Persons or vessels receiving permission to enter the regulated area must comply with the instructions of the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.
We developed this proposed 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 protestors.
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
This regulatory action determination is based on the size, location, duration, and time-of-day of the special local regulation. This regulation would impact approximately 3.5 miles of the Intracoastal Waterway in Venice, FL for twelve and half hours on one day. The Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the regulation, and the rule would allow vessels to seek permission to enter the race area in emergency situations. Advance notice of the regulation will provide the local community with ample time to plan around the race event accordingly.
The Regulatory Flexibility Act of 1980, 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 certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the regulation area may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
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 proposed 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
This proposed rule would not call for a 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 proposed 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 proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would 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. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
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 would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves special local regulation which temporarily limits access to the portions of the Intracoastal Waterway in Venice, FL to race participants only, except in emergency situations. Normally such actions are categorically excluded from further review under paragraph L[61] of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 100 as follows:
33 U.S.C. 1233; 33 CFR 1.05-1.
(a)
(b)
(c)
(2) Persons and vessels desiring to enter, transit through, anchor in, or remain within the race area may contact the COTP St. Petersburg by telephone at (727) 824-7506 or via VHF-FM radio Channel 16 to request authorization.
(3) If authorization to enter, transit through, anchor in, or remain within the race area is granted, all persons and vessels receiving such authorization shall comply with the instructions of the COTP or a designated representative.
(4) The Coast Guard will provide notice of the regulated areas by Local Notice to Mariners, Broadcast Notice to Mariners, or by on-scene designated representatives.
(d) Enforcement Period. This rule will be enforced from 7 a.m. until 7:30 p.m. on September 15, 2018.
Environmental Protection Agency (EPA).
Proposed rule; notice of intent.
The Environmental Protection Agency (EPA) Region 8 is issuing a Notice of Intent to Delete the Eureka Mills Superfund Site (Site) located in Eureka, Utah, from the National Priorities List (NPL) and requests public comments on this proposed action. The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is an appendix of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). The EPA and the State of Utah, through the Utah Department of Environmental Quality (UDEQ), have determined that all appropriate response actions under CERCLA, other than operation and maintenance and five-year reviews (FYR), have been completed. However, this deletion does not preclude future actions under Superfund.
Comments must be received by September 6, 2018.
Submit your comments, identified by Docket ID no. EPA-HQ-SFUND-2002-0001 by one of the following methods:
•
•
•
Armando Saenz, Remedial Project Manager, U.S. Environmental Protection Agency, Region 8, EPR-SR, Denver, CO 80202, (303) 312-6559, email:
EPA Region 8 announces its intent to delete the Eureka Mills Superfund Site from the NPL and requests public comment on this proposed action. The NPL constitutes Appendix B of 40 CFR part 300 which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of CERCLA of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 40 CFR 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.
EPA will accept comments on the proposal to delete this Site for thirty (30) days after publication of this document in the
Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Eureka Mills Superfund Site and demonstrates how it meets the deletion criteria.
The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the State, whether any of the following criteria have been met:
i. Responsible parties or other persons have implemented all appropriate response actions required;
ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or
iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures in not appropriate.
Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.
The following procedures apply to deletion of the Site:
(1) EPA consulted with the State before developing this Notice of Intent to Delete.
(2) EPA has provided the State 30 working days for review of this notice prior to publication of it today.
(3) In accordance with the criteria discussed above, EPA has determined that no further response is appropriate;
(4) The State of Utah, through the UDEQ, has concurred with deletion of the Site from the NPL.
(5) Concurrently with the publication of this Notice of Intent to Delete in the
(6) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.
If comments are received within the 30-day public comment period on this document, EPA will evaluate and respond appropriately to the comments before making a final decision to delete. If necessary, EPA will prepare a Responsiveness Summary to address any significant public comments received. After the public comment period, if EPA determines it is still appropriate to delete the Site, the Regional Administrator will publish a final Notice of Deletion in the
Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.
The following information provides EPA's rationale for deleting the Site from the NPL.
The 450-acre Eureka Mills Superfund Site (UT0002240158) encompasses much of Eureka. The town is situated in a southwest trending valley on the west side of the East Tintic Mountains in Juab County about 80 miles southwest of Salt Lake City, Utah. The town was founded in 1870 upon the discovery of a high-grade mineralized outcrop containing silver, lead, gold, copper and arsenic. The area was extensively mined until 1958. Because of extensive mining activities, numerous mine waste piles were formed and spread throughout the town (including residential areas).
Investigations of the impacts from historic mining activities in Eureka began in 2000. Based on the results of initial blood lead testing and soil sampling, EPA and the State initiated an extensive blood lead testing program for Eureka residents in the summer of 2000. In addition, EPA's Emergency Response Program initiated an extensive soil sampling program of residential properties and mine waste areas.
During the 2001 and 2002 construction seasons, EPA's Emergency Response Program conducted an emergency removal action on 69 properties. The action consisted of removing and replacing up to 18 inches of soil high in lead content on each property. The properties were selected based on soil lead levels greater than 3000 ppm and/or a child living in the home with a blood lead level greater than 10 μg/dL. The Site was proposed
The RI/FS began in 2000 and was completed in 2002. Samples confirmed that metals were present in mine waste piles, residential/non-residential soils and within the interiors of some residences/commercial buildings. Over 4,205 soil samples were collected from 505 residential/commercial properties. One hundred residential properties contained surface soil lead in concentrations greater than 3,000 ppm. An additional 350 residential properties showed surface soil lead concentrations at levels between 231 and 2,999 ppm. Samples were also collected from mine waste piles and areas with future development potential. Lead concentrations within the waste pile material ranged from 1,000 ppm to 47,806 ppm. Lead in areas with future development potential ranged from 325 ppm to 15,000 ppm.
The Baseline Human Health Risk Assessment (BHHRA) was completed in 2002 and evaluated the current/future risks to human health associated with elevated concentrations of metals in soils and mine waste within the Site. Lead was found to be the primary soil contaminant of concern (COC) and other soil COCs (antimony, arsenic, mercury, silver and thallium) were found to be co-located with lead.
An interim ROD (September 2002) for Operable Unit (OU) 00 addressed the public health actions to reduce the immediate exposure of residents (particularly, children under the age of 7 years) to lead from soil/dust in the environment prior to the implementation of the final remedy for the soils and mine wastes. Five OUs were designated for the Site:
With the completion of the BHHRA and RI/FS in 2002, EPA issued the final Site remedy for the soils and mine waste areas found to pose an imminent/substantial endangerment to public health in the September 2002 ROD for OUs 00-03. Lead was found to be the primary soil COC and other soil COCs (antimony, arsenic, mercury, silver and thallium) were co-located with lead. The health based clean-up levels specified in the ROD were 231 ppm lead in soils for residential use and 735 ppm lead in soils for recreational use.
The Remedial Action Objectives were:
• Prevent exposure of children to lead in surface soil within current residential properties, vacant properties interspersed among residential properties, and commercial properties at the Site where soil is determined to be the source of lead and the ingestion of soil is predicted to result in a greater than 5% chance that an individual child or a group of similarly exposed children will have a blood lead level greater than 10 μg/dL.
• Prevent exposure of adolescents/adults engaging in recreational activities to lead in surface soil within discrete mine waste piles and non-residential properties (areas currently used for recreation but could be proposed for future development) where ingestion of soil is predicted to result in a greater than 5% chance that an individual or a similarly exposed group will have a blood lead level greater than 11.1 μg/dL.
• The final remedy included the following components:
• Cleanup of 691 residential and commercial properties with lead in soil concentrations greater than the action level. The cleanup generally consisted of removal of 18 inches of soil, placement of a marker barrier at 18 inches to define contaminated soil below and construction of an 18-inch cap consisting of soil with a vegetative cover or rock materials;
• Capping of 13 mine waste piles near Eureka that posed a human health risk with an 18-inch cap of vegetated soil or rock;
• Construction of a disposal cell (open cell) for contaminated soils that may be excavated during future development activities;
• Implementation of institutional controls in the form of (1) proprietary controls in the form of easements or environmental covenants and; (2) local governmental ordinances to control excavation activities that could disturb contaminated materials; and,
• Conducting public health actions, including information programs, periodic blood lead testing of children, and a program for evaluating sources of indoor lead exposure.
The 2002 ROD for OUs 00-03 did not address the groundwater, surface water and ecological pathways because of the urgency to address actual exposures to lead contaminated soils evident in blood lead tests Eureka children. EPA conducted an RI for the surface water/groundwater from 2007 to 2009. Analysis of surface water samples collected during the RI met the Utah State Criteria for agricultural and recreational use. No groundwater impacts were found from historical mining that presented a concern for human health. In addition, samples from drinking water wells showed consistently high-quality water with no metals exceeding Maximum Contaminant Levels (MCLs). An ecological risk assessment (conducted from 2009 to 2010) concluded that, while there was a small risk to certain avian species, addressing the associated contamination would result in the destruction of valuable habitat for other avian species/wildlife not at risk. A No Action ROD for OU O4 was issued in September 2011 for the groundwater, surface water and ecological pathways.
In summary, the three RODs for the Site are as follows: (1) Early Interim Action ROD for Operable Unit 00 at the Eureka Mills Site (September 30, 2002); (2) ROD for Lead-Contaminated Soil, Operable Unit 00-03 at the Eureka Mills NPL Site (September 30, 2002); and (3) Eureka Mills OU 4 Groundwater, Surface Water and Ecological Risk ROD (September 21, 2011).
The remedial design (RD) was completed in May 2003 and the remedial action (RA) began in August 2003 and was completed in October 2010. Most of the RA activities were performed by EPA with the assistance from the United States Army Corps of Engineers (USACE) under an interagency agreement. The USACE oversaw all work performed by its contractors and provided monthly progress reports. The monthly progress reports documented the work completed, problems encountered and their resolution, upcoming work and invoices submitted for payment during the reporting period. Potentially responsible parties (mine owners/operators) performed portions of the RA and provided materials and resources for other RA tasks.
Because the duration of the RA extended over an eight-year period with multiple parties performing the RA work, pre-final/final inspections were conducted throughout the remedial action as specific portions of the Site were completed. Each PRP prepared a RA report after its work which was then reviewed by EPA and UDEQ and approved by EPA. EPA prepared annual RA reports documenting the work completed during the year which were reviewed and concurred on by UDEQ.
The OU 00 RA for residential cleanup began in August 2004, and was
The surface runoff control features were designed to conform to the Federal Emergency Management Agency's (FEMA) revised Flood Insurance Rate Map. The initial hydrologic studies for the mapping were jointly conducted by FEMA and EPA in 2003. Following the completion of the RA and the surveying of the constructed drainages, EPA (on behalf of Eureka) submitted a letter to FEMA requesting revisions to the 2004 Flood Insurance Rate Map. FEMA approved the revisions in a letter dated May 12, 2011.
Construction completion for the Site was achieved with the signing of the Preliminary Close Out Report (PCOR) and RA Report on September 21, 2011.
The O&M Plan and O&M Manual for the Site were approved on July 31, 2009 as attachments to the amended State Superfund Contract (SSC). The O&M Plan outlines the responsibilities of UDEQ and the City of Eureka for the O&M of the remedy at the Site including the implementation of ICs and operation of the open cell. The remedy was determined to be Operational and Functional on July 18, 2011 by EPA and the State of Utah assumed responsibility for O&M pursuant to the O&M Plan.
The O&M Manual defines the maintenance tasks—inspection schedule, operation of the open cell and any material specifications for erosion repairs, etc. The O&M Manual includes the “as-built” drawings of the Response Action Structures (RASs) and individual inspection sheets for each RAS. In addition, the O&M Manual includes the survey descriptions and drawings of the RASs attached to the environmental covenants filed on each affected parcel.
The final remedy requires ICs because contaminated materials remain at the Site above levels that allow for unlimited use and unrestricted exposure. The ICs at the Site include environmental covenants and a local excavation ordinance.
Environmental covenants (ECs) were filed for each land parcel wholly or partially within the footprint of each RAS. RASs include the capped mine waste piles, drainage control features (sedimentation ponds/constructed drainages) and access roads. Filed by the property owner (usually a PRP), the ECs limit the type of land uses on RASs. Uses that could compromise the integrity of the remedy are prohibited. The ECs prohibit any disturbance or alteration of the RASs without prior approval by EPA/UDEQ and require compliance with Eureka's excavation ordinance. Future property owners will have to comply with the requirements of the ECs given that the ECs run with the land.
In October 2010, Eureka adopted a local ordinance that governs excavation activities in areas that have been remediated but not developed. Undeveloped areas were not remediated at the time of the RA because of thick vegetation (and limited exposure to contaminated soils). The 00-03 ROD determined that the most appropriate time to remediate undeveloped areas would be during development. The ordinance requires property owners to obtain a permit for certain excavation activities defined as “restricted activities.” All contaminated materials displaced during excavation must either be disposed at the open cell or be capped with 18 inches of clean topsoil/road base material or capped with a structure or paved surface (minimum 2-inch hard cover surface). UDEQ provides technical/financial support to Eureka for the administration and enforcement of the ordinance through a funding agreement.
Statutory Five-Year Reviews (FYR) of the Site are required because hazardous substances remain on-Site above levels which allow for unlimited use and unrestricted exposure. The last FYR Report was signed on July 17, 2018 and found that, because the remedial actions at all OUs are protective, the remedy implemented at the Site is protective of human health and the environment. There were no issues/recommendations. The next five-year review is scheduled to be completed by July 2023.
Since the implementation of the final Site remedy, there has not been any significant public/congressional interest. There have been no expressions of health/environmental concerns with the remedy.
Community involvement activities associated with the most recent FYR included a public notice published in the Eureka Review Newsletter on March 1, 2018 and stakeholder interviews to discuss the review and address concerns or issues with the Site. The interviews were conducted from March 1 through April 15, 2018 and included representatives from the Eureka City Council, Eureka City Officials and surrounding property owners.
None of the interviewees expressed any health or environmental concerns with the remedy and felt the remedy remains protective. The City of Eureka expressed concerns about issues that are not remedy-related such as problems with sewer/water lines, roads, drainage areas and historic head frames. Property owners either approved of the necessity of a cleanup for a healthy community or disapproved of the rock appearance extensively used for cover of mine waste areas. The interviewees approved of EPA's proposal and State concurrence to delete the Site from the NPL by the end of the federal fiscal year 2018.
This Site meets all the completion requirements as specified in the OSWER Directive 9320.2-22, Close Out Procedures for National Priorities List Sites. All remedial activities at the Site are consistent with agency policy and guidance. The only remaining CERCLA activities to be performed at the Site are O&M and five-year reviews. No further Superfund responses are needed to protect human health and the environment at the Site.
The NCP (40 CFR 300.425(e)) states that a site may be deleted from the NPL when no further response action is appropriate. EPA, in consultation with the State of Utah, has determined that all required response actions have been implemented and no further response action is appropriate.
Environmental protection, Air pollution control, Chemicals, Hazardous waste, Hazardous substances, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply.
33 U.S.C. 1321(d); 42 U.S.C. 9601-9657; E.O. 13626, 77 FR 56749, 3 CFR, 2013 Comp., p. 306; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp., p. 193.
Federal Emergency Management Agency, DHS.
Proposed rule; correction.
On July 16, 2018, FEMA published a proposed rule which would revise the National Flood Insurance Program's regulations to codify certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014 that FEMA has already implemented and to clarify certain existing NFIP rules relating to NFIP operations and the Standard Flood Insurance Policy. In the preamble to the proposed rule, an incorrect web address appeared. This correction fixes that address.
This correction is effective August 7, 2018. The closing of the comment period for the proposed rule published July 16, 2018, at 83 FR 39256, remains September 14, 2018.
For information on submitting comments, see the July 16, 2018, proposed rule at 83 FR 39256.
In proposed rule document 2018-13292 appearing on pages 32956 through 33015 in the issue of Monday, July 16, 2018, make the following correction:
1. On page 32957, in the third column, in the first full paragraph, correct the web address “
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) 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) the accuracy of the agency's estimate of burden 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 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 regarding this information collection received by September 6, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The regulations and subsequent requirements are enforced by the Animal and Plant Health Inspection Service (APHIS) and require the collection of information verifying oversight and inspection of the growing, handling, packing, transporting, and importing of fruits, vegetables, plants for planting, logs, lumber, unprocessed wood products, cotton, corn, rice, sugar cane, and coffee into the United States. The information is collected from businesses, individuals, and foreign government officials, via forms, labels, certifications, and other formats. On a quarterly basis, APHIS will submit a report to the Office of Management and Budget that documents the burden imposed by import requirements for commodities covered by this information collection (fruits, vegetables, plants for planting, logs, lumber, unprocessed wood products, cotton, corn, rice, sugar cane, and coffee) that have been finalized within that quarterly period.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) 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) the accuracy of the agency's estimate of burden 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)
Comments regarding this information collection received by September 6, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725—17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Commodity Credit Corporation and Farm Service Agency, U.S. Department of Agriculture (USDA).
Notice.
The Farm Service Agency (FSA), on behalf of Commodity Credit Corporation (CCC), is republishing this announcement to extend the application deadline for the availability of competitive grants to conduct a forest inventory analysis, forest management, and economic outcomes modelling, for certain currently enrolled Conservation Reserve Program (CRP) land. The analysis is focused on lands enrolled in CRP for at least 8 years and located in areas with a substantial concentration of acres enrolled under the following conservation practices devoted to multiple bottomland hardwood tree species: General tree planting, hardwood tree planting, vegetative cover on previously established tree stands, riparian buffers, bottomland timber establishments, and farmable and aquaculture wetlands. Qualified applicants must be non-profit organizations dedicated to conservation, forestry, and wildlife habitats that have experience in conducting accurate forest inventory analysis through the use of advanced, cost-effective technology, as determined by FSA.
Applications must be submitted in the following method:
Richard Iovanna, telephone (202) 720-5291.
When the NOFA was initially published on July 19, 2018, (83 FR 34098-34100), the application deadline was August 15, 2018. FSA is republishing the NOFA to extend the application deadline to August 25, 2018. No other changes have been made to the announcement.
Section 743 of the Consolidated Appropriations Act, 2018 (Pub. L. 115-141) requires that the USDA enter into grant agreements for forest inventory analysis, and forest management, and economic outcomes modelling of certain CRP land. Under this authority, the CCC will make available not more than $1 million in grants to non-profit organizations. The CRP Forest Inventory Analysis Pilot will be administered under the general supervision of FSA on behalf of CCC, in accordance with the provisions of 2 CFR part 200.
The CRP Forest Inventory Analysis Pilot is focused on lands enrolled in CRP for at least 8 years and located in areas with a substantial concentration of acres enrolled under certain conservation practices devoted to multiple bottomland hardwood tree species, including conservation practices for general tree planting, hardwood tree planting, vegetative cover on previously established tree stands, riparian buffers, bottomland timber establishments, and farmable and aquaculture wetlands. Qualified applicants must be non-profit organizations dedicated to conservation, forestry, and wildlife habitats that have experience in conducting accurate forest inventory analysis through the use of advanced, cost-effective technology.
Comprehensive data analysis using advanced, cost-effective technology on land enrolled in CRP with certain bottomland hardwood practices is important for several reasons. Such data will provide the FSA CRP program manager with the information needed to more effectively manage enrollment. For example, the inventory may find that
For more than 30 years under CRP, landowners have voluntarily enrolled tens of millions of farmland acres to conserve and improve soil, protect water quality, and provide wildlife habitat by establishing long-term cover, primarily grasses and trees. Landowners voluntarily enroll their lands for periods of between 10 and 15 years.
CRP cost share funding is provided to landowners who install the prescribed conservation practices. These practices can be costly and require ample investment by the landowner and technical assistance provider to ensure that the practices are appropriate and properly installed. The adequacy of the conservation plan is paramount to achieving CRP enrollment goals, especially for bottomland hardwoods.
Bottomland hardwoods are streamside forest trees—such as cottonwood, sycamore, oak, maple, ash, cypress, and tupelo—that typically grow on lands prone to flooding. Over the past 8 years, 46 States have enrolled land into CRP that is devoted to bottomland hardwood trees. Cumulative CRP bottomland hardwood tree enrollment, over the past 8 years, is just over 799,000 acres, with over 550,000 acres (69 percent) located in the States shown in Table 1.
The CRP Forest Inventory Analysis Pilot is intended to provide information and analysis needed to better inform CRP decision making associated with the following bottomland hardwood conservation and stand maintenance practices:
1. CP03—Tree Planting;
2. CP03A—Hardwood Tree Planting;
3. CP11—Vegetative Cover—Trees Already Established;
4. CP22—Riparian Buffer;
5. CP31—Bottomland Timber Establishment; and
6. CP40—Farmable Wetland Program—Aquaculture Wetland.
The inventory, analysis, and modeling must estimate, at a minimum, stand composition, stand density, basal area, and tree height using remotely sensed data (rather than data collected by visiting a site). The data will be used to generate statistically robust estimates of commercial value, economic returns, carbon sequestration, and wildlife and water quality impacts for each of the practices in at least one of the regions and states enumerated in Table 1. These estimates will identify species appropriate for bottomland CRP practices or sites, as well as forest management practices needed to maintain cover during the contract period. An accurate assessment of the model output will be conducted using ground plots.
The 2018 Consolidated Appropriations Act uses the term “non-profit organizations.” Consistent with OMB Circular A-122, the term “non-profit organization” means any corporation, trust, association, cooperative, or other organization that:
1. Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;
2. Is not organized primarily for profit; and
3. Uses its net proceeds to maintain, improve, or expand its operations.
The term “non-profit organization” excludes:
1. Colleges and universities, unless a 501(c)(3) has been established;
2. Hospitals;
3. State, local, and federally-recognized Indian tribal governments; and
4. Those non-profit organizations that are excluded from coverage under paragraph 5 of Office of Management and Budget (OMB) Circular A-122.
The term “economic outcomes modelling” as used in this NOFA, must include multiple dimensions, including, but not limited to, baseline return estimates to CRP participants (taking into account, among other items, commercial value), and returns under alternative scenarios that reflect management recommendations.
Non-profit organizations dedicated to conservation, forestry, and wildlife habitats, that have experience in conducting forest inventory analysis through the use of remote sensing data and technology are eligible to apply. Applicants must submit an application by August 25, 2018, through
Non-profit organizations may submit a combined cross-organization proposal to include work that will be coordinated across more than one organization, especially if a joint proposal creates synergies or increased efficiencies. The application may include one or more forest regions.
The result of a successful application will be a one-time grant agreement. Successful applicants will be required to sign the grant agreement with FSA, which will include reporting and recordkeeping requirements. It is possible that not all of the $1 million
FSA will evaluate applications using the evaluation criteria specified in this NOFA and on
1. Amount of funding requested;
2. Amount of funding from other parties (with sufficient documentation) that provide additional leverage, if any; for example, specifying the regions, states, practices and plots where the proposal goes beyond minimal requirements (such as by considering CP-36, long-leaf pine);
3. Sampling approach to be used;
4. Remotely sensed data to be used, including its sources and its spatial, temporal, and spectral resolution;
5. Number and relevance of metrics to be estimated and the modeling approach to be used to estimate the metrics;
6. The accuracy assessment, including sampling approach and location of ground plots following the U.S. Forest Service's Common Stand Examination protocols or those in the peer-reviewed literature; and
7. Work plan and timeline for completion by September 30, 2020.
After applicants submit applications, FSA, on behalf of CCC, will screen each application to determine whether the applicant is eligible and whether the application is complete and sufficiently responsive to the requirements specified in this NOFA. Applicants may revise their applications and re-submit them prior to the published deadline if there is sufficient time to do so. FSA will appoint an inter-agency review panel to evaluate the applications. During the evaluation period, FSA may contact an applicant to seek clarification and modification of the proposal. The resulting CRP Forest Inventory Analysis Pilot grant agreements will be between the non-profit organization(s) and FSA.
Any non-profit organization that receives a grant must commit to fully expend the awarded federal funds by September 30, 2020, with an opportunity for extension upon approval by FSA.
Successful applicants will be required to sign an agreement with FSA and provide detailed budget and schedule information. The agreement will require periodic achievement reports. The agreement will require the grantee to commit to do all of the following:
1. Perform inventory, analysis, modelling and validating, including conducting site visits and plot sampling, on the CRP enrolled acreage; and
2. Provide an accounting for the money received by the grantee.
During the term of the grant, the grantee will be required to obtain prior approval for any changes to the scope, objectives, or funding allocation of the approved agreement. Failure to obtain prior approval of such changes may be considered a violation, and in such case the grantee may be required to return all grant funds, including any funds already expended, as determined appropriate by FSA. Grantees will be required to monitor funds and report on expenditures. The grantee must certify that the CCC funds will not be used to:
1. Duplicate existing inventories, analysis, or economic modelling efforts; however, grant funds may be used to expand the prior inventories, analysis, or economic modelling efforts;
2. Pay costs of preparing a CRP Forest Inventory Analysis Pilot grant application;
3. Pay costs of the project incurred prior to the date of grant approval;
4. Fund political activities or lobbying efforts;
5. Pay any judgment or debt owed to the United States;
6. Pay for the repair of privately owned vehicles;
7. Pay for unrelated salaries, overhead, and expenses; or
8. Pay for unrelated research.
Failure of the grantee to execute a grant agreement in a timely fashion, as determined by FSA, will be construed to be a withdrawal from the CRP Forest Inventory Analysis Pilot. In this event, FSA will demand a refund of the grant funds as deemed appropriate by FSA.
FSA expects to transfer CCC funds to the selected non-profit organization applicants before September 30, 2018.
The environmental impacts of this NOFA have been considered in a manner consistent with the provisions of the National Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council on Environmental Quality (40 CFR parts 1500 through 1508), and the FSA regulations for compliance with NEPA (7 CFR part 799).
The purpose of the grants for the CRP Forest Inventory Analysis Pilot is to provide the CRP Program Manager with information to inform decision-making about the effectiveness of certain conservation practices on CRP land for bottomland hardwoods and are passive in nature and will not involve ground disturbance or tree removals or disturbance. The discretionary aspects of the CRP Forest Inventory Analysis Pilot include, but are not limited to, eligibility, how many grants to award, and how to evaluate submissions. As such, the Categorical Exclusions in 7 CFR 799.31 apply, specifically 7 CFR 799.31(b)(6)(vii) and (viii) (these two categorical exclusions include site characterization, environmental testing, and monitoring where no significant alteration of existing ambient conditions would occur; and, stand analysis for forest management planning, respectively). No “Extraordinary circumstances” (7 CFR 799.33) exist; as such, FSA has determined that this NOFA does not constitute a major Federal action that would significantly affect the quality of the human environment, individually or cumulatively. Therefore, beyond this Environmental Review in this NOFA, FSA will not prepare any additional environmental documentation for this action.
The CRP Forest Inventory Analysis Pilot is exempt from the requirements of the Paperwork Reduction Act (44 U.S.C. Chapter 35), as amended, as specified in subsection 1601(c)(2)(B) of the Agricultural Act of 2014 (the 2014 Farm Bill, 16 U.S.C. 3846(b)), which provides that CRP, as a Title II program, be promulgated and administered without regard to the Paperwork Reduction Act.
The title and number of the Federal assistance in the Catalog of Federal Domestic Assistance to which this NOFA applies is 10.122, the Conservation Reserve Program (CRP) Forest Inventory Analysis Pilot.
Food and Nutrition Service (FNS), USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on this proposed information collection. This collection is a new information collection for the voluntary collection of summer meal site information from State agencies.
Written comments must be received on or before October 9, 2018.
Comments may be sent to: Community Meals Branch, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 1200, Alexandria, VA 22302. Comments may also be submitted via fax to the attention of Andrea Farmer at 703-305-6294 or via email to
All responses to this notice will be summarized and included in the request for Office of Management and Budget approval. All comments will be a matter of public record.
Requests for additional information or copies of this information collection should be directed to Andrea Farmer at 703-305-2590.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions that were 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 those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
This data collection was originally part of OMB control number 0584-0474 National Hunger Clearinghouse Database Forms and now has been transferred to Child Nutrition in order to improve efficiency under form number FNS-905 and a new OMB control number (0584-XXXX) Summer Food Site Locations for State Agencies.
The Form FNS-905: Summer Food Site Locations for State Agencies is the instrument used to voluntarily collect information from State agencies about approved summer meal sites for the Summer Food Service Program and the Seamless Summer Option of the National School Lunch Program. The form collects site name, location, and operating details, such as dates and times of the day that the sites are in operation, that provide summer meals to children 18 years and younger in low income communities during the summer. The Form FNS-905 may only be completed by State agencies as Summer Sites must be approved by the State agencies before being made public.
The Form FNS-905 is part of requirements found in statute in Section 26 of the National School Lunch Act (NLSA), which mandates that the Food and Nutrition Service (FNS) enter into a contract with a nongovernmental organization to develop and maintain a national information clearinghouse of grassroots organizations working on hunger, food, nutrition, and other agricultural issues, including food recovery, food assistance and self-help activities to aid individuals to become self-reliant, and other activities that empower low-income individuals.
The Form FNS-543, originally developed to satisfy this statutory requirement, collects information and resources to help build the capacity of emergency food providers to address the immediate needs of struggling families and individuals while promoting self-reliance and access to healthy food. The Form FNS-543a was submitted as an addendum to Form FNS-543. The Form FNS-543 collects information directly from organizations providing other types of assistance; however, the information collected through Form FNS-543a was collected and submitted by the State agencies. Because of this, FNS decided to develop a new form to replace Form FNS-543a. Form FNS-905 was developed for this purpose and may only be submitted by State agencies. The Form FNS-905 collects information about approved summer meal sites. The information from both of these forms populates the National Hunger Clearinghouse, which is a resource for the public to find information about the food safety net.
FNS will also provide this information for individuals to find meals for children when school is out, and for groups that assist these low income individuals or communities to find meals for children in the summer. The information provides an innovative way to connect families to meals during the summer months, and assists communities in the development, coordination, and evaluation of strategic initiatives, partnership, and outreach activities.
Forest Service, USDA.
Notice of availability.
In accordance with Section 3(b) of the Wild and Scenic Rivers Act, the USDA Forest Service, Washington Office, transmitted the final boundary of the Ontonagon National Wild and Scenic River to Congress.
Information may be obtained by contacting the Ottawa National Forest, E6248 US 2; Ironwood, MI; 49938; (906)-932-1330.
The Ontonagon Wild and Scenic River boundary is available for review at the following offices: USDA Forest Service, Lands, Yates Building, 14th and Independence Avenues SW, Washington, DC 20024; Eastern Region, 626 East Wisconsin Ave., Milwaukee, WI, 53202; and, Ottawa National Forest, E6248 US 2, Ironwood, MI, 49938.
The Michigan Scenic Rivers Act of 1991, Public Law 102-249, March 3, 1992, designated the Ontonagon River, Michigan, as a National Wild and Scenic River, to be administered by the Secretary of Agriculture. The USDA Forest Service transmitted the final boundary to Congress on March 2, 2017. As specified by law, the boundary became effective ninety days after Congress received the transmittal.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Brenda E. Brown, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-4735.
Each year during the anniversary month of the publication of an antidumping or countervailing duty order, finding, or suspended investigation, an interested party, as defined in section 771(9) of the Tariff Act of 1930, as amended (the Act), may request, in accordance with 19 CFR 351.213, that the Department of Commerce (Commerce) conduct an administrative review of that antidumping or countervailing duty order, finding, or suspended investigation.
All deadlines for the submission of comments or actions by Commerce discussed below refer to the number of calendar days from the applicable starting date.
In the event Commerce limits the number of respondents for individual examination for administrative reviews initiated pursuant to requests made for the orders identified below, Commerce intends to select respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports during the period of review. We intend to release the CBP data under Administrative Protective Order (APO) to all parties having an APO within five days of publication of the initiation notice and to make our decision regarding respondent selection within 21 days of publication of the initiation
In the event Commerce decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, Commerce finds that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that requests a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that Commerce may extend this time if it is reasonable to do so. Determinations by Commerce to extend the 90-day deadline will be made on a case-by-case basis.
In accordance with 19 CFR 351.213(b), an interested party as defined by section 771(9) of the Act may request in writing that the Secretary conduct an administrative review. For both antidumping and countervailing duty reviews, the interested party must specify the individual producers or exporters covered by an antidumping finding or an antidumping or countervailing duty order or suspension agreement for which it is requesting a review. In addition, a domestic interested party or an interested party described in section 771(9)(B) of the Act must state why it desires the Secretary to review those particular producers or exporters. If the interested party intends for the Secretary to review sales of merchandise by an exporter (or a producer if that producer also exports merchandise from other suppliers) which was produced in more than one country of origin and each country of origin is subject to a separate order, then the interested party must state specifically, on an order-by-order basis, which exporter(s) the request is intended to cover.
Note that, for any party Commerce was unable to locate in prior segments, Commerce will not accept a request for an administrative review of that party absent new information as to the party's location. Moreover, if the interested party who files a request for review is unable to locate the producer or exporter for which it requested the review, the interested party must
As explained in
Commerce no longer considers the non-market economy (NME) entity as an exporter conditionally subject to an antidumping duty administrative reviews.
All requests must be filed electronically in Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS) on Enforcement and Compliance's ACCESS website at
Commerce will publish in the
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period of the order, if such a gap period is applicable to the period of review.
This notice is not required by statute but is published as a service to the international trading community.
Office of National Marine Sanctuaries (ONMS), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Notice of availability.
The National Oceanic and Atmospheric Administration (NOAA) has prepared four draft programmatic environmental assessments for the proposed continuation of field operations for each region of sites managed by the Office of National Marine Sanctuaries. The field operations support resource protection, research and education objectives as mandated by the National Marine Sanctuaries Act and as described in site-specific management plans. In each PEA, NOAA analyzes the potential effects on the human environment of two alternatives to implement field operations in the subject region. NOAA is soliciting public comment on the four regional draft programmatic environmental assessments.
Comments on these draft programmatic environmental assessments will be considered if received by September 21, 2018.
You may submit comments on these documents, identified by NOAA-NOS-2018-XXXX, by any of the following methods:
Helene Scalliet, Policy and Planning Division, Office of National Marine Sanctuaries at 240-533-0648 or via email at
NOAA's Office of National Marine Sanctuaries (ONMS) serves as the trustee for a network of underwater parks encompassing more than 600,000 square miles of marine and Great Lakes waters. The network includes a system of 13 national marine sanctuaries and Papahānaumokuākea and Rose Atoll marine national monuments. The National Marine Sanctuaries Act (NMSA; 16 U.S.C. 1431
Within the context of the ONMS management plans, field operations are an important component of implementing many of the actions necessary to support resource protection, research and education activities. The management plans also contain information relevant to these draft regional programmatic environmental assessments (PEAs) such as background about each sanctuary environment and its resources.
NOAA has prepared four draft PEAs for the proposed continuation of field operations described in management plans for each site managed by the Office of National Marine Sanctuaries. There is a draft PEA for each of the following regions: West Coast, Pacific Islands, Northeast/Great Lakes, and Southeast/Gulf of Mexico. The purpose of the underlying field operations analyzed in the draft PEAs is to support resource protection, research and education objectives as mandated by the National Marine Sanctuaries Act and as described in site-specific management plans. Field operations in ONMS-managed sites fall under 10 categories: vessel operations; vessel maintenance; aircraft operations; non-motorized craft operations; SCUBA or snorkel operations; onshore field work; deployment of autonomous underwater vehicles (AUVs)/remotely operated vehicles (ROVs)/gliders/drifters; deployment of remote sensing equipment; deployment of equipment on the seafloor; and other sampling activities. The four regional draft PEAs describe in detail the field operations taking place at each site in the next five years as well as their environmental impacts on the physical, biological, socioeconomic, maritime heritage and cultural environment.
In these documents, NOAA analyzes the potential effects of two alternatives to implement the proposed action. NOAA also intends to use these four draft PEAs as the basis for compliance under the Marine Mammal Protection Act, Endangered Species Act, Magnuson-Stevens Act, National Historic Preservation Act, and Coastal Zone Management Act. NOAA intends to finalize any necessary compliance requirements for these statutes prior to finalizing this action.
16 U.S.C. 1431
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting (webinar).
The Pacific Fishery Management Council's (Pacific Council) Ad Hoc Ecosystem Workgroup (EWG) will hold a meeting via webinar, which is open to the public.
The webinar meeting will be held on Tuesday, August 21, 2018, from 1:30 p.m. to 3:30 p.m. (Pacific Daylight Time) or until business for the day has been completed.
The meeting will be held via webinar. A public listening station is available at the Pacific Council office (address below). To attend the webinar (1) join by visiting this link
Dr. Kit Dahl, Pacific Council; telephone: (503) 820-2422.
The EWG is holding this webinar to help other Council advisory bodies and the public prepare comments on two topics the Council will take up at its September 7-12, 2018 meeting. First, the Council will be deciding on future activities as part of the Climate and Communities Initiative pursuant to its Fishery Ecosystem Plan (FEP). Second, the Council will be scoping the first 5-year review of the FEP. The Council may consider initiating revisions to FEP and forming any new ad hoc committees necessary to revise the Plan. To help advisory bodies and the public make comments on these topics the EWG prepared two sets of discussion questions, available on the Council's website (
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt, (503) 820-2411, at least 10 business days prior to the meeting date.
Department of the Army, U.S. Army Corps of Engineers, DoD.
Notice; extension of public comment deadline.
The comment period for the Availability of the Final Environmental Impact Statement for the Northern Integrated Supply Project, Larimer and Weld Counties, Colorado published in the
John Urbanic, NISP EIS Project Manager, telephone 303-979-4120, fax at 303-979-0602, or email at
None.
Department of the Army, U.S. Army Corps of Engineers, DoD.
Notice.
The U.S. Army Corps of Engineers, Fort Worth District, Regulatory Division is notifying interested parties that it has withdrawn the Notice of Intent (NOI) to develop an EIS for the proposed Cedar Ridge Reservoir. The original NOI to Prepare an EIS was published in the
Questions regarding the withdrawal of this NOI should be addressed to Mr. Frederick Land, Regulatory Division (CESWF-DE-R), Fort Worth District, U.S. Army Corps of Engineers, P.O. Box 17300, Fort Worth, TX 76102-0300; (817) 886-1729;
On March 20, 2018, the Office of Management and Budget (OMB) and the Council on Environmental Quality (CEQ) issued an OMB/CEQ Memorandum for Heads of Federal Departments and Agencies titled “One Federal Decision Framework for the Environmental Review and Authorization Process for Major Infrastructure Projects under Executive Order [E.O.] 13807.” Additionally, twelve federal agencies, including Department of the Army, signed a Memorandum of Understanding (MOU) as an appendix to the OMB/CEQ Memorandum. The MOU is titled “Memorandum of Understanding Implementing One Federal Decision Under Executive Order 13807” and was effective on April 10, 2018. E.O. 13807 sets a goal for agencies of reducing the time for completing environmental reviews and authorization decisions to an agency average of not more than two years from publication of a NOI to prepare an EIS. The MOU set forth activities to be accomplished before the issuance of an NOI, including project prescoping, the development of a permitting timetable, and the development of project Purpose and Need. Because the Cedar Ridge Reservoir planning had not reached these milestones prior to publication of the NOI, the NOI is being withdrawn until such time that these milestones are complete.
Department of the Navy, DoD.
Notice.
The Department of the Navy (DoN) announces the availability of the inventions listed below, assigned to the United States Government, as represented by the Secretary of the Navy, for domestic and foreign licensing by the Department of the Navy.
Requests for copies of the patents cited should be directed to Naval Surface Warfare Center, Crane Div., Code OOL, Bldg. 2, 300 Highway 361, Crane, IN 47522-5001.
Mr. Christopher Monsey, Naval Surface Warfare Center, Crane Div., Code OOL, Bldg. 2, 300 Highway 361, Crane, IN 47522-5001, email
The following patents are available for licensing: Patent No. 10,012,457 (Navy Case No. 200367): TAKE-DOWN COMPACT PRECISION RIFLE//Patent No. 10,036,800 (Navy Case No. 103387): SYSTEMS AND METHODS FOR USING COHERENT NOISE FILTERING//and Patent No. 10,037,498 (Navy Case No. 100130): PROJECT MANAGEMENT SYSTEM AND METHOD.
35 U.S.C. 207, 37 CFR part 404
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
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d.
e.
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h.
i.
j.
The Commission strongly encourages electronic filing. Please file motions to intervene and protests using the Commission's eFiling system at
The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application has been accepted, but is not ready for environmental analysis at this time.
l. The project consists of the following existing facilities:
(1) A 14-foot-high, 250-foot-long rock masonry gravity dam impounding Swan Lake with a surface area of approximately 1,364 acres at an elevation of 201 feet above sea level; (2) a concrete inlet structure; (3) three 3.5-foot-high, 4-foot-wide manually operated butterfly gates that regulate flow through the inlet structure; (4) two culverts the convey flow under Route 141; and (5) appurtenant facilities.
(1) A 15-foot-high, 86-foot-long rock masonry dam impounding a reservoir with a storage capacity of approximately 1,621 acre-feet at an elevation of 188 feet above sea level; (2) a concrete inlet structure; (3) a manually operated butterfly gate regulating flow from the inlet structure to the penstock; (4) a 3-foot-diameter, 350-foot-long steel penstock; (5) a 266-square-foot concrete powerhouse containing two Kaplan turbines and generating units with a licensed capacity of 75 kW; (6) a 300-foot-long, 12-kilovolt (kV) transmission line and (7) appurtenant facilities.
(1) A 15-foot-high, 135-foot-long masonry gravity dam impounding a reservoir with a storage capacity of approximately 200 acre-feet at an elevation of approximately 159 feet above sea level; and (2) three 3-foot-high, 4-foot-wide manually operated butterfly gates.
(1) A 6-foot-tall, 70-foot-wide masonry dam impounding a reservoir with a storage capacity of approximately 7 acre-feet at an elevation of approximately 128 feet above sea level; (2) a concrete inlet structure; (3) a trash sluice with wooden stop logs; (4) a powerhouse containing a Francis-type turbine and generator unit with a licensed capacity of 94 kW; and (5) an approximately 100-foot-long, 12-kV transmission line. The penstock used to deliver water to the powerhouse has been removed due to deterioration and subsequent leakage; thus, the powerhouse is not operating.
(1) A 21-foot-high, 231-foot-long buttress dam impounding a reservoir with a storage capacity of approximately 72 acre-feet at an elevation of approximately 109 feet above sea level; (2) a manually operated low-level water release lift gate; (3) a manually operated lift gate regulating flow to the penstock; (4) a 5-foot-diameter, 1,200-foot-long steel penstock; (5) a 300-square-foot concrete and timber powerhouse with a Kaplan-type turbine and generator unit with a licensed capacity of 200 kW; and (6) an approximately 500-foot-long, 12-kV transmission line. The penstock used to deliver water to the powerhouse is currently out of service due to damage, deterioration, and subsequent leakage; thus, the powerhouse is not operating.
m. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
You may also register online at
n. Anyone may submit a protest or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210, 385.211, and 385.214. In determining the appropriate action to take, the Commission will consider all protests filed, but only those who file a motion to intervene in accordance with the Commission's Rules may become a party to the proceeding. Any protests or motions to intervene must be received on or before the specified deadline date for the particular application.
All filings must (1) bear in all capital letters the title PROTEST or MOTION TO INTERVENE; (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person protesting or intervening; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. Agencies may obtain copies of the application directly from the applicant. A copy of any protest or motion to intervene must be served upon each representative of the applicant specified in the particular application.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Description: § 205(d) Rate Filing: 1875R3 Kansas Electric Power Cooperative, Inc. NITSA and NOA to be effective 7/31/2018.
Description: § 205(d) Rate Filing: 2018-07-27_SA 3134 Entergy Texas-Liberty County Solar Project GIA (J483) to be effective 7/13/2018.
Description: § 205(d) Rate Filing: AEPTX-Pedernales Electric Cooperative TSA Amend & Restated to be effective 6/1/2018.
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 intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on July 31, 2018, NextEra Desert Center Blythe, LLC on behalf of itself, Southern California Edison Company, and California Independent System Operator Corporation submitted an offer of settlement intended to resolve all issues in the above-captioned proceeding.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Comment Date: 5:00 p.m. Eastern Time on August 21, 2018.
Take notice that on July 19, 2018, Florida Gas Transmission, LLC (FGT), 1300 Main St., Houston, Texas 77002, filed in Docket No. CP18-530-000 a prior notice request pursuant to sections 157.205, 157.208, 157.210 and 157.211 of the Commission's regulations under the Natural Gas Act (NGA), requesting authorization to construct/modify, own, maintain and operate, certain natural gas mainline facilities and appurtenances in Santa Rosa County, Florida, and modify an existing delivery point, in Escambia County, Alabama for its South Alabama Project. FGT's South Alabama Project would provide up to 60,000 million British thermal units per day of firm transportation service to two shippers, all as more fully set forth in the application which is on file with the Commission and open to public inspection. FGT estimates the cost of the proposed project to be approximately $7,000,000. The filing may also be viewed on the web at
Any questions concerning this application may be directed to Blair Lichtenwalter, Senior Director of Certificates, Florida Gas Transmission Company, LLC, 1300 Main St., Houston, Texas 77002, or call (713) 989-2605, or fax (713) 989-1205, or via eMail to
Any person or the Commission's staff may, within 60 days after issuance of the instant notice by the Commission, file pursuant to Rule 214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to intervene or notice of intervention and pursuant to section 157.205 of the regulations under the NGA (18 CFR 157.205), a protest to the request. If no protest is filed within the time allowed therefore, the proposed activity shall be deemed to be authorized effective the day after the time allowed for filing a protest. If a protest is filed and not withdrawn within 30 days after the allowed time for filing a protest, the instant request shall be treated as an application for authorization pursuant to section 7 of the NGA.
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's EA.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenter's will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenter's will not be required to serve copies of filed documents on all other parties. However, the non-party commentary, will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the eFiling link at
This is a supplemental notice in the above-referenced proceeding of Minco Wind IV, 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 August 16, 2018.
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 website 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 Minco Wind V, 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 August 16, 2018.
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 website 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
Environmental Protection Agency (EPA).
Notice; extension of comment period.
EPA issued a notice in the
Comments, identified by docket identification (ID) numbers identified in Table 1, must be received on or before August 16, 2018.
Follow the detailed instructions provided under
This document extends the public comment period for certain chemicals established in the
Although the comment periods will end on August 16, 2018, EPA will try to consider any additional comments received after this date. However, given the need to peer review the draft risk evaluations, the peer reviewers may not receive public comments submitted late. There will be an additional comment period following the publication of each of the draft risk evaluations.
To submit comments, or access the docket, please follow the detailed instructions provided under
15 U.S.C. 2601
The following item has been deleted from the list of items scheduled for consideration at the Thursday, August 2, 2018, Open Meeting and previously listed in the Commission's Notice of July 26, 2018.
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 (OMB No. 3064-0151).
Comments must be submitted on or before October 9, 2018.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
•
•
•
•
All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.
Jennifer Jones, Counsel, 202-898-6768,
1.
Section 7(e)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1817(e)(3)) (FDI Act), as amended by the Federal Deposit Insurance Reform Act of 2005, requires that the FDIC provide by regulation an initial, one-time assessment credit to each “eligible” insured depository institution (or its successor) based on the assessment base of the institution as of December 31, 1996, as compared to the combined aggregate assessment base of all eligible institutions as of that date, taking into account such other factors as the FDIC Board of Directors determines to be appropriate. The one-time credits must, with certain exceptions, be applied by the FDIC to the maximum extent allowed by law to the assessments imposed on such institution that become due for assessment periods beginning after the effective date of the one-time credit regulations until such time as the credit is exhausted. For assessments that become due for assessment periods beginning in fiscal years 2008, 2009, and 2010, the FDI Act provides that credits may not be applied to more than 90 percent of an institution's assessment.
FDIC-insured institutions must notify the FDIC if their one-time assessment credit is transferred,
There is no change in the method or substance of the collection and the burden remains unchanged from the previous Paperwork Reduction Act submission.
Notice is hereby given that the Federal Deposit Insurance Corporation (FDIC or Receiver) as Receiver for the institution listed below intends to terminate its receivership for said institution.
The liquidation of the assets for the receivership has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors.
Based upon the foregoing, the Receiver has determined that the continued existence of the receivership will serve no useful purpose. Consequently, notice is given that the receivership shall be terminated, to be effective no sooner than thirty days after the date of this notice. If any person wishes to comment concerning the termination of the receivership, such comment must be made in writing, identify the receivership to which the comment pertains, and sent within thirty days of the date of this notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of this receivership will be considered which are not sent within this time frame.
The Federal Deposit Insurance Corporation (FDIC or Receiver), as Receiver for each of the following insured depository institutions, was
The Receiver has further irrevocably authorized and appointed FDIC-Corporate as its attorney-in-fact to execute and file any and all documents that may be required to be executed by the Receiver which FDIC-Corporate, in its sole discretion, deems necessary, including but not limited to releases, discharges, satisfactions, endorsements, assignments, and deeds. Effective on the termination dates listed above, the Receiverships have been terminated, the Receiver has been discharged, and the Receiverships have ceased to exist as legal entities.
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 September 4, 2018.
1.
1.
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request entitled
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) 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;
(b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) 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,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570 or send an email to
Strengthening U.S. Response to Resistant Gonorrhea (SURRG)—New—National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention (NCHHSTP), Centers for Disease Control and Prevention (CDC).
The purposes of Strengthening U.S. Response to Resistant Gonorrhea (SURRG) are to: (1) Improve national capacity to detect, monitor, and respond to emerging antibiotic-resistant gonorrhea, (2) understand trends in, and factors contributing to antibiotic-resistant gonorrhea, and (3) build a robust evidence base for public health action. This information collection is important because: (1) Effective treatment of gonorrhea is critical to gonorrhea control and prevention; (2) untreated or inadequately treated gonorrhea can cause serious reproductive health complications, such as infertility; (3)
SURRG will support rapid detection of resistant gonorrhea and get actionable information into the hands of healthcare providers (to support appropriate treatment of individual patients) and local health departments (to support rapid public health response to slow the spread of resistant infections).
Jurisdictions participating in SURRG applied, as part of a competitive process, and will participate voluntarily. As an overview of SURRG, healthcare providers at participating clinics (sexually transmitted disease [STD] clinics affiliated with a single public health department or other participating non-STD clinic sites) will collect specimens for
Under the SURRG protocol, the local SURRG data managers from each of the funded jurisdictions will abstract STD clinic data for patients tested for gonorrhea, receive data from non-STD clinic healthcare sites about persons tested for gonorrhea, receive resistance testing laboratory results from local public health laboratories, abstract data about field investigations, and will merge the data. Every two months, the local SURRG data manager will clean the data, remove personally identifiable information, and transmit the data to CDC. We estimate these data processes will take 16 hours every two months. Annually, the local SURRG data manager will send a final cumulative data file. Seven data transmissions/responses will occur.
Every two months, data managers at each of the participating non-STD clinic health centers will abstract and clean data and securely transmit the data to the local SURRG data manager. We estimate that it will take 3 hours each time data managers at each non-STD SURRG location abstract, clean, and transmit SURRG data.
Microbiologists at public health laboratories from each of the nine SURRG funded jurisdictions will conduct antibiotic resistance testing on all
Health department staff will interview any person diagnosed with antibiotic-resistant gonorrhea or having a case of gonorrhea of public health significance index case, a diagnosed person's social and sexual contacts, and the sexual contacts of the index case's sexual contacts.
On average, each jurisdiction will identify four drug-resistant isolates each month. These isolates will spur field investigations, which will result in six additional interviews each month. We estimate 120 interviews will occur annually at each site (annual 1,080 interviews for the nine sites). Each interview will take 30 minutes.
The total estimated annual burden hours are 2,976. Respondents receive federal funds to participate in this project. There are no additional costs to respondents other than their time.
Centers for Medicare & Medicaid Services, Department of Health and Human Services.
Notice of a new matching program.
In accordance with the Privacy Act of 1974, as amended, the Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) is providing notice of a re-established matching program between CMS and the Social Security Administration (SSA), “Determining Enrollment or Eligibility for Insurance Affordability Programs Under the Patient Protection and Affordable Care Act (ACA).” The matching program provides CMS with SSA data to use in determining individuals' eligibility to enroll in a qualified health plan through an exchange established under the ACA and for insurance affordability programs and certificates of exemption, and to make eligibility redeterminations and renewals, including appeal determinations.
The deadline for comments on this notice is September 6, 2018. The re-established matching program will commence not sooner than 30 days after publication of this notice, provided no comments are received that warrant a change to this notice. The matching program will be conducted for an initial term of 18 months (from approximately September 2018 to March 2020) and within 3 months of expiration may be renewed for one additional year if the parties make no change to the matching program and certify that the program has been conducted in compliance with the matching agreement.
Interested parties may submit written comments on this notice, by mail or email, to the CMS Privacy Officer, Division of Security, Privacy Policy & Governance, Information Security & Privacy Group, Office of Information Technology, Centers for Medicare & Medicaid Services, Location: N1-14-56, 7500 Security Blvd., Baltimore, MD 21244-1850,
If you have questions about the matching program, you may contact Jack Lavelle, Senior Advisor, Marketplace Eligibility and Enrollment Group, Centers for Consumer Information and Insurance Oversight, CMS, at (410) 786-0639, or by email at
The Privacy Act of 1974, as amended (5 U.S.C. 552a) provides certain protections for individuals applying for and receiving Federal benefits. The law governs the use of computer matching by Federal agencies when records in a system of records (meaning, federal agency records about individuals retrieved by name or other personal identifier) are matched with records of other federal or non-federal agencies. The Privacy Act requires agencies involved in a matching program to:
1. Enter into a written agreement, which must be prepared in accordance with the Privacy Act, approved by the Data Integrity Board of each source and recipient Federal agency, provided to Congress and the Office of Management and Budget (OMB), and made available to the public, as required by 5 United States Code (U.S.C.) 552a(o), (u)(3)(A), and (u)(4).
2. Notify the individuals whose information will be used in the matching program that the information they provide is subject to verification through matching, as required by 5 U.S.C. 552a(o)(1)(D).
3. Verify match findings before suspending, terminating, reducing, or making a final denial of an individual's benefits or payments or taking other adverse action against the individual, as required by 5 U.S.C. 552a(p).
4. Report the matching program to Congress and the OMB, in advance and annually, as required by 5 U.S.C. 552a(o)(2)(A)(i), (r), and (u)(3)(D).
5. Publish advance notice of the matching program in the
This matching program meets these requirements.
Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) is the recipient agency, and the Social Security Administration (SSA) is the source agency.
The matching program is authorized under 42 U.S.C. 18001.
The purpose of the matching program is to provide CMS with SSA data that CMS needs to determine individuals' eligibility to enroll in a qualified health plan through an exchange established under the ACA and for insurance affordability programs and certificates of exemption, and to make eligibility redetermination and renewal decisions, including appeal determinations. The
The categories of individuals whose information is involved in the matching program are consumers who apply for any of the following eligibility determinations, and other relevant individuals (
The categories of records used in the matching program are identity, citizenship, birth, death, disability coverage and income, and imprisonment status records. The data elements are as follows:
1. For each applicant and for relevant individuals, CMS will submit a request file to SSA that contains the following mandatory specified data elements in a fixed record format: Last name, first name, date of birth, social security number (SSN), and citizenship indicator.
2. For each applicant, SSA will provide CMS with a response file in a fixed record format. Depending on CMS' request, SSA's response may include the following data elements: Last name, first name, date of birth, death indicator, disability indicator, prisoner information, Title II (annual and monthly) income information, and confirmation of attestations of citizenship status and SSN. SSA may also provide QC data when CMS requests it.
3. For relevant individuals, CMS will request a limited amount of SSA information. Based on CMS' request, SSA will verify a relevant individual's SSN with a death indicator and may provide a relevant individual's QC data or Title II (annual and monthly) income information. CMS will not request citizenship or immigration status data for a relevant individual.
4. For renewals and redeterminations, CMS will request and SSA will verify SSN with a death indicator, disclose Title II income information, and provide the disability indicator.
5. For self-reported redeterminations, CMS will provide SSA with the following: Updated or new information reported by the enrollee or enrolled individual, last name, first name, date of birth, and SSN. Depending on CMS' request, SSA's response will include each of the following data elements that are relevant and responsive to CMS' request: Last name, first name, date of birth, death indicator, disability indicator, prisoner information, Title II (annual and monthly) income information, and confirmation of new attestations of citizenship status, verification of SSN, and QC data.
6. For individuals seeking an exemption, CMS will provide last name, first name, date of birth, citizenship indicator, and SSN to SSA. SSA will provide CMS with a response including: Last name, first name, date of birth, confirmation of attestations of citizenship status, verification of SSN, death indicator, disability indicator, prisoner information, and Title II (annual and monthly) income information.
The records used in this matching program are disclosed from the following systems of records, as authorized by routine uses published in the System of Records Notices (SORNs) cited below:
☐ The CMS SOR that supports this matching program is the “CMS Health Insurance Exchanges System (HIX)”, CMS System No. 09-70-0560, last published in full at 78 FR 63211 (October 23, 2013), as amended at 83 FR 6591 (February 14, 2018).
☐ Master Files of SSN Holders and SSN Applications, 60-0058, 75 FR 82121 (Dec. 29, 2010), as amended at 78 FR 40542 (July 5, 2013), and 79 FR 8780 (Feb. 13, 2014);
☐ Prisoner Update Processing System (PUPS), 60-0269, 64 FR 11076 (Mar. 8, 1999), as amended at 72 FR 69723 (Dec. 10, 2007) and 78 FR 40542 (July 5, 2013);
☐ Master Beneficiary Record, 60-0090, 71 FR 1826 (Jan. 1, 2006), as amended at 72 FR 69723 (Dec. 10, 2007) and 78 FR 40542 (July 5, 2013); and
☐ Earnings Recording and Self-Employment Income System, 60-0059, 71 FR 1819 (Jan. 11, 2006), as amended at 78 FR 40542 (July 5, 2013).
Centers for Medicare and Medicaid Services (CMS), HHS.
Notice with request for comment.
This proposed notice acknowledges the receipt of an application from the National Dialysis Accreditation Commission (NDAC) for recognition as a national accrediting organization (AO) for End Stage Renal Disease (ESRD) Facilities that wish to participate in the Medicare or Medicaid programs.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on September 6, 2018.
In commenting, refer to file code CMS-3366-PN. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
Tara Lemons, (410) 786-3030, Monda Shaver, (410) 786-3410, or Marie Vasbinder, (410) 786-8665.
Under the Medicare program, eligible beneficiaries may receive covered services from an end-stage renal disease (ESRD) facility provided the facility meets the requirements established by the Secretary of the Department of Health and Human Services (Secretary). Section 1881(b) of the Social Security Act (the Act) establishes distinct requirements for facilities seeking designation as an ESRD facility under Medicare. Regulations concerning provider agreements and supplier approval are at 42 CFR part 489 and those pertaining to activities relating to the survey, certification, and enforcement procedures of suppliers which include ESRD facilities are at 42 CFR part 488. The regulations at 42 CFR part 494 subparts A through D implement section 1881(b) of the Act, which specify the conditions that an ESRD facility must meet in order to participate in the Medicare program and the conditions for Medicare payment for ESRD facilities.
Generally, to enter into a Medicare agreement, an ESRD facility must first be certified by a State survey agency as complying with the conditions or requirements set forth in part 494 subparts A through D of our Medicare regulations. Thereafter, the ESRD facility is subject to regular surveys by a State survey agency to determine whether it continues to meet these requirements.
Section 1865(a)(1) of the Act provides that, if a provider entity demonstrates through accreditation by a Centers for Medicare & Medicaid Services (CMS) approved national accrediting organization (AO) that all applicable Medicare conditions are met or exceeded, we may deem those provider entities as having met the requirements. Section 1865(a)(1) of the Act had historically prohibited dialysis facilities from participating in Medicare via a CMS-approved accreditation program; however, section 50403 of the Bipartisan Budget Act of 2018 amended section 1865(a) of the Act to include renal dialysis facilities as provider entities allowed to participate in Medicare through a CMS-approved accreditation program. Accreditation by an AO is voluntary and is not required for Medicare participation.
If an AO is recognized by the Secretary as having standards for accreditation that meet or exceed Medicare requirements, any provider entity accredited by the national accrediting body's approved program may be deemed to meet the Medicare conditions. An AO applying for approval of its accreditation program under part 488, subpart A, must provide CMS with reasonable assurance that the AO requires the accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning the approval of AOs are set forth at § 488.5.
Section 1865(a)(2) of the Act and our regulations at § 488.5 require that our findings concerning review and approval of an AO's requirements consider, among other factors, the applying AO's requirements for accreditation; survey procedures; resources for conducting required surveys; capacity to furnish information for use in enforcement activities; monitoring procedures for provider entities found not in compliance with the conditions or requirements; and ability to provide CMS with the necessary data for validation.
Section 1865(a)(3)(A) of the Act further requires that we publish, within 60 days of receipt of an organization's complete application, a notice identifying the national accrediting body making the request, describing the nature of the request, and providing at least a 30-day public comment period. We have 210 days from the receipt of a complete application to publish notice of approval or denial of the application.
The purpose of this proposed notice is to inform the public of National Dialysis Accreditation Commission's (NDAC) request for CMS-approval of its ESRD facility accreditation program. This notice also solicits public comment on whether NDAC's requirements meet or exceed the Medicare conditions for coverage (CfCs) for ESRD facilities.
This is the first application from a national accreditation body seeking approval of an accreditation program for ESRD facilities.
NDAC submitted all the necessary materials to enable us to make a determination concerning its request for CMS-approval of its ESRD facility accreditation program. This application was determined to be complete on June 8, 2018. Under section 1865(a)(2) of the Act and our regulations at § 488.5, our review and evaluation of NDAC will be conducted in accordance with, but not necessarily limited to, the following factors:
• The equivalency of NDAC's standards for ESRD facilities as compared with Medicare's CfCs for ESRD facilities.
• NDAC's survey process to determine the following:
++ The composition of the survey team, surveyor qualifications, and the ability of the organization to provide continuing surveyor training.
++ The comparability of NDAC's processes to those of State agencies, including survey frequency, and the ability to investigate and respond appropriately to complaints against accredited facilities.
++ NDAC's processes and procedures for monitoring an ESRD facility found out of compliance with NDAC's program requirements. These monitoring procedures are used only when NDAC identifies noncompliance. If noncompliance is identified through validation reviews or complaint surveys, the State survey agency monitors corrections as specified at § 488.9(c)(1).
++ NDAC's capacity to report deficiencies to the surveyed facilities and respond to the facility's plan of correction in a timely manner.
++ NDAC's capacity to provide CMS with electronic data and reports necessary for effective validation and assessment of the organization's survey process.
++ The adequacy of NDAC's staff and other resources, and its financial viability.
++ NDAC's capacity to adequately fund required surveys.
++ NDAC's policies with respect to whether surveys are announced or unannounced, to assure that surveys are unannounced.
++ NDAC's agreement to provide CMS with a copy of the most current accreditation survey together with any other information related to the survey as CMS may require (including corrective action plans).
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Because of the large number of public comments we normally receive on
Upon completion of our evaluation, including evaluation of comments received as a result of this notice, we will publish a final notice in the
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Opioid Use Disorder: Endpoints for Demonstrating Effectiveness of Drugs for Medication-Assisted Treatment.” This guidance addresses the clinical endpoints acceptable to demonstrate effectiveness of drugs for medication-assisted treatment of opioid use disorder. FDA is also requesting comments on when the use of placebo or active controls is most appropriate in clinical trials for such drugs.
Submit either electronic or written comments on the draft guidance by October 9, 2018 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.”
• 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
Silvana Borges, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 3200,
FDA is announcing the availability of a draft guidance for industry entitled “Opioid Use Disorder: Endpoints for Demonstrating Effectiveness of Drugs for Medication-Assisted Treatment.” This guidance addresses the clinical endpoints acceptable to demonstrate effectiveness of drugs for medication-assisted treatment of opioid use disorder. FDA is also requesting comments on when the use of placebo or active controls is most appropriate in clinical trials for such drugs.
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 endpoints for demonstrating effectiveness of drugs for medication-assisted treatment of opioid use disorder. 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 refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 312 have been approved under OMB control number 0910-0014.
Persons with access to the internet may obtain the draft guidance at either
Office of Medicare Hearings and Appeals (OMHA), HHS.
Notice.
This quarterly notice announces the reorganization and revision of the OMHA Case Processing Manual (OCPM) and lists the OCPM manual instructions that were published from April through June 2018. This manual standardizes the day-to-day procedures for carrying out adjudicative functions, in accordance with applicable statutes, regulations, and OMHA directives, and gives OMHA staff direction for processing appeals at the OMHA level of adjudication.
Amanda Axeen, by telephone at (571) 777-2705, or by email at
The Office of Medicare Hearings and Appeals (OMHA), a staff division within the Office of the Secretary within the U.S. Department of Health and Human Services (HHS), administers the nationwide Administrative Law Judge hearing program for Medicare claim, organization and coverage determination, and entitlement appeals under sections 1869, 1155, 1876(c)(5)(B), 1852(g)(5), and 1860D-4(h) of the Social Security Act (the Act). OMHA ensures that Medicare beneficiaries and the providers and suppliers that furnish items or services to Medicare beneficiaries, as well as Medicare Advantage Organizations (MAOs), Medicaid State Agencies, and applicable plans, have a fair and impartial forum to address disagreements with Medicare coverage and payment determinations made by Medicare contractors, MAOs, or Part D Plan Sponsors (PDPSs), and determinations related to Medicare eligibility and entitlement, Part B late enrollment penalty, and income-related monthly adjustment amounts (IRMAA) made by the Social Security Administration (SSA).
The Medicare claim, organization and coverage determination appeals processes consist of four levels of administrative review, and a fifth level of review with the Federal district courts after administrative remedies under HHS regulations have been exhausted. The first two levels of review are administered by the Centers for Medicare & Medicaid Services (CMS) and conducted by Medicare contractors for claim appeals, by MAOs and an independent review entity for Part C organization determination appeals, or by PDPSs and an independent review entity for Part D coverage determination appeals. The third level of review is administered by OMHA and conducted by Administrative Law Judges and attorney adjudicators. The fourth level of review is administered by the HHS Departmental Appeals Board (DAB) and conducted by the Medicare Appeals Council (Council). In addition, OMHA and the DAB administer the second and third levels of appeal, respectively, for Medicare eligibility, entitlement, Part B late enrollment penalty, and IRMAA reconsiderations made by SSA; a fourth level of review with the Federal district courts is available after administrative remedies within SSA and HHS have been exhausted.
Sections 1869, 1155, 1876(c)(5)(B), 1852(g)(5), and 1860D-4(h) of the Act are implemented through the regulations at 42 CFR part 405 subparts I and J; part 417, subpart Q; part 422, subpart M; part 423, subparts M and U; and part 478, subpart B. As noted above, OMHA administers the nationwide Administrative Law Judge hearing program in accordance with these statutes and applicable regulations. To ensure nationwide consistency in that effort, OMHA established a manual, the OMHA Case Processing Manual (OCPM). Through the OCPM, the OMHA Chief Administrative Law Judge establishes the day-to-day procedures for carrying out adjudicative functions, in accordance with applicable statutes, regulations and OMHA directives. The OCPM provides direction for processing appeals at the OMHA level of adjudication for Medicare Part A and B claims; Part C organization determinations; Part D coverage determinations; and SSA eligibility and entitlement, Part B late enrollment penalty, and IRMAA determinations.
Section 1871(c) of the Act requires that the Secretary publish a list of all Medicare manual instructions, interpretive rules, statements of policy, and guidelines of general applicability not issued as regulations at least every 3 months in the
This quarterly notice provides the specific updates to the OCPM that have
This notice lists the OCPM chapters and subjects published during the quarter covered by the notice so the reader may determine whether any are of particular interest. We expect this notice to be used in concert with future published notices. The OCPM can be accessed at
This notice lists the OCPM chapters and subjects published during the quarter covered by the notice so the reader may determine whether any are of particular interest. We expect this notice to be used in concert with future published notices. The OCPM can be accessed at
OMHA is in the process of restructuring, reorganizing, and reformatting the OCPM to make it more user friendly. As part of this ongoing process, we are drafting new OCPM chapters and revising existing OCPM chapters to conform to the new format. Previously, the OCPM contained separate divisions for each Medicare part, and most chapters were repeated in each division. New and revised chapters provide information pertaining to all appeals arising under all Medicare parts. Plain language is used where possible and guidance is provided in a user-friendly, question-and-answer format. The manual is also being revised to reflect regulatory changes made by the final rule that was published in the January 17, 2017
The OCPM is used by OMHA adjudicators and staff to administer the OMHA program. It offers day-to-day operating instructions, policies, and procedures based on statutes and regulations, and OMHA directives.
The following is a list and description of new OCPM provisions and the subject matter. For future quarterly notices, we will list only the specific updates to the list of manual provisions that have occurred in the covered 3-month period. This information is available on our website at
OMHA receives a variety of appeals, as discussed in section I above. This chapter describes when a specific OCPM provision may be read to apply to all or certain types of appeals, and describes OCPM conventions for citing to statutory, regulatory, and other applicable authorities. In addition, this chapter describes the process for updating an OCPM chapter, as well as how to determine when a revision was issued or became effective, and how to access prior versions of a chapter.
In addition, parties may seek Council review of decisions and dismissals. CMS and its contractors, or SSA, may also refer decisions and dismissals to the Council for possible own motion review. The chapter also describes actions the Council may take on an appealed or referred case, including remanding the case to OMHA.
Department of Health and Human Services.
Notice.
The Secretary is amending a Declaration pursuant to the Public Health Service Act to provide liability immunity protection for activities related to Zika virus vaccines consistent with the terms of the Declaration.
The declaration is effective as of August 1, 2018.
Robert P. Kadlec, MD, MTM&H, MS, Assistant Secretary for Preparedness and Response, Office of the Secretary, Department of Health and Human Services, 200 Independence Avenue SW, Washington, DC 20201; Telephone: 202-205-2882.
The Public Readiness and Emergency Preparedness Act (PREP Act) authorizes the Secretary of Health and Human Services (the Secretary) to issue a Declaration to provide liability immunity to certain individuals and entities (Covered Persons) against any claim of loss caused by, arising out of, relating to, or resulting from the administration or use of medical countermeasures (Covered Countermeasures), except for claims that meet the PREP Act's definition of willful misconduct. The Secretary may, through publication in the
The PREP Act was enacted on December 30, 2005, as Public Law 109-148, Division C, Section 2. It amended the Public Health Service (PHS) Act, adding Section 319F-3, which addresses liability immunity, and Section 319F-4, which creates a compensation program. These sections are codified in the U.S. Code as 42 U.S.C. 247d-6d and 42 U.S.C. 247d-6e, respectively.
The Pandemic and All-Hazards Preparedness Reauthorization Act (PAHPRA), Public Law 113-5, was enacted on March 13, 2013. Among other things, PAHPRA added sections 564A and 564B to the Federal Food, Drug & Cosmetic (FD&C) Act to provide new authorities for the emergency use of approved products in emergencies and products held for emergency use. PAHPRA accordingly amended the definitions of “Covered Countermeasures” and “qualified pandemic and epidemic products” in Section 319F-3 of the Public Health Service Act (PREP Act provisions), so that products made available under these new FD&C Act authorities could be covered under PREP Act Declarations. PAHPRA also extended the definition of qualified pandemic and epidemic products that may be covered under a PREP Act Declaration to include products or technologies intended to enhance the use or effect of a drug, biological product, or device used against the pandemic or epidemic or against adverse events from these products. Zika virus is a mosquito-borne flavivirus that usually causes mild symptoms but has been determined to cause microcephaly and other severe brain abnormalities in fetuses and infants born to women infected with Zika virus before birth. Zika virus has also been associated with other adverse pregnancy outcomes, including miscarriage, stillbirth, and congenital Zika syndrome, and is linked to Guillain-Barre Syndrome. Beginning in 2015, Brazil experienced the largest outbreak of disease caused by Zika infection since its discovery in Uganda in 1947. On February 1, 2016, the World Health Organization (WHO) determined that microcephaly cases and other neurologic disorders reported in Brazil constituted a Public Health Emergency of International Concern (PHEIC) in accordance with the International Health Regulations (IHR). Since 2015, Zika virus has been detected in nations throughout the world. In the United States, traveler-associated cases have been identified in all the states, and local transmission of Zika virus is occurring in Puerto Rico; American Samoa; areas of Miami, Florida; and Texas. On August 12, 2016, former Secretary Sylvia M. Burwell determined that a public health emergency of national significance existed within the Commonwealth of Puerto Rico relating to pregnant women and children born to pregnant women with Zika. Former Secretary Burwell renewed that determination on November 4, 2016; Acting Secretary Norris Cochran renewed that determination on January 31, 2017; and former Secretary Thomas E. Price renewed that declaration on April 28, 2017. The Secretary's public health emergency declaration expired on July 26, 2017. On November 18, 2016, the WHO Director-General declared the end of the PHEIC based on recommendations of the WHO Emergency Committee that Zika virus and associated consequences no longer represent a PHEIC as defined under the IHR, but remain a significant enduring public health challenge requiring intense action that should be escalated into a sustained program of work with dedicated resources to address the long-term nature of the disease and its associated consequences. In 2018, cases continue to be reported throughout the U.S. states and territories of laboratory-confirmed Zika virus disease in individuals returning from travel to affected areas, or presumed local mosquito-borne transmission, or other modes of transmission.
Unless otherwise noted, all statutory citations below are to the U.S. Code.
Before issuing a Declaration under the PREP Act, the Secretary is required to determine that a disease or other health condition or threat to health constitutes a public health emergency or that there is a credible risk that the disease, condition, or threat may constitute such an emergency. This determination is separate and apart from a Declaration issued by the Secretary under Section 319 of the PHS Act that a disease or disorder presents a public health emergency or that a public health emergency, including significant outbreaks of infectious diseases or bioterrorist attacks, otherwise exists, or other Declarations or determinations made under other authorities of the Secretary. Accordingly, in Section I, the Secretary determines that there is a credible risk that the spread of Zika virus and the resulting disease may constitute a public health emergency.
In deciding whether and under what circumstances to issue a Declaration with respect to a Covered Countermeasure, the Secretary must consider the desirability of encouraging the design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, and use of the countermeasure. In Section II, the Secretary states that he has considered these factors.
The Secretary must recommend the activities for which the PREP Act's liability immunity is in effect. These activities may include, under conditions as the Secretary may specify, the manufacture, testing, development, distribution, administration, or use of
The Secretary must also state that liability protections available under the PREP Act are in effect with respect to the Recommended Activities. These liability protections provide that, “[s]ubject to other provisions of [the PREP Act], a covered person shall be immune from suit and liability under federal and state law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or use by an individual of a covered countermeasure if a Declaration has been issued with respect to such countermeasure.” In Section IV, the Secretary states that liability protections are in effect with respect to the Recommended Activities.
The PREP Act's liability immunity applies to “Covered Persons” with respect to administration or use of a Covered Countermeasure. The term “Covered Persons” has a specific meaning and is defined in the PREP Act to include manufacturers, distributors, program planners, and qualified persons, and their officials, agents, and employees, and the United States. The PREP Act further defines the terms “manufacturer,” “distributor,” “program planner,” and “qualified person” as described below.
A manufacturer includes a contractor or subcontractor of a manufacturer; a supplier or licenser of any product, intellectual property, service, research tool or component or other article used in the design, development, clinical testing, investigation or manufacturing of a Covered Countermeasure; and any or all the parents, subsidiaries, affiliates, successors, and assigns of a manufacturer.
A distributor means a person or entity engaged in the distribution of drugs, biologics, or devices, including but not limited to: Manufacturers; repackers; common carriers; contract carriers; air carriers; own-label distributors; private-label distributors; jobbers; brokers; warehouses and wholesale drug warehouses; independent wholesale drug traders; and retail pharmacies.
A program planner means a state or local government, including an Indian tribe; a person employed by the state or local government; or other person who supervises or administers a program with respect to the administration, dispensing, distribution, provision, or use of a Covered Countermeasure, including a person who establishes requirements, provides policy guidance, or supplies technical or scientific advice or assistance or provides a facility to administer or use a Covered Countermeasure in accordance with the Secretary's Declaration. Under this definition, a private sector employer or community group or other “person” can be a program planner when it carries out the described activities.
A qualified person means a licensed health professional or other individual authorized to prescribe, administer, or dispense Covered Countermeasures under the law of the state in which the Covered Countermeasure was prescribed, administered, or dispensed; or a person within a category of persons identified as qualified in the Secretary's Declaration. Under this definition, the Secretary can describe in the Declaration other qualified persons, such as volunteers, who are Covered Persons. Section V describes other qualified persons covered by this Declaration.
The PREP Act also defines the word “person” as used in the Act: A person includes an individual, partnership, corporation, association, entity, or public or private corporation, including a federal, state, or local government agency or department.
Section V describes Covered Persons under the Declaration, including Qualified Persons.
As noted above, Section III describes the Secretary's Recommended Activities for which liability immunity is in effect. This section identifies the Covered Countermeasures for which the Secretary has recommended such activities. The PREP Act states that a “Covered Countermeasure” must be: A “qualified pandemic or epidemic product,” or a “security countermeasure,” as described immediately below; or a drug, biological product or device authorized for emergency use in accordance with Sections 564, 564A, or 564B of the FD&C Act.
A qualified pandemic or epidemic product means a drug or device, as defined in the FD&C Act or a biological product, as defined in the PHS Act that is: (i) Manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat, or cure a pandemic or epidemic or limit the harm such a pandemic or epidemic might otherwise cause; (ii) manufactured, used, designed, developed, modified, licensed, or procured to diagnose, mitigate, prevent, treat, or cure a serious or life-threatening disease or condition caused by such a drug, biological product, or device; (iii) or a product or technology intended to enhance the use or effect of such a drug, biological product, or device.
A security countermeasure is a drug or device, as defined in the FD&C Act or a biological product, as defined in the PHS Act that: (i)(a) The Secretary determines to be a priority to diagnose, mitigate, prevent, or treat harm from any biological, chemical, radiological, or nuclear agent identified as a material threat by the Secretary of Homeland Security, or (b) to diagnose, mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, or device against such an agent; and (ii) is determined by the Secretary of Health and Human Services to be a necessary countermeasure to protect public health.
To be a Covered Countermeasure, qualified pandemic or epidemic products or security countermeasures also must be approved or cleared under the FD&C Act; licensed under the PHS Act; or authorized for emergency use under Sections 564, 564A, or 564B of the FD&C Act.
A qualified pandemic or epidemic product also may be a Covered Countermeasure when it is subject to an exemption (that is, it is permitted to be used under an Investigational Drug Application or an Investigational Device Exemption) under the FD&C Act and is the object of research for possible use for diagnosis, mitigation, prevention, treatment, or cure, or to limit harm of a pandemic or epidemic or serious or life-threatening condition caused by such a drug or device.
A security countermeasure also may be a Covered Countermeasure if it may reasonably be determined to qualify for approval or licensing within 10 years after the Department's determination that procurement of the countermeasure is appropriate.
Section VI lists Zika virus vaccines that are Covered Countermeasures. The Secretary is amending the list of vaccines by: Deleting “whole particle” from the first category of vaccines listed to clarify that the category includes all inactivated virus vaccines; adding “and/or polysaccharide and/or conjugate” to the sixth category of vaccines listed to include these types of peptide vaccine; and adding a new ninth category, “recombinant vaccines” to include any Zika virus vaccines using this type of technology.
Section VI also refers to the statutory definitions of Covered Countermeasures
The Secretary may specify that liability immunity is in effect only to Covered Countermeasures obtained through a particular means of distribution. The Declaration states that liability immunity is afforded to Covered Persons for Recommended Activities related to: (a) Present or future federal contracts, cooperative agreements, grants, other transactions, interagency agreements, or memoranda of understanding or other federal agreements; or (b) Activities authorized in accordance with the public health and medical response of the Authority Having Jurisdiction to prescribe, administer, deliver, distribute, or dispense the Covered Countermeasures following a Declaration of an emergency.
Section VII defines the terms “Authority Having Jurisdiction” and “Declaration of an emergency.” We have specified in the definition that Authorities having jurisdiction include federal, state, local, and tribal authorities and institutions or organizations acting on behalf of those governmental entities.
For governmental program planners only, liability immunity is afforded only to the extent they obtain Covered Countermeasures through voluntary means, such as (1) donation; (2) commercial sale; (3) deployment of Covered Countermeasures from federal stockpiles; or (4) deployment of donated, purchased, or otherwise voluntarily obtained Covered Countermeasures from state, local, or private stockpiles. This last limitation on distribution is intended to deter program planners that are government entities from seizing privately held stockpiles of Covered Countermeasures. It does not apply to any other Covered Persons, including other program planners who are not government entities.
The Secretary must identify, for each Covered Countermeasure, the categories of diseases, health conditions, or threats to health for which the Secretary recommends the administration or use of the countermeasure. In Section VIII, the Secretary states that the disease threat for which he recommends administration or use of the Covered Countermeasures is Zika virus.
The PREP Act does not explicitly define the term “administration” but does assign the Secretary the responsibility to provide relevant conditions in the Declaration. In Section IX, the Secretary defines “Administration of a Covered Countermeasure:”
Administration of a Covered Countermeasure means physical provision of the countermeasures to recipients, or activities and decisions directly relating to public and private delivery, distribution, and dispensing of the countermeasures to recipients; management and operation of countermeasure programs; or management and operation of locations for purpose of distributing and dispensing countermeasures.
The definition of “administration” extends only to physical provision of a countermeasure to a recipient, such as vaccination or handing drugs to patients, and to activities related to management and operation of programs and locations for providing countermeasures to recipients, such as decisions and actions involving security and queuing, but only insofar as those activities directly relate to the countermeasure activities. Claims for which Covered Persons are provided immunity under the Act are losses caused by, arising out of, relating to, or resulting from the administration to or use by an individual of a Covered Countermeasure consistent with the terms of a Declaration issued under the Act. Under the definition, these liability claims are precluded if they allege an injury caused by physical provision of a countermeasure to a recipient, or if the claims are directly due to conditions of delivery, distribution, dispensing, or management and operation of countermeasure programs at distribution and dispensing sites.
Thus, it is the Secretary's interpretation that, when a Declaration is in effect, the Act precludes, for example, liability claims alleging negligence by a manufacturer in creating a vaccine, or negligence by a health care provider in prescribing the wrong dose, absent willful misconduct. Likewise, the Act precludes a liability claim relating to the management and operation of a countermeasure distribution program or site, such as a slip-and-fall injury or vehicle collision by a recipient receiving a countermeasure at a retail store serving as an administration or dispensing location that alleges, for example, lax security or chaotic crowd control. However, a liability claim alleging an injury occurring at the site that was not directly related to the countermeasure activities is not covered, such as a slip and fall with no direct connection to the countermeasure's administration or use. In each case, whether immunity is applicable will depend on the particular facts and circumstances.
The Secretary must identify, for each Covered Countermeasure specified in a Declaration, the population or populations of individuals for which liability immunity is in effect with respect to administration or use of the countermeasure. This section explains which individuals should use the countermeasure or to whom the countermeasure should be administered—in short, those who should be vaccinated or take a drug or other countermeasure. Section X provides that the population includes “any individual who uses or who is administered a Covered Countermeasure in accordance with the Declaration.”
In addition, the PREP Act specifies that liability immunity is afforded: (1) To manufacturers and distributors without regard to whether the countermeasure is used by or administered to this population; and (2) to program planners and qualified persons when the countermeasure is either used by or administered to this population or the program planner or qualified person reasonably could have believed the recipient was in this population. Section X includes these statutory conditions in the Declaration for clarity.
The Secretary must identify, for each Covered Countermeasure specified in the Declaration, the geographic area or areas for which liability immunity is in effect with respect to administration or use of the countermeasure, including, as appropriate, whether the Declaration applies only to individuals physically present in the area or, in addition, applies to individuals who have a described connection to the area. Section XI provides that liability immunity is afforded for the administration or use of a Covered Countermeasure without geographic limitation. This could include claims related to administration or use in
In addition, the PREP Act specifies that liability immunity is afforded: (1) To manufacturers and distributors without regard to whether the countermeasure is used by or administered to individuals in the geographic areas; and (2) to program planners and qualified persons when the countermeasure is either used or administered in the geographic areas or the program planner or qualified person reasonably could have believed the countermeasure was used or administered in the areas. Section XI includes these statutory conditions in the Declaration for clarity.
The Secretary must identify, for each Covered Countermeasure, the period or periods during which liability immunity is in effect, designated by dates, milestones, or other description of events, including factors specified in the PREP Act. Section XII extends the effective period for different means of distribution of Covered Countermeasures through December 31, 2022.
The Secretary must specify a date after the ending date of the effective time period of the Declaration that is reasonable for manufacturers to arrange for disposition of the Covered Countermeasure, including return of the product to the manufacturer, and for other Covered Persons to take appropriate actions to limit administration or use of the Covered Countermeasure. In addition, the PREP Act specifies that for Covered Countermeasures that are subject to a Declaration at the time they are obtained for the Strategic National Stockpile (SNS) under 42 U.S.C. 247d-6b(a), the effective period of the Declaration extends through the time the countermeasure is used or administered pursuant to a distribution or release from the stockpile. Liability immunity under the provisions of the PREP Act and the conditions of the Declaration continues during these additional time periods. Thus, liability immunity is afforded during the “Effective Time Period,” described under XII of the Declaration, plus the “Additional Time Period” described under Section XIII of the Declaration.
Section XIII provides for 12 months as the additional time period of coverage after expiration of the Declaration. Section XIII also explains the extended coverage that applies to any products obtained for the SNS during the effective period of the Declaration.
Section 319F-4 of the PREP Act authorizes the Countermeasures Injury Compensation Program (CICP) to provide benefits to eligible individuals who sustain a serious physical injury or die as a direct result of the administration or use of a Covered Countermeasure. Compensation under the CICP for an injury directly caused by a Covered Countermeasure is based on the requirements set forth in this Declaration, the administrative rules for the Program, and the statute. To show direct causation between a Covered Countermeasure and a serious physical injury, the statute requires “compelling, reliable, valid, medical and scientific evidence.” The administrative rules for the Program further explain the necessary requirements for eligibility under the CICP. Please note that, by statute, requirements for compensation under the CICP may not align with the requirements for liability immunity provided under the PREP Act. Section XIV, “Countermeasures Injury Compensation Program” explains the types of injury and standard of evidence needed to be considered for compensation under the CICP.
Further, the administrative rules for the CICP specify if countermeasures are administered or used outside the United States, only otherwise eligible individuals at American embassies, military installations abroad (such as military bases, ships, and camps) or at North Atlantic Treaty Organization (NATO) installations (subject to the NATO Status of Forces Agreement) where American servicemen and servicewomen are stationed may be considered for CICP benefits. Other individuals outside the United States may not be eligible for CICP benefits.
The Secretary may amend any portion of this Declaration through publication in the
Declaration for Public Readiness and Emergency Preparedness Act Coverage for Zika Virus Vaccines.
I have determined that there is a credible risk that the spread of Zika virus and the resulting disease or conditions may in the future constitute a public health emergency.
I have considered the desirability of encouraging the design, development, clinical testing, or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, and use of the Covered Countermeasures.
I recommend, under the conditions stated in this Declaration, the manufacture, testing, development, distribution, administration, and use of the Covered Countermeasures.
Liability immunity as prescribed in the PREP Act and conditions stated in this Declaration is in effect for the Recommended Activities described in Section III.
Covered Persons who are afforded liability immunity under this Declaration are “manufacturers,” “distributors,” “program planners,” “qualified persons,” and their officials, agents, and employees, as those terms are defined in the PREP Act, and the United States.
In addition, I have determined that the following additional persons are qualified persons: (a) Any person authorized in accordance with the public health and medical emergency response of the Authority Having Jurisdiction, as described in Section VII below, to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures, and their officials, agents, employees, contractors and volunteers, following a Declaration of an emergency; (b) any person authorized to prescribe, administer, or dispense the Covered Countermeasures or who is otherwise authorized to perform an activity under an Emergency Use
Covered Countermeasures are the following Zika virus vaccines, all components and constituent materials of these vaccines, and all devices and their constituent components used in the administration of these vaccines:
(1) Inactivated virus vaccines
(2) Live-attenuated vaccines
(3) mRNA vaccines
(4) DNA vaccines
(5) Subunit vaccines
(6) Peptide and/or polysaccharide and/or conjugate vaccines
(7) Virus-like particles vaccines
(8) Nanoparticle vaccines
(9) Recombinant vaccines
Covered Countermeasures must be “qualified pandemic or epidemic products,” or “security countermeasures,” or drugs, biological products, or devices authorized for investigational or emergency use, as those terms are defined in the PREP Act, the FD&C Act, and the Public Health Service Act.
I have determined that liability immunity is afforded to Covered Persons only for Recommended Activities involving Covered Countermeasures that are related to:
(a) Present or future federal contracts, cooperative agreements, grants, other transactions, interagency agreements, memoranda of understanding, or other federal agreements; or,
(b) Activities authorized in accordance with the public health and medical response of the Authority Having Jurisdiction to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures following a Declaration of an emergency.
i. The Authority Having Jurisdiction means the public agency or its delegate that has legal responsibility and authority for responding to an incident, based on political or geographical (
ii. A Declaration of Emergency means any Declaration by any authorized local, regional, state, or federal official of an emergency specific to events that indicate an immediate need to administer and use the Covered Countermeasures, with the exception of a federal Declaration in support of an Emergency Use Authorization under Section 564 of the FD&C Act unless such Declaration specifies otherwise;
I have also determined that for governmental program planners only, liability immunity is afforded only to the extent such program planners obtain Covered Countermeasures through voluntary means, such as (1) donation; (2) commercial sale; (3) deployment of Covered Countermeasures from federal stockpiles; or (4) deployment of donated, purchased, or otherwise voluntarily obtained Covered Countermeasures from state, local, or private stockpiles.
The category of disease, health condition, or threat for which I recommend the administration or use of the Covered Countermeasures is Zika virus.
Administration of the Covered Countermeasure means physical provision of the countermeasures to recipients, or activities and decisions directly relating to public and private delivery, distribution and dispensing of the countermeasures to recipients, management and operation of countermeasure programs, or management and operation of locations for purpose of distributing and dispensing countermeasures.
The populations of individuals include any individual who uses or is administered the Covered Countermeasures in accordance with this Declaration.
Liability immunity is afforded to manufacturers and distributors without regard to whether the countermeasure is used by or administered to this population; liability immunity is afforded to program planners and qualified persons when the countermeasure is used by or administered to this population, or the program planner or qualified person reasonably could have believed the recipient was in this population.
Liability immunity is afforded for the administration or use of a Covered Countermeasure without geographic limitation.
Liability immunity is afforded to manufacturers and distributors without regard to whether the countermeasure is used by or administered in any designated geographic area; liability immunity is afforded to program planners and qualified persons when the countermeasure is used by or administered in any designated geographic area, or the program planner or qualified person reasonably could have believed the recipient was in that geographic area.
Liability immunity for Covered Countermeasures through means of distribution, as identified in Section VII(a) of this Declaration, other than in accordance with the public health and medical response of the Authority Having Jurisdiction and extends through December 31, 2022.
Liability immunity for Covered Countermeasures administered and used in accordance with the public health and medical response of the Authority Having Jurisdiction begins with a Declaration and lasts through (1) the final day the emergency Declaration is in effect, or (2) December 31, 2022, whichever occurs first.
I have determined that an additional 12 months of liability protection is reasonable to allow for the manufacturer(s) to arrange for disposition of the Covered Countermeasure, including return of the Covered Countermeasures to the manufacturer, and for Covered Persons to take such other actions as are appropriate to limit the administration or use of the Covered Countermeasures.
Covered Countermeasures obtained for the SNS during the effective period of this Declaration are covered through the date of administration or use pursuant to a distribution or release from the SNS.
The PREP Act authorizes the Countermeasures Injury Compensation
Amendments to this Declaration will be published in the
42 U.S.C. 247d-6d.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
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 Institutes of Health, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S.
Licensing information may be obtained by emailing the indicated licensing contact at the National Heart, Lung, and Blood, Office of Technology Transfer and Development Office of Technology Transfer, 31 Center Drive Room 4A29, MSC2479, Bethesda, MD 20892-2479; telephone: 301-402-5579. A signed Confidential Disclosure Agreement may be required to receive any unpublished information.
This notice is in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve commercialization of results of federally-funded research and development.
Technology description follows.
The invention pertains to a radiotherapeutic against neuroendocrine tumors that express somatostatin receptor. Radionuclide therapies directed against tumors that express somatostatin receptors (SSTRs) have proven effective for the treatment of advanced, low- to intermediate-grade neuroendocrine tumors. The subject radiotherapeutic covered by the subject patent estate includes a somatostatin (SST) peptide derivative like octreotate (TATE), conjugated to an Evans Blue (EB) analog, and further chelated via DOTA to therapeutic radionuclide
Potential Commercial Applications:
Development Stage:
National Institutes of Health, HHS.
Notice.
The National Heart, Lung and Blood Institute (NHLBI), National Institutes of Health, Department of Health and Human Services, is contemplating the grant of an exclusive patent License to Inversago Pharma, Inc., located in Montreal, Quebec, Canada, to practice the inventions embodied in the patent applications
Only written comments and/or applications for a license which are received by the NHLBI Office of Technology Transfer and Development August 22, 2018 will be considered.
Requests for copies of the patent applications, inquiries, and comments relating to the contemplated exclusive patent license should be directed to: Michael Shmilovich, Esq., Senior Licensing and Patent Manager, 31 Center Drive Room 4A29, MSC2479, Bethesda, MD 20892-2479, phone number 301-435-5019, or
The following and all continuing U.S. and foreign patents/patent applications thereof are the intellectual properties to be licensed under the prospective agreement to Inversago Pharma, Inc.:
The patent rights in these inventions have been assigned to the Government of the United States of America. The prospective exclusive patent license territory will be granted worldwide and in a field of use not broader than human therapeutics for type I diabetes and its comorbidities diabetic nephropathy, chronic kidney disease, diabetic retinopathy, and peripheral and autonomic neuropathy.
The invention covered by the patents and patent applications pertaining to HHS Ref. No. E-282-2012-0 pertain to cannabinoid receptor 1 (CN
The inventions covered by HHS Ref. E-140-2014-0 also pertain to pyrazole CN
This notice is made in accordance with 35 U.S.C. 209 and 37 CFR part 404. The prospective exclusive patent license will be royalty bearing and may be granted unless within fifteen (15) days from the date of this published notice, the NHLBI receives written evidence and argument that establishes that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR part 404.
Complete applications for a license in the prospective field of use that are timely filed in response to this notice will be treated as objections to the grant of the contemplated exclusive patent license.
Comments and objections submitted to this notice will not be made available for public inspection and, to the extent permitted by law, will not be released under the
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Board of Scientific Counselors, NIA.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public as indicated below in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for the review, discussion, and evaluation of individual intramural programs and projects conducted by the NATIONAL INSTITUTE ON AGING, including consideration of personnel qualifications and performance, and the competence of individual investigators, 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 the following meeting.
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 the following meetings.
The meetings 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 the following meetings.
The meetings 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 grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S.
Licensing information may be obtained by emailing the indicated licensing contact at the National Heart, Lung, and Blood, Office of Technology Transfer and Development Office of Technology Transfer, 31 Center Drive, Room 4A29, MSC2479, Bethesda, MD 20892-2479; telephone: 301-402-5579. A signed
This notice is in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve commercialization of results of federally-funded research and development.
Technology description follows.
The invention pertains to a therapeutic agent that includes a chemically conjugated residue derived from (((R-)-1-carboxy-2-mercaptoethyl)carbamoyl)-L-glutamic acid that is further bound to an Evans blue analog (EB). The EB analog reversibly binds to circulating serum albumin to provide a radiopharmaceutical that retains affinity and specificity to prostate specific membrane antigen (PSMA; in this case PSMA-617). PSMA is a surface molecule shown to be specifically expressed by prostate tumor cells. PSMA expression levels correlate with disease stage and with hormone refractory cancers. Although most PSMA expression appears to be restricted to the prostate cancer, low levels of expression can also be detected in the brain, kidneys, salivary glands, and small intestine. The antigen is also shown to be expressed by neovascular tumor vessels of multiple other cancers. Inclusion of the Evans blue analog promotes high internalization and retention rates of the conjugated target ligand, and therefore, higher accumulation in PSMA positive tumors. Labeling EB-PSMA-617 derivatives with the therapeutic beta emitters,
Potential Commercial Applications:
Development Stage:
National Institutes of Health, HHS.
Notice.
The invention listed below is owned by an agency of the U.S. Government and is available for licensing to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Barry Buchbinder, Ph.D., 240-627-3678;
Technology description follows.
Antigens on the surface of virus particles are displayed in a regular, repetitive pattern which facilitates B cell activation. Presenting trimeric antigens on engineered particles that mimic the geometric patterns observed for native viral proteins can lead to an improved host antibody response.
Self-assembling globular ferritin nanoparticles have previously been used to display multiple copies of a co-assembled trimeric antigen to the immune system. However, prior ferritin nanoparticle technologies only permit a random co-assembly of diverse trimeric antigens, and therefore cannot guarantee the pattern and ratio of diverse trimeric antigens on a single ferritin nanoparticle.
Researchers at the Vaccine Research Center (VRC) of the National Institute of Allergy and Infectious Diseases are developing novel recombinant ferritin nanoparticles that are based on insect ferritin proteins, and that have been engineered to display two different trimeric antigens in a defined ratio and geometric pattern. This system has been tested with antigens derived from HIV-1 envelope (Env) and influenza hemagglutinin (HA). Interestingly, when guinea pigs are immunized with ferritin nanoparticles displaying two different trimeric antigens, induced B cells could simultaneously recognize both trimeric antigens, thus leading to an immune response with improved neutralization breadth.
This technology can be used as a platform for multimerized display of trimeric antigens such as viral type I fusion glycoproteins, and may be applied to many high-priority vaccine targets, such as HIV-1, influenza, respiratory syncytial virus, parainfluenza viruses, and coronaviruses.
• Platform for multimerized immunogen presentation and vaccine design.
• Vaccines for pathogens that use genetic diversity to escape the immune response.
• Particles have equal fractions of two different antigens in a specific configuration on the nanoparticle surface (unlike regular ferritin used previously)
• Designed particles have a geometry that allows for attachment of trimeric antigens (unlike the native insect ferritin).
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National Institutes of Health, HHS.
Notice.
This notice announces the next meeting of the Scientific Advisory Committee on Alternative Toxicological Methods (SACATM). SACATM, a federally chartered, external advisory group composed of scientists from the public and private sectors, including representatives of regulated industry and national animal protection organization, will review and provide advice on programmatic activities. SACATM advises the Interagency Coordinating Committee on the Validation of Alternative Methods (ICCVAM), the National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM), and the Director of the National Institute of Environmental Sciences (NIEHS) and NTP regarding statutorily mandated duties of ICCVAM and activites of NICEATM. The meeting is open to the public and registration is requested for both attendance and oral comment and required to access the webcast. Information about the meeting and registration are available at
Registration to view the meeting via the webcast is required.
Dr. Mary Wolfe, Designated Federal Official for the SACATM, Office of Liaison, Policy and Review, Division of NTP, NIEHS, P.O. Box 12233, K2-03, Research Triangle Park, NC 27709. Phone: 984-287-3209, Fax: 301-451-5759, Email:
SACATM will provide input to ICCVAM, NICEATM, and NIEHS on programmatic activities and issues. Preliminary agenda includes the US Strategic Roadmap including challenges to and opportunities for implementing non-animal approaches to evaluate chemicals and medical products and the importance of international harmonization through the Organisation for Economic Co-operation and Development activites. Please see the preliminary agenda for information about the specific presentations. The preliminary agenda, roster of SACATM members, background materials, public comments, and any additional information, when available, will be posted on the SACATM meeting website (
The public may attend the meeting in person or view the webcast. Registration is required to view the webcast; the URL for the webcast will be provided in the email confirming registration. Individuals who plan to provide oral comments (see below) are encouraged to register online at the SACATM meeting website (
The deadline for submission of written comments is August 29, 2018. Written public comments should be submitted through the meeting website. Persons submitting written comments should include name, affiliation, mailing address, phone, email, and sponsoring organization (if any). Written comments received in response to this notice will be posted on the NTP website, and the submitter will be identified by name, affiliation, and sponsoring organization (if any).
If possible, oral public commenters should send a copy of their slides and/or statement or talking points to Robbin
NICEATM administers ICCVAM, provides scientific and operational support for ICCVAM-related activities, and conducts independent validation studies to assess the usefulness and limitations of new, revised, and alternative test methods and strategies. NICEATM and ICCVAM work collaboratively to evaluate new and improved test methods and strategies applicable to the needs of U.S. federal agencies. NICEATM and ICCVAM welcome the public nomination of new, revised, and alternative test methods and strategies for validation studies and technical evaluations. Additional information about ICCVAM and NICEATM can be found at
SACATM was established in response to the ICCVAM Authorization Act [Section 285
Additional information about SACATM, including the charter, roster, and records of past meetings, can be found at
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Interagency Autism Coordinating Committee.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
For IACC Public Comment guidelines please see:
Any interested person may submit written public comments to the IACC prior to the meeting by emailing the comments to
In the 2016-2017 IACC Strategic Plan, the IACC listed the “Spirit of Collaboration” as one of its core values, stating that, “We will treat others with respect, listen with open minds to the diverse views of people on the autism spectrum and their families, thoughtfully consider community input, and foster discussions where participants can comfortably where participants can comfortably offer opposing opinions.” In keeping with this core value, the IACC and the NIMH Office of Autism Research Coordination ask that members of the public who provide public comments or participate in meetings of the IACC also seek to treat others with respect and consideration in their communications and actions, even when discussing issues of genuine concern or disagreement.
Individuals wishing to participate in person or by using these electronic services and who need special assistance, such as captioning of the conference call or other reasonable accommodations, should submit a request to the Contact Person listed on this notice at least five days prior to the meeting.
Meeting schedule subject to change. Information about the IACC is available on the website:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the meeting of the Council of Councils.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (
A portion of 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.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Council of Council's home page at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as
The meeting will be open to the public as indicated below, with a short public comment period at the end. Attendance is limited by the space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will also be videocast and can be accessed from the NIH Videocasting and Podcasting website (
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.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Institute's/Center's home page:
Notice is hereby given of a workshop convened by the Interagency Autism Coordinating Committee (IACC).
The purpose of the 2018 IACC Workshop, Addressing the Health Needs of People with Autism Spectrum Disorder (ASD), is to convene a working group of the IACC that will focus on health needs and outcomes among individuals with ASD. The working group will use this workshop to discuss health epidemiology, patient-provider interactions, and co-occurring health conditions that affect individuals with ASD. The workshop will be open to the public, will include time for public comments, and will be accessible by live webcast and conference call.
The IACC invites oral and written public-related comments relevant to the topic of the workshop. Individuals interested in presenting oral comments must notify the Contact Person listed on this notice by 5:00 p.m. ET on Friday, September 14, 2018 with their request to present oral comments at the meeting, and a written/electronic copy of the oral presentation/statement must be submitted by 5:00 p.m. ET on Wednesday, September 19, 2018. A limited number of slots for oral comment are available and will be assigned on a first come, first serve basis. Only one representative of an organization will be allowed to present oral comments at this meeting; other representatives of the same group may provide written comments. If the oral comment session is full, individuals who could not be accommodated are welcome to provide written comments instead. Comments to be read or presented in the meeting will be assigned a 3-minute time slot, but a longer version may be submitted in writing for the record. Commenters going beyond their allotted time in the meeting may be asked to conclude immediately to allow other comments and presentations to proceed on schedule.
Any interested person may submit written public comments to the IACC prior to the meeting by emailing the comments to
In the 2009 IACC Strategic Plan, the IACC listed the “Spirit of Collaboration” as one of its core values, stating that, “We will treat others with respect, listen to diverse views with open minds, discuss submitted public comments, and foster discussions where participants can comfortably offer opposing opinions.” In keeping with this core value, the IACC and the NIMH Office of Autism Research Coordination (OARC) ask that members of the public who provide public comments or participate in meetings of the IACC also seek to treat others with respect and consideration in their communications and actions, even when discussing issues of genuine concern or disagreement.
Meeting schedule subject to change. Information about the IACC is available on the website:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
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 Institutes of Health, HHS.
Notice.
The invention listed below is owned by an agency of the U.S. Government and is available for licensing to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Vince Contreras, Ph.D., 240-669-2823;
Technology description follows.
Researchers at the Vaccine Research Center (VRC) of the National Institute of Allergy and Infectious Diseases have overcome technical obstacles to produce a homogeneous, soluble RSV F glycoprotein vaccine which is stabilized in the prefusion conformation and has improved stability and immunogenicity compared to the native protein. Additionally, several modifications were introduced to remove the requirement for furin during production, resulting in an increase in expression levels of the immunogen. Stability of the immunogen was increased 20-fold as compared to DS-CAV1 (a prefusion-stabilized RSV F glycoprotein vaccine candidate that is currently being assessed in clinical trials) upon incubation at 60 °C. In mice, these immunogens elicited neutralization titers that were 2 to 5-fold higher than DS-CAV1.
This technology is available for licensing for commercial development in accordance with 35 U.S.C. 209 and 37 CFR part 404, as well as for further development and evaluation under a research collaboration.
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• Increased stability compared to the current leading RSV vaccine candidate (DS-Cav1).
• Elicits increased neutralization titers in mice.
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National Institutes of Health, HHS.
Notice.
The National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM) announces availability of the Interagency Coordinating Committee on the Validation of Alternative Methods (ICCVAM) Biennial Progress Report: 2016-2017. This report, prepared in accordance with requirements of the ICCVAM Authorization Act of 2000, describes activities and accomplishments from January 2016 through December 2017.
The report is available at
Dr. Warren Casey, Director, NICEATM; email:
A provision of the ICCVAM Authorization Act states that ICCVAM shall prepare “reports to be made available to the public on its progress under this Act.” The eighth ICCVAM biennial progress report describing ICCVAM activities and accomplishments from January 2016 through December 2017 is now available.
• Development of a strategic roadmap for incorporating new approaches into safety testing of chemicals and medical products in the United States.
• Publication of two guidance documents by the U.S. Environmental Protection Agency (EPA) in 2016. One included a policy statement to waive all acute dermal lethality studies for pesticide formulations. The other described a transparent, stepwise process for evaluating and implementing alternative methods for six-pack studies, which test for acute systemic toxicity by the oral, dermal, and inhalation routes; skin and eye irritation; and skin sensitization.
• Publication of notices permitting removal of back-titration hamsters for potency testing of vaccines containing
• Publication by the U.S. Food and Drug Administration of the Predictive Toxicology Roadmap for integrating predictive toxicology methods into safety and risk assessments.
• Development by NICEATM and EPA scientists of a defined approach that combines data from 11 high-throughput screening assays with a computational model to identify chemicals with the potential to interact with the androgen receptor pathway.
• Development by NICEATM and ICCVAM scientists of a defined approach that uses non-animal approaches to predict murine local lymph node assay outcomes and human skin sensitization hazard and potency.
• Submission of a proposal to develop a performance-based test guideline for defined approaches to skin sensitization testing and assessment to the Organisation for Economic Co-operation and Development (OECD) by partners in the International Cooperation on Alternative Test Methods in 2016. The proposal was approved as part of the OECD workplan in 2017.
• Launch of the Integrated Chemical Environment, a publicly accessible online resource developed to provide high-quality curated data and
The ICCVAM Authorization Act of 2000 (42 U.S.C. 285
NICEATM administers ICCVAM, provides scientific and operational support for ICCVAM-related activities, and conducts and publishes analyses and evaluations of data from new, revised, and alternative testing approaches. NICEATM and ICCVAM work collaboratively to evaluate new and improved testing approaches applicable to the needs of U.S. federal agencies. NICEATM and ICCVAM welcome the public nomination of new, revised, and alternative testing approaches for validation studies and technical evaluations. Additional information about NICEATM can be found at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of meetings of the National Diabetes and Digestive and Kidney Diseases Advisory Council.
The meetings will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meetings 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.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Institute's/Center's home page:
U.S. Coast Guard, Department of Homeland Security.
Notice of Federal Advisory Committee Meeting.
The Merchant Mariner Medical Advisory Committee and its Working Groups will meet to discuss matters relating to medical certification determinations for issuance of licenses, certificates of registry, and merchant mariners' documents, medical standards and guidelines for the physical qualifications of operators of commercial vessels, medical examiner education, and medical research. The meetings will be open to the public.
The meetings will be held at STAR Center, 2 West Dixie Highway, Dania Beach, FL 33004,
For information on facilities or services for individuals with disabilities or to request special assistance at the meeting, contact the Alternate Designated Federal Officer as soon as possible using the contact information provided in the
Mr. Davis Breyer, Alternate Designated Federal Officer of the Merchant Mariner Medical Advisory Committee, 2703 Martin Luther King Jr. Ave. SE, Stop 7509, Washington, DC 20593-7509, telephone 202-372-1445, fax 202-372-8382 or
Notice of this meeting is pursuant with the Federal Advisory Committee Act, Title 5 United States Code Appendix.
The Merchant Mariner Medical Advisory Committee Meeting is authorized by U.S. Code, Title 46, section 7115. The Committee advises the Secretary of the Department of Homeland Security on matters related to (a) medical certification determinations for issuance of licenses, certificates of registry, and merchant mariners' documents; (b) medical standards and guidelines for the physical qualifications of operators of commercial vessels; (c) medical examiner education; and (d) medical research.
The agenda for the September 13, 2018, meeting is as follows:
(1) The full Committee will meet briefly to discuss the Working Groups' business/task statements, which are listed under paragraph 2 and 3 (a)-(b) below.
(2) General Discussion of Mariner Mental Health Issues with presentations by mariner service organizations and industry.
(3) Working Groups will separately address the following task statements, which are available at
(a) Task statement 16-24 Recommendations on Appropriate Diets and Wellness for Mariners While Onboard Merchant Vessels; and
(b) Task statement 17-26, Input to Support Regulatory Reform of Coast Guard Regulations-Executive Orders 13771 and 13783.
(4) Public comment period.
(5) Reports of Working Groups. At the end of the day, the Working Groups will report to the full Committee on what was accomplished in their meetings. The full Committee will not take action on these reports on this date. Any official action taken as a result of these Working Group meetings will be taken on day two of the meeting.
(6) Adjournment of meeting.
The agenda for the September 14, 2018, meeting is as follows:
(1) Introduction.
(2) Designated Federal Officer announcements.
(3) Remarks from U.S. Coast Guard Leadership.
(4) Roll call of Committee members and determination of a quorum.
(5) Reports from the following Working Groups:
(a) Task statement 16-24, requesting recommendations on appropriate diets
(b) Task statement 17-26, Input to Support Regulatory Reform of Coast Guard Regulations-Executive Orders 13771 and 13783.
(6) New Business:
(a) Task Statement X-1, Communication Between External Stakeholders and the Mariner; and
(b) Task Statement X-2, Mariner Health Issues.
(7) Other items for discussion:
(a) Report on the Mariner Credentialing Program;
(b) Report on National Maritime Center activities; and
(c) Drug and Alcohol Prevention and Investigations.
(8) Public comment period.
(9) Discussion of Working Group recommendations. The Committee will review the information presented on each issue, deliberate on any recommendations presented by the Working Groups, approve/formulate recommendations and close any completed tasks. Official action on these recommendations may be taken on this date.
(10) Closing remarks/plans for next meeting.
(11) Adjournment of meeting.
A copy of all meeting documentation will be available at
A public comment period will be held during each Working Group and full Committee meeting concerning matters being discussed. Public comments will be limited to three minutes per speaker. Please note that the meeting may adjourn early if the work is completed.
Federal Emergency Management Agency, DHS.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, the FIRM and FIS report, once effective, will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings.
Comments are to be submitted on or before November 5, 2018.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-1842, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP and are used to calculate the appropriate flood insurance premium rates for new buildings built after the FIRM and FIS report become effective.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations also will be considered before the FIRM and FIS report become effective.
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Bureau of Land Management, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Bureau of Land Management (BLM) is proposing to renew an information collection.
Interested persons are invited to submit comments on or before September 6, 2018.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Flora Bell by email at
In accordance with the Paperwork Reduction Act of 1995, the BLM provides the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format. A
We are again soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BLM; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BLM enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BLM minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. 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.
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 authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Land Management, Interior.
Notice of Realty Action.
The Bureau of Land Management (BLM) intends to dispose of the reversionary interest held by the United States in a 140-acre parcel of public land in Las Vegas, Nevada, pursuant to Section 203 of the Federal Land Policy and Management Act of October 21, 1976 (FLPMA), as amended, for a non-competitive direct sale to the Black Mountain Golf and Country Club (BMGCC). The BLM has found this
Interested parties may submit written comments regarding the direct sale on or before September 21, 2018.
Send written comments to the BLM Las Vegas Field Manager, 4701 North Torrey Pines Drive, Las Vegas, Nevada 89130.
Supervisory Realty Specialist Manuela Johnson at the above address, by phone at 702-515-5224, or by email at
The BMGCC is operated as a non-profit corporation. The land occupied by the BMGCC was patented on May 9, 1962, under the authority of the Recreation and Public Purposes (R&PP) Act of June 14, 1926. The purpose of the non-competitive direct sale is to dispose of the reversionary interest in the patented lands that prevents the BMGCC from using the land for other purposes.
The parcel, which was identified as suitable for direct sale of the reversionary interest, is located on the northwest corner of Horizon Drive and Mona Lane in Henderson, Nevada, and is legally described as:
The area described contains 140 acres.
The 140-acre parcel of public land is difficult and uneconomic to manage, and meets the criteria for disposal set forth in 43 CFR 2710.0-3(a)(3). The parcel is within the boundaries of the City of Henderson and is surrounded by private lands. The parcel is not contiguous to any public land administered by the BLM. The location and absence of other contiguous public land makes the parcel impractical for the BLM to administer. Therefore, it is in the best interest of the public to dispose of this parcel of public land by direct sale procedures pursuant to 43 CFR 2711.3-3 to BMGCC.
The sale is consistent with the BLM Las Vegas Resource Management Plan (RMP) and the Record of Decision (ROD) approved on October 5, 1998. This sale would be made pursuant to Section 202 of the FLPMA, as amended, and Section 203, which authorizes a sale of public lands when the Secretary determines that the proposed sale parcel, “because of its location or other characteristics is difficult and uneconomic to manage as part of the public lands, and is not suitable for management by another Federal department or agency.” The parcel is not needed for any Federal purposes; therefore, its disposal is in the public interest.
The appraised fair market value of the parcel is $30,800,000. The appraisal report, dated February 1, 2017, is available for public review at the BLM Las Vegas Field Office.
Upon conveyance of the reversionary interest, all other terms and conditions of Patent No. 1226785 will continue to apply.
The reversionary interest will not be sold until at least October 9, 2018. The conveyance document issued will only transfer the reversionary interest retained by the United States in patent 1226785 and will contain the following terms, conditions, and reservations:
1. A right-of-way thereon for ditches or canals constructed by the authority of the United States, Act of August 30, 1890 (43 U.S.C. 945);
2. The terms and conditions of the United States Patent No. 1226785, including but not limited to, the reservation of all mineral deposits in the land so patented, and the right to prospect for, mine, and remove such deposits from the same under applicable law and regulations to be established by the Secretary of the Interior;
3. Additional terms and conditions that the authorized officer deems appropriate.
The purchaser, by accepting the release of the reversionary interest of the United States agrees to indemnify, defend, and hold the United States, its officers, agents, or employees harmless from any costs, damages, claims, causes of action, penalties, fines, liabilities, and judgements of any kind arising from the past, present, or future acts or omissions of the purchaser, its employees, agents, contractors, or lessees, or third-party arising out of or in connection with the purchaser's acceptance of the aforementioned release or purchaser's use and/or occupancy of the land involved resulting in: (1) Violations of Federal, State, and local laws and regulations that are now, or in the future become, applicable to real property; (2) judgments, claims, or demands of any kind assessed against the United States; (3) cost, expenses, or damages of any kind incurred by the United States; (4) releases or threatened releases of solid or hazardous waste(s) and/or hazardous substances(s), as defined by Federal or State environmental laws, off, on, into or under land, property, and other interests of the United States; (5) other activities by which solids or hazardous substances or wastes, as defined by Federal and State environmental laws are generated, released, stored, used, or otherwise disposed of on the land involved, and any cleanup, response, remedial action, or other actions related in any manner to said solid or hazardous substances or wastes; or (6) natural resource damages as defined by Federal and State law. Patentee shall stipulate that it will be solely responsible for compliance with all applicable Federal, State, and local environmental and regulatory provisions, throughout the life of the facility, including any closure and/or post closure requirements that may be imposed with respect to any physical plant and/or facility upon the land involved under any Federal, State, or local environmental laws or regulatory provisions. This covenant shall be construed as running with the land and may be enforced by the United States in a court of competent jurisdiction.
No warranty of any kind, express or implied, is given by the United States in connection with the sale or release of the reversionary interest. The documentation for land use conformance, National Environmental Policy Act (NEPA) procedures, a map, and the appraisal report, are available for review at the BLM Las Vegas Office located at the address listed above. A Determination of NEPA Adequacy document—with the number DOI-BLM-NV-S010-2017-0091-DNA—was prepared in connection with this Notice of Realty Action.
Interested parties may submit written comments on the direct sale of the reversionary interest for the 140-acres sale parcel. Before including your address, phone number, email address, or other personally identifying information in your comment, you should be aware that your entire comment—including your personally identifying information—may be made publicly available at any time. While you can ask the BLM in your comment to withhold your personally identifying information from public review, we cannot guarantee that we will be able to do so.
Any adverse comments will be reviewed by the BLM Nevada State Director who may sustain, vacate, or modify this realty action. In the absence of any adverse comments, the decision will become effective on October 9, 2018.
43 CFR 2711.1-2.
Bureau of Land Management, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Bureau of Land Management (BLM) is proposing to renew an information collection with revisions.
Interested persons are invited to submit comments on or before September 6, 2018.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Jennifer Spencer by email at
In accordance with the Paperwork Reduction Act of 1995, the BLM provides the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
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The BLM is again soliciting comments on the proposed ICR that is described below. The BLM is especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BLM; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BLM enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BLM minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. 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.
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 authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Land Management, Interior.
Notice.
The State of Alaska (State) has filed an application with the Bureau of Land Management (BLM) for a Recordable Disclaimer of Interest (RDI) from the United States in those lands underlying the Egegik River, Becharof Lake, and Ruth Lake and Outlet in southwest Alaska. The State asserts that the Egegik River, Becharof Lake, and Ruth Lake and Outlet, were navigable and unreserved at the time of Alaska Statehood in 1959.
The BLM should receive all comments to this action on or before November 5, 2018.
You may submit comments by mail or email on the State's application for an RDI or on the BLM Draft “Summary Report on Federal Interest in Lands Underlying the Egegik River, Becharof Lake, and Ruth Lake
Copies of the State's application, supporting evidence, the Draft Summary Report, and comments, including names and street addresses of commenters, will be available for public review at the BLM Alaska Public Information Center (Public Room), 222 West 8th Avenue, Anchorage, Alaska, during regular business hours 8 a.m. to 4 p.m., Monday through Friday, except holidays.
Angie Nichols, RDI Program Manager, 222 West 7th Avenue, #13, Anchorage, Alaska 99513; 907-271-3359;
People who use a telecommunications device for the deaf (TDD) may call the Federal Relay System (FRS) at 1-800-877-8339 to contact the above individual during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or a question with the above individual. You will receive a reply during normal business hours.
On Sept. 7, 2016, the State filed an application (AA-94269) for an RDI pursuant to Section 315 of the Federal Land Policy and Management Act of 1976 (FLPMA) and the regulations contained in 43 CFR subpart 1864 for the lands underlying the Egegik River, Becharof Lake, and Ruth Lake and Outlet. The State asserts that these waterbodies were navigable at the time of Alaska Statehood. As such, the State contends that ownership of the lands underlying this river system automatically passed from the United States to the State in 1959 at the time of Statehood under the Equal Footing Doctrine; the Submerged Lands Act of 1953; the Alaska Statehood Act; and other title navigability law. Section 315 of FLPMA authorizes the BLM to issue an RDI when it determines that a record interest of the United States in lands has terminated by law or is otherwise invalid, and a disclaimer will help remove a cloud on title to such lands.
The State's application is for an RDI for all submerged lands underlying the portions described below of the Egegik River, Becharof Lake, and Ruth Lake and Outlet. Specifically, these are Becharof Lake: All submerged lands and bed up to and including the ordinary high water lines of Becharof Lake upstream from its outlet within section 5, township 25 south, range 46 west, Seward Meridian, Alaska; Egegik River: All submerged lands and bed of the Egegik River lying between the ordinary high water lines of the left and right banks of the Egegik River, beginning at the outlet of Becharof Lake, downstream to the limit of tidal influence; Unnamed outlet Ruth Lake: All submerged lands up to and including the ordinary high water lines of Unnamed outlet of Ruth Lake upstream from its outlet at Becharof Lake within section 5, township 30 south, range 42 west, Seward Meridian, Alaska, upstream to Ruth Lake; and Ruth Lake: All submerged lands and bed up to and including the ordinary high water lines of Ruth Lake upstream from its outlet within section 9, township 30 south, range 42 west, Seward Meridian, Alaska.
The State listed the coverage area on the USGS 1:63,360 series topographic maps as follows: Naknek A-1 through A-3, Karluk C-6, D-6 and Ugashik C-1 and D-1, D-2, D-3. Over time, the precise location of the submerged lands described above may vary between townships due to the ambulatory nature of these water bodies.
An RDI is a legal document through which the BLM disclaims the United States' interest in, or ownership of, specified lands, but the disclaimer does not grant, convey, transfer, or renounce any title or interest in the lands, nor does it release any tax, judgment, or lien. This Notice of Application is to inform the public of the pending application and the State's supporting evidence, as well as to provide the opportunity to comment or provide additional information to the BLM.
The BLM will not make a final decision on the merits of the State's application before November 5, 2018. During this 90-day period, interested parties may comment on the State's application, AA-94269, and supporting evidence. Interested parties may also comment on the BLM's Draft Summary Report, which is available on the BLM's RDI website (see
Copies of the State's application, supporting evidence, the Draft Summary Report, and comments, including names and street addresses of commenters, will be available for public review at the BLM Alaska Public Information Center (Public Room), 222 West 8th Avenue, Anchorage, Alaska, during regular business hours 8 a.m. to 4 p.m., Monday through Friday, except holidays. Before including your address, phone number, email address, or other personally identifiable information in your comment, you should be aware that your entire comment—including your personally identifiable information—may be made publicly available at any time. While you can ask the BLM in your comment to withhold your personally identifiable information from public review, we cannot guarantee that we will be able to do so.
If the BLM determines the State's evidence and any additional information the agency receives concerning the State's application is sufficient to reach a favorable determination, and neither the records nor a valid objection discloses a reason not to disclaim, the BLM may decide to approve the application for the RDI.
43 CFR 1864.2.
Bureau of Land Management, Interior
Notice of Intent.
In accordance with the National Environmental Policy Act (NEPA) of 1969, as amended, and the Naval Petroleum Reserves Production Act of 1976, as amended, the Bureau of Land Management (BLM) Alaska State Office, Anchorage, Alaska, intends to prepare a Master Development Plan Environmental Impact Statement (MDP/EIS) for the Willow oil and gas prospect within the Bear Tooth Unit of the National Petroleum Reserve in Alaska (NPR-A).
This Notice initiates the public scoping process for the Willow oil and gas prospect MDP/EIS. Comments on issues, impacts, and potential alternatives to be analyzed may be submitted in writing until September 6, 2018. The BLM will hold public scoping meetings in Anchorage, Fairbanks, Nuiqsut, and Utqiagvik. The dates, times, and locations of scoping meetings will be announced through local news media, newspapers, and the BLM Alaska website. Any Federal, state, local
You may submit comments on issues related to the scope of the proposed Willow MDP/EIS by any of the following methods:
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Requests for information regarding the Willow MDP/EIS and cooperating agency requests may be mailed to: Attn: Willow MDP/EIS, 222 West 7th Avenue, Stop #13, Anchorage, Alaska 99517. You may also request to be added to the mailing list for the MDP/EIS.
Documents and other information pertaining to the MDP/EIS are available on the BLM Alaska website at
You may examine documents pertinent to this proposal at the BLM Alaska Public Room, Arctic District Office, 222 University Avenue, Fairbanks, Alaska 99709, and at the BLM Alaska Public Information Center, Alaska State Office, 222 West 7th Ave., Anchorage, Alaska 99513.
Ferris Couture, BLM Alaska State Office, 907-271-1306. People who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact the above individual during normal business hours. The FRS is available 24 hours a day, seven days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
ConocoPhillips Alaska, Inc. (ConocoPhillips) initiated discussions with the BLM regarding potential development of its recently announced Willow oil and gas prospect, which is located on Federal oil and gas leases ConocoPhillips holds within the Bear Tooth Unit of the NPR-A approximately 30 air miles west of the Native Village of Nuiqsut. The BLM manages approximately 23 million acres comprising the NPR-A, located on Alaska's North Slope.
On May 10, 2018, ConocoPhillips submitted a letter requesting the development of the Willow prospect through a MDP/EIS. The letter, available on the BLM Alaska website, includes a description of the foreseeable infrastructure and activity associated with the proposed Willow prospect development and a map of the proposed area of development. Analyzing the entire proposed Willow development in a single MDP/EIS will allow the BLM to make determinations of National Environmental Policy Act (NEPA) adequacy when individual applications for permits to drill are submitted. This is expected to result in a quicker and more efficient process for the approval of applications for permits to drill.
The MDP/EIS will analyze the environmental impacts and appropriate mitigation measures to reduce adverse effects to surface resources of the proposed Willow prospect which would involve the construction, operation, and maintenance of an oil and gas development project which may include: One central processing facility, an infrastructure pad, up to five drill pads with up to fifty wells on each pad, access and infield roads, an airstrip, pipelines, a gravel mine, and a temporary island to support module delivery via sealift barges.
The MDP/EIS will be prepared in accordance with recently issued Executive Orders and Secretarial guidance on streamlining and improving the NEPA and other regulatory processes. At present, the BLM has identified the following preliminary issues for evaluation in the MDP/EIS, impacts to: Subsistence use and access; biological resources, including caribou, polar bears, spectacled and Stellar eiders, yellow billed loons, and fisheries; social and cultural resources; air quality and climate; and aquatic resources.
The BLM will use NEPA public participation guidelines to assist the agency in satisfying the public involvement requirements under Section 106 of the National Historic Preservation Act (54 U.S.C. 306108), pursuant to 36 CFR 800.2(d)(3).
The information about historic and cultural resources within the area potentially affected by the Willow development project will assist the BLM in identifying and evaluating impacts to cultural resources in the context of both NEPA and Section 106 of the National Historic Preservation Act.
Before including your address, phone number, email address, or other personally identifiable information in your comment, you should be aware that your entire comment—including your personally identifiable information—may be made publicly available at any time. While you can ask the BLM in your comment to withhold your personally identifiable information from public review, we cannot guarantee that we will be able to do so.
The BLM will consult with federally recognized Tribes on a government-to-government basis in accordance with Executive Order 13175 and other policies. Tribal concerns will be given appropriate consideration.
Federal, state, local agencies, and Tribes that may be interested in or substantially affected by the proposal that the BLM is evaluating are invited to request participation in the development of the MDP/EIS as cooperating agencies. Appropriate cooperating agencies are those with jurisdiction by law and/or those that can offer special expertise in the development of the MDP/EIS.
40 CFR 1501.7.
9:00 a.m., August 20, 2018.
On board MISSISSIPPI V at City Front, Caruthersville, Missouri.
Open to the public.
(1) Summary report by President of the Commission on national and regional issues affecting the U.S. Army Corps of Engineers and Commission programs and projects on the Mississippi River and its tributaries; (2) District Commander's overview of current project issues within the St. Louis and Memphis Districts; and (3) Presentations by local organizations and members of the public giving views or comments on any issue affecting the programs or projects of the Commission and the Corps of Engineers.
9:00 a.m., August 21, 2018.
On board MISSISSIPPI V at Beale Street Landing, Memphis, Tennessee.
Open to the public.
(1) Summary report by President of the Commission on national and regional issues affecting the U.S. Army Corps of Engineers and Commission programs and projects on the Mississippi River and its tributaries; (2) District Commander's overview of current project issues within the Memphis District; and (3) Presentations by local organizations and members of the public giving views or comments on any
12:00 noon, August 22, 2018.
On board MISSISSIPPI V at City Front, Vicksburg, Mississippi.
Open to the public.
(1) Summary report by President of the Commission on national and regional issues affecting the U.S. Army Corps of Engineers and Commission programs and projects on the Mississippi River and its tributaries; (2) District Commander's overview of current project issues within the Vicksburg District; and (3) Presentations by local organizations and members of the public giving views or comments on any issue affecting the programs or projects of the Commission and the Corps of Engineers.
9:00 a.m., August 24, 2018.
On board MISSISSIPPI V at Morgan City Port Commission Dock, Morgan City, Louisiana.
Open to the public.
(1) Summary report by President of the Commission on national and regional issues affecting the U.S. Army Corps of Engineers and Commission programs and projects on the Mississippi River and its tributaries; (2) District Commander's overview of current project issues within the New Orleans District; and (3) Presentations by local organizations and members of the public giving views or comments on any issue affecting the programs or projects of the Commission and the Corps of Engineers.
Mr. Charles A. Camillo, telephone 601-634-7023.
National Aeronautics and Space Administration (NASA).
Notice of information collection.
The National Aeronautics and Space Administration, 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.
All comments should be submitted within 60 calendar days from the date of this publication.
All comments should be addressed to Gatrie Johnson, National Aeronautics and Space Administration, 300 E Streets SW, Washington, DC 20546-0001.
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Gatrie Johnson, NASA Clearance Officer, NASA Headquarters, 300 E Street SW, JF0000, Washington, DC 20546 or email
A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States. The NASA Procurement Office supports NASA research, science, and education communities through the award of research/education/and training grants in the science, technology, engineering, and math (STEM) fields. NASA has a continuing commitment to identify and address inequities associated with its grant review and awards processes. To support that commitment, NASA implemented a process to collect demographic data from grant applicants for the purpose of analyzing demographic differences associated with its award processes. Information collected includes the name, gender, race, ethnicity, disability status, citizenship status, education, and career data of the respondents.
Submission of the information is voluntary and is not a precondition of award. However, if the information is not submitted, it will undermine the usefulness of information received from other respondents.
Electronic.
Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of NASA, including whether the information collected has practical utility; (2) the accuracy of NASA's estimate of the burden (including hours and cost) of the proposed collection of information; (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 automated collection techniques or the use of other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They will also become a matter of public record.
Weeks of August 6, 13, 20, 27, September 3, 10, 2018.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
There are no meetings scheduled for the week of August 6, 2018.
There are no meetings scheduled for the week of August 13, 2018.
There are no meetings scheduled for the week of August 20, 2018.
There are no meetings scheduled for the week of August 27, 2018.
There are no meetings scheduled for the week of September 3, 2018.
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 you may email
Nuclear Regulatory Commission.
Exemption and combined license amendment; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is granting exemptions to allow a departure from elements of the certification information of Tier 1 of the generic AP1000 design control document (DCD) and issuing License Amendment Nos. 131 and 130 to Combined Licenses (COL), NPF-91 and NPF-92, respectively. The COLs were issued to Southern Nuclear Operating Company, and Georgia Power Company, Oglethorpe Power Corporation, MEAG Power SPVM, LLC, MEAG Power SPVJ, LLC, MEAG Power SPVP, LLC, and the City of Dalton, Georgia (the licensee); for construction and operation of the Vogtle Electric Generating Plant (VEGP) Units 3 and 4, located in Burke County, Georgia.
The granting of the exemptions allows the changes to Tier 1 information asked for in the amendment. Because the acceptability of the exemptions were determined in part by the acceptability of the amendments, the exemptions and amendments are being issued concurrently.
The exemption revises the plant-specific Tier 1 information and corresponding changes to COL Appendix C, and the amendment changes the associated plant-specific DCD Tier 2 material incorporated into the VEGP Updated Final Safety Analysis Report (UFSAR), to modify an administrative program to manage unqualified inorganic zinc coatings in Service Level I areas of the VEGP Units 3 and 4 containment buildings.
The exemptions and amendments were issued on July 10, 2018.
Please refer to Docket ID NRC-2008-0252 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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William (Billy) Gleaves, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-5848; email:
The NRC is granting an exemption from paragraph B of section III, “Scope and Contents,” of appendix D, “Design Certification Rule for the AP1000,” to part 52 of title 10 of the
Part of the justification for granting the exemption was provided by the review of the amendment. Because the exemption is necessary in order to issue the requested license amendment, the NRC granted the exemption and issued the amendment concurrently, rather than in sequence. This included issuing a combined safety evaluation containing the NRC staff's review of both the
Identical exemption documents (except for referenced unit numbers and license numbers) were issued to the licensee for VEGP Units 3 and 4 (COLs NPF-91 and NPF-92). The exemption documents for VEGP Units 3 and 4 can be found in ADAMS under Accession Nos. ML18158A307 and ML18158A308, respectively. The exemption is reproduced (with the exception of abbreviated titles and additional citations) in Section II of this document. The amendment documents for COLs NPF-91 and NPF-92 are available in ADAMS under Accession Nos. ML18158A309 and ML18158A311, respectively. A summary of the amendment documents is provided in Section III of this document.
Reproduced below is the exemption document issued to VEGP Units 3 and Unit 4. It makes reference to the combined safety evaluation that provides the reasoning for the findings made by the NRC (and listed under Item 1) in order to grant the exemption:
1. In a letter dated November 3, 2017, as supplemented March 28, 2018, Southern Nuclear Operating Company (SNC) requested from the Commission an exemption to allow departures from Tier 1 information in the certified DCD incorporated by reference in 10 CFR part 52, appendix D, “Design Certification Rule for the AP1000 Design,” as part of license amendment request (LAR) 17-039, “Unqualified Service Level I Coatings Program.”
For the reasons set forth in Section 3.2 of the NRC staff's Safety Evaluation, which can be found under ADAMS Accession No. ML18158A313, the Commission finds that:
A. The exemption is authorized by law;
B. the exemption presents no undue risk to public health and safety;
C. the exemption is consistent with the common defense and security;
D. special circumstances are present in that the application of the rule in this circumstance is not necessary to serve the underlying purpose of the rule;
E. the special circumstances outweigh any decrease in safety that may result from the reduction in standardization caused by the exemption; and
F. the exemption will not result in a significant decrease in the level of safety otherwise provided by the design.
2. Accordingly, the licensee is granted an exemption from the certified DCD Tier 1 information, with corresponding changes to Appendix C of the Facility Combined License, as described in the licensee's request dated November 3, 2017, as supplemented by letter dated March 28, 2018. This exemption is related to, and necessary for the granting of License Amendment No. 131 (Unit 3) and 130 (Unit 4), which is being issued concurrently with this exemption.
3. As explained in Section 5.0 of the NRC staff's Safety Evaluation (ADAMS Accession Number ML18158A313), this exemption meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9). Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment needs to be prepared in connection with the issuance of the exemption.
4. This exemption is effective as of the date of its issuance.
By letter dated November 3, 2017, as supplemented by letter dated March 28, 2018 (ADAMS Accession No. ML17307A201 and ML18087A147), the licensee requested that the NRC amend the COLs for VEGP, Units 3 and 4, COLs NPF-91 and NPF-92. The proposed amendment is described in Section I of this
The Commission has determined for these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR chapter I, which are set forth in the license amendment.
A notice of consideration of issuance of amendment to facility operating license or COL, as applicable, proposed no significant hazards consideration determination, and opportunity for a hearing in connection with these actions, was published in the
The Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments.
Using the reasons set forth in the combined safety evaluation, the staff granted the exemptions and issued the amendments that the licensee requested by letter November 3, 2017, as supplemented by letter dated March 28, 2018 (ADAMS Accession No. ML17307A201 and ML18087A147, respectively).
The exemptions and amendments were issued on July 10, 2018, as part of a combined package to the licensee (ADAMS Accession No. ML18158A305).
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Regulatory guide; withdrawal.
The U.S. Nuclear Regulatory Commission (NRC) is withdrawing Regulatory Guide (RG) 8.23, “Radiation Safety Surveys at Medical Institutions.” RG 8.23 is being withdrawn because the NRC amended its regulations to remove certain prescriptive requirements regarding the types and frequencies of surveys. Therefore, the prescriptive guidance in RG 8.23 is no longer needed.
The withdrawal of RG 8.23 is applicable August 7, 2018.
Please refer to Docket ID NRC-2018-0162 when contacting the NRC about the availability of information regarding this document. You may access publicly-available information related to this document using any of the following methods:
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Vered, Shaffer, telephone: 630-829-9862, email:
Regulatory Guide 8.23 was published in January 1981 to provide guidance on the types and frequencies of surveys that are acceptable to the NRC staff for use in medical institutions to comply with part 20 of title 10 of the
The regulations in 10 CFR part 20 were revised after 1981 and became less prescriptive. As part of amending its regulations in 10 CFR part 20, several of the prescriptive survey requirements applicable to radiation protection programs were deleted. Therefore, the prescriptive guidance in RG 8.23 is no longer needed, and RG 8.23 is being withdrawn.
The NRC is withdrawing RG 8.23 because it is no longer needed. Withdrawal of a RG means that the guide no longer provides useful information or has been superseded by other guidance, technological innovations, congressional actions, or other events. The withdrawal of RG 8.23 does not alter any prior or existing NRC licensing approval or the acceptability of licensee commitments to RG 8.23. Although RG 8.23 is withdrawn, current licensees may continue to use it, and withdrawal does not affect any existing licenses or agreements. However, RG 8.23 should not be used in future requests or applications for NRC licensing actions.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft regulatory guide; extension of comment period.
On May 29, 2018, the U.S. Nuclear Regulatory Commission (NRC) solicited comments on draft regulatory guide (DG), DG-5048, “Standard Format and Content of Physical Security Plans, Training and Qualifications Plans and Safeguards Contingency Plans for Nuclear Power Plants.” The public comment period was originally scheduled to close on August 13, 2018. The NRC has decided to extend the public comment period by 30 days to allow more time for members of the public to develop and submit their comments.
The due date of comments requested in the document published on May 29, 2018 (83 FR 24510), is extended. Comments should be filed no later than September 13, 2018. Comments received after this date will be considered, if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Dennis Gordon, Office of Nuclear Security and Incident Response, telephone: 301-287-3633, email:
Please refer to Docket ID NRC-2018-0092 when contacting the NRC about the availability of information regarding this action. You may obtain publically-available information related to this action, by any of the following methods:
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Please include Docket ID NRC-2018-0092 in your comment submission. The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
On May 29, 2018 (83 FR 24510), the NRC solicited comments on DG-5048, “Standard Format and Content of Physical Security Plans, Training and Qualifications Plans and Safeguards Contingency Plans for Nuclear Power Plants” (ADAMS Accession No. ML17124A490). The NRC granted an initial extension of the public comment period to August 13, 2018, and the NRC held a public meeting on July 25, 2018. On July 26, 2018, the Nuclear Energy Institute (NEI) requested an additional 30 days extension to the public comment period to allow NEI and its members' sufficient time to perform a thorough review of the document, consistent with other work priorities (ADAMS Accesion No. ML18208A473). The NRC has decided to extend the public comment period on this document until September 13, 2018, to allow more time for industry and members of the public to submit their comments.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft interim staff guidance; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is soliciting public comment on its draft Interim Staff Guidance (ISG) Digital Instrumentation and Controls (DI&C)-ISG-06, “Licensing Process.” This ISG defines the licensing process used to support the review of license amendment requests (LARs) associated with safety-related DI&C equipment modifications in operating plants and in new plants once they become operational. This ISG provides guidance for activities performed before an LAR is submitted and for activities performed during the LAR review. The NRC staff uses the process described in this ISG to evaluate compliance with NRC regulations.
Submit comments by September 6, 2018. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received before this date.
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Joseph Golla, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1002, email:
Please refer to Docket ID NRC-2018-0056 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
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Please include Docket ID NRC-2018-0056 in your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
This ISG provides guidance for the NRC staff's review of LARs supporting installation of digital I&C equipment in accordance with licensing processes defined in NRC office instruction LIC-101, “License Amendment Review Procedures.” This ISG identifies information the NRC staff should review for digital I&C equipment. This ISG provides guidance on when that information should be reviewed.
This ISG is designed to be used with the NRC's topical report review and approval process defined in NRC Office of Nuclear Reactor Regulation office instruction LIC-500, “Topical Report Process.” Where a licensee references an NRC-approved topical report, the NRC staff should be able to, where
The NRC staff performs evaluations of proposed digital I&C equipment to ensure equipment will perform required functions. These evaluations use the guidance in the Standard Review Plan, Chapter 7, and other associated guidance. When a license amendment is required, licensees are obligated to provide a description of the licensing basis functions of digital I&C equipment and include a description of the equipment that implements the functions. Additionally, licensees identify those parts of the licensing basis being updated as a result of the proposed change.
The NRC staff review processes include activities for evaluating documentation of plans and processes which are used to support system development activities and their outcomes.
The Standard Review Plan, Appendix 7.0-A, and Branch Technical Position 7-14, guide the NRC staff in performing reviews of digital systems in support of safety evaluations. For reviews using the Alternate Process as defined in the ISG, the ISG provides additional guidance for performing early stage reviews of digital safety-related systems in support of safety evaluations. The NRC staff may review the system design and development process to support a determination that the design meets regulatory requirements and that in safety-related applications in nuclear power plants, the process is of sufficient high quality to produce systems and software suitable for use.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
License amendment request; notice of opportunity to comment, request a hearing, and petition for leave to intervene; order imposing procedures.
The U.S. Nuclear Regulatory Commission (NRC) received and is considering approval of one amendment request. The amendment request is for Millstone Power Station, Unit No. 3. For each amendment request, the NRC proposes to determine that they involve no significant hazards consideration. Because each amendment request contains sensitive unclassified non-safeguards information (SUNSI), an order imposes procedures to obtain access to SUNSI for contention preparation.
Comments must be filed by September 6, 2018. A request for a hearing must be filed by October 9, 2018. Any potential party as defined in § 2.4 of title 10 of the
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Paula Blechman, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-2242; email:
Please refer to Docket ID NRC-2018-0139, facility name, unit number(s), plant docket number, application date, and subject when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
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Please include Docket ID NRC-2018-0139, facility name, unit number(s), plant docket number, application date, and subject in your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should
Pursuant to Section 189a.(2) of the Atomic Energy Act of 1954, as amended (the Act), the NRC is publishing this notice. The Act requires the Commission to publish notice of any amendments issued, or proposed to be issued and grants the Commission the authority to issue and make immediately effective any amendment to an operating license or combined license, as applicable, upon a determination by the Commission that such amendment involves no significant hazards consideration, notwithstanding the pendency before the Commission of a request for a hearing from any person.
This notice includes notice of an amendment containing SUNSI.
The Commission has made a proposed determination that the following amendment request involves no significant hazards consideration. Under the Commission's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not (1) involve a significant increase in the probability or consequences of an accident previously evaluated, or (2) create the possibility of a new or different kind of accident from any accident previously evaluated, or (3) involve a significant reduction in a margin of safety. The basis for this proposed determination for each amendment request is shown below.
The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination.
Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day period provided that its final determination is that the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period if circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example, in derating or shutdown of the facility. If the Commission takes action prior to the expiration of either the comment period or the notice period, it will publish a notice of issuance in the
Within 60 days after the date of publication of this notice, any persons (petitioner) whose interest may be affected by this action may file a request for a hearing and petition for leave to intervene (petition) with respect to the action. Petitions shall be filed in accordance with the Commission's “Agency Rules of Practice and Procedure” in 10 CFR part 2. Interested persons should consult a current copy of 10 CFR 2.309. The NRC's regulations are accessible electronically from the NRC Library on the NRC's website at
As required by 10 CFR 2.309(d) the petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements for standing: (1) The name, address, and telephone number of the petitioner; (2) the nature of the petitioner's right under the Act to be made a party to the proceeding; (3) the nature and extent of the petitioner's property, financial, or other interest in the proceeding; and (4) the possible effect of any decision or order which may be entered in the proceeding on the petitioner's interest.
In accordance with 10 CFR 2.309(f), the petition must also set forth the specific contentions which the petitioner seeks to have litigated in the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner must provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner must also provide references to the specific sources and documents on which the petitioner intends to rely to support its position on the issue. The petition must include sufficient information to show that a genuine dispute exists with the applicant or licensee on a material issue of law or fact. Contentions must be limited to matters within the scope of the proceeding. The contention must be one which, if proven, would entitle the petitioner to relief. A petitioner who fails to satisfy the requirements at 10 CFR 2.309(f) with respect to at least one contention will not be permitted to participate as a party.
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene. Parties have the opportunity to participate fully in the conduct of the hearing with respect to resolution of that party's admitted contentions, including the opportunity to present evidence, consistent with the NRC's regulations, policies, and procedures.
Petitions must be filed no later than 60 days from the date of publication of this notice. Petitions and motions for leave to file new or amended contentions that are filed after the deadline will not be entertained absent a determination by the presiding officer that the filing demonstrates good cause by satisfying the three factors in 10 CFR 2.309(c)(1)(i) through (iii). The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document.
If a hearing is requested, and the Commission has not made a final determination on the issue of no significant hazards consideration, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to establish when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing would take place after issuance of the amendment. If the final determination is that the amendment request involves a
A State, local governmental body, Federally-recognized Indian Tribe, or agency thereof, may submit a petition to the Commission to participate as a party under 10 CFR 2.309(h)(1). The petition should state the nature and extent of the petitioner's interest in the proceeding. The petition should be submitted to the Commission no later than 60 days from the date of publication of this notice. The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document, and should meet the requirements for petitions set forth in this section, except that under 10 CFR 2.309(h)(2) a State, local governmental body, or Federally-recognized Indian Tribe, or agency thereof does not need to address the standing requirements in 10 CFR 2.309(d) if the facility is located within its boundaries. Alternatively, a State, local governmental body, Federally-recognized Indian Tribe, or agency thereof may participate as a non-party under 10 CFR 2.315(c).
If a hearing is granted, any person who is not a party to the proceeding and is not affiliated with or represented by a party may, at the discretion of the presiding officer, be permitted to make a limited appearance pursuant to the provisions of 10 CFR 2.315(a). A person making a limited appearance may make an oral or written statement of his or her position on the issues but may not otherwise participate in the proceeding. A limited appearance may be made at any session of the hearing or at any prehearing conference, subject to the limits and conditions as may be imposed by the presiding officer. Details regarding the opportunity to make a limited appearance will be provided by the presiding officer if such sessions are scheduled.
All documents filed in NRC adjudicatory proceedings, including a request for hearing and petition for leave to intervene (petition), any motion or other document filed in the proceeding prior to the submission of a request for hearing or petition to intervene, and documents filed by interested governmental entities that request to participate under 10 CFR 2.315(c), must be filed in accordance with the NRC's E-Filing rule (72 FR 49139; August 28, 2007, as amended at 77 FR 46562; August 3, 2012). The E-Filing process requires participants to submit and serve all adjudicatory documents over the internet, or in some cases to mail copies on electronic storage media. Detailed guidance on making electronic submissions may be found in the Guidance for Electronic Submissions to the NRC and on the NRC website at
To comply with the procedural requirements of E-Filing, at least 10 days prior to the filing deadline, the participant should contact the Office of the Secretary by email at
Information about applying for a digital ID certificate is available on the NRC's public website at
A person filing electronically using the NRC's adjudicatory E-Filing system may seek assistance by contacting the NRC's Electronic Filing Help Desk through the “Contact Us” link located on the NRC's public website at
Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing stating why there is good cause for not filing electronically and requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff. Participants filing adjudicatory documents in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. A presiding officer, having granted an exemption request from using E-Filing, may require a participant or party to use E-Filing if the presiding officer subsequently determines that the reason for granting the exemption from use of E-Filing no longer exists.
Documents submitted in adjudicatory proceedings will appear in the NRC's electronic hearing docket which is available to the public at
1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated?
The proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated.
The proposed change will not affect plant equipment or structure, including the SFP, NFSR [new fuel storage racks], or fuel handling equipment, including how the equipment is operated and maintained. There are no changes to the equipment for fuel handling or how fuel assemblies are handled, including how fuel assemblies are inserted into and removed from SFP and NFSR storage locations. There is no change to administrative means to verify correct fuel assembly storage in the SFP, or the required response to a fuel assembly misload or drop event. There are no changes to how RCCAs [rod cluster control assemblies] will be handled, including how RCCAs are inserted into or removed from a fuel assembly or other location such as a SFP storage location. Also, since the proposed change does not modify plant equipment or its operation and maintenance, including equipment used to maintain SFP soluble boron levels, the proposed change will not impact a boron dilution event or plant response to it.
The criticality safety evaluation concluded that the NFSR limiting accident is the fully flooded condition with each storage location loaded with a maximum reactivity fuel assembly. The NFSR maintains [k-effective] k
Regarding the SFP, the Region 1 storage configuration will change. The Region 2 and 3 burnup curves will be updated and reduced in number. The process of choosing fuel assembly storage locations will not change, except that the Region 1 storage configuration and Region 2 and 3 burnup requirements will be updated, and fuel assemblies containing RCCAs may be stored in Region 2 without consideration of the burnup curve. The physical handling, insertion, removal, and storage of fuel assemblies in SFP racks will not change. The MPS3 program for choosing fuel assembly storage locations, for fuel handling, and for assuring that the fuel assemblies are placed into correct locations will remain in place. Thus, the probability of a fuel assembly misloading or a fuel assembly drop in the SFP will not significantly increase due to the proposed change.
Several postulated accidents for the SFP were reviewed for the proposed change which included postulated fuel assembly misload and drop scenarios. The criticality safety evaluation for the SFP concluded that the limiting accident, which bounds the other scenarios, is a multiple misload of fuel assemblies into each Region 2 fuel storage location. The criticality safety evaluation concluded that a SFP soluble boron concentration of 2600 ppm [part per million] will maintain k
There are no changes to plant equipment, including its operation and maintenance, as a result of the proposed change, including equipment associated with maintaining SFP soluble boron concentration or possible flow paths that could contribute to a boron dilution event. Thus, no new avenues for a boron dilution event will be created. There is no change regarding how the plant maintains boron concentration or responds to a boron dilution event. The criticality safety evaluation for the postulated boron dilution event shows the SFP maintains k
The MPS3 SFP is currently licensed to store 1860 fuel assemblies which include a Region 2 rack that has not been placed in the SFP (TS 5.6.3).
Thus, the SFP seismic/structural loading requirements for the proposed change are bounded by the existing TS. The criticality safety evaluation shows that k
In each of the above scenarios the proposed change does not significantly increase the probability of an accident previously evaluated, and maintains required k
2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated?
The proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
There is no change to any plant equipment, including how equipment is operated and maintained. There will be no changes to equipment used to handle fuel assemblies (or any heavy load) over the NFSR or the SFP.
There is no change regarding how the fuel assemblies are stored, inserted into, and removed from fuel storage locations. There is no change to how RCCAs will be inserted into or removed from a fuel assembly or other location, or otherwise how RCCAs are handled. Thus, there are no new accidents created over and above the existing postulated accidents of a fuel misload or a fuel assembly drop in the SFP or a flooding event in the NFSR area.
Also, since there is no change to the plant equipment or how equipment is operated and
The criticality safety evaluation for the first time at MPS3 specifically analyzes a boron dilution event. However, the overall accident analyzed is the potential for a SFP criticality, and the boron dilution event is another potential initiator of the postulated SFP criticality accident. Also, the possibility of a SFP boron dilution event has always existed at MPS3 and the proposed change does not newly create or change the possibility of such an event occurring.
The criticality safety evaluation for the first time at MPS3 specifically analyzes a multiple fuel misload event. As with the postulated boron dilution event, the possibility of a multiple fuel assembly misload has always existed at MPS3 and the proposed change does not newly create or change the possibility of such an event occurring. Also, this postulated event was analyzed for the MPS2 spent fuel pool criticality LAR [license amendment request] which the NRC approved in June 2016 [Reference 3 of the application dated May 3, 2018].
Since the proposed change will not change fuel/RCCA handling equipment or how fuel assemblies and RCCAs are handled and stored, nor will it change any other plant equipment, there is no mechanism for creating a new or different kind of accident not previously evaluated. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Does the proposed change involve a significant reduction in the margin of safety?
The proposed change does not involve a significant reduction in a margin of safety.
The licensing requirement for the SFP is that k
In addition, the criticality safety evaluation concludes that the SFP will maintain k
The criticality safety evaluation also allows the following storage configurations. In each case the storage configuration does not increase reactivity assuring that k
• Storing non-fuel components in any spent fuel rack storage location where fuel assemblies are allowed
• Storing non-fuel components in the guide tubes of any fuel assembly.
The criticality safety evaluation evaluated non-standard fuel stored in the MPS3 to determine where they can be stored in the SFP. This information is used to maintain k
The licensing requirement for the NFSR is that k
The criticality safety evaluation concludes that these requirements are met assuming each fuel storage location is loaded with a maximum reactivity fuel assembly (5.0 wt% U-235 enrichment with no burnable poisons).
Therefore, all the margins of safety are maintained, and the proposed change does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration.
A. This Order contains instructions regarding how potential parties to this proceeding may request access to documents containing Sensitive Unclassified Non-Safeguards Information (SUNSI).
B. Within 10 days after publication of this notice of hearing and opportunity to petition for leave to intervene, any potential party who believes access to SUNSI is necessary to respond to this notice may request access to SUNSI. A “potential party” is any person who intends to participate as a party by demonstrating standing and filing an admissible contention under 10 CFR 2.309. Requests for access to SUNSI submitted later than 10 days after publication of this notice will not be considered absent a showing of good cause for the late filing, addressing why the request could not have been filed earlier.
C. The requester shall submit a letter requesting permission to access SUNSI to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff, and provide a copy to the Associate General Counsel for Hearings, Enforcement and Administration, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. The expedited delivery or courier mail address for both offices is: U.S. Nuclear Regulatory Commission, 11555 Rockville Pike, Rockville, Maryland 20852. The email address for the Office of the Secretary and the Office of the General Counsel are
(1) A description of the licensing action with a citation to this
(2) The name and address of the potential party and a description of the potential party's particularized interest that could be harmed by the action identified in C.(1); and
(3) The identity of the individual or entity requesting access to SUNSI and the requester's basis for the need for the information in order to meaningfully participate in this adjudicatory proceeding. In particular, the request must explain why publicly available versions of the information requested would not be sufficient to provide the basis and specificity for a proffered contention.
D. Based on an evaluation of the information submitted under paragraph C.(3) the NRC staff will determine within 10 days of receipt of the request whether:
(1) There is a reasonable basis to believe the petitioner is likely to establish standing to participate in this NRC proceeding; and
(2) The requestor has established a legitimate need for access to SUNSI.
E. If the NRC staff determines that the requestor satisfies both D.(1) and D.(2) above, the NRC staff will notify the requestor in writing that access to SUNSI has been granted. The written notification will contain instructions on how the requestor may obtain copies of the requested documents, and any other conditions that may apply to access to those documents. These conditions may include, but are not limited to, the signing of a Non-Disclosure Agreement or Affidavit, or Protective Order
F. Filing of Contentions. Any contentions in these proceedings that are based upon the information received as a result of the request made for SUNSI must be filed by the requestor no later than 25 days after receipt of (or access to) that information. However, if more than 25 days remain between the petitioner's receipt of (or access to) the information and the deadline for filing all other contentions (as established in the notice of hearing or opportunity for hearing), the petitioner may file its SUNSI contentions by that later deadline.
G. Review of Denials of Access.
(1) If the request for access to SUNSI is denied by the NRC staff after a determination on standing and requisite need, the NRC staff shall immediately notify the requestor in writing, briefly stating the reason or reasons for the denial.
(2) The requester may challenge the NRC staff's adverse determination by filing a challenge within 5 days of receipt of that determination with: (a) The presiding officer designated in this proceeding; (b) if no presiding officer has been appointed, the Chief Administrative Judge, or if he or she is unavailable, another administrative judge, or an Administrative Law Judge with jurisdiction pursuant to 10 CFR 2.318(a); or (c) if another officer has been designated to rule on information access issues, with that officer.
(3) Further appeals of decisions under this paragraph must be made pursuant to 10 CFR 2.311.
H. Review of Grants of Access. A party other than the requester may challenge an NRC staff determination granting access to SUNSI whose release would harm that party's interest independent of the proceeding. Such a challenge must be filed within 5 days of the notification by the NRC staff of its grant of access and must be filed with: (a) The presiding officer designated in this proceeding; (b) if no presiding officer has been appointed, the Chief Administrative Judge, or if he or she is unavailable, another administrative judge, or an Administrative Law Judge with jurisdiction pursuant to 10 CFR 2.318(a); or (c) if another officer has been designated to rule on information access issues, with that officer.
If challenges to the NRC staff determinations are filed, these procedures give way to the normal process for litigating disputes concerning access to information. The availability of interlocutory review by the Commission of orders ruling on such NRC staff determinations (whether granting or denying access) is governed by 10 CFR 2.311.
I. The Commission expects that the NRC staff and presiding officers (and any other reviewing officers) will consider and resolve requests for access to SUNSI, and motions for protective orders, in a timely fashion in order to minimize any unnecessary delays in identifying those petitioners who have standing and who have propounded contentions meeting the specificity and basis requirements in 10 CFR part 2. The attachment to this Order summarizes the general target schedule for processing and resolving requests under these procedures.
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning negotiated service agreements. 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 website (
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 part 3010, and 39 CFR part 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 part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
2.
This notice will be published in the
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on August 1, 2018, it filed with the Postal Regulatory Commission a
Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)
Pursuant to Section 806(e)(1) of the Clearing Supervision Act
This Amendment No. 2 to the advance notice is filed in connection with a proposed change to make certain revisions to OCC's Rules and By-Laws to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish new tools by which OCC could re-establish a matched book following a default. Each of the tools proposed herein is contemplated to be deployed by OCC in an extreme stress event that has placed OCC into a recovery or orderly wind-down scenario.
The proposed changes to OCC's By-Laws and Rules were submitted as Exhibits 5A and 5B of the filing, respectively, and proposed changes to OCC's Default Management Policy were submitted as confidential Exhibit 5C of the filing.
The proposed change is described in detail in Item II below. All terms with initial capitalization not defined herein have the same meaning as set forth in OCC's By-Laws and Rules.
In its filing with the Commission, OCC included statements concerning the purpose of and basis for the advance notice and discussed any comments it received on the advance notice. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections A and B below, of the most significant aspects of these statements.
Written comments were not and are not intended to be solicited with respect to the advance notice and none have been received. OCC will notify the Commission of any written comments received by OCC.
The purpose of this advance notice is to make certain revisions to OCC's Rules and By-Laws Laws that are designed to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish tools by which OCC could re-establish a matched book following a default. Each of the tools proposed herein is contemplated to be deployed by OCC in an extreme stress event that has placed OCC into a recovery or orderly wind-down scenario. Each of the proposed revisions also is designed to further OCC's compliance, in whole or in part, with the provisions of the Commission's rules identified immediately below.
On September 28, 2016, the Commission adopted amendments to Rule 17Ad-22
• Rule 17Ad-22(e)(3)(ii) requires that each CCA “establish, implement,
• Rule 17Ad-22(e)(4)(viii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, including by . . . [a]ddressing allocation of credit losses the [CCA] may face if its collateral and other resources are insufficient to fully cover its credit exposures, including the repayment of any funds the [CCA] may borrow from liquidity providers.”
• Rule 17Ad-22(e)(4)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, including by . . . [d]escribing the [CCA's] process to replenish any financial resources it may use following a default or other event in which use of such resources is contemplated.”
• Rule 17Ad-22(e)(7)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively measure, monitor, and manage the liquidity risk that arises in or is borne by the [CCA], including measuring, monitoring, and managing its settlement and funding flows on an ongoing and timely basis, and its use of intraday liquidity by, at a minimum, doing the following . . . [d]escribing the [CCA's] process to replenish any liquid resources that the clearing agency may employ during a stress event.”
• Rule 17Ad-22(e)(13) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]nsure the covered clearing agency has the authority and operational capacity to take timely action to contain losses and liquidity demands and continue to meet its obligations . . .”
• Rule 17Ad-22(e)(23)(i) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]ublicly disclos[e] all relevant rules and material procedures, including key aspects of its default rules and procedures.”
• Rule 17Ad-22(e)(23)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]rovid[e] sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the covered clearing agency.”
OCC meets the definition of a CCA and is therefore subject to the requirements of the CCA rules, including new Rules 17Ad-22(e)(3)(ii), (e)(4)(viii), (e)(4)(ix), (e)(7)(ix), (e)(13), (e)(23)(i) and (e)(23)(ii).
In order to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish new tools by which OCC could re-establish a matched book following a default, OCC is proposing to make the following revisions to its Rules and By-Laws:
(1) Revise the existing assessment powers in Section 6 of Article VIII of OCC's By-Laws, specifically to:
(a) Establish a rolling “cooling-off period” that would be triggered by the payment of a proportionate charge against the Clearing Fund (“triggering proportionate charge”), during which period the aggregate liability of a Clearing Member to replenish the Clearing Fund (inclusive of assessments) would be 200% of the Clearing Member's required contribution as of the time immediately preceding the triggering proportionate charge;
(b) Clarify that a Clearing Member that chooses to terminate its membership status during a cooling-off period will not be liable for replenishment of the Clearing Fund immediately following the expiration of such cooling-off period, provided that the withdrawing Clearing Member satisfies enumerated criteria, including providing notice of such termination by no later than the end of the cooling-off period and by closing-out and/or transferring of all its open positions with OCC by no later than the last day of the cooling-off period; and
(c) Delineate between the obligation of a Clearing Member to replenish its contributions to the Clearing Fund and its obligations to meet additional “assessments” that may be levied following a proportionate charge to the Clearing Fund.
(2) Adopt a new Rule 1011
(3) Adopt a new Rule 1111 that would provide authority to:
(a) Allow OCC to call for voluntary tear-ups (“Voluntary Tear-Up,” as defined below) of non-defaulting Clearing Member and/or customer positions at any time following the suspension or default of a Clearing Member, with the scope of any such Voluntary Tear-Ups being determined by the Risk Committee of OCC's Board (“Risk Committee”);
(b) Allow OCC's Board to vote to tear-up the “Remaining Open Positions” (defined below) of a defaulted Clearing Member, as well as any “Related Open Positions” (defined below) in a circumstance where OCC has attempted one or more auctions of such defaulted
(c) Allow OCC's Board to vote to re-allocate losses, costs and fees imposed upon holders of positions extinguished in a Partial Tear-Up through a special charge levied against remaining non-defaulting Clearing Members.
(4) Revise the descriptions and authorizations in Article VIII of OCC's By-Laws concerning the use of the Clearing Fund to reflect the discretion of OCC to use remaining Clearing Fund contributions to re-allocate losses imposed on non-defaulting Clearing Members and customers from a Voluntary Tear-Up or a mandatory tear-up (“Partial Tear-Up,” as defined below).
Each of the proposed revisions to OCC's Rules and By-Laws is described in more detail in the following sub-sections:
OCC's current assessment powers are described in Section 6 of Article VIII of OCC's By-Laws. Section 6 establishes a general requirement for each Clearing Member to promptly make good any deficiency in its required contribution to the Clearing Fund whenever an amount is paid out of its Clearing Fund contribution (whether by proportionate charge or otherwise).
OCC proposes to revise Section 6 of Article VIII of OCC's By-Laws to make three primary modifications regarding its existing authority to assess proportionate charges against Clearing Members' contributions to the Clearing Fund. First, the proposal introduces an automatic minimum fifteen calendar day “cooling-off” period that begins when a proportionate charge is assessed by OCC against Clearing Members' Clearing Fund contributions. While the cooling-off period will continue for a minimum of fifteen consecutive calendar days, if one or more of the events described in clauses (i) through (iv) of Article VIII, Section 5(a) of OCC's By-Laws occur(s) during that fifteen calendar day period and result in one or more proportionate charges against the Clearing Fund, the cooling-off period shall be extended through either (i) the fifteenth calendar day from the date of the most recent proportionate charge resulting from the subsequent event, or (ii) the twentieth day from the date of the proportionate charge that initiated the cooling-off period, whichever is sooner.
During a cooling-off period, each Clearing Member would have its aggregate liability to replenish the Clearing Fund capped at 200% of the Clearing Member's then-required contribution to the Clearing Fund. Once the cooling-off period ends each remaining Clearing Member would be required to replenish the Clearing Fund in the amount necessary to meet its then-required contribution. Once the cooling-off period ends, any remaining losses or expenses suffered by OCC as a result of any event described in clauses (i) through (iv) of Article VIII, Section 5(a) of OCC's By-Laws that occurred during such cooling-off period could not be charged against the amounts Clearing Members have contributed to replenish the Clearing Fund upon the expiration of the cooling-off period.
Second, in connection with the cooling-off period, the proposal would extend the time frame within which a Clearing Member may provide a termination notice to OCC to avoid liability for replenishment of the Clearing Fund after the cooling-off period and would modify the obligations of such a terminating Clearing Member for closing-out and transferring its remaining open positions. Specifically, to effectively terminate its status as a Clearing Member and not be liable for replenishing the Clearing Fund after the cooling-off period, a Clearing Member would be required to: (i) Notify OCC in writing of its intent to terminate not later than the last day of the cooling-off period, (ii) not initiate any opening purchase or opening writing transaction, and, if the Clearing Member is a Market Loan Clearing Member or a Hedge Clearing Member, not initiate any Stock Loan transaction, through any of its accounts, and (iii) close-out or transfer all of its open positions by no later than the last day of the cooling-off period. If a Clearing Member fails to satisfy all of these conditions by the end of a given cooling-off period, it would not have completed all of the requirements necessary to terminate its status as a Clearing Member under Article VIII, Section 6 of OCC's By-Laws and therefore it would remain subject to the obligation to replenish the Clearing Fund after the end of the cooling-off period.
Third, the proposal would clarify the distinction between “replenishment” of the Clearing Fund and a Clearing Member's obligation to answer “assessments.” In this context, the term “replenish” (and its variations) shall to refer to a Clearing Member's standing
OCC proposes to add new Rule 1011, which will provide a framework by which OCC could receive voluntary payments in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211,
OCC proposes to add new Rule 1111, which, in relevant part, will establish a framework by which non-defaulting Clearing Members and non-defaulting customers of Clearing Members could be given an opportunity to voluntarily extinguish (
While Risk Committee approval is not needed to commence a voluntary tear-up, the Risk Committee would be responsible for determining the appropriate scope of each voluntary tear-up. To ensure OCC retains sufficient flexibility to effectively deploy this tool in an extreme stress event, proposed Rule 1111(c) is drafted to provide the Risk Committee with discretion to determine the appropriate scope of each voluntary tear-up.
Once the Risk Committee has determined the scope of the Voluntary Tear-Up, OCC will initiate the call for voluntary tear-ups by issuing a “Voluntary Tear-Up Notice.” The Voluntary Tear-Up Notice shall inform all non-defaulting Clearing Members of the opportunity to participate in a Voluntary Tear-Up.
OCC is not proposing a tear-up process that would require the imposition of “gains haircutting” (
In OCC's proposed tear-up process, the holders of torn-up positions would be assigned a Tear-Up Price and OCC would draw on its remaining financial resources in order to extinguish the torn-up positions at the assigned Tear-Up Price without forcing a reduction in the amount of unpaid value of such positions. OCC is amending the Initial Filing to clarify that while OCC does not intend, in the first instance, for its tear-up process to serve as a means of loss allocation, circumstances may arise such that, despite best efforts, OCC has inadequate remaining financial resources to extinguish torn-up positions at their assigned Tear-Up Price without forcing a reduction in the amount of unpaid value of such positions (
The proposed changes would provide OCC with two separate and non-exclusive means of equitably re-allocating the losses, costs or expenses imposed upon the holders of torn-up positions as a result of the tear-up(s). First, the proposed changes to Article VIII would provide OCC discretion to use remaining Clearing Fund contributions to re-allocate losses imposed on non-defaulting Clearing Members and customers from such tear-up(s). Second, Rule 1111(a) would provide that if OCC subsequently recovers from the defaulted Clearing Member or the estate(s) of the defaulted Clearing Member(s) and the amount of such recovery exceeds the amount OCC received in voluntary payments, then non-defaulting Clearing Members and non-defaulting customers that voluntarily tore-up open positions and incurred losses from such tear-ups would be repaid from the amount of the recovery in excess of the amount OCC received in voluntary payments.
With respect to Voluntary Tear-Ups, new Rule 1111(h) would clarify that no action or omission by OCC pursuant to and in accordance with Rule 1111 shall constitute a default by OCC.
OCC proposes to add new Rule 1111, which, in relevant part, will provide the Board with discretion to extinguish the remaining open positions of any defaulted Clearing Member or customer of such defaulted Clearing Member(s) (such positions, “Remaining Open Positions”), as well as any related open positions as necessary to mitigate further disruptions to the markets affected by the Remaining Open Positions (such positions, “Related Open Positions”), in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default (such tear-ups hereinafter collectively referred to as “Partial Tear-Ups”). Like the determination for Voluntary Tear-Ups, the Risk Committee shall determine the appropriate scope of each Partial Tear-Up and such determination shall (i) be based on then-existing facts and circumstances, (ii) be in furtherance of the integrity of OCC and the stability of the financial system, and (iii) take into consideration the legitimate interests of Clearing Members and market participants. Once the Risk Committee has determined the scope of the Partial Tear-Up, OCC will initiate the Partial Tear-Up process by issuing a “Partial Tear-Up Notice.” The Partial Tear-Up Notice shall (i) identify the Remaining Open Positions and Related Open Positions designated for tear-up, (ii) identify the open positions of non-defaulting Clearing Members and non-defaulting customers that will be subject to Partial Tear-Up (such positions, “Tear-Up Positions”), (iii) specify the termination price (“Partial Tear-Up Price”) for each position to be torn-up, and (iv) list the date and time as of which the Partial Tear-Up will occur.
The scope of any Partial Tear-Up will be determined in accordance with Rule 1111(e).
Rule 1111(e)(iii) provides that every Partial Tear-Up position is automatically terminated upon and with effect from the Partial Tear-Up Time, without the need for any further step by any party to such Cleared Contract or Cleared Security, and that upon termination, either OCC or the relevant Clearing Member (as the case may be) shall be obligated to pay the other the applicable Partial Tear-Up Price. Rule 1111(e)(iii) further provides that the corresponding open position shall be deemed terminated at the Partial Tear-Up Price.
Rule 1111(g) provides that to the extent losses imposed upon non-defaulting Clearing Members and non-defaulting customers resulting from a Partial Tear-Up can reasonably be determined, the Board may elect to re-allocate such losses among all non-defaulting Clearing Members through a special charge to all non-defaulting Clearing Members in an amount corresponding to each such non-defaulting Clearing Member's proportionate share of the variable amount of the Clearing Fund at the time such Partial Tear-Up is conducted.
With respect to Partial Tear-Ups, new Rule 1111(h) would clarify that no action or omission by OCC pursuant to and in accordance with Rule 1111 shall constitute a default by OCC.
OCC believes that the proposed changes would reduce the nature and level of risk presented to OCC in three primary ways: (i) By providing greater certainty regarding what financial resources will be available to OCC after a proportionate charge is assessed; (ii) by providing additional tools by which to allocate credit losses in excess of OCC's available financial resources; and (iii) by enhancing OCC's ability to re-establish a matched book. First, OCC believes the imposition of a 200% cap on OCC's assessment powers during any cooling-off period provides Clearing Members with greater certainty regarding their maximum liability with respect to the Clearing Fund during extreme stress events, which in turn, facilitates Clearing Members' management of their own risks, and to the extent applicable, regulatory capital considerations. Further, OCC believes that extending the window for Clearing Member withdrawal following a proportionate charge to be equivalent with the cooling-off period would afford a Clearing Member a more reasonable period in which to evaluate whether the withdrawal from clearing membership would be necessary to cap its liability for proportionate charges at 200% of its then-required Clearing Fund contributions. With this change, OCC believes the increased predictability would help it to more reliably understand the amount of Clearing Fund contributions that will likely be available to it after a proportionate charge is assessed. Second, the introduction of rules to allow for voluntary payments, Voluntary Tear-Ups and Partial Tear-Ups would provide OCC with three distinct tools that could be used to allocate any credit losses OCC may face in excess of collateral and other resources available to OCC. Finally, in the event that OCC believes its obligations and liabilities arising from remaining positions in the portfolio of a defaulted Clearing Member may exceed its remaining available financial resources, the proposed changes ultimately would enable OCC to extinguish those positions, thereby re-establishing a matched book.
The risks of a Partial Tear-Up are extremely remote; nonetheless, OCC believes that the express authority to conduct a Partial Tear-Up may be viewed as increasing Clearing Members' and customers' exposure to an extreme stress scenario. As explained above, the proposed Partial Tear-Up authority is consistent with regulatory requirements, as well as with the expectations of CCPs of various international organizations. OCC further believes that its proposed Partial Tear-Up authority strikes an appropriate balance between seeking to protect the interests of Clearing Members and customers and the need to have appropriate tools to stabilize a systemically important financial market utility and minimize the risk of disruption to the broader financial system. To address the potential impact of a Partial Tear-Up on Clearing Members and customers, OCC has proposed two tools that would enable it to equitably re-allocate the losses, costs and fees imposed upon holders of torn-up positions.
The stated purpose of the Clearing Supervision Act is to mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for systemically important financial market utilities and strengthening the liquidity of systemically important financial market utilities.
• Promote robust risk management;
• promote safety and soundness;
• reduce systemic risks; and
• support the stability of the broader financial system.
The Commission has adopted risk management standards under Section 805(a)(2) of the Clearing Supervision Act and the Act in furtherance of these objectives and principles, including those standards adopted pursuant to the Commission rules cited below.
In relevant part, Rule 17Ad-22(e)(3)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . plan[ ] for the recovery and orderly wind-down of the [CCA] necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.”
In relevant part, Rule 17Ad-22(e)(4)(viii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [ a]ddress[ ] allocation of credit losses the [CCA] may face if its collateral and other resources are insufficient to fully cover its credit exposures . . .”
In relevant part, Rule 17Ad-22(e)(4)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [d]escrib[e] the [CCA's] process to replenish any financial resources it may use following a default or other event in which use of such resources is contemplated.”
OCC believes that the proposed approach improves predictability for OCC and for Clearing Members regarding the size of Clearing Fund contributions that are likely to be subject to assessments for proportionate charges. Additionally, replacing the five business day withdrawal period with the withdrawal period commensurate with the cooling-off period (which, as proposed would be a minimum of fifteen calendar days) would give Clearing Members a more reasonable period in which to meet the wind-down and termination requirements necessary to cap their liability. OCC believes that
OCC believes that the relative certainty provided by the proposed cooling-off period and 200% cap on assessments ultimately could reduce the risks of successive or “cascading” defaults, in which the financial demands on remaining non-defaulting Clearing Members to continually replenish OCC's Clearing Fund (and similar guaranty funds at other CCPs to which such Clearing Members might belong) have the effect of further weakening such Clearing Members to the point of default. In this regard, the proposed changes are designed to provide OCC, Clearing Members and other stakeholders with sufficient time to manage the ongoing default(s) without further aggravating the extreme stresses facing market participants.
OCC recognizes that the proposed changes would limit the maximum amount of Clearing Fund resources that could be available to OCC in an extreme stress scenario, which introduces the possibility, however remote, that the proposed 200% cap ultimately could be reached. If during any cooling-off period the amount of aggregate proportionate charges against the Clearing Fund approaches the 200% cap, the amount remaining in the Clearing Fund may no longer be sufficient to comply with the applicable minimum regulatory financial resources requirements in the CCAs. In any such event, OCC's existing authority under Rule 603 would permit OCC to call on participants for additional initial margin, which could ensure that OCC's minimum financial resources remain in excess of applicable CCA requirements.
Given the products cleared by OCC and the composition of its clearing membership, OCC has determined that a minimum 15-calendar day cooling-off period, rolling up to a maximum of 20 calendar days, is likely to be a sufficient amount of time for OCC to manage the ongoing default(s) and take necessary steps in furtherance of stabilizing the clearing system. Further, through conversations with Clearing Members, OCC believes that the proposed cooling-off period is likely to be a sufficient amount for Clearing Members (and their customers) to orderly reduce or rebalance their positions, in an attempt to mitigate stress losses and exposure to potential initial margin increases as they navigate the stress event. Through conversations with Clearing Members, OCC also believes that the proposed cooling-off period is likely to be a sufficient amount for certain Clearing Members to orderly close-out their positions and transfer customer positions as they withdraw from clearing membership. OCC believes the proposed cooling-off period, coupled with the other proposed changes to OCC's assessment powers, is likely to provide Clearing Members with an adequate measure of stability and predictability as to the potential use of Clearing Fund resources, which OCC believes removes the existing incentive for Clearing Members to withdraw following a proportionate charge.
In light of the foregoing, OCC believes that the proposed changes would enhance and strengthen its process to replenish the Clearing Fund following a default or other event in which use of the Clearing Fund is contemplated, in accordance with Rule 17Ad-22(e)(4)(ix).
In relevant part, Rule 17Ad-22(e)(7)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [d]escrib[e] the [CCA's] process to replenish any liquid resources that the clearing agency may employ during a stress event.”
In relevant part, Rule 17Ad-22(e)(13) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]nsure the [CCA] has the authority and operational capacity to take timely action to contain losses and liquidity demands and continue to meet its obligations . . .”
In relevant part, Rule 17Ad-22(e)(23)(i) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]ublicly disclos[e] all relevant rules and material procedures, including key aspects of its default rules and procedures.”
In relevant part, Rule 17Ad-22(e)(23)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]rovid[e] sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the covered clearing agency.”
The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date the proposed change was filed with the Commission or (ii) the date any additional information requested by the Commission is received. OCC shall not implement the proposed change if the Commission has any objection to the proposed change.
The Commission may extend the period for review by an additional 60 days if the proposed change raises novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. A proposed change may be implemented in less than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.
OCC shall post notice on its website of proposed changes that are implemented. The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the advance notice is consistent with the Clearing Supervision 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.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal or identifying information from comment submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-OCC-2017-809 and should be submitted on or before August 22, 2018.
By the Commission.
On November 27, 2012, the Securities and Exchange Commission (“Commission”) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (“Sub-Penny Rule)
The Exchange now seeks to extend the exemption until December 31, 2018.
THEREFORE, IT IS HEREBY ORDERED, that, pursuant to Rule 612(c) of Regulation NMS, the Exchange is granted a limited exemption from Rule 612(c) of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its RPI Program.
The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the federal securities laws must rest with the persons relying on the exemptions that are the subject of this Order.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Nasdaq BX, Inc. (“BX”), Nasdaq GEMX, LLC (“GEMX”), Nasdaq ISE, LLC (“ISE”), Nasdaq MRX, LLC (“MRX”), and Nasdaq PHLX LLC (“Phlx”) (each the “Exchange” and collectively, the “Exchanges”) have filed with the Securities and Exchange Commission (the “Commission”) an application for an exemption from the rule filing requirements of Section 19(b) of the Securities Exchange Act of 1934 (the “Exchange Act”)
The Nasdaq Market and the Exchanges are Participants in the National Market System Plan Governing the Consolidated Audit Trail (“CAT NMS Plan” or “Plan”).
The Exchanges request, pursuant to Rule 0-12 under the Exchange Act,
The Exchanges do not intend to incorporate by reference any trading rules. Instead, they represent that the Nasdaq Market Compliance Rule is regulatory in nature. Further, the Exchanges represent that they will, as a condition of this exemption, provide written notice to their members whenever the Nasdaq Market proposes a change to the Nasdaq Market Compliance Rule.
The Exchanges believe this exemption is appropriate because it will result in the Exchanges' rules pertaining to CAT NMS Plan compliance to remain consistent at all times, thus ensuring consistent regulation of joint members of the Nasdaq Market and Exchanges with respect to the incorporated rules.
The Commission has issued exemptions similar to the Exchanges' request.
• An SRO wishing to incorporate rules of another SRO by reference has submitted a written request for an order exempting it from the requirement in Section 19(b) of the Exchange Act to file proposed rule changes relating to the rules incorporated by reference, has identified the applicable originating SRO(s), together with the rules it wants to incorporate by reference, and otherwise has complied with the procedural requirements set forth in the Commission's release governing procedures for requesting exemptive orders pursuant to Rule 0-12 under the Exchange Act;
• The incorporating SRO has requested incorporation of categories of rules (rather than individual rules within a category) that are not trading rules (
• The incorporating SRO has reasonable procedures in place to provide written notice to its members each time a change is proposed to the incorporated rules of another SRO.
The Commission believes that the Exchanges have satisfied each of these conditions. Further, the Commission also believes that granting the Exchanges an exemption from the rule filing requirements under Section 19(b) of the Exchange Act will promote efficient use of the Commission's and the Exchanges' resources by avoiding duplicative rule filings based on simultaneous changes to identical rule text sought by more than one SRO.
Accordingly, it is ordered, pursuant to Section 36 of the Exchange Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)
The Advance Notice, as amended by Partial Amendment No. 3 is described in Item II below, which Item has been prepared by OCC. The Commission is publishing this notice to solicit comments on the Advance Notice, as amended by Partial Amendments No. 1, 2 and 3, from interested persons.
This Partial Amendment No. 3 would make the following three amendments to the Initial Filing: (1) Removal of sections of the RWD Plan concerning OCC's proposed authority to require cash settlement of certain physically delivered options and single stock futures; (2) updating the list of OCC's Critical Support Functions;
With regard to the removal of sections of the RWD Plan concerning OCC's proposed authority to require cash settlement of certain physically delivered options and single stock futures, OCC proposes to amend the following text on pages 16-17 and 55 of the Initial Filing (new text is underlined and proposed deletions are marked in strikethrough text).
OCC also proposes to amend the following text on pages 22-23 and 61-62 of the Initial Filing (including associated footnotes).
OCC plans to resubmit the proposed cash settlement tool previously filed in SR-OCC-2017-018 and SR-OCC-2017-807 on a separate timeline from the rest of its enhanced and new tools for recovery scenarios and would submit a
In addition, OCC proposes to make the following amendments on pages 32 and 71 of the Initial Filing.
With regard to updating the list of OCC's Critical Support Functions, the amendment would revise OCC's RWD Plan to consistently identify one of OCC's internal functions as a Critical Support Function.
Finally, OCC proposes to make two changes to Chapter 5 of the RWD Plan, which would align an exhibit, a related list and a related paragraph with the certain changes OCC is contemporaneously proposing in Amendment No. 2 to OCC advance notice filing SR-OCC-2017-809 concerning enhanced and new tools for recovery scenarios.
OCC has included an updated Exhibit 5 containing its RWD Plan as well as an Exhibit 4 showing the changes proposed in this Partial Amendment No. 3 to the proposed rule text in the Initial Filing, with the proposed changes in the Initial Filing marked in underlined and strikethrough text. Exhibits 4 and 5 have been redacted and filed separately with the Commission and confidential treatment for Exhibits 4 and 5 is requested pursuant to 17 CFR 240.24b-2.
The Partial Amendments No. 1, 2 and 3 would not change the purpose of or basis for the proposed changes. All other representations in the Initial Filing remain as stated therein and no other changes are being made.
The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date the proposed change was filed with the Commission or (ii) the date any additional information requested by the Commission is received. OCC shall not implement the proposed change if the Commission has any objection to the proposed change.
The Commission may extend the period for review by an additional 60 days if the proposed change raises novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. A proposed change may be implemented in less than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.
OCC shall post notice on its website of proposed changes that are implemented. The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the advance notice is consistent with the Clearing Supervision Act. Comments may be submitted by any of the following methods:
• Use the Commissions internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal or identifying information from comment submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-OCC-2017-810 and should be submitted on or before August 22, 2018.
By the Commission.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Commentary .01 to NYSE Arca Rule 8.600-E relating to certain generic listing standards for Managed Fund Shares. The proposed change is available on the Exchange's website 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.
Commentary .01 to NYSE Arca Rule 8.600-E sets forth generic listing standards for listing and trading of Managed Fund Shares on the Exchange.
Commentary .01(a) to NYSE Arca Rule 8.600-E sets forth generic standards applicable to equity securities included in the portfolio of a series of Managed Fund Shares.
Commentary .01(a)(2)(A) provides that Non-U.S. Component Stocks each shall have a minimum market value of at least $100 million. Commentary .01(a)(2)(B) provides that Non-U.S. Component Stocks each shall have a minimum global monthly trading volume of 250,000 shares, or minimum global notional volume traded per month of $25,000,000, averaged over the last six months.
The Exchange proposes to amend Commentary .01(a)(2)(A) to provide that Non-U.S. Component Stocks that in the aggregate account for at least 90% of the weight of the Non-U.S. Component Stocks of the equity portion of a portfolio each shall have a minimum market value of at least $100 million. In addition, the Exchange proposes to amend Commentary .01(a)(2)(B) to provide that Non-U.S. Component Stocks that in the aggregate account for at least 70% of the weight of the Non-U.S. Component Stocks of the equity portion of a portfolio each shall have a minimum global monthly trading volume of 250,000 shares, or minimum global notional volume traded per month of $25,000,000, averaged over the last six months.
The proposed amendments are comparable to the current numerical requirements in Commentary .01(a)(B)(1) and Commentary .01(a)(B)(2) to NYSE Arca Rule 5.2-E(j)(3) applicable to component stocks in an index or portfolio underlying Investment Company Units. The Exchange notes that, in originally approving the generic listing criteria in Commentary .01(a)(B) to NYSE Arca Rule 5.2-E(j)(3) applicable to indexes that include only non-U.S. Component Stocks or both U.S. and Non-U.S. Component Stocks in an index or portfolio underlying a series of Investment Company Units, the Commission stated that “[t]hese requirements are designed, among other things, to require that components of an index or portfolio underlying an ETF are adequately capitalized and sufficiently liquid, and that no one stock dominates the index.”
Like the requirements applicable to an index or portfolio underlying
Commentary .01(a)(2)(D) provides that, where the equity portion of the portfolio includes Non-U.S. Component Stocks, the equity portion of the portfolio shall include a minimum of 20 component stocks; provided, however, that there shall be no minimum number of component stocks if (i) one or more series of Derivative Securities Products or Index-Linked Securities constitute, at least in part, components underlying a series of Managed Fund Shares, or (ii) one or more series of Derivative Securities Products or Index-Linked Securities account for 100% of the equity weight of the portfolio of a series of Managed Fund Shares.
Commentary .01(b) to NYSE Arca Rule 8.600-E sets forth generic standards applicable to fixed income securities included in the portfolio of a series of Managed Fund Shares.
This Exchange believes this amendment is appropriate because a fund's investment in non-agency, non-GSE and privately-issued mortgage-related and other ABS may provide a fund with benefits associated with increased diversification, as such investments may be less correlated to interest rates than many other fixed income securities. In addition, a fund's investment in non-agency, non-GSE and privately-issued mortgage-related and other ABS will be subject to a fund's liquidity procedures as adopted by a fund's board of directors. The Exchange notes that the Commission has previously approved the listing of actively managed exchange-traded funds that can invest 20% of their total assets in non-U.S. Government, non-agency, non-GSE and other privately issued asset-backed and mortgage-backed securities (“MBS”).
The Exchange further proposes to add new Commentary .01(a)(3) to NYSE Arca Rule 8.600-E to provide that the portfolio of a series of Managed Fund Shares may include non-exchange-traded open-end management investment company securities, which securities shall be excluded from the equity portion of the portfolio for purposes of meeting the criteria in Commentary .01(a)(1).
A fund's investment in such securities, which are registered under the 1940 Act, may be utilized, for example, to obtain income on short-term cash balances while awaiting attractive investment opportunities, to provide liquidity in preparation for anticipated redemptions or for defensive purposes.
The Exchange notes that Commentary .01(a)(1)(A) through (D) to Rule 8.600-E exclude certain “Derivative Securities Products” that are exchange-traded investment company securities, including Investment Company Units (as described in NYSE Arca Rule 5.2-E(j)(3)), Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100-E)) and Managed Fund Shares (as described in NYSE Arca Rule 8.600-E)).
The Exchange notes that the Commission has previously approved listing and trading of an issue of Managed Fund Shares that may invest in equity securities that are non-exchange-traded securities of other open-end investment company securities notwithstanding that the fund would not meet the requirements of Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to such fund's investments in such securities.
The Exchange, therefore, believes it is appropriate to exclude non-exchange-traded open-end management investment company securities from the equity portion of the portfolio for purposes of meeting the criteria in Commentary .01(a)(1).
The Exchange believes the proposed amendments would provide issuers of Managed Fund Shares with additional investment choices for fund portfolios for issues permitted to list and trade on the Exchange pursuant to the Rule 19b-4(e), which would enhance competition among market participants, to the benefit of investors and the marketplace.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange has in place surveillance procedures that are adequate to properly monitor trading in series of Managed Fund Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange notes that the Exchange or Financial Industry Regulatory Authority (“FINRA”), on behalf of the Exchange, or both, would communicate as needed regarding trading in Managed Fund Shares with other markets and other entities that are members of the Intermarket Surveillance Group, and the Exchange or FINRA, on behalf of the Exchange, or both, could obtain trading information regarding trading in Managed Fund Shares from such markets and other entities. In addition, the Exchange could obtain information regarding trading in Managed Fund Shares from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
With respect to the proposed amendment to Commentary .01(a)(2), the proposed amendments are comparable to the current numerical requirements in Commentary .01(a)(B)(1) and Commentary .01(a)(B)(2) to NYSE Arca Rule 5.2-E(j)(3) applicable to component stocks in an index or portfolio underlying Investment Company Units. The Exchange notes that, in originally approving the generic listing criteria in Commentary .01(a)(B) to NYSE Arca Rule 5.2-E(j)(3) applicable to indexes that include only non-U.S. Component Stocks or both U.S. and Non-U.S. Component Stocks in an index or portfolio underlying a series of Investment Company Units, the Commission stated that “[t]hese requirements are designed, among other things, to require that components of an index or portfolio underlying an ETF are adequately capitalized and sufficiently liquid, and that no one stock dominates the index.”
Like the requirements applicable to an index or portfolio underlying Investment Company Units noted above, the proposed amendments to Commentary .01(a)(2)(A) and (B) would subject a substantial portion of a fund's holdings in Non-U.S. Component Stocks to specified minimum liquidity and market value requirements. Such holdings also will continue to be subject to the weighting and diversification requirements of Commentary .01(a)(2)(C) and (D), which prevent any stock or small group of stocks from dominating a fund's portfolio. The proposed amendments to Commentary .01(a)(2) to Rule 8.600-E would provide additional flexibility to series of Managed Fund Shares investing in Non-U.S. Component Stocks while continuing to apply substantial minimum criteria relating to liquidity, market capitalization and diversification.
With respect to the proposed amendment to Commentary .01(b)(5), the Exchange believes this amendment is appropriate because a fund's investment in non-agency, non-GSE and privately-issued mortgage-related and other ABS may provide a fund with benefits associated with increased diversification, as such investments may be less correlated to interest rates than many other fixed income securities. In addition, a fund's investment in non-agency, non-GSE and privately-issued mortgage-related and other ABS will be subject to a fund's liquidity procedures as adopted by a fund's board of directors.
The Exchange notes that the Commission has previously approved the listing of actively managed exchange-traded funds that can invest 20% of their total assets in non-U.S. Government, non-agency, non-GSE and other privately issued asset-backed and MBS. In addition, the Commission has previously approved listing and trading of shares of an issue of Managed Fund Shares where such fund's investments in non-U.S. Government, non-agency, non-GSE and other privately issued ABS will, in the aggregate, not exceed more than 20% of the total assets of the fund, rather than the weight of the fixed income portion of the fund's portfolio.
The Exchange further proposes to add new Commentary .01(a)(3) to NYSE Arca Rule 8.600-E to provide that the equity portion of a portfolio may include non-exchange-traded open-end management investment company securities, which securities shall be excluded from the equity portion of the portfolio for purposes of meeting the criteria in Commentary .01(a)(1). A fund's investment in such securities may be utilized, for example, to obtain income on short-term cash balances while awaiting attractive investment opportunities, to provide liquidity in preparation for anticipated redemptions or for defensive purposes. Such investments may include mutual funds that invest principally in securities and financial instruments that help the Fund meet its investment objective and/or to equitize cash in the short term. Because such securities must satisfy applicable 1940 Act diversification requirements, and have a net asset value based on the value of securities and financial instruments the investment company holds, it is both unnecessary and inappropriate to apply to such investment company securities the criteria in Commentary .01(a)(1). For the same reasons, such investment company securities are appropriately excluded from the equity portion of the portfolio for purposes of meeting the criteria in Commentary .01(a)(1).
The Exchange notes that Commentary .01(a)(1)(A) through (D) to Rule 8.600-E exclude certain “Derivative Securities Products” that are exchange-traded investment company securities, including Investment Company Units (as described in NYSE Arca Rule 5.2-E(j)(3)), Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100-E)) and Managed Fund Shares (as described in NYSE Arca Rule 8.600-E)). In its 2008 Approval Order approving amendments to Commentary .01(a) to Rule 5.2(j)(3) to exclude Derivative Securities Products from certain provisions of Commentary .01(a) (which exclusions are similar to those in Commentary .01(a)(1) to Rule 8.600-E), the Commission stated that “based on the trading characteristics of Derivative Securities Products, it may be difficult for component Derivative Securities Products to satisfy certain quantitative index criteria, such as the minimum market value and trading volume limitations.” The Exchange notes that it would be difficult or impossible to apply to mutual fund shares certain of the generic quantitative criteria (
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of additional types of Managed Fund Shares that will enhance competition among market participants, to the benefit of investors and the marketplace.
In accordance with Section 6(b)(8) of the Act,
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be 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 filed a proposal to extend the pilot period for the Exchange's Retail Price Improvement Program, which is currently scheduled to expire on July 31, 2018, until the earlier of approval of the filing to make the Program permanent or December 31, 2018.
The text of the proposed rule change is available at the Exchange's website 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.
The purpose of the proposed rule change is to extend the pilot period for the Exchange's Retail Price Improvement Program (the “Program”), which is set to expire on July 31, 2018, until the earlier of approval of the filing to make the Program permanent or December 31, 2018.
In November 2012, the Commission approved the Program on a pilot basis.
The Program was approved by the Commission on a pilot basis running one year from the date of implementation.
The Exchange established the Program in an attempt to attract retail order flow to the Exchange by potentially providing price improvement to such order flow. The Exchange believes that the Program promotes competition for retail order flow by allowing Exchange members to submit Retail Price Improvement Orders (“RPI Orders”)
The Exchange believes that its proposal is consistent with the requirements of 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 Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change extends an established pilot program, thus allowing the Program to enhance competition for retail order flow and contribute to the public price discovery process.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from Members or other interested parties.
Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, 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
The Exchange has requested that the Commission waive the 30-day operative delay period after which a proposed rule change under Rule 19b-4(f)(6) becomes operative so that the proposal may become operative immediately upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the Exchange to extend the Program uninterrupted and will ensure that the Program continues while the Exchange and Commission continue to analyze data. Accordingly, the Commission hereby grants the Exchange's request and designates the proposal operative upon filing.
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 proposal 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.
2:00 p.m. on Thursday, August 9, 2018.
Closed Commission Hearing Room 10800.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
Commissioner Stein, as duty officer, voted to consider the items listed for the closed meeting in closed session.
The subject matters of the closed meeting will be:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting items.
For further information and to ascertain what, if any, matters have been added, deleted or postponed; please contact Brent J. Fields from the Office of the Secretary at (202) 551-5400.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for the State of Texas (FEMA-4377-DR), dated 07/06/2018.
Issued on 07/31/2018.
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 Texas, dated 07/06/2018, is hereby amended to include the following areas as adversely affected by the disaster:
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of VERMONT (FEMA-4380-DR), dated 07/30/2018.
Issued on 07/30/2018.
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.
Notice is hereby given that as a result of the President's major disaster declaration on 07/30/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 156186 and for economic injury is 156190.
The Advisory Committee for the Study of Eastern Europe and the Independent States of the Former Soviet Union (Advisory Committee) will convene on Wednesday, September 5, 2018, from 1:30 p.m. until approximately 3:30 p.m. The meeting will take place at the U.S. Department of State, Harry S Truman Building, 2201 C Street NW, Washington, DC, in room 1406.
The Advisory Committee will recommend grant recipients for the 2018 funding opportunity for the Program for the Study of Eastern Europe and the Independent States of the Former Soviet Union, in accordance with the Research and Training for Eastern Europe and the Independent States of the Former Soviet Union Act of 1983, Public Law 98-164, as amended. The agenda will include opening statements by the chairperson and members of the committee. The committee will provide an overview and discussion of grant proposals from “national organizations with an interest and expertise in conducting research and training concerning the countries of Eastern Europe and the Independent States of the Former Soviet Union,” based on the guidelines set forth in the June request for proposals published on
This meeting will be open to the public; however, attendance is limited to available seating. Entry into the Harry S Truman building is controlled and must be arranged in advance of the meeting. Those planning to attend should notify the Title VIII Program Officer at the U.S. Department of State at
For pre-clearance into the Harry S Truman building, the Title VIII Program Officer will request identifying data pursuant to Public Law 99-399 (Omnibus Diplomatic Security and Antiterrorism Act of 1986), as amended; Public Law 107-56 (USA PATRIOT Act); and Executive Order 13356. This information is being collected pursuant to 22 U.S.C. 2651a and 22 U.S.C. 4802 for the purpose of screening and pre-clearing participants to enter the host venue at the U.S. Department of State, in line with standard security procedures for events of this size. The Department of State will use this information consistent with the routine uses set forth in the System of Records Notices for Security Records (State-36). Provision of this information is voluntary, but failure to provide accurate information may impede your ability to register for the event. Please see the Security Records System of Records Notice (State-36) at
All attendees must use the 2201 C Street entrance and must arrive no later than 12:30 p.m. to pass through security before entering the building. The Program Officer cannot admit visitors who arrive without prior notification or without photo identification.
Office of the United States Trade Representative.
Extension of public comment period.
In a notice published on July 17, 2018 (83 FR 33608), the U.S. Trade Representative (Trade Representative) proposed a modification of the action taken in this investigation in the form of an additional 10 percent
To be assured of consideration, you must submit comments and responses in accordance with the following schedule:
USTR strongly prefers electronic submissions made through the Federal eRulemaking Portal:
For questions about the ongoing investigation or proposed action, contact Arthur Tsao, Assistant General Counsel, or Justin Hoffmann, Director of Industrial Goods, at (202) 395-5725. For questions on customs classification of products, contact
In the July 17th notice, the Trade Representative proposed modifying the action in this investigation by maintaining the original $34 billion action and the proposed $16 billion action, and by taking a further, supplemental action. In particular, the Trade Representative proposed a supplemental action of an additional 10 percent
On August 1, 2018, the Trade Representative announced that the President directed the Trade Representative to consider increasing the proposed level of the additional duty from 10 percent to 25 percent. This additional 25 percent duty would be applied to the proposed list of products in the Annex to the July 17th notice. The possible increase in the proposed rate of the additional duty is intended to provide the Administration with additional options to obtain the elimination of the acts, policies, and practices covered in the investigation.
Subject to the modified due dates set out above, the procedures for submission of public comments and requests to participate in the public hearing set out in sections E and F of the July 17th notice continue to apply. Interested persons are invited to include comments in their written submissions and oral testimony on the possible imposition of a 25 percent additional duty. In the event an interested person already has provided written comments and wishes to provide further comments in light of the possible increase in the rate of additional duty, the submitter may file a supplemental comment.
Federal Aviation Administration, DOT.
Notice.
The Federal Aviation Administration (FAA) announces its findings (Record of Approval) on the noise compatibility program submitted by the Jackson Hole Airport under the provisions of the Aviation Safety and Noise Abatement Act, (hereinafter referred to as “the Act”) and 14 CFR part 150 (Part 150). On March 23, 2018, the FAA determined that the noise exposure maps submitted by the Jackson Hole Airport under Part 150 were in compliance with applicable requirements. On August 1, 2018 the FAA approved the
Kandice Krull, Federal Aviation Administration, Denver Airports District Office, 26805 E 68th Ave., Suite 224, Denver, CO 80249, telephone 303-342-1261. Documents reflecting this FAA action may be reviewed at this same location.
This notice announces that the FAA has given its overall approval to the noise compatibility program for the Jackson Hole Airport, effective August 1, 2018.
Under section 47504 of the Act, an airport operator who has previously submitted a noise exposure map may submit to the FAA a noise compatibility program which sets forth the measures taken or proposed by the airport operator for the reduction of existing non-compatible land uses and prevention of additional non-compatible land uses within the area covered by the noise exposure maps. The Act requires such programs to be developed in consultation with interested and affected parties including local communities, government agencies, airport users, and FAA personnel.
Each airport noise compatibility program developed in accordance with the Part 150 regulations is a local program, not a Federal program. The FAA does not substitute its judgment for that of the airport proprietor with respect to which measures should be recommended for action. The FAA's approval or disapproval of Part 150 program recommendations is measured according to the standards expressed in Part 150 and the Act and is limited to the following determinations:
a. The noise compatibility program was developed in accordance with the provisions and procedures of Part 150;
b. Program measures are reasonably consistent with achieving the goals of reducing existing non-compatible land uses around the airport and preventing the introduction of additional non-compatible land uses;
c. Program measures would not create an undue burden on interstate or foreign
d. Program measures relating to the use of flight procedures can be implemented within the period covered by the program without derogating safety, adversely affecting the efficient use and management of the navigable airspace and air traffic control systems, or adversely affecting other powers and responsibilities of the Administrator prescribed by law.
Specific limitations with respect to FAA's approval of an airport noise compatibility program are delineated in Part 150, section 150.5. Approval is not a determination concerning the acceptability of land uses under Federal, state, or local law. Approval does not by itself constitute an FAA implementing action. A request for Federal action or approval to implement specific noise compatibility measures may be required, and an FAA decision on the request may require an environmental review of the proposed action. Approval does not constitute a commitment by the FAA to financially assist in the implementation of the program nor a determination that all measures covered by the program are eligible for grant-in-aid funding from the FAA. Where federal funding is sought, requests for project grants must be submitted to the FAA Denver Airports District Office in Denver, CO. The Jackson Hole Airport submitted to the FAA on March 21, 2018 the noise exposure maps, descriptions, and other documentation produced during the noise compatibility planning study for the Jackson Hole Airport conducted in 2013-2018. The Jackson Hole Airport noise exposure maps were determined by FAA to be in compliance with applicable requirements on March 23, 2018. Notice of this determination was published in the
Comments received during the noise compatibility planning public process were addressed in the final noise compatibility program submitted to FAA. No comments were received during the 60-day public comment period for the
The Jackson Hole Airport study contains a proposed noise compatibility program comprised of actions designed for phased implementation by airport management and adjacent jurisdictions. It was requested that the FAA evaluate and approve this material as a noise compatibility program as described in section 47504 of the Act. The FAA began its review of the program on March 23, 2018, and was required by a provision of the Act to approve or disapprove the program within 180 days (other than the use of new or modified flight procedures for noise control). Failure to approve or disapprove such program within the 180-day period shall be deemed to be an approval of such program.
The submitted program contained six (6) noise abatement recommendations, two (2) land use management recommendations and seven (7) program management recommendations for FAA action. The FAA completed its review and determined that the procedural and substantive requirements of the Act and Part 150 have been satisfied. The overall program therefore, was approved by the FAA on August 1, 2018.
Approval was granted for five of the 15 measures and ten measures were disapproved for the purposes of Part 150. Three of the approved recommendations were approved as a continuation of a measure approved in a prior ROA, one was approved as voluntary, and one was approved for the purposes of Part 150. The attachment to this ROA provides a summary of all of the recommendations in the three NCPs for JAC along with FAA's decision and the status of each.
These determinations are set forth in detail in a Record of Approval signed by the Airports Division Manager, Northwest Mountain Region on August 1, 2018. The Record of Approval, as well as other evaluation materials and the documents comprising the submittal are available for review at the FAA office listed above and at the Jackson Hole Airport, 1250 E Airport Road, Jackson, WY 83001. The Record of Approval also will be available on-line at
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
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, this aspect of the FAA's regulatory activities. 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 involved and must be received on or before August 27, 2018.
Send comments identified by docket number FAA-2018-0725 using any of the following methods:
•
•
•
•
Mark Forseth, AIR-673, Federal Aviation Administration, 2200 S 216th St., WA 98198-6547, email
This notice is published pursuant to 14 CFR 11.85.
Federal Aviation Administration (FAA), DOT.
Notice of petition for exemption received.
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, this aspect of the FAA's regulatory activities. 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 involved and must be received on or before August 27, 2018.
Send comments identified by docket number FAA-2018-0267 using any of the following methods:
•
•
•
•
Mark Forseth, AIR-673, Federal Aviation Administration, 2200 S. 216th St., WA 98198-6547, email
This notice is published pursuant to 14 CFR 11.85.
Provide relief from the requirements of flightdeck smoke protection for Boeing Model 737-7, 737-8, and 737-8200 airplanes.
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more 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
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On August 1, 2018, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
1. SOYLU, Suleyman; DOB 21 Nov 1969; POB Istanbul, Turkey; nationality Turkey; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(C)(1) of Executive Order 13818 of December 20, 2017, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption” (E.O. 13818) for being or having been a leader or official of Turkey's
2. GUL, Abdulhamit; DOB 12 Mar 1977; POB Nizip, Gaziantep, Turkey; nationality Turkey; Gender Male (individual) [GLOMAG].
Designated pursuant to section 1(a)(ii)(C)(1) of E.O. 13818 for being or having been a leader or official of Turkey's Ministry of Justice, an entity that has engaged in, or whose members have engaged in, serious human rights abuse relating to the leader's or official's tenure.
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of two 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
The Specially Designated Nationals and Blocked Persons List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On July 31, 2018, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
1. JABBAR, Abdul (a.k.a. JABAR, Abdul), 124 Yasir Ghaffar Town, Okara, Punjab, Pakistan; DOB 03 Feb 1977; nationality Pakistan; Gender Male (individual) [SDGT].
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 acting for or on behalf of LASHKAR-E TAYYIBA, an entity determined to be subject to E.O. 13224.
2. HASSAN, Hameed ul (a.k.a. HASAN, Hameed ul; a.k.a. HASSAN, Hameedul), House number 4, Lane 4, Village flag 2, Dhalwan, Pasrur Tehsil, Sialkot District, Punjab Province, Pakistan; DOB 02 Jan 1980; alt. DOB 02 Nov 1980; POB Sialkot, Pakistan; nationality Pakistan; Gender Male (individual) [SDGT].
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 acting for or on behalf of LASHKAR-E TAYYIBA, an entity determined to be subject 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 continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning certain gambling winnings.
Written comments should be received on or before October 9, 2018 to be assured of consideration.
Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington, DC 20224.
Requests for additional information or copies of the form should be directed to Kerry Dennis, at (202) 317-5751 or Internal Revenue Service, Room 6529, 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 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 continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning long-term care and accelerated death benefits.
Written comments should be received on or before October 9, 2018 to be assured of consideration.
Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington, DC 20224.
Requests for additional information or copies of the form should be directed to Kerry Dennis, at (202) 317-5751 or Internal Revenue Service, Room 6529, 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.
Department of Veterans Affairs.
Notice with request for comments.
This notice announces that the burden of proof for disciplinary and major adverse actions imposed against certain employees of the Department of Veterans Affairs has been changed from preponderance of evidence to substantial evidence.
Comments must be received on or before September 6, 2018. The proposed effective date of these amendments is 30 days after publication of this notice.
Written comments may be directed to: Elizabeth A. Hill, Team Lead, Employee Relations & Performance Management Service, Office of Human Resources Management, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420. Comments may also be faxed to (202) 495-5200.
Elizabeth A. Hill, Team Lead, (706) 504-3988, or by email to
Section 203 of the Department of Veterans Affairs Health Care Personnel Act of 1991 (Pub. L. 102-40), dated May 7, 1991, revised the disciplinary grievance and appeal procedures for employees appointed under 38 United States Code (U.S.C.) 7401(1). 38 U.S.C. 7461(e) requires that whenever the Secretary proposes to prescribe regulations under 38 U.S.C., Part V, Chapter 74, Subchapter V, “the Secretary shall publish the proposed regulations in the
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Jacquelyn Hayes-Byrd, Acting Chief of Staff, Department of Veterans Affairs, approved this document on July 30, 2018, for publication.
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission is adopting amendments to regulatory requirements in Regulation ATS under the Securities Exchange Act of 1934 (“Exchange Act”) applicable to alternative trading systems (“ATSs”) that trade National Market System (“NMS”) stocks (hereinafter referred to as “NMS Stock ATSs”), including so called “dark pools.” First, we are adopting new Form ATS-N, which will require NMS Stock ATSs to disclose information about their manner of operations, the broker-dealer that operates the ATS (“broker-dealer operator”), and the ATS-related activities of the broker-dealer operator and its affiliates. Second, as amended, the regulations will require public posting of certain Form ATS-N filings on the Commission's website, which will be accomplished through the Commission's Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) and require each NMS Stock ATS that has a website to post on its website a direct URL hyperlink to the Commission's website. Third, the amendments that we are adopting today provide a process for the Commission to review Form ATS-N filings and, after notice and opportunity for hearing, declare an NMS Stock ATS's Form ATS-N ineffective. Fourth, the regulations, as amended, will require all ATSs subject to the regulations to place in writing its safeguards and procedures to protect subscribers' confidential trading information. We are also adopting conforming amendments.
Tyler Raimo, Senior Special Counsel, at (202) 551-6227; Matthew Cursio, Special Counsel, at (202) 551-5748; Marsha Dixon, Special Counsel, at (202) 551-5782; Jennifer Dodd, Special Counsel, at (202) 551-5653; David Garcia, Special Counsel, at (202) 551-5681; or Megan Mitchell, Special Counsel, at (202) 551-4887; Office of Market Supervision, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-7010.
We are adopting: (1) Amendments to 17 CFR 242.300 through 242.303 (“Regulation ATS”) to add new 17 CFR 242.304 (“Rule 304”) under the Exchange Act to provide new conditions for NMS Stock ATSs seeking to rely on the exemption from the definition of “exchange” provided by 17 CFR 240.3a1-1(a) (“Rule 3a1-1(a)”) of the Exchange Act; (2) new Form ATS-N
NMS Stock ATSs, including trading centers commonly referred to as dark pools,
A “trading center” means a national securities exchange or national securities association that operates an SRO trading facility, an ATS, an exchange market maker, an OTC market maker, or any other broker or dealer that executes orders internally by trading as principal or crossing orders as agent. 17 CFR 242.600(b)(78). Some trading centers, such as OTC market makers, also offer dark liquidity, primarily in a principal capacity, and do not operate as ATSs. For purposes of this adopting release, these trading centers are not defined as dark pools because they are not ATSs.
Despite their role in the equity markets, little information is widely available to market participants about NMS Stock ATSs, which restricts their ability to adequately assess these ATSs as potential routing destinations. On November 18, 2015, we proposed to amend Regulation ATS with the stated goals of enhancing operational transparency for NMS Stock ATSs to enable market participants to make more informed order routing decisions, and to facilitate better Commission oversight of these trading venues.
We received 32 comment letters on the Proposal from a variety of interested persons, including ATSs, a national securities exchange, broker-dealers, institutional investors, industry trade groups, the Commission's Investor Advocate, and the Attorney General of the State of New York.
At the time Regulation ATS was proposed, there were 8 registered national securities exchanges,
NYSE National, Inc. (f.k.a. National Stock Exchange, Inc.) was not trading as of March 31, 2018 but filed a proposed rule change with the Commission for its proposed relaunch.
In contrast to dark pools, an ATS could be an Electronic Communication Network (“ECN”), which are ATSs that provide their best-priced orders for inclusion in the consolidated quotation data, whether voluntarily or as required by Rule 301(b)(3) of Regulation ATS.
During the second quarter of 2015, there were 38 ATSs that reported transactions in NMS stocks, accounting for 59 billion shares traded in NMS stocks ($2.5 trillion), which represented approximately 15.0% of total share trading volume (15.4% of total dollar trading volume) on all national securities exchanges, ATSs, and non-ATS OTC trading venues combined.
Competitors for listed-equity (NMS) trading services also include several hundred OTC market makers and broker-dealers.
In 2009, there were 32 active dark pools trading in NMS stocks.
The market share percentages were calculated by Commission staff using aggregate trade data reported by ATSs to the FINRA equity trade reporting facilities and made available on FINRA's website and TAQ Data.
Pursuant to FINRA rules, each ATS is required to use a unique MPID in its reporting to FINRA, such that its volume reporting is distinguishable from other transaction volume reported by the broker-dealer operator of the ATS, including volume reported for other ATSs operated by the same broker-dealer.
NMS Stock ATSs have grown increasingly complex in terms of the services and functionalities that they offer subscribers, and they have used advances in technology to improve the speed, capacity, and efficiency of the trading functionalities that they offer to execute orders in NMS stocks.
The relationships between broker-dealer operators
Furthermore, ATSs that trade NMS stocks are increasingly operated by multi-service broker-dealers that engage in significant brokerage and dealing activities in addition to operation of their ATS.
Exchange Act Rule 3b-16(a)
Section 5 of the Exchange Act
A trading platform that meets the definition of “exchange” under Section 3(a)(1) of the Exchange and fails to register with the Commission as a national securities exchange pursuant to Section 6 of the Exchange Act, unless exempt, risks operating as an unregistered exchange in violation of Section 5 of the Exchange Act.
Exchange Act Rule 3a1-1(a)(2)
Rule 3a1-1(b) provides an exception to the Rule 3a1-1(a) exemptions pursuant to which the Commission may require a trading system that is a substantial market to register as a national securities exchange, if the Commission finds doing so is necessary or appropriate in the public interest or consistent with the protection of investors.
Rule 300(a) of Regulation ATS defines an ATS as: “any organization, association, person, group of persons, or
Rule 301(b)(1) of Regulation ATS requires that every ATS that is subject to Regulation ATS, pursuant to paragraph (a) of Rule 301,
ATSs must notify the Commission of any changes in their operations by filing an amendment to its Form ATS initial operation report. There are three types of amendments to an initial operation report.
Rule 301(b)(9) of Regulation ATS also requires an ATS to periodically report certain information about transactions on the ATS and information about certain activities on Form ATS-R within 30 calendar days after the end of each calendar quarter in which the market
Under Rule 301(b)(3), an ATS that (1) displays subscriber orders in an NMS stock to any person (other than an employee of the ATS) and (2) during at least four of the preceding six calendar months, had an average daily trading volume of 5% or more of the aggregate average daily share volume for that NMS stock, as reported by an effective transaction reporting plan, must comply with certain order display and execution access obligations.
Under Rule 301(b)(5)—and even if the ATS does not display subscribers' orders to any person (other than an ATS employee)—an ATS with 5% or more of the average daily volume in an NMS stock during at least four of the preceding six calendar months, as reported by an effective transaction reporting plan, must:
Prior to the Commission's adoption of Regulation SCI,
Rule 301(b)(7)
Under Rule 301(b)(10), all ATSs must establish adequate safeguards and procedures to protect subscribers' confidential trading information, which includes limiting access to the confidential trading information of subscribers to those employees of the ATS who are operating the system or responsible for its compliance with Regulation ATS or any other applicable rules; and implementing standards controlling employees of the ATS trading for their own accounts.
Furthermore, all ATSs must adopt and implement adequate oversight procedures to ensure that the above safeguards and procedures are followed.
Despite their role in the equity markets and complexity of their operations, NMS Stock ATSs are not required under Regulation ATS to publicly disclose information about their operations. We are concerned that little information is widely available to market participants about NMS Stock ATSs, and that the lack of, or differential access to, information about operations of NMS Stock ATSs inhibits the ability of market participants to assess NMS Stock ATSs as potential trading venues. These concerns are shared by several commenters.
We are also concerned that the lack of available information about the ATS-related activities of the broker-dealer operator and its affiliates may hinder the ability of market participants to evaluate potential conflicts of interest, and thus limit their ability to protect their interests. Because of overlap between a broker-dealer's ATS operations and its other operations, there is a risk of information leakage of subscribers' confidential trading information to other business units of the broker-dealer operator or its affiliates.
Not all NMS Stock ATSs, however, are operated by multi-service broker-dealers.
The rules being adopted today would not require a broker-dealer that operates an NMS Stock ATSs to limit it business only to operating the ATS. We believe that the Form ATS-N disclosures will inform market participants about the ATS-related activities of the broker-dealer operator and its affiliates that give rise to potential conflicts between the interests of the broker-dealer operator and subscribers that use the services of the NMS Stock ATS.
One commenter, however, observes that in the recent settlements cited in the Proposal, there were conflicts of interest related to commercial relationships that had nothing to do with affiliates, and believes that all differential treatment of subscribers should be disclosed and recommends limiting disclosures regarding affiliate relationships.
NMS Stock ATSs, which meet the definition of “exchange” but are not required to register with the Commission as national securities exchanges, compete with national securities exchanges and operate with similar complexity. Unlike national securities exchanges, NMS Stock ATSs are not required to, among other things, publicly disclose their operations and fees.
Transparency has long been a hallmark of the U.S. securities markets, and is one of the primary tools used by investors to protect their interests.
ATSs that trade NMS stocks operate pursuant to the exemption provided by Exchange Act Rule 3a1-1(a)(2), which exempts from the definition of an “exchange” any ATS that complies with Rules 300 through 303 of Regulation ATS.
We proposed to amend Rules 3a1-1(a)(2) and (3) to require compliance with proposed Rule 304 as a condition to operating pursuant to the Rule 3a1-1(a)(2) exemption.
Nearly all commenters agree with our stated goal of enhancing operational transparency for NMS Stock ATSs.
With respect to the Commission's effectiveness determination for Form ATS-N, another commenter states that “given the level of competition between exchanges and NMS Stock ATSs, this effectiveness determination would better align the Commission's oversight among different types of trading venues.”
We believe that the current market for NMS stock execution services, consisting of national securities exchanges, NMS Stock ATSs, and other off-exchange venues, has resulted in an improvement to market efficiency.
Another commenter believes that increased disclosure will aid in developing industry-based standards.
We believe that a wide range of market participants will benefit from the enhanced operational transparency,
We believe that the information disclosed on Form ATS-N will help brokers meet their best execution obligations to their customers, as they should be better able to assess the trading venues to which they route orders.
Some commenters, however, believe NMS Stock ATSs should not be required to comply with new Rule 304 and the Commission should instead simply amend Regulation ATS to require making Form ATS public for NMS Stock ATSs.
We are not adopting commenters' suggestion to make Form ATS public rather than requiring NMS Stock ATSs to comply with Rule 304 and file Form ATS-N. First, we believe that new Form ATS-N requires important additional disclosures that are not made under existing Form ATS.
Based on Commission staff's experience reviewing disclosures made by ATSs on Form ATS over the past 19 years and as discussed in the Proposal, we have observed that ATSs have often provided minimal, rudimentary, and summary disclosures about their operations on Form ATS. One commenter agrees with our assessment, stating that based on its review of publicly available Forms ATS, the forms “often provide minimal and often generalized information” with respect to classification and segmentation of subscribers, means of access to the ATS, matching priority, order interaction, order types, and how the NBBO is calculated, and they are often missing “critical details” about their operations.
Two commenters argue that a new Form ATS-N is unnecessary because most of the fundamental information required in Form ATS-N is currently covered by Form ATS.
One commenter who suggests making Form ATS public as an alternative to requiring Form ATS-N expresses concern that the “crippling amount of detail” required to be disclosed under Form ATS-N would not be useful to market participants.
Other commenters discuss how market participants currently glean information about ATSs, and suggest that such methods could serve as alternatives to the requirements of Rule 304, or inform the Rule 304 requirements.
One commenter suggests that, as an alternative to the proposed Form ATS-N, the Commission should mandate that ATS operators publicly disclose current and historical Form ATS filings and related amendments, and responses to standardized, frequently asked questions (“FAQs”) regarding ATS operations.
We received four comments about the application of Rule 304 to some or all NMS Stock ATSs. We received three comments expressing the importance of the Commission's need to heighten the regulatory requirements for all NMS Stock ATSs.
We continue to believe that requiring all NMS Stock ATSs to publicly file a Form ATS-N, irrespective of the volume of NMS stocks transacted on the ATS is appropriate, and does not agree that its objectives would be achieved by applying Rule 304 on a tiered basis to NMS Stock ATSs. Given that broker-dealers can route their customers' orders to any NMS Stock ATS for execution, we do not believe that transaction volume in NMS stocks serves as a proxy for whether customers of broker-dealers or subscribers to an ATS should have information about how their orders would be prioritized, matched, or executed on an NMS Stock ATS or understand the ATS-related activities of the broker-dealer operator and its affiliates that may give rise to conflicts of interest.
We received comments regarding the competitive effect of Rule 304 on ATSs relative to national securities exchanges.
Another commenter states its view that requiring public disclosure of Form ATS-N will “alter the competitive landscape . . . between NMS Stock ATSs and national securities exchanges.”
One commenter asserts that the Proposal treats all ATSs as stand-alone, exchange-like price/time priority models and fails to account for distinct ATS models (
One commenter questions why the Commission has determined that NMS Stock ATSs should be subject to “essentially similar disclosure requirements” as national securities exchanges without affording NMS Stock ATSs benefits such as limited immunity and market data revenue that national securities exchanges receive.
While NMS Stock ATSs and national securities exchanges are subject to different regulatory regimes, NMS Stock ATSs are trading centers that perform similar trading functions as national securities exchanges and have evolved to become more like national securities exchanges in their operations. We believe that Form ATS-N, as adopted, accommodates the differences between the regulatory requirements for national securities exchanges and those of NMS Stock ATSs while increasing public operational transparency for NMS Stock ATSs. The Commission does not agree that NMS Stock ATSs are being treated like national securities exchanges and believes that Form ATS-N is designed in a manner that allows ATSs to explain their unique business models. For example, NMS Stock ATSs will be able to explain their trading models, and associated facilities and procedures, in Part III, Item 11 of adopted Form ATS-N (“Trading, Rules and Facilities”). In addition, Part III, Item 19 (“Fees”) requires an NMS Stock ATS to identify and describe the types of fees or charges of the ATS and any differences among subscribers, whereas national securities exchanges are required to publicly post their complete fee schedules and any changes are subject to the SRO rule filing process under Section 19 of the
We proposed that to qualify for the exemption from the definition of “exchange,” an NMS Stock ATS's Form ATS-N must be declared effective by the Commission; as adopted, a Form ATS-N must be effective for the ATS to qualify for the exemption.
We do not believe that requiring Form ATS-N to become effective after Commission review is “unnecessary;”
Rule 304 of Regulation ATS, as proposed and adopted, would apply only to NMS Stock ATSs, as defined in Rule 300(k) of Regulation ATS. We are concerned that, given the significance of NMS Stock ATSs in equity market structure and their operational complexities, the lack of transparency around NMS Stock ATSs operations could inhibit market participants' ability to evaluate NMS Stock ATSs as potential routing destinations for their orders in NMS stocks. As discussed in the Proposal, we did not propose to apply Rule 304 to non-NMS Stock ATSs, which would include ATSs that trade corporate or municipal fixed income securities (“Fixed Income ATSs”), U.S. Government securities (“Government Securities ATSs”),
We received several comments generally supporting operational transparency and about whether or not to apply Rule 304 to non-NMS Stock ATSs.
Several commenters specifically argue for extending Rule 304, including Form ATS-N, to Fixed Income ATSs.
We also received several comments that specifically address enhancing operational transparency for, or extending Rule 304 to, Government Securities ATSs.
We also received comments regarding enhancing operational transparency for other non-ATS OTC trading centers—namely broker-dealers that internalize order flow.
Given the range of commenter views on these questions and our belief that it is appropriate to take an incremental approach by first applying the amended regime to NMS Stock ATSs before considering a further step, we are not amending Rule 3a1-1(a) and Regulation ATS for non-NMS Stock ATSs. We intend to monitor the implementation and effectiveness of Rule 304 to NMS Stock ATSs, and should we decide to take further action with respect to non-NMS Stock ATSs, we would do so in a separate rulemaking and take into account our experience with Rule 304 and NMS Stock ATSs.
The Commission notes that the Fixed Income Market Structure Advisory Committee (“FIMSAC”) was formed in 2017 pursuant to the Commission's authority under the Federal Advisory Committee Act to provide the Commission with diverse perspectives on the structure and operations of the U.S. fixed income markets, as well as advice and recommendations on matters related to fixed income market structure.
To operate pursuant to the Exchange Act Rule 3a1-1a(2) exemption, NMS Stock ATSs will be required to comply with new Rule 304, in addition to the applicable existing Rules 300 through 303 of Regulation ATS. In light of the new requirements of Rule 304, we are adopting, with modifications discussed below, amendments to several existing rules of Regulation ATS.
Proposed Rule 300(k) of Regulation ATS defined “NMS Stock ATS” in new paragraph (k) as “an alternative trading system, as defined in § 242.300(a), that facilitates transactions in NMS stocks, as defined in § 242.300(g).” We received no comments on the proposed definition of NMS Stock ATS and are adopting Rule 300(k) with modifications. We are replacing “facilitates transactions in” with “trades.” The term “trades” is well understood in the context Regulation ATS
We made explicit in proposed Rule 304(a) that NMS Stock ATSs must comply with Rules 300 through 304, unless not required to comply with Regulation ATS pursuant to Rule 301(a). Pursuant to Rule 301(a), certain ATSs that are subject to other appropriate regulations are not required to comply with Regulation ATS.
Rule 301(a)(5) of Regulation provides that an ATS shall comply with the requirements of Rule 301(b) unless such ATS is exempted, conditionally or unconditionally, by Commission order after application by such ATS, from one or more of the requirements of Rule 301(b), and that the Commission will grant such exemption only after determining that such an order is consistent with the public interest, the protection of investors, and the removal of impediments to, and perfection of, a national market system.
When adopting Rule 301(a)(5), we stated that while the requirements of Regulation ATS are appropriate for all ATSs, a system may develop in the future for which these requirements may not be appropriate. The Commission expected to issue such an order only under unusual circumstances, and only after making the applicable determination.
In response to the Proposal, we received one comment regarding possible use of the Commission Section 36 exemptive authority in connection with the requirements of Rule 304.
We also received other comments regarding specific exceptions from the proposed requirements of Rule 304. Specifically, three commenters suggest providing an exception to the 30-calendar day advance notice requirement for material changes in case of exigent circumstances.
We believe that there may be unusual circumstances under which an NMS Stock ATS may need to seek an exemption from the requirements of Rule 304 or the disclosure requirements of Form ATS-N. For example, under exceptionally rare occasions, an NMS Stock ATS may need to make a material change to its operations on an expedited basis to prevent substantial harm to market participants, such as in response to a significant operational or market-wide event. The amendments to Rule 301(a)(5) are designed to address these concerns.
As noted by commenters, circumstances may necessitate the implementation of a material change to the operations of an NMS Stock ATS on an expedited basis. We believe that, based on particular facts and circumstances, it may be appropriate to grant such an exemption from the 30-day advance notice requirement of Rule 304(a)(2)(i)(A), for example, in the event of extraordinary, unforeseen circumstances, and if delaying implementation pursuant to the 30-calendar day advance notice requirement would cause substantial harm to subscribers or other markets trading NMS stocks. By comparison, to the extent that an NMS Stock ATS may need to change its operations in response to an operational problem, as suggested by one commenter, an NMS Stock ATS could proactively develop and disclose in the relevant Form ATS-N Item alternative procedures that the ATS would apply if the ATS experiences a systems problem that causes it to be unable to perform a particular function. For example, an NMS Stock ATS that routes orders and trading interest resting in the ATS to destinations outside the ATS could state, for example, that the NMS Stock ATS will either execute or cancel orders and trading interest submitted to the ATS if the ATS is unable to route orders and trading interest away from the ATS due to a systems problem.
We proposed in Rule 304 to except NMS Stock ATSs from complying with Rule 301(b)(2) of Regulation ATS. Existing Rule 301(b)(2) requires an ATS to file with the Commission a Form ATS initial operation report, amendments to the Form ATS initial operation report, and cessation of operations reports on Form ATS, all of which are “deemed confidential when filed.”
We received one comment regarding proposed Rule 301(b)(2)(viii).
We do not believe that requiring an ATS that trades both NMS stocks and non-NMS stocks to file reports on Form ATS-N with respect to NMS stocks, but also file reports on Form ATS with respect to non-NMS stocks, will be unduly burdensome. We recognize the additional burdens for NMS Stock ATSs resulting from the requirement to file disclosures on new Form ATS-N; however, we estimate that the burden for these ATSs to maintain their Forms ATS will decrease, because they will no longer be required to disclose information about their NMS stock operations on Form ATS.
Because we are adopting rules that require NMS Stock ATSs to file Form ATS-N pursuant to Rule 304, we are adopting Rule 304(a) with modifications to provide that an NMS Stock ATS would specifically be excepted from compliance with Rules 301(b)(2)(i) through (vii) of Regulation ATS, which govern the filing of Form ATS.
We are also adopting Rule 301(b)(2)(viii) to provide for how Legacy NMS Stock ATSs transition from filing a Form ATS to filing a Form ATS-N. We are defining the term “Legacy NMS Stock ATS” to mean an NMS Stock ATS that is operating pursuant to an initial operation report on Form ATS as of January 7, 2019. We are also replacing proposed language that stated that an NMS Stock ATS would not be subject to the requirements of Rule 301(b)(2) with language stating that a Legacy NMS Stock ATS shall be subject to the Form ATS filing requirements of Rule 301(b)(2)(i) through (vii) until the Legacy NMS Stock ATS files an initial Form ATS-N with the Commission pursuant to Rule 304(a)(1)(iv)(A), and that thereafter, the Legacy NMS Stock ATS shall file reports
We are also including language in Rule 301(b)(2)(viii) stating that as of January 7, 2019, an entity seeking to operate as an NMS Stock ATS shall not be subject to the ATS filing requirements of Rule 301(b)(2)(i) through (vii) and shall file reports pursuant to Rule 304.
We recognize that an entity may wish to start operating as an NMS Stock ATS between the time the final rule is adopted and January 7, 2019. During that time, an entity must file an initial operation report on Form ATS and comply with Rule 301(b)(2); after January 7, 2019, the ATS, which would operate as a Legacy NMS Stock ATS, must file an initial Form ATS-N between January 7, 2019 and February 8, 2019 pursuant to Rule 304(a)(1)(iv)(A).
We are adopting, with a non-substantive modification, the proposed Rule 301(b)(2)(viii) requirement that an ATS that effects transactions in both NMS stocks and non-NMS stocks be subject to the requirements of new Rule 304 with respect to NMS stocks and
We also proposed to amend Rule 301(b)(9) of Regulation ATS,
We received two comments regarding Form ATS-R. One commenter states that in light of information on FINRA's website regarding ATSs,
We proposed amending Rules 303(a)(1) and 303(a)(2) of Regulation ATS to reflect the proposed amendments to Rule 301(b)(2)
Unless not required to comply with Regulation ATS pursuant to Rule 301(a)
We are amending the record preservation requirements of Rule 303 to incorporate the preservation of records that would be created pursuant to the requirements that NMS Stock ATSs file initial Form ATS-N, Form ATS-N amendments, and notices of cessation on Form ATS-N, instead of Form ATS. Specifically, we are amending Rule 303(a)(2)(ii) to require that an ATS shall preserve, for the life of the enterprise and of any successor enterprise, copies of reports filed pursuant to Rule 301(b)(2) or—in the case of an NMS Stock ATS—Rule 304, and records made pursuant to Rule 301(b)(5).
We are also adopting a minor technical amendment to Rule 303(a). Currently, Rule 303(a) references “paragraph (b)(9) of § 242.301” when setting forth the record preservation requirements for ATSs; this reference is incorrect, as Rule 301(b)(9) describes the filing requirements, rather than the recordkeeping requirements, for ATSs. We are therefore adopting a change to correct the above reference to “paragraph (b)(8) of § 242.301.” In addition, we are adopting an amendment to Rule 303(a)(1) to incorporate amendments to Rule 301(b)(10).
In the Proposal, we requested comment on other potential changes to Regulation ATS rules, including the order display and execution access requirement in Rule 301(b)(3) and the fair access requirement in Rule 301(b)(5).
In addition, the Commission received two comments recommending changes to the fair access requirements in Rule 301(b)(5).
We are not adopting changes to the order display and execution requirement or the fair access requirement at this time. We believe that it is appropriate to take an incremental approach by first applying the amended regime to NMS Stock ATSs before considering a further step and we intend to monitor the effectiveness of Rule 301(b)(3) and Rule 301(b)(5) requirements. Should the Commission decide to take further action with regard to these requirements, such as proposing to amend Regulation ATS, the Commission would do so in a separate rulemaking and take into account its experience with Rule 304 and NMS Stock ATSs.
Rule 304(a)(1)(i) requires that an NMS Stock ATS operate pursuant to an effective initial Form ATS-N to be exempt from the definition of “exchange.” Proposed Rule 304(a)(1)(i) (“Filing”) provided that no exemption from the definition of “exchange” is available to an NMS Stock ATS pursuant to § 240.3a1-1(a)(2) unless the NMS Stock ATS files with the Commission a Form ATS-N, in accordance with the Instructions therein, and the Commission declares the Form ATS-N effective. Proposed Rule 304(a)(1)(i) also included transitional provisions for Legacy NMS Stock ATSs to file Form ATS-N and operate under Rule 304. These provided that if an NMS Stock ATS is operating pursuant to a previously-filed initial operation report on Form ATS as of the effective date of the final rule, such NMS Stock ATS shall file with the Commission a Form ATS-N, in accordance with the Instructions therein, no later than 120 calendar days after the effective date of the final rule. Further, proposed Rule 304(a)(1)(i) would have provided that an NMS Stock ATS operating as of the effective date of the final rule may continue to operate pursuant to a previously-filed initial operation report on Form ATS pending the Commission's review of the filed Form ATS-N. We are adopting Rule 304(a)(1)(i) (“Filing and Effectiveness Requirement”) with modifications and relocating the provisions applicable to Legacy NMS Stock ATSs to another provision within Rule 304(a)(1). Rule 304(a)(1)(i) sets forth two principal conditions of the Exchange Act Rule 3a1-1(a)(2) exemption for NMS Stock ATSs: (1) The NMS Stock ATS must file an initial Form ATS-N, and (2) the initial Form ATS-N must be effective.
We are relocating the provisions of proposed Rule 304(a)(1)(i) regarding the filing of Form ATS-N by Legacy NMS Stock ATSs during the Commission review period to Rule 304(a)(1)(iv) to better organize the rule text, particularly in light of other changes we are making to the proposed rule in response to comments. In addition, we are making other, non-substantive modifications that we believe will not impact NMS Stock ATSs and will result in a more readable rule text for the public.
We are also changing Rule 304(a)(1)(i) to state that the exemption for NMS Stock ATSs will not be available unless “the initial Form ATS-N is effective
Rule 304(a)(1)(ii) describes the timing for the Commission's review of initial Form ATS-N for Legacy NMS Stock ATSs. Proposed Rule 304(a)(1)(ii) provided the timing for the Commission's review of initial Form ATS-N as adopted for both Legacy NMS Stock ATSs and non-Legacy NMS Stock ATSs. The timing for the Commission's review of initial Form ATS-N for Legacy NMS Stock ATSs is provided by Rule 304(a)(1)(iv)(B).
Proposed Rule 304(a)(1)(ii)(A) (“Review period and extension of the 120-day review period”) provided that the Commission would declare a Form ATS-N filed by a Legacy NMS Stock ATS effective or ineffective no later than 120 calendar days from filing with the Commission. Proposed Rule 304(a)(1)(ii)(A) also provided that the Commission could extend the review period for Forms ATS-N filed by Legacy NMS Stock ATSs: (1) An additional 120 calendar days if the Form ATS-N is unusually lengthy or raises novel or complex issues that require additional time for review, in which case the Commission will notify the NMS Stock ATS in writing within the initial 120-calendar day review period and will briefly describe the reason for the determination for which additional time for review is required; or (2) any extended review period to which a duly-authorized representative of the NMS Stock ATS agrees in writing.
Proposed Rule 304(a)(1)(ii)(B) would have provided that the Commission would declare a Form ATS-N filed by an non-Legacy NMS Stock ATS effective or ineffective no later than 120 calendar days from filing with the Commission. The proposed rule also would have provided that the Commission may extend the Form ATS-N review period for: (1) An additional 90 days, if the Form ATS-N is unusually lengthy or raises novel or complex issues that require additional time for review, in which case the Commission will notify the NMS Stock ATS in writing within the initial 120-calendar day review period and will briefly describe the reason for the determination for which additional time for review is required; or (2) any extended review period to which a duly-authorized representative of the NMS Stock ATS agrees in writing. We received three comments regarding the length of the Commission review period and extended review period for Form ATS-N filings.
One commenter worries the review process may devolve into other market centers seeking to have the Commission preserve their market positions, and urges the Commission to promptly evaluate and act on initial Form ATS-N filings.
In addition, one commenter states that the proposed process for determining whether an NMS Stock ATS qualifies for the exemption from the definition of “exchange” could, in light of the Commission's SRO rule filing review responsibilities, overwhelm staff by adding potentially hundreds of new NMS Stock ATS filings.
We are adopting proposed Rule 304(a)(1)(ii)(B) with modifications, renumbering the proposed rule as Rule 304(a)(1)(ii) (“Commission review period”), and relocating Rule 304(a)(1)(ii)(A), which relates to Legacy NMS Stock ATSs, to Rule 304(a)(1)(iv)(B). We are modifying proposed Rule 304(a)(1)(ii) to state that the Commission “may,” “by order,”
We are modifying Rule 304(a)(1)(ii) to add a provision that will allow NMS Stock ATSs to amend their initial Forms ATS-N during the Commission review period. We discussed in the Proposal that during the Commission's review, the Commission staff may provide comments to the entity, and may request that the entity supplement information in the Form ATS-N or revise its disclosures on Form ATS-N.
Rule 304(a)(1)(iii) describes the process by which an initial Form ATS-N would become effective, or be declared ineffective by the Commission. Proposed Rule 304(a)(1)(iii) (“Effectiveness”) provided that the Commission will declare effective a Form ATS-N if the NMS Stock ATS qualifies for the Rule 3a1-1(a)(2) exemption and that the Commission will declare ineffective a Form ATS-N if it finds, after notice and opportunity for hearing, that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors.
Pursuant to Rule 304 and Form ATS-N, as adopted and as discussed below, an NMS Stock ATS must provide all the information required by the form and respond to each item, as applicable, and disclose information that is accurate, current, and complete. A Form ATS-N filing that is defective may be rejected. If the filing is accepted for review, it will become effective unless the Commission finds, after notice and opportunity for hearing, that it is necessary or appropriate in the public interest, and consistent with the protection of investors, to declare the filing ineffective. Responsibility for current, complete, and accurate disclosures rests with the NMS Stock ATS.
The determination of whether to reject a Form ATS-N filing is separate from the Commission's determination to declare a filed Form ATS-N ineffective after Commission review. We received one comment regarding the process pursuant to which a Form ATS-N would be accepted for Commission review.
As proposed, the Instructions to Form ATS-N required that “[a]n NMS Stock ATS must respond to each item, as applicable, in detail and disclose information that is accurate, current, and complete. An NMS Stock ATS must provide all the information required by the form, including the exhibits, and must present the information in a clear and comprehensible manner. A filing that is incomplete or similarly deficient may be returned to the NMS Stock ATS.”
We are also modifying the Instructions to Form ATS-N to delete the phrase: “and must present the information in a clear and comprehensible manner.”
We are modifying our guidance and the rule text for determinations of ineffectiveness, and believe these modifications to the Instructions to Form ATS-N better align them with that guidance and adopted rule text and reduce any potential confusion about the difference between an NMS Stock ATS's obligations with respect to completing Form ATS-N and the standard of review that the Commission will apply when determining whether to declare a Form ATS-N ineffective.
We believe that it would be appropriate to reject a Form ATS-N if the filing is defective.
We proposed that the Commission will declare effective a Form ATS-N if the NMS Stock ATS qualifies for the Rule 3a1-1(a)(2) exemption, and will declare it ineffective if it finds, after notice and opportunity for hearing, that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors.
We received several comments regarding the standard that the Commission would apply to declare a Form ATS-N effective or ineffective. One commenter asserts that it would be helpful to have the Commission review initial Forms ATS-N for completeness and accuracy, and legal and regulatory compliance, and to help standardize the level of disclosure across NMS Stock ATSs.
This commenter also states that the Commission should only find a disclosure to be “materially deficient” with respect to the accuracy, currency, and completeness in an “extreme situation, not a circumstance where additional color or language might be viewed as preferable to a disclosure as filed,” and asserts that a response that is facially responsive to a question on Form ATS-N should be deemed sufficient.
We believe that it would be necessary or appropriate in the public interest, and consistent with the protection of investors, to declare ineffective a Form ATS-N if, for example, the Commission finds, after notice and opportunity for hearing, the Form ATS-N was filed by an entity that does not meet the definition of NMS Stock ATS; one or more disclosures reveal non-compliance
The Commission received comments about the proposed process by which a Form ATS-N would become effective or ineffective, including the potential implications of the proposed process. One commenter expresses concern that a declaration of effectiveness may give market participants a false sense of security that the Commission's deeming an NMS Stock ATS's Form ATS-N “effective” will be tantamount to the Commission's approval of an ATS's operations on the merits, as market participants may not fully understand that a declaration of effectiveness only implies that the NMS Stock ATS has met the Form ATS-N filing requirements, and that the Commission is not approving the merits of the NMS Stock ATS's operations or conflicts of interest.
We also received two comments about an NMS Stock ATS potentially using a declaration of effectiveness to shield itself from potential liability.
While we do not believe that providing a process by which Form ATS-N filings will become effective or ineffective
In addition, one commenter argues that a Form ATS-N should be considered ineffective upon filing until the Commission affirmatively declares it effective or ineffective.
We are adopting Rule 304(a)(1)(iii) with modifications, and relocating most of proposed Rule 304(a)(1)(iv), with modifications,
In the Proposal, we stated that it would be necessary or appropriate in the public interest, and consistent with the protection of investors, to declare ineffective a Form ATS-N if it finds, after notice and opportunity for hearing, that one or more disclosures on Form ATS-N are materially deficient with respect to their accuracy, currency, or completeness.
We are also modifying the Instructions to Form ATS-N to better align them with that guidance, and to reduce any potential confusion about the difference between an NMS Stock ATS's obligations with respect to completing Form ATS-N and the standard of review that the Commission will apply when determining whether to declare a Form ATS-N ineffective.
The same standard for declarations of ineffectiveness will apply to filings of both initial Form ATS-N and Form ATS-N amendments.
We are also relocating two provisions of proposed Rule 304(a)(1)(iv), with non-substantive modifications,
In the Proposal, we provided certain examples of scenarios in which we believed that it would be necessary or appropriate in the public interest, and consistent with the protection of investors, to declare ineffective a Form ATS-N, after notice and opportunity for hearing.
Several commenters request additional guidance and clarity regarding the Commission's review of initial Form ATS-N filings and Form ATS-N amendments and the circumstances under which the Commission may declare a Form ATS-N ineffective.
We believe
We believe that it would be necessary to declare Form ATS-N ineffective if one or more disclosures reveal non-compliance with federal securities laws, including Regulation ATS. As discussed in the Proposal,
We believe that it would be necessary to declare Form ATS-N ineffective if one or more disclosures are materially deficient with respect to their completeness and comprehensibility. The following are non-exhaustive examples of Form ATS-N disclosures that may be deficient with respect to
The following are non-exhaustive examples of Form ATS-N disclosures that may be deficient with respect to their comprehensibility:
We do not agree with the commenter that believes that the term materially deficient should be understood to represent only “extreme situation[s].”
As discussed above, one commenter questions how the Commission's review will be undertaken to help ensure consistency across filings when initial Form ATS-N filings are made “without any prior knowledge of the detail the Commission expects,”
Any order declaring a Form ATS-N ineffective will require the Commission to find that such action is necessary or appropriate in the public interest, and consistent with the protection of investors. Rule 304(a)(1)(iii) provides that the Commission must provide notice to the NMS Stock ATS and provide an opportunity for a hearing. As such, an NMS Stock ATS will have the opportunity to be heard before the Commission declares its Form ATS-N ineffective.
As discussed above, we do not agree with a commenter's suggestion that a Form ATS-N be considered ineffective upon filing.
We also received three comments regarding whether the Commission should add a requirement to make available Form ATS-N filings for public notice and comment before the Commission declares a Form ATS-N effective or ineffective. One commenter notes that the rule filings of national securities exchanges are made publicly available and subject to notice and comment before approval, and that Form ATS-N should be the same.
We believe that it would not be appropriate to subject Form ATS-N filings to public notice and comment, as some commenters suggest. The Commission did not propose to subject Form ATS-N filings to a public notice and comment process. As discussed above,
The standard of review for ineffectiveness of Form ATS-N filings that we are adopting does not include an evaluation of the merits of the services that an NMS Stock ATS offers to subscribers. As discussed above, some commenters raise concerns about whether the Commission review process will result in imposing substantive standards on NMS Stock ATSs.
Rule 304(a)(1)(iv) describes the process through which Legacy NMS Stock ATSs would file their initial Form ATS-N. We are adopting Rule 304(a)(1)(iv) (“Transition for Legacy NMS Stock ATSs”) to provide a process for a Legacy NMS Stock ATS to file its initial Form ATS-N, and to continue to operate while its initial Form ATS-N is under Commission review.
Adopted Rule 304(a)(1)(iv) modifies proposed Rule 304(a)(1)(i) to address certain commenter concerns, as described below. Under the proposed rule, an NMS Stock ATS operating as of the effective date of the final rule would continue to operate pursuant to its previously filed initial operation report on Form ATS, pending the Commission's review of the filed Form ATS. We modified this proposed process in response to comments. In the Proposal, we asked whether the Commission should allow a Legacy NMS Stock ATS to continue operations pursuant to Form ATS pending the Commission's review of Form ATS-N.
A Legacy NMS Stock ATS will be required to file an initial Form ATS-N to continue to operate pursuant to the Rule 3a1-1(a)(2) exemption with respect to its Rule 3b-16 activity in NMS stocks beyond January 7, 2019. This provision will allow a Legacy NMS Stock ATS to continue its current operations without disruptions to the ATS or its current subscribers and provide the Legacy NMS Stock ATS with sufficient time to make an orderly transition from compliance under the current Regulation ATS requirements to compliance with Rule 304.
Under the adopted rule, both Legacy NMS Stock ATSs and non-Legacy NMS Stock ATSs will be required to file an initial Form ATS-N. We believe that market participants should have access to the same level of information disclosed by both Legacy NMS Stock ATSs and non-Legacy NMS Stock ATSs as market participants will consider routing orders to both types of NMS Stock ATS. Allowing Legacy NMS Stock ATSs to file Form ATS instead of Form ATS-N would limit the amount of information available to market participants about these ATSs' operations and the ATS-related activities of their broker-dealer operators, and would thereby make it difficult for market participants to assess Legacy NMS Stock ATSs as potential routing destinations for their orders.
We believe that a Legacy NMS Stock ATS should be permitted to continue to operate during the Commission review period for initial Form ATS-N.
Two commenters request clarification about the process for a Legacy NMS Stock ATS to file an initial Form ATS-N and its obligations to update its Form ATS on file with the Commission while the Commission reviews its initial Form ATS-N.
These commenters suggest processes that they believe will address these concerns.
In response to these commenters, and after considering their alternative suggestions, we are adopting Rule 304(a)(1)(iv)(A), which is modified from proposed Rule 304(a)(1)(i), to provide that a filed Form ATS-N shall supersede and replace for purposes of the exemption a Legacy NMS Stock ATS's previously-filed Form ATS. After considering the comments, we acknowledge that if the Commission were to require a Legacy NMS Stock ATS to file and amend both Form ATS and Form ATS-N during the Commission review period for an initial Form ATS-N, the Legacy NMS Stock ATS could incur additional legal and regulatory risks, as it would be required to make changes to two forms and ensure that the information on the two forms is consistent. The disclosures on an initial Form ATS-N would include the vast majority of information provided to the Commission on Form ATS that pertains to the ATS's NMS stock operations. Therefore, we believe that the modifications to the proposed rule would alleviate the burden on Legacy NMS Stock ATSs of filing two separate documents with the Commission that would likely contain significantly overlapping information. In addition, to address the commenters' concerns, and facilitate the ability of a Legacy NMS Stock ATS to maintain only one filing for a limited time during the transition, we are also modifying proposed Rule 304(a)(1)(i), and adopting as Rule 304(a)(1)(iv)(A), to provide that the Legacy NMS Stock ATS may operate, on a provisional basis, pursuant to the filed Form ATS-N, and any amendments thereto,
In addition, we are adopting a provision in Rule 304(a)(1)(iv)(A) that provides that an initial Form ATS-N filed by a Legacy NMS Stock ATS, as amended, will become effective, unless declared ineffective, upon the earlier of: (1) The completion of review by the Commission and publication pursuant to Rule 304(b)(2) or (2) the expiration of the review period, or, if applicable, the end of the extended review period, pursuant to Rule 304(a)(1)(iv)(B). We are adding this provision to reflect changes to the effectiveness process; this provision is designed to replace parts of proposed Rule 304(a)(1)(iii). In addition, because we are adopting a process that allows a Legacy NMS Stock ATS to amend its initial Form ATS-N during the Commission review period, we are adding to Rule 304(a)(1)(iv)(A) that a Legacy NMS Stock ATS's Form ATS-N “as amended” will become effective, which will include any amendments made to an initial Form ATS-N during the Commission review period.
Finally, proposed Rule 304(a)(1) would have required Legacy NMS Stock ATSs to submit their initial Form ATS-N filings within 120 days of the effective date of this rulemaking. We received one comment supporting the requirement that Legacy NMS Stock ATSs file Form ATS-N within 120 calendar days of the effective date of the final rule, “given the reasonable assumption that the operators of the ATS should be very familiar with the operational structure of said ATS.”
Rule 304(a)(1)(iv)(B) provides the process and timing for the Commission to review a Legacy NMS Stock ATS's initial Form ATS-N, and, if applicable, declare such initial Form ATS-N effective. We are adopting Rule 304(a)(1)(iv)(B) (“Commission review period; Ineffectiveness determination”), which provides that the Commission may, by order, as provided in Rule 304(a)(1)(iii), declare an initial Form ATS-N filed by a Legacy NMS Stock ATS ineffective no later than 120 calendar days from the date of filing with the Commission, or, if applicable, the end of the extended review period. The Commission may extend the initial Form ATS-N review period for a Legacy NMS Stock ATS for: (1) An additional 120 calendar days if the initial Form ATS-N is unusually lengthy or raises novel or complex issues that require additional time for review, in which case the Commission will notify the
As discussed above, we received comments on the 120-calendar day review period and extended review periods that either support or do not object to the time frames proposed for both non-Legacy NMS Stock ATSs and Legacy NMS Stock ATSs.
One commenter suggests that if the Commission declares a Legacy NMS Stock ATS's initial Form ATS-N ineffective, the NMS Stock ATS should have the opportunity to amend its Form ATS-N so that the form would be effective before the NMS Stock ATS is required to cease operating.
This commenter also states that a declaration of ineffectiveness should remain confidential until the Legacy NMS Stock ATS has amended the Form ATS-N and the amended form is “approved.”
Two commenters request clarification about whether amending an initial Form ATS-N as a result of a material change during the Commission review period would toll the review period, and suggest that the review period should not restart with every amendment.
Rule 304(a)(1)(iv)(C) describes the process through which Legacy NMS Stock ATSs would amend their initial Form ATS-N during the Commission review period. We are adopting Rule 304(a)(1)(iv)(C) (“Amendments to initial Form ATS-N”), which requires that during the review period of the initial Form ATS-N filed by a Legacy NMS Stock ATS, the Legacy NMS Stock ATS shall amend its initial Form ATS-N pursuant to the requirements of Rule 304(a)(2)(i)(A) through (D). The adopted rule differs from the Proposal. As proposed, during the Commission review period for an initial Form ATS-N filed by a Legacy NMS Stock ATS, the Legacy NMS Stock ATS would have been required to continue operating pursuant to its existing Form ATS initial operation report and file amendments on Form ATS to provide notice of changes to the operations of its
As discussed above, two commenters request that the Commission clarify the process for filing amendments during the Commission review period for Legacy NMS Stock ATSs
In addition, one commenter asked the Commission to adopt a process that would allow Legacy NMS Stock ATSs to introduce a new functionality or make changes during the 120-calendar day review period for the initial Form ATS-N.
Rule 304(a)(1)(iv)(C) provides that a Legacy NMS Stock ATS shall amend its initial Form ATS-N pursuant to the requirements of Rule 304(a)(2)(i)(A) through (D), which govern the process for filing amendments to Form ATS-N. Amendments will be subject to Commission review and could be declared ineffective under Rule 304(a)(2)(ii). Filed Form ATS-N amendments will not be made public until the Legacy NMS Stock ATS's initial Form ATS-N becomes effective and publicly available. Once a Legacy NMS Stock ATS's initial Form ATS-N becomes effective, the Commission will make public the Form ATS-N, as amended, which will incorporate any amendments that the Legacy NMS Stock ATS filed to the initial Form ATS-N during the Commission review period, except for any material amendments still subject to the 30-calendar day Commission review period.
Rule 304(a)(2)(i) describes the types of amendments that NMS Stock ATSs would be required to file to their Form ATS-N. We proposed Rule 304(a)(2)(i) (“Form ATS-N amendment filing requirements”) to require an NMS Stock ATS to update information disclosed on Form ATS-N concerning its manner of operations and the ATS-related activities of its broker-dealer operator and its affiliates. Proposed Rule 304(a)(2)(i) would have required an NMS Stock ATS to amend an effective Form ATS-N in accordance with the Instructions therein: (A) at least 30 calendar days prior to the date of implementation of a material change to the operations of the NMS Stock ATS or to the activities of the broker-dealer operator or its affiliates that are subject to disclosure on Form ATS-N; (B) within 30 calendar days after the end of each calendar quarter to correct any other information that has become inaccurate for any reason and has not been previously reported to the Commission as a Form ATS-N amendment; or (C) promptly, to correct information in any previous disclosure on Form ATS-N, after discovery that any information filed under proposed Rule 304(a)(1)(i) or (a)(2)(i)(A) or (B) was inaccurate or incomplete when filed.
We are adopting Rule 304(a)(2)(i) with modifications. As adopted, Rule 304(a)(2)(i) requires an NMS Stock ATS to amend a Form ATS-N in accordance with the conditions of Rule 304:
In addition, we are replacing the rule text that stated that an NMS Stock ATS shall amend Form ATS-N in accordance with “the instructions therein” with text requiring an NMS Stock ATS to amend Form ATS-N in accordance with “the conditions of this section” because we intended for NMS Stock ATSs to comply with all of the applicable provisions of Rule 304, including any procedural provisions, in addition to the Instructions on Form ATS-N.
We are also adding a separate amendment filing process for changes to information disclosed in Part III, Item 24 and 25 of Form ATS-N.
We proposed that an NMS Stock ATS would be required to amend an effective Form ATS-N at least 30 calendar days prior to the date of implementation of a material change to the operations of the NMS Stock ATS or to the activities of the broker-dealer operator or its affiliates that are subject to disclosure on Form ATS-N.
We received several comments relating to the proposed 30-calendar day advance notice requirement for material changes in proposed Rule 304(a)(2)(i)(A). One commenter states that it supports the requirement that an NMS Stock ATS file a material amendment to Form ATS-N 30 days in advance of implementing a material change to the operations of the NMS Stock ATS, or the activities of the broker-dealer operator or its affiliates.
Two commenters suggest that instead of requiring 30 calendar days of advance notice, the Commission should require NMS Stock ATSs to file an amendment on Form ATS-N at least 20 calendar days in advance of implementing a material change, which is the same as the current requirement for filing amendments to Form ATS.
We are adopting Rule 304(a)(2)(i)(A) with modifications. We do not agree with commenters who believe that the current 20-calendar day advance notice period for material amendments to be filed on Form ATS would be more appropriate for NMS Stock ATSs than a 30-calendar day period. We believe that a 30 calendar day advance notice period for a material change would allow the Commission sufficient time to review the amendment and determine, if necessary, whether the filing should be declared ineffective. Although we agree with the commenter that states that market participants will have access to more information regarding NMS Stock ATS operations than in the past,
One commenter states that the advance notice requirement for material changes would be close to an “advance notice and approval” approach that may effectively result in a merit review process of NMS Stock ATS operations.
Another commenter expresses concern regarding situations in which it files a material amendment to Form ATS-N but needs to modify a functionality based on customer feedback or unanticipated workflows or scenarios.
In the Proposal, we stated our belief that a change to the operations of an NMS Stock ATS, or the disclosures regarding the activities of the broker-dealer operator and its affiliates, would be material if there is a substantial likelihood that a reasonable market participant would consider the change important when evaluating the NMS Stock ATS as a potential trading venue.
Some commenters agree that materiality is an appropriate standard for requiring advance notice.
Some commenters ask that we provide greater clarity with respect to the types of changes that would be material changes.
We continue to believe that the Proposal's guidance regarding whether a change is material is appropriate. In addition, we agree with the comment that a change that falls in one of the categories set forth in the Proposal, including a change to the manner in which the NMS Stock ATS displays orders or trading interest, such as the font size in which orders are displayed,
One commenter notes that NMS Stock ATSs may over-file material amendments to avoid risk, and that over-filing would cost substantial time and resources for NMS Stock ATSs, as well as burden the Commission staff that will be processing and reviewing the submissions.
The Commission does not believe that its materiality standard will result in overreporting or underreporting of information by an NMS Stock ATS or create an overly time-consuming and voluminous Form ATS-N amendment filing process for NMS Stock ATSs or the Commission. The Commission recognizes that Form ATS-N will require an NMS Stock ATS to provide more information about its operations and ATS-related activities of the broker-dealer operator and its affiliates than Form ATS. The Commission also recognizes that the structure and complexities of NMS Stock ATS operations have significantly changed since Regulation ATS was adopted, and believes that these changes require enhanced disclosures for subscribers to better understand how NMS Stock ATSs operate. Given the technology advancements and the proclivity for NMS Stock ATSs to enhance the operations of their ATSs, and the fact that market participants search for the best trading venue for their orders, we believe that it is important for an NMS Stock ATS to amend its Form ATS-N as required to ensure disclosures on Form ATS-N are complete and comprehensible. Based on the Commission experience with Form ATS filings, we believe that we have provided reasonable estimates of the time and resources that NMS Stock ATSs will need to expend to ensure that disclosures on amended Form ATS-N are accurate, current, and complete.
With regard to the commenter that asks for more specificity about the level of detail that amendments to Form ATS-N require,
One commenter states that it may be worth considering an approach that leverages the Regulation SCI framework of major changes determined to be material because such an approach would help ensure consistency between different Commission regulations that impact and govern ATSs.
In addition, one commenter states that because consumers of ATS disclosures vary widely in business models and sophistication, the Commission should not create “tiers” of materiality, and states that although the Commission has always understood that some “material” factors may be more or less important to different market participants, it should not substitute its priorities and relative rankings of importance for those of diverse market participants.
In the Proposal, we stated that if an NMS Stock ATS triggers the Rule 301(b)(3)(i) order display and execution access volume thresholds after commencing operations pursuant to an effective Form ATS-N, the Commission generally would consider this to be a material change to the operations of the NMS Stock ATS.
Under Rule 304(a)(i)(2)(A), an NMS Stock ATS is required to file a material amendment at least 30 calendar days prior to the date of implementation of a material change. We continue to believe that it generally would be a material change to the operations of an NMS Stock ATS if the ATS were to exceed the order display and execution access threshold or become subject to the order display and execution access requirements under Rule 301(b)(3). Likewise, we continue to believe that it generally would be a material change to the operations of an NMS Stock ATS if the ATS were to exceed the fair access threshold or become subject to the order display and execution access requirements under Rule 301(b)(5). We recognize, however, that an NMS Stock ATS may not be able to comply with the 30-calendar day advance notice period for material amendments because the ATS may not be able to foresee when it will exceed the order display and execution access or fair access volume thresholds. To provide market participants with information about when an NMS Stock ATS becomes subject to, or no longer is subject to, the
We proposed in Rule 304(a)(2)(i)(B) that an NMS Stock ATS is required to update its Form ATS-N within 30 calendar days after the end of each calendar quarter to correct any other information that has become inaccurate for any reason and has not been previously reported to the Commission as a Form ATS-N amendment.
We are amending Rule 304(a)(2)(i)(B) to expand the circumstances under which “updating amendments”
We also are revising Rule 304(a)(2)(i)(B) to provide that an updating amendment shall be filed “no later than” 30 calendar days after the end of the calendar quarter. This change allows, but does not require, an NMS Stock ATS to file amendments required by Rule 304(a)(2)(i)(B) earlier than the 30 calendar day window at the end of each calendar quarter.
In addition, proposed Rule 304(a)(2)(i)(B) would have required an NMS Stock ATS to file an amendment to correct “any other” information that has not been previously reported as a Form ATS-N amendment. We believe that, as proposed, the phrase “any other” information could be vague and therefore, it could have been unclear when it would be permitted for an NMS Stock ATS to file an updating amendment, as opposed to a material or correcting amendment. To distinguish between what information may be filed pursuant to Rule 304(a)(2)(i)(B), rather than as a material amendment under Rule 304(a)(2)(i)(A), correcting amendment under Rule 304(a)(2)(i)(C), or order display and fair access amendment under Rule 304(a)(2)(i)(D), we are making a change to provide that updating amendments shall be filed to correct information that “was not required to be reported to the Commission as a Form ATS-N amendment pursuant to paragraphs 304(a)(2)(i)(A), (C), or (D) of this section.”
We believe that requiring NMS Stock ATSs to correct information that has become inaccurate or incomplete for any reason (and was not required to be reported to the Commission as a material amendment, correcting, or order display and fair access amendment) no later than 30 calendar days after the end of each calendar quarter would tailor the reporting burden for filing amendments on NMS Stock ATSs to the degree of significance of the change in a manner that does not compromise the Commission's oversight of NMS Stock ATSs or its ability to protect investors and the public interest. For example, if an NMS Stock ATS that publishes or otherwise provides to one or more subscribers or persons aggregate platform-wide order flow and execution statistics of the NMS Stock ATS that are not otherwise required disclosures under Rule 605 of Regulation NMS, the NMS Stock ATS could, depending on the facts and circumstances, disclose changes to such statistics in a updating amendment no later than 30 calendar days after the end of the calendar quarter in which the changes occurred.
We continue to believe that allowing NMS Stock ATSs to implement non-material changes immediately would allow NMS Stock ATSs to make updating changes to their operations and disclosures without delay, while at the same time provide disclosure about those changes to market participants and the Commission within an appropriate time frame. Updating amendments, like all amendments to Form ATS-N, will be subject to Commission review pursuant to Rule 304(a)(2)(ii) and could be declared ineffective if the Commission makes the required findings.
We proposed in Rule 304(a)(2)(i)(C) to require an NMS Stock ATS to amend its Form ATS-N promptly to correct information in any previous disclosure on Form ATS-N after discovery that any information previously filed on Form ATS-N was inaccurate or incomplete when filed. We proposed that such amendments will be subject to
We received one comment regarding proposed Rule 304(a)(2)(i)(C) that supports allowing an NMS Stock ATS to file a Form ATS-N amendment to correct information in a previous Form ATS-N disclosure that was inaccurate or incomplete when filed.
Another commenter is generally concerned about the amount and types of amendment filings required under the Proposal, and the burden that filing such amendments could impose on NMS Stock ATSs.
Generally, we will consider a correcting amendment to be filed “promptly,” if it is filed within five business days after discovery that any material information previously filed on Form ATS-N was materially inaccurate or incomplete when filed.
In addition, we are making a technical change by defining the type of amendment described in Rule 304(a)(2)(i)(C) as a “correcting amendment.”
Rule 304(a)(2)(ii) provides the process through which the Commission would review and declare Form ATS-N amendments to Form ATS-N. Proposed Rule 304(a)(2)(ii) (“Commission review period; Ineffectiveness determination”) provided that the Commission will, by order, if it finds that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors, declare ineffective any Form ATS-N amendment filed pursuant to Rule 304(a)(2)(i)(A) through (C) no later than 30 calendar days from filing with the Commission. The proposed rule also provided that if the Commission declares a Form ATS-N amendment ineffective, the NMS Stock ATS shall be prohibited from operating pursuant to the ineffective Form ATS-N amendment. Under proposed Rule 304(a)(2)(ii), the NMS Stock ATS could have, however, continued to operate pursuant to a Form ATS-N that was previously declared effective. In addition, the proposed rule provided that a Form ATS-N amendment declared ineffective would not prevent the NMS Stock ATS from subsequently filing a new Form ATS-N amendment that resolves the disclosure deficiency that resulted in the declaration of ineffectiveness. We are adopting Rule 304(a)(2)(ii) with modifications to provide that the Commission will, by order, declare ineffective any Form ATS-N amendment filed pursuant to Rule 304(a)(2)(i)(A) through (D), no later than 30 calendar days from filing with the Commission, if the Commission finds that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors.
We stated in the Proposal that the Commission could declare ineffective a Form ATS-N amendment if one or more disclosures on an amended Form ATS-N are materially deficient with respect to its accuracy, currency, completeness, or fair presentation.
We received comments regarding the proposed process for reviewing Form ATS-N amendments. One commenter expresses support for the proposal not to require the Commission to affirmatively declare material amendments effective, and states that such a requirement might serve as an impediment to NMS Stock ATSs seeking to introduce a new functionality, would unnecessarily burden Commission staff, and would discourage NMS Stock ATSs from filing changes more than 30 days in advance of implementation.
One commenter does not object to the Commission having the ability to declare a material amendment ineffective, but hopes the Commission would identify concerns as soon as practical during the review period so an NMS Stock ATS could address any issues.
In contrast, we believe a material change to a Form ATS-N material amendment could reflect a significant change to the intended operations of the ATS or the ATS-related activities of its broker-dealer operator, which would necessitate a full review period. Therefore, we are modifying Rule 304(a)(a)(2)(ii) to specify that an NMS Stock ATS making material changes to a filed material amendment during the Commission review period shall withdraw its filed material amendment and, if the NMS Stock ATS chooses to pursue the change, must file a new material amendment pursuant to Rule 304(a)(2)(i)(A).
Another commenter suggests that similar to the current process for reviewing Form ATS amendments, the Commission should require advanced notice of material changes, but not impose a review process for ineffectiveness.
We are declining to adopt the commenter's suggestion to not review Form ATS-N amendments for ineffectiveness because the review process allows the Commission to better fulfill its oversight responsibilities of NMS Stock ATSs and to help ensure that Form ATS-N amendments contain disclosures that are complete and comprehensible. We also disagree with the commenter's view that the Commission review process will incentivize NMS Stock ATSs to make vague disclosures to allow for operational flexibility. Rather, we believe that without a process to declare ineffective a Form ATS-N amendment, an NMS Stock ATS may have less incentive to provide complete and comprehensible disclosures.
While the review process for Form ATS-N amendments may have some
Other commenters express the same concerns with regard to the review process for Form ATS-N amendments as they did for the review process for initial Form ATS-N. These comments are addressed above.
Rule 304(a)(3) provides the requirement for NMS Stock ATSs to provide notice if they plan to cease to operate. Proposed Rule 304(a)(3) (“Notice of cessation”) provided that an NMS Stock ATS shall notice its cessation of operations on Form ATS-N at least 10 business days before the date the NMS Stock ATS ceases to operate as an NMS Stock ATS. Proposed Rule 304(a)(3) also provided that a notice of cessation shall cause the Form ATS-N to become ineffective on the date designated by the NMS Stock ATS.
We received no comments regarding proposed Rule 304(a)(3). We believe that 10 business days is a reasonable period within which an NMS Stock ATS will provide notice that it intends to cease operations and will give market participants sufficient time to seek alternative routing destinations for their orders.
Paragraph (i) of proposed Rule 304(a)(4) (“Suspension, limitation, and revocation of the exemption from the definition of exchange”) provided that the Commission will, by order, if it finds, after notice and opportunity for hearing, that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors, suspend for a period not exceeding twelve months, limit, or revoke an NMS Stock ATS's exemption from the definition of “exchange” pursuant to Rule 3a1-1(a)(2). Further, proposed Rule 304(a)(4)(ii) provided that if an NMS Stock ATS's exemption is suspended or revoked pursuant to proposed Rule 304(a)(4)(i), the NMS Stock ATS would be prohibited from operating pursuant to the exemption from the definition of an “exchange” pursuant to Rule 3a1-1(a)(2). In addition, proposed Rule 304(a)(4)(i) provided that if an NMS Stock ATS's exemption is limited pursuant to proposed Rule 304(a)(4)(i), the NMS Stock ATS shall be prohibited from operating in a manner otherwise inconsistent with the terms and conditions of the Commission order. We are adopting Rule 304(a)(4) with minor modifications.
We received four comments regarding proposed Rule 304(a)(4).
In addition, one commenter states that the Commission “should be empowered to suspend, limit, or revoke an ATS's exemption from the definition of an `exchange', irrespective of the assets traded on the ATS.”
One commenter is concerned that the process to suspend, limit, or revoke an NMS Stock ATS's exemption provided under Rule 3a1-1(a)(2) could result in a sanction (such as suspension or revocation of its exemption) that is “disproportionate to the alleged violation,” and asks the Commission to reconsider such requirement.
The exemption from the definition of “exchange” provided under Rule 3a1-1(a)(2) is conditional upon initial and ongoing compliance with Regulation ATS. As a result of this rulemaking, the conditions of the Rule 3a1-1(a)(2) exemption are being expanded for NMS Stock ATSs. An ATS that fails to comply with those conditions would fall outside the scope of the exemption. We believe that it is appropriate to provide a process by which the Commission may, by order, suspend, limit, or revoke an NMS Stock ATS's exemption provided under Rule 3a1-1(a)(2) if the NMS Stock ATS is operating or has operated in a manner such that the exemption for the NMS Stock ATS is not necessary or appropriate in the public interest, or is inconsistent with the protection of investors,
Pursuant to Rule 304(a)(4)(ii), an NMS Stock ATS whose exemption has been suspended or revoked would be prohibited from operating pursuant to the Rule 3a1-1(a)(2) exemption; if an NMS Stock ATS were to continue to engage in Rule 3b-16 activity in NMS stocks without the exemption, it would be operating as an unregistered national securities exchange because it would no longer qualify for the exemption.
We also continue to believe that providing a process by which the Commission can determine to suspend, limit, or revoke an NMS Stock ATS's exemption will provide appropriate flexibility to address the specific facts and circumstances of an NMS Stock ATS's failure to comply with Regulation ATS.
Another commenter requests clarification regarding the process for revoking, suspending, or limiting an NMS Stock ATS's exemption. The commenter asks the Commission to clarify how an ATS could reestablish its exemption provided under Rule 3a1-1(a)(2) after it has been revoked. This commenter also questions whether there
One commenter also requests clarification regarding the procedure that the Commission will follow for an NMS Stock ATS that has had its exemption suspended for the maximum 12 months.
An additional commenter questions what action the Commission would take in the event that there are “ambiguous, seemingly incomplete, or otherwise questionable disclosures that do not rise to the level of material deficiency,” and suggests that the Commission apply “intermediate” sanctions, such as monetary fines and the temporary suspension of the right to operate as an NMS Stock ATS without notice or hearing.
Rule 304(b)(1) provides that every Form ATS-N would constitute a report under the Exchange Act. Paragraph (1) of proposed Rule 304(b) (“Public disclosures”) provided that every Form ATS-N filed pursuant to Rule 304 shall constitute a “report” within the meaning of Sections 11A, 17(a), 18(a), and 32(a) and any other applicable provisions of the Exchange Act. Because proposed Form ATS-N is a report that is required to be filed under the Exchange Act, it would be unlawful for any person to willfully or knowingly make, or cause to be made, a false or misleading statement with respect to any material fact in Form ATS-N. Proposed Rule 304(b)(1) is nearly identical to current Rule 301(b)(2)(vi),
We received two comments on proposed Rule 304(b)(1).
We do not believe that the fact that Form ATS-N requires more detailed disclosures than Form ATS would justify reducing the potential liability for false or misleading statements made in Form ATS-N disclosures. The information required on Form ATS-N is designed to provide the public with transparency into an NMS Stock ATS's operations and the ATS-related activities of the broker-dealer operator and its affiliates. Although the commenter does not directly object to Rule 304(b)(1), the commenter argues that the Commission should narrow the scope of disclosures and standardize the Form ATS-N format in light of the potential liability this presents.
Rule 304(b)(2) provides which Form ATS-N filings and related orders the Commission would make public. Proposed Rule 304(b)(2) provided that we would make public, via posting on the Commission's website, each (1) order of effectiveness of a Form ATS-N; (2) order of ineffectiveness of a Form ATS-N; (3) effective Form ATS-N; (4) filed Form ATS-N amendment; (5) order of ineffectiveness of a Form ATS-N amendment; (6) notice of cessation; and (7) order suspending, limiting, or revoking the exemption from the definition of an “exchange” pursuant to Exchange Act Rule 3a1-1(a)(2). We are adopting Rule 304(b)(2) with modifications discussed below.
As discussed above, many commenters support making Form ATS-N public, observing that market participants do not currently have access to sufficient, standardized information about the operations and ownership of NMS Stock ATSs.
We continue to believe that making Form ATS-N filings publicly available is important because most market participants have limited access to information that permits them to adequately compare and contrast how an NMS Stock ATS would handle its orders with how a national securities exchange or other NMS Stock ATS would handle its orders.
We are adopting Rule 304(b)(2), with the modifications to address commenters' concerns, to mandate greater public disclosure of NMS Stock ATS operations through the publication of Form ATS-N. Adopted Rule 304(b)(2) provides that the Commission will make Form ATS-N and related filings available via posting on the Commission's website. NMS Stock ATS broker-dealer operators will submit Form ATS-N filings via EDGAR, and the Commission will make such filings available on its website.
Several commenters express support for proposed Rule 304(b)(2)(iii), which would make public an effective Form ATS-N.
Adopted Rule 304(a)(1)(ii)(B) and Rule 304(a)(1)(iv)(C) provide processes for NMS Stock ATSs to amend their initial Forms ATS-N during the Commission review period. If, for example, the Commission staff provides comments to a broker-dealer operator suggesting modifications designed to enhance the completeness and comprehensibility of its initial Form ATS-N disclosures, the NMS Stock ATS would have the opportunity to file an amendment to respond to such comments during the Commission review period. We believe that it is appropriate to make public initial Form ATS-N, as revised by any such amendments (except for material amendments during the Commission review period),
Some commenters express concerns regarding the timing of publicly disclosing a filed Form ATS-N.
Several commenters suggest that the Commission should make certain information required by Form ATS-N available only to the Commission.
Other commenters express concern that publicly disclosing Form ATS-N could result in the disclosure of an NMS Stock ATS's proprietary or commercially sensitive information.
Some commenters that believe that Form ATS-N disclosures may be too detailed to be helpful to market participants
Another commenter states that, although the Commission should not address commenters' concerns regarding disclosure of sensitive or proprietary information,
In addition, FINRA requests that the Commission require NMS Stock ATSs to file duplicate copies of Form ATS-N submissions with FINRA so that FINRA has access to these filings before they become effective, or in the event that they are deemed ineffective and thus never made public.
Because the Commission will not issue orders of effective initial Forms ATS-N, adopted Rule 304(b)(2) does not include each “Order of effectiveness of a Form ATS-N.” We continue to believe that it is appropriate to make public each order of ineffective Form ATS-N, substantially as proposed,
Other than the comment about orders of ineffectiveness relating to a Legacy NMS Stock ATS's initial Form ATS-N, which is discussed above,
We proposed, in Rule 304(a)(2)(iv), making all filed amendments to Form ATS-N public; as proposed, Form ATS-N amendments would have been public during the Commission review period and prior to the Commission's determination of whether a Form ATS-N amendment should be declared ineffective.
In the Proposal, we asked whether commenters believe that the Commission should make public on its website upon filing a Form ATS-N amendment for a material change, and whether there should be a delay in when the Form ATS-N for a material change is made public.
We are modifying the proposed rules for making Form ATS-N amendments to an effective Form ATS-N public. In response to commenters' concerns, we are adding new subparagraph (b)(2)(iii)(A) to Rule 304 to provide that, for material amendments (as defined by Rule 304(a)(2)(i)(A)) to an effective Form ATS-N, the cover page of the filed material amendment will be made public by the Commission upon filing and, unless the Commission declares the material amendment ineffective, the entirety of the material amendment, as amended, will be made public by the Commission following the Commission's 30-calendar day review period. In addition, we are adding new subparagraph (b)(2)(iii)(B) to Rule 304 to provide that, for updating, correcting, and order display and fair access amendments (as defined by Rule 304(a)(2)(i)(B), (C), and (D), respectively) to an effective Form ATS-N, the entirety of the updating, correcting, or order display and fair access amendment will be made public by the Commission upon filing. We are also adding to subparagraph (b)(2)(iii)(B) that an updating or correcting amendment filed to a material amendment will be made public by the Commission following the expiration of the review period for such material amendment pursuant to paragraph (a)(2)(ii) of Rule 304.
We share the commenters' concerns that making public Form ATS-N material amendments before expiration of the Commission's 30-day calendar review period could be confusing or misleading to the public, particularly in the event the material amendment is declared ineffective and the related change is never implemented. One commenter asserts that advance disclosure of Form ATS-N amendments may burden market participants who feel obligated to review premature disclosures for possible effects on them and their underlying customers.
In addition, we share the commenters' concerns that providing advance public notice of material changes to NMS Stock ATSs could burden ATSs, which would be required to provide at least 30-calendar day advance notice of material changes to all market participants, including their competitors. Requiring such advance public notice of material changes before they are implemented could reduce incentives for NMS Stock ATSs to innovate.
However, we continue to believe that market participants that are planning routing strategies would benefit from advance notice that the NMS Stock ATS is planning changes to its operations or conflicts of interest. To minimize the potential competitive harm of advance public notice, while also providing the benefits of immediate public transparency, the Commission will make public the cover page of a material amendment to an effective Form ATS-N upon filing of such amendment. The cover page will indicate that the NMS Stock ATS has filed a material amendment and provide a brief narrative about the content of the amendment. An NMS Stock ATS is required to indicate the part and item number of Form ATS-N that is subject to the change, state whether or not such change will apply to all subscribers and the broker-dealer operator, and provide a brief summary of the changes. For example, if an NMS Stock ATS is introducing a new order type, the brief narrative might state: “The ATS is amending Part III, Item 7(a) of Form ATS-N to include a new order type, which will be available to all subscribers.”
In addition, we are adding, in new subparagraph (b)(2)(iii)(A) to Rule 304, that the Commission will, following the expiration of the 30-calendar day Commission review period pursuant to Rule 304(a)(2)(ii), make public the entirety of the material amendment “as amended.” We are providing a process, under Rule 304(a)(2)(ii), for NMS Stock ATSs to file updating and correcting amendments under Rule 304(a)(2)(i)(B) and (C), respectively, to material amendments during the Commission review period. In addition, Rule 304(b)(2)(iii)(B) provides that an updating or correcting amendment filed to a material amendment will be made public by the Commission following the expiration of the review period for such material amendment pursuant to Rule 304(a)(2)(ii). We believe that disclosing updating and correcting amendments to material amendments before expiration of the Commission's 30-day calendar review period for the material amendment (and before the material amendment is made public) could be confusing or misleading to the public as the underlying material amendment would not yet be public or operative. We will make public material amendments “as amended;” material amendments will reflect any updating and correcting amendments filed during the Commission review period. Such amended disclosures could provide market participants with more complete and comprehensible information about NMS Stock ATS operations and the activities of their broker-dealer operators and affiliates. Accordingly, Rule 304(b)(2)(iii)(B) provides that an updating or correcting amendment filed to a material amendment will be made public by the Commission following the
The change to delay making the entirety of Form ATS-N material amendments, as amended, public until after the Commission has completed the review will not impact the manner in which we proposed to make public updating, correcting, and order display and fair access amendments. Form ATS-N updating amendments require NMS Stock ATSs to, no later than 30 calendar days after the end of a calendar quarter, correct information that has become inaccurate or incomplete for any reason and was not required to be reported to the Commission as a Form ATS-N amendment pursuant to Rules 304(a)(2)(i)(A), (C), or (D).
With respect to amendments declared ineffective, one commenter states that such amendments should be returned to the NMS Stock ATS and not be made publicly accessible.
Three commenters state that by making pending amendments public, the Commission may incidentally turn the process into a review, notice, and comment period.
Two commenters suggest that material amendments should be made public after the Commission has completed its review, but prior to implementation.
In addition, we received comments asking for clarification regarding the process for a Legacy NMS Stock ATS to file amendments to its Form ATS while the Commission is reviewing the ATS's initial Form ATS-N.
Under Rule 304(b)(2)(iv), the Commission will make public each order of ineffective Form ATS-N amendment. This would provide notice to market participants that the Commission had declared a Form ATS-N amendment ineffective. We received no comments on making public orders of ineffective Form ATS-N amendments. We are adopting proposed Rule 304(b)(2)(v) as adopted Rule 304(b)(2)(iv).
Under Rule 304(b)(2)(v) (which was proposed as Rule 304(b)(2)(vi)),
Under proposed Rule 304(b)(2)(vii), the Commission would make public each order suspending, limiting, or revoking the exemption provided pursuant to Rule 3a1-1(a)(2). We did not receive any comments on this requirement. We believe that it is important for market participants to be aware of whether an NMS Stock ATS is subject to an order suspending, limiting, or revoking the exemption from the definition of “exchange” when they are making their routing decisions because such an order could prevent an NMS Stock ATS from operating, or it could limit its functionality. Therefore, we are adopting substantially as proposed the requirement that the Commission make public each order suspending limiting, or revoking the exemption from the definition of “exchange,” as renumbered Rule 304(b)(2)(vi).
Proposed Rule 304(b)(3) required each NMS Stock ATS to make public via posting on its website a direct URL hyperlink to the Commission's website that contains the documents enumerated in proposed Rule 304(b)(2).
We received two comments on proposed Rule 304(b)(3).
We are adopting, with modifications, the requirement that each NMS Stock ATS make public via posting on its website a direct URL hyperlink to the Commission's website that contains the documents enumerated in proposed Rule 304(b)(2). We continue to believe that the requirement of posting on the NMS Stock ATS's website a direct URL hyperlink to the Commission's website would make it easier for market participants to review an NMS Stock ATS's Form ATS-N filings by providing an additional means for market participants to locate Form ATS-N filings that are made available through the Commission's website.
Proposed Rule 304(c)(1) required NMS Stock ATSs to respond to each item on Form ATS-N, as applicable, in detail, and disclose information that is accurate, current, and complete. Unlike proposed Rule 304(c)(2), reports required under Rule 304 must be filed electronically on Form ATS-N, include all information as prescribed in Form ATS-N and the Instructions thereto, and contain an electronic signature that is authenticated by manual signature. Further, proposed Rule 304(c)(2) required that such document be executed before or at the time Form ATS-N is electronically filed and be retained by the NMS Stock ATS in accordance with Rule 303.
We are adopting Rule 304(c)(2), with technical and non-substantive modifications to reduce redundancy and reduce potential ambiguity about the filing requirements for Form ATS-N.
The Commission continues to believe that it is appropriate to require authorized persons to certify that the Form ATS-N is “current, true, and complete.” We believe that market participants will rely on Form ATS-N disclosures to understand the operations of an NMS Stock ATS and ATS-related activities of the broker-dealer operator, and decide whether that trading center would be a desirable venue for their orders. The information contained on Form ATS-N will also be available for Commission use, including as part of its oversight functions. Further, existing Form ATS also requires authorized persons to certify that the information and statements in the form, exhibits, schedules and other documents attached are “current, true, and complete.”
We are adopting Rule 304(c)(1) with certain modifications.
One commenter suggests that an NMS Stock ATS should be permitted to disclose additional information to its subscribers and potential customers, outside of the Form ATS-N process, or respond to requests for information from market participants.
The Commission received several comments on the general format of the Form ATS-N. Several commenters suggest that the Commission modify Form ATS-N so that the requests for information result in disclosures that are more standardized and allow market participants to more easily compare Form ATS-N filings.
Although one commenter expressly agrees with the Commission's approach of requiring summaries of amendments,
The Commission has revised the format of proposed Form ATS-N to further standardize the form's requests, better organize questions by subject matter, reduce redundancy, reduce ambiguity, make more explicit requests on Form ATS-N to facilitate complete responses, and achieve the appropriate balance between yes/no and narrative responses. For instance, the adopted format of Form ATS-N changes several questions from proposed Form ATS-N for certain subject matters (
Also, certain requests have been amended to only require summary information. We believe that requiring summaries for certain disclosures could help reduce potential extraneous information.
As proposed, Form ATS-N would have set forth definitions of the following terms: (1) Affiliate; (2) alternative trading system; (3) broker-dealer operator; (4) control; (5) NMS security; (6) NMS Stock; (7) NMS Stock ATS; (8) order; (9) person; and (10) subscriber.
The Commission received several comments regarding the proposed definitions of “affiliate.” The Commission is adopting the definition of the term “affiliate,” with a technical change,
We do not believe that the status of an affiliate's registration with the Commission should limit the scope of the disclosures about that affiliate in Form ATS-N. However, the adopted Form ATS-N conflicts-of-interest disclosures are tailored to inform market participants about how affiliates of the broker-dealer operator trade on the NMS Stock ATS and how the use of the ATS by affiliates may affect the handling and execution of orders from unaffiliated parties. While the definition of “affiliate” in Form ATS-N may encompass a large number of entities for some ATSs, Form ATS-N is designed to solicit information that is relevant to a market participant's evaluation of an NMS Stock ATS as a potential trading venue. Therefore, while we have not amended the proposed definition of “affiliate,” the disclosures about affiliate activity on an NMS Stock ATS are not designed to require information about affiliates that the Commission and commenters believe would be extraneous to a market participant's evaluation of conflicts of interest and information leakage on the ATS.
We received two comments regarding the proposed definition of “control.” After carefully considering these comments, we are adopting the definition of “control,” as proposed, to mean:
One commenter expresses support for the Commission's proposal that the definition of control contain a 25% ownership threshold that the commenter states currently serves as a presumption of control and is consistent with that used in other areas of the securities laws.
Disclosures related to affiliates extend to persons that control, are controlled by, or are under common control with the broker-dealer operator, and, as a result, parallel the disclosures related to “control affiliates” that broker-dealer
The Commission is adopting as proposed the changes to the definition of “control” under Rule 300(f) in Regulation ATS. The definition of the term control being adopted herein contains the additional phrase “the broker-dealer of” before the two instances of the phrase “an alternative trading system” and before the phrase “the alternative trading system” in subsections (2) and (3) of the definition.
The disclosures of ATS-related activities of the broker-dealer operator's affiliates in Part II of adopted Form ATS-N are designed to provide subscribers and market participants with a comprehensive understanding of the conflicts of interest that may arise from the broker-dealer operator's other business activities and its operation of the NMS Stock ATS. Under the adopted definitions of “affiliate” and “control,” any affiliate of the broker-dealer operator of the NMS Stock ATS would be an affiliate of the NMS Stock ATS. These definitions are designed to cover entities that have a close relationship with the broker-dealer operator and whose activities could raise conflicts of interest concerns, or could otherwise be relevant to market participants when evaluating an NMS Stock ATS.
Furthermore, in Part III, Item 1 of proposed Form ATS-N, the Commission used the term “non-ATS trading center.” A commenter requests that the Commission define the term “non-ATS trading center” so that broker-dealer operators can better focus on making proper disclosures.
Another commenter agrees with the goal of highlighting potential conflicts of interest faced by broker-dealer operators of NMS Stock ATSs and their affiliates in connection with the ATS.
The Commission is adding the term “trading center” to the definitions set forth in the Instructions to adopted Form ATS-N to define that term for purposes of its use in Part II and Part III of adopted Form ATS-N. The term “trading center” was used in proposed Form ATS-N with regard to arrangements with other trading centers—Part III, Item 4 of proposed Form ATS-N—and is used in adopted Form ATS-N's requests regarding the routing of orders from the NMS Stock ATS to business units or affiliates of the broker-dealer operator (adopted Part II, Items 1 and 2) and the NMS Stock ATS's arrangements with other trading centers (adopted Part II, Item 4).
The definition of the term “trading center” used for purposes of adopted Form ATS-N is the same as that currently set forth in Regulation NMS Rule 600(b)(78).
One commenter states that the Commission should add additional definitions for certain terms to promote consistency throughout Forms ATS-N, which the commenter believes could ultimately facilitate comparison among
When seeking disclosures regarding how an NMS Stock ATS operates and the ATS-related activities of the broker-dealer operator and its affiliates, proposed Form ATS-N used the terms “subscriber” and “person(s).” One commenter believes that Form ATS-N should instead focus on the term “user” rather than “subscriber.”
Similarly, another commenter believes the phrase “subscriber orders or other trading interest” as used in proposed Part III, Item 1—which would have required the NMS Stock ATS to disclose information about the interaction and coordination between non-ATS trading centers operated by the broker-dealer operator or its affiliates and the NMS Stock ATS—should be read as “subscriber orders or subscriber trading interest.”
We agree that responses to questions in Form ATS-N should be uniformly applied by NMS Stock ATSs regardless of the source of orders (
First, we believe that the term “subscriber” sufficiently captures the vast majority of market participants whose orders or trading interest are submitted to and executed in an NMS Stock ATS. Regulation ATS defines subscriber “[a]s any person that has entered into a contractual agreement with an ATS to access such ATS for the purpose of effecting transactions in securities or submitting, disseminating, or displaying orders on such ATS, including a
Another example of a subscriber would include a customer of the broker-dealer operator whose orders are submitted to the ATS by the broker-dealer operator. Many NMS Stock ATSs are operated by broker-dealers that offer their customers a wide range of order handling and execution services in addition to the execution services of their NMS Stock ATSs.
Second, as noted above, a commenter believes that Regulation ATS does not adequately define the term “subscriber” in the case of an ATS that is part of a larger broker-dealer operation, which the commenter believes could lead to inconsistencies in the application of the requirements applicable to subscribers across ATSs.
Adopted Form ATS-N uses the term “subscriber” throughout, and, in certain Items, specifically states the type of ATS-related activities of, or information about, the broker-dealer operator that must be disclosed. For example, Part III, Item 5(b) of adopted Form ATS-N requires the NMS Stock ATS to state whether the terms and conditions to directly enter orders and trading interest into the NMS Stock ATS are the same for all subscribers and the broker-dealer operator. We believe that drafting the Form ATS-N requests in this manner will help ensure that the scope of information solicited encompasses all relevant users of the ATS services (
In response to concerns from commenters that the public may be led to believe that the Commission is conducting a merit-based review of Form ATS-N disclosures filed with the Commission, we are including on the cover page of Form ATS-N a legend stating that the Commission has not passed upon the merits or accuracy of the disclosures in the filing.
On the cover page of adopted Form ATS-N, the responding entity is required to identify the type of filing
In the cover page of proposed Form ATS-N, the Commission sought a brief narrative description for Form ATS-N amendments so market participants could quickly understand the nature of the amendment.
Furthermore, in response to comments, we are adopting Rule 304(b)(2)(iii), which provides that it will make public the cover page of a filed Form ATS-N material amendment upon filing and then make public the entirety of the material amendment following the expiration of the review period pursuant to Rule 304(a)(2)(ii).
In addition, we are making a technical change to relocate the check box indicating whether an initial Form ATS-N is being filed by a Legacy NMS Stock ATS operating pursuant to a Form ATS.
Part I of adopted Form ATS-N combines the requests set forth in Parts I and II of proposed Form ATS-N, which covered, among other things, the name of the NMS Stock ATS and the NMS Stock ATS's broker-dealer operator's registration and contact information.
To assist the Commission in more easily assessing whether the NMS Stock ATS has registered as a broker-dealer pursuant to Rule 301(b)(1) of Regulation ATS, we are adopting the proposed requirement that the NMS Stock ATS provide the name of the registered broker-dealer for the NMS Stock ATS (
We are not, however, including in adopted Part I the proposed requests that the NMS Stock ATS provide the effective date of its broker-dealer operator's registration with the Commission, the broker-dealer operator's legal status (
We are adopting Part II, Item 4 of proposed Form ATS-N as Part I, Item 5 of adopted Form ATS-N to require the NMS Stock ATS to provide the full name of the national securities association of the broker-dealer operator and the effective date of the broker-dealer operator's membership with the national securities association. We are adding to Part I, Item 4 of adopted Form ATS-N the proposed requirement for an NMS Stock ATS to provide its Market Participant Identifier (“MPID”).
Also, as was proposed, adopted Form ATS-N requires the NMS Stock ATS to provide a URL address for the website of the ATS, and in the signature block in Part IV of adopted Form ATS-N, the representative of the broker-dealer operator will also be required to provide his or her business contact information, including the person's name and title, telephone number, email address, and primary street address and mailing address (if different) of the NMS Stock ATS.
We are modifying the proposed request for the physical street address of the NMS Stock ATS to also require the ATS to provide the physical street address, if any, of a secondary location for the ATS that may be used in the event that the primary physical location is not available. The location of an NMS Stock ATS, including its matching system, may differ from the main physical or mailing address of the broker-dealer operator. We believe that it is important for both the Commission and market participants to know where the NMS Stock ATS is located in the event of, for instance, a natural disaster that could impact market participants' ability to trade on the ATS and potential latency that could be experienced due to the location of the secondary site of the NMS Stock ATS. Also, we are concerned that market participants could be harmed from systems problems that necessitate a suspension or halt to trading at an NMS Stock ATS. Thus, we believe it is important to fully understand what, if any, trading procedures an NMS Stock ATS would follow if trading is suspended or stopped, which would be disclosed under Part III, Item 20 of adopted Form ATS-N. We believe that knowing any secondary location(s) for the NMS Stock ATS would be relevant to both the Commission's and market participants' understanding of how the ATS handles certain contingencies.
The main physical address and mailing address of the broker-dealer operator are provided on Form BD, so we do not believe it is necessary to publicly disclose this information on Form ATS-N.
Also, as was proposed, the Part I, Items 8 and 9 require an NMS Stock ATS to attach its most recently filed or amended Schedule A of the broker-dealer operator's Form BD disclosing information related to direct owners and executive officers, and its most recently filed or amended Schedule B of the broker-dealer operator's Form BD disclosing information related to indirect owners as Exhibits 1 and 2, respectively. In lieu of attaching those schedules, the NMS Stock ATS can indicate, via a checkbox, that the information under those schedules is available on its website and is accurate as of the date of the filing of the Form ATS-N. We continue to believe that these exhibits will help market participants identify the persons and entities that directly and indirectly own the broker-dealer operator and any potential associated conflicts of interest. We are requiring the NMS Stock ATS to provide this information on Form ATS-N, even though the same information is provided on Form BD, because information about ownership of the broker-dealer operator will enable market participants to better understand conflicts of interest that may arise therefrom, which is one of the central purposes of the form. As such, an NMS Stock ATS must file this information on Form ATS-N. We also continue to believe that it is appropriate for an NMS Stock ATS to provide this information using a URL address for these documents in lieu of attaching the actual documents to their Form ATS-N filings because the ATS's disclosures on Form ATS-N will provide the public with the required information. Part I, Item 10 of adopted Form ATS-N requires the NMS Stock ATS, for filings made pursuant to Rule 304(a)(2)(i) (
We proposed to require that NMS Stock ATSs provide, in Exhibit 1 to Form ATS-N, a copy of any materials currently provided to subscribers or other person related to the operations of the NMS Stock ATS or the disclosures on Form ATS-N (
Commenters express concerns that the requirements of Exhibit 1 are broad,
We are not adopting the proposed requirement that NMS Stock ATSs provide a copy of any materials currently provided to subscribers or other persons related to the operations of the NMS Stock ATS or the disclosures on Form ATS-N. We recognize that some of such materials could contain proprietary or other information that NMS Stock ATSs would not wish to make public due to confidentiality or competitive concerns. With respect to the comments in support of requiring subscriber materials to be made public,
One commenter states that while it does not support a requirement for public filing of exhibits, it supports requiring these exhibits to be filed with the Commission.
Another commenter states that to the extent that ATSs would disclose statistics or data that had been requested by firms to help with their cost and best execution analysis, such an approach would be less helpful than a greatly enhanced, comprehensive disclosure for this information.
In the Proposal, we asked if NMS Stock ATSs should be required to provide disclosure about their governance structure and compliance programs and controls to comply with Regulation ATS.
We believe that the interests of the broker-dealer operator or its affiliates sometimes compete against the interest of those that use the ATS's services. These competing interests, at times, may give rise to conflicts of interests for the broker-dealer operator and its affiliates or the potential for information leakage of subscribers' confidential trading information. As such, Part II of Form ATS-N is designed to provide subscribers and market participants with information about these competing interests, and in doing so, inform them about: (1) The operation of the NMS Stock ATS—regardless of the corporate structure of the NMS Stock ATS—and of its broker-dealer operator, or any arrangements the broker-dealer operator may have made, whether contractual or otherwise, pertaining to the operation of its NMS Stock ATS; and (2) ATS-related activities of the broker-dealer operator and its affiliates that may give rise to conflicts of interest for the broker-dealer operator and its affiliates or the potential for information leakage of subscribers' confidential trading information.
Commenters generally support disclosing information about potential conflicts of interest and information leakage, and we did not receive any comments opposing the principle that information related to conflicts of interest or information leakage on an NMS Stock ATS should be publicly disclosed.
Furthermore, a commenter argues that the proposed conflicts of interest requests regarding affiliates of the broker-dealer operator would have placed a significant burden on multi-service broker-dealers with a large number of affiliates, sometimes numbering in the hundreds.
As outlined below in more detail—and in response to both these general commenter concerns and commenter concerns that are more specific to particular disclosure requests, which are explained below—we are modifying the conflicts of interest requests to focus on: (1) The ability of business units or affiliates of the broker-dealer operator to enter, or direct the entry of, orders into the NMS Stock ATS and whether such business units or affiliates actually trade on the NMS Stock ATS; and (2) whether those business units and affiliates that do trade on the NMS Stock ATS receive any preferential treatment with respect to the services offered by the NMS Stock ATS.
We continue to believe that disclosures regarding the ATS-related activities of the broker-dealer operator and its affiliates will help enable market participants to assess potential conflicts of interest that may impact their trading on the ATS and assess the potential for information leakage. At the same time, we also believe that Form ATS-N should not require public disclosure of activities or affiliate relationships of the broker-dealer operator that do not relate to the NMS Stock ATS and thus, do not present a potential conflict of interest. We believe that the revisions to the proposed disclosure requests are responsive to commenters' concerns about the scope of the form's affiliate disclosures.
Furthermore, the burden of responding to the affiliate requests has been reduced from that which was proposed. First, the adopted affiliate disclosure requests focus on substantive information about how affiliated entities interact with the ATS and differences in how the ATS treats affiliates' orders. As such, frequent updates to Part II for ministerial or minor administrative changes by the ATS would not normally be necessary.
Another commenter expresses concern that the proposed conflicts of interest requests would seek public disclosure of proprietary or confidential information that would pose unintended consequences or security risks to ATS operators.
We also note that the disclosure requests on Form ATS-N seek information that the Commission and some commenters believe to be important to market participants when evaluating an NMS Stock ATS as a potential trading venue. We believe that the disclosures on adopted Form ATS-N will provide market participants with information necessary to evaluate potential conflicts of interest and information leakage while not requiring NMS Stock ATSs to provide granular details about aspects of the ATS that it might consider to be commercially sensitive. Accordingly, to the extent an NMS Stock ATS believes that Form ATS-N requires the disclosure of what it believes to be commercially sensitive information, we believe that such disclosure is justified by the public benefit of the information required on Form ATS-N becoming publicly available.
On the other hand, one commenter expresses a specific concern that narrowing the universe of affiliates subject to disclosure could result in less relevant information being provided to the Commission and the public, as NMS Stock ATSs could structure their legal affiliations and operations to take advantage of unanticipated gaps in the rule.
We agree with this commenter that Form ATS-N requests regarding the ATS-related activities of the broker-dealer operator and its affiliates should provide clear and unambiguous requirements for NMS Stock ATSs. We also agree that Form ATS-N should be comprehensive enough to preclude an NMS Stock ATS from finding “unanticipated gaps” in the language to avoid disclosing critical aspects of its operations. We believe that the refinements to adopted Form ATS-N, as outlined above and further explained below, strike the appropriate balance between providing market participants with relevant information about potential conflicts of interest information and information leakage and the burden that Form ATS-N will place on NMS Stock ATSs. We do not believe that it is necessary to adopt all of the conflicts of interest requests as proposed and require NMS Stock ATSs to seek exemptive relief from certain disclosure requirements. Furthermore, the adopted definitions of “affiliate” and “control” are intended to encompass all relevant affiliate relationships between the broker-dealer operator and other entities that we believe would help market participants' evaluation of potential conflicts of interest.
Part III, Item 1 of proposed Form ATS-N would have required disclosures
As discussed above, we received general comments on Part III of proposed Form ATS-N.
First, in addition to the general comments regarding the scope of the affiliate disclosure requests that are explained above, some commenters provide comments specific to proposed Part III, Item 1 and Part III, Item 5.
Furthermore, with regard to Part III, Item 5 of proposed Form ATS-N, one commenter states that affiliates or business units that indirectly send orders to an NMS Stock ATS through another entity or through services provided by another entity are not `enter[ing]' orders “on the NMS Stock ATS.”
The adopted requests also specify the type of information that must be provided with regard to business units or affiliates of the broker-dealer operator. Specifically, Item 1(a) requires the NMS Stock ATS to name and describe each type of business unit of the broker-dealer operator that enters or directs the entry of orders and trading interest into the ATS (
We also believe that the revised requests will reduce the burden on NMS Stock ATSs when completing the form because they will only require the NMS Stock ATS to list entities that trade on the ATS. The narrative responses to Items 1(a) and 2(a) could typically be kept up-to-date via Updating Amendments to Form ATS-N, which the ATS could file on a quarterly basis. However, we also note that in most cases, if the “yes” or “no” response to Items 1(a) or 2(a) changes (
Another commenter recommends that the Commission take a progressive approach of “yes” or “no” questioning for disclosures concerning affiliates of the broker-dealer operators that initially targets whether the affiliate directly
Several commenters also opine that terms such as “describe,” “any interaction or coordination,” “circumstances,” and “otherwise made known” in the conflicts of interest requests might result in overbroad or lengthy responses that contain information which would not be helpful for market participants.
In response to these comments, we are eliminating the terms “interaction and coordination,” “circumstances,” and “otherwise made known” from these requests to reduce any potential ambiguity.
Furthermore, while the term “describe” is still used in Items 1(a) and 2(a), we are adding specific examples to each respective request to better explain the type of description that would necessary, such as “NMS Stock ATS,” “trading desks,” “market maker,” “sales” or “client desk.” Also, Items 1(b)-(d) and 2(b)-(d) specifically state that the NMS Stock ATS must explain (1) any differences between the treatment of those business units or affiliates of the broker-dealer operator and other subscribers regarding services offered and provided by the NMS Stock ATS; (2) whether any of those business units or affiliates of the broker-dealer operator have formal or informal arrangements with the NMS Stock ATS to provide liquidity to the NMS Stock ATS; and (3) how orders and trading interest in the NMS Stock ATS can be routed to a trading center of the broker-dealer operator or affiliate.
Additionally, a commenter expresses concern that it may not be privy to some the information that proposed Form ATS-N would have required.
We have also revised the requests in proposed Form ATS-N to reduce redundant disclosure requirements. First, Part II, Items 1 and 2 of adopted Form ATS-N now require the NMS Stock ATS to provide any narratives about differences in treatment between the broker-dealer operator, its affiliates, and other subscribers in Part III of the adopted form, and only cross reference those narratives in Part II (as opposed to providing a separate, likely redundant narrative in Part II). Second, Part II, Items 1 and 2 of adopted Form ATS do not require the NMS Stock ATS to disclose whether subscriber orders or other trading interest sent to the NMS Stock ATS are displayed or otherwise made known to a non-ATS trading center or another NMS Stock ATS operated by the broker-dealer operator or an affiliate.
Finally, Part II, Items 1 and 2 of adopted Form ATS-N do not require the NMS Stock ATS to disclose how the business units and affiliates of the broker-dealer operator connect to the ATS, such as through a Financial Information Exchange (“FIX”) protocol.
Another commenter believes that the information requested under proposed Part III, Item 5 of proposed Form ATS-N was too granular, duplicative of information required by Form BD, and that some of the prompts (
As explained above, Part II, Items 1(a) and 2(a) of adopted Form ATS-N provide more specificity about the information requested about the ATS-related activities of business units and affiliates of the broker-dealer operator by providing examples of what we intend to solicit from these requests. To the degree that some information solicited by adopted Form ATS-N is duplicative of information sought on Form BD, the duplicative information is straightforward for the broker-dealer to reproduce on Form ATS-N, and we believe that market participants will derive greater benefit from this information being disclosed on a single form (Form ATS-N) as opposed to being spread across multiple forms filed with the Commission.
Similarly, another commenter cites the proposed requirement to provide the names of specific business units and algorithms that trade in NMS Stock ATS as an example of requested information that it believes is unnecessary to risk assessment.
We also received comments supporting the original requests under Part III, Items 1, 2, and 5 of proposed Form ATS-N. One commenter believes that these proposed disclosure requests are essential to alerting market participants about potentially significant advantages of the broker-dealer operator and its affiliates and to allow market participants to obtain a reasonable understanding of the conflicts of interest posed by the broker-dealer operator's or its affiliates' trading activities on the ATS.
In addition, one commenter states that it supports the disclosure of potential trading activity on the NMS Stock ATS by the broker-dealer operator and its affiliates, but asserts that the disclosure requirement should be revised to allow for a series of progressive “yes” or “no” responses.
As noted above, we reorganized and relocated the subject matter requested in Part III, Items 1, 2, and 5 of proposed Form ATS-N to Part II, Items 1 (“Broker-Dealer Operator ATS Trading Activities”) and 2 (“Affiliates ATS Trading Activities”) of adopted Form ATS-N. We have also revised the content of the proposed disclosure requests in response to public comment.
Part II, Item 1(a) of adopted Form ATS-N requires the NMS Stock ATS to disclose whether business units of the Broker-Dealer Operator are permitted to enter or direct the entry of orders and trading interest (
The subject matter covered by Part III, Item 1(b)(i) and (ii) is no longer included in the disclosure request contained in Part II, Item 1 of adopted Form ATS-N.
Next, Part II, Item 1(b) of adopted Form ATS-N requires an NMS Stock ATS to disclose whether the services that the NMS Stock ATS offers and provides to the business units required to be identified in Item 1(a) are the same for all subscribers. This request will be in the form of a “yes” or “no” question, and if the NMS Stock ATS answers “no,” it will be required to explain any differences in response to the applicable Item number(s) in Part III of adopted Form ATS-N and list the applicable Item number(s). If there are differences that are not applicable to Part III of adopted Form ATS-N, the NMS Stock ATS must explain those differences in detail under Part II, Item 1.
Next, Part II, Item 1(c) of adopted Form ATS-N requires NMS Stock ATSs to disclose the broker-dealer operator's role as a liquidity provider on the NMS Stock ATS, if applicable.
Finally, Part II, Item 1(d) of adopted Form ATS-N requires the NMS Stock ATSs to disclose information about the routing of orders and trading interest to trading centers operated or controlled by the broker-dealer operator. This Item will require the NMS Stock ATS to disclose—in the form of a “yes” or “no” question—whether orders and trading interest in the NMS Stock ATS can be routed to a trading center of the broker-dealer operator. If the NMS Stock ATS answers “yes,” it must respond to the requests in Part III, Item 16 of adopted Form ATS-N, which sets forth the requests for disclosures about routing orders and trading interest out of the NMS Stock ATS. We continue to believe that disclosures regarding the routing of orders will provide subscribers with information about how their orders would be handled if they are not executed on the ATS and allow them to assess whether such routing could result in the leakage of confidential information, particularly if those orders are being routed to a trading center of the broker-dealer operator. Similar to Part II, Item 1(c) of adopted Form ATS-N, the request in Part II, Item 1(d) will not require a narrative because Part IV, Item 16 of adopted Form ATS-N requires disclosures about routing.
Part II, Item 2(a) of adopted Form ATS-N requires an NMS Stock ATS to disclose whether affiliates of the broker-dealer operator are permitted to enter or direct the entry of orders and trading interest into the NMS Stock ATS. This request will be in the form of a “yes” or “no” question, and if the NMS Stock ATS answers “yes,” it must name and describe each type of affiliate that enters or directs the entry of orders and trading interest in the ATS (
Next, Part II, Item 2(b) of adopted Form ATS-N requires an NMS Stock ATS to disclose whether the services that the NMS Stock ATS offers and provides to the affiliates required to be identified in Item 2(a) are the same for all subscribers. This request is in the form of a “yes” or “no” question, and if the NMS Stock ATS answers “no,” it will be required to explain any differences in response to the applicable Item number(s) in Part III of adopted Form ATS-N, as required, and list the applicable Item number(s). If there are differences that are not applicable to Part III of adopted Form ATS-N, the NMS Stock ATS must explain those differences in detail under Part II, Item 2.
Part II, Item 2(c) of adopted Form ATS-N requests information about the role of the broker-dealer operator's affiliates as liquidity providers on the NMS Stock ATS, if applicable. This item requires the NMS Stock ATS to disclose—in the form of a “yes” or “no” question—whether there are there any formal or informal arrangements with affiliates of the broker-dealer operator identified in Item 2(a) to provide orders or other trading interest to the NMS Stock ATS (
Finally, Part II, Item 2(d) of adopted Form ATS-N requires an NMS Stock ATS to disclose information about routing orders and trading interest out of the NMS Stock ATS to a trading center operated and controlled by affiliates of the broker-dealer operator. This item will require the NMS Stock ATS to disclose—in the form of a “yes” or “no” question—whether orders and trading interest in the NMS Stock ATS can be routed to a trading center operated or controlled by an affiliate of the broker-dealer operator. If the NMS Stock ATS answers “yes,” it must respond to request in Part III, Item 16, which sets forth the required disclosures for routing orders and trading interest out of the NMS Stock ATS.
Part II, Item 3 of adopted Form ATS-N requests information about the interaction of orders of between unaffiliated subscribers to the ATS and orders of the broker-dealer operator and its affiliates in the NMS Stock ATS. Part II, Item 3(a) of adopted Form ATS-N requires an NMS Stock ATS to disclose whether a subscriber can opt out of interacting with orders and trading interest of the broker-dealer operator in the NMS Stock ATS, and Part II, Item 3(b) requires an NMS Stock ATS to disclose whether a subscriber can opt out of interacting with the orders and trading interest of an affiliate of the broker-dealer operator in the NMS Stock ATS.
We believe that is helpful to market participants for the subject matter covered by proposed Part III, Item 5(d) to be a stand-alone question in adopted Form ATS-N. Such information is important to unaffiliated market participants trading on an ATS because some unaffiliated subscribers may not wish to interact with the order flow of the broker-dealer operator or its affiliates. This disclosure will help market participants understand whether and how they may avoid trading with the broker-dealer operator and its affiliates should they elect to use the services of the NMS Stock ATS.
As explained above, we received several comments about the proposed requests addressing ATS-related activities of the broker-dealer operator and its affiliates, including the request set forth in Part III, Item 5. In addition to these comments, one commenter opines that if a subscriber desires to opt out of trading with the broker-dealer operator's principal orders, the broker-dealer operator should be obliged to follow and implement the stated instruction.
Part III, Item 4 of proposed Form ATS-N requested disclosures about arrangements the broker-dealer operator, or any of its affiliates, has with unaffiliated trading centers. The subject matter covered in Part III, Item 4 of proposed Form ATS-N is under Part II, Item 4 of adopted Form ATS-N.
The Commission received several comments regarding disclosure requests about arrangements with unaffiliated trading centers. Three commenters support the public disclosure of preferential arrangements with third parties.
We have not limited the disclosures required under adopted Part II, Item 4 of adopted Form ATS-N to preferential arrangements or other unique access given to unaffiliated third parties, as suggested by these commenters. We believe that some market participants may consider other arrangements with third parties relevant to their evaluations of an NMS Stock ATS as a potential trading venue. For example, if an NMS Stock ATS has a mutual access agreement with another ATS, a market participant may take into account the fact that its order may eventually route to another ATS, even if orders from the other ATS do not receive preferential treatment on the ATS.
The disclosure requests in Part II, Item 4 of adopted Form ATS-N will provide market participants with information necessary to evaluate potential conflicts of interest or sources of information leakage. For example, Part II, Item 4 of adopted Form ATS-N requires the disclosure of an arrangement between the NMS Stock ATS and an unaffiliated NMS Stock ATS under which the NMS Stock ATS would route orders or other trading interest to the unaffiliated NMS Stock ATS for possible execution before routing to any other destination. By way of further example, Item 4 also requires disclosure of an arrangement pursuant to which any subscriber orders routed out of the unaffiliated NMS Stock ATS would be routed first to the NMS Stock ATS before any other trading center; it also requires a summary of the terms and conditions of the arrangement such as, for example, whether the NMS Stock ATS is providing monetary compensation or some other brokerage service to the unaffiliated NMS Stock ATS.
In response to the above commenter concerns, however, Part II, Item 4 of adopted Form ATS-N includes some modifications. First, the adopted disclosure request in Part II, Item 4 replaces the proposed phrase “describe the terms of the arrangement” with the phrase “provide a summary of the terms and conditions of the arrangement.” We believe that replacing the term “describe” with a requirement to “provide a summary” will make it clear that the scope of the adopted request should not typically require the NMS Stock ATS to provide granular details about its arrangements that the ATS might consider to be commercially sensitive.
Second, Part II, Item 4 of adopted Form ATS-N does not use the phrase “
Additionally, we are including in Part II, Item 4 of adopted Form ATS-N examples of the types of arrangements that would be responsive to the disclosure request, such as mutual or reciprocal access arrangements
Likewise, the Commission is modifying the wording of the proposed disclosure requests to require the NMS Stock ATS to disclose formal or informal arrangements for a trading center “to access the NMS Stock ATS services.” Adding the word “services” clarifies that the disclosure must explain the services provided to the unaffiliated trading center after it connects to the ATS. An NMS Stock ATS can provide various types of services to subscribers and the request, as revised, is tailored for those ATSs services that a subscriber may use.
Next, the scope of Part III, Item 4 of proposed Form ATS-N only encompassed arrangements with unaffiliated trading centers, but Part II, Item 4 of adopted Form ATS-N encompasses arrangements with both unaffiliated and affiliated trading centers. As explained above, the requests set forth in Part III, Items 1(b)(ii)-(iii) and 2(b)(i), (iii) of proposed Form ATS-N—which addressed the transmission of subscriber orders to other trading centers operator by the broker-dealer operator or its affiliates—have either been narrowed or eliminated from Part II, Items 1 and 2 of adopted Form ATS-N. However, to the extent that an NMS Stock ATS has an arrangement with a trading center operated by the broker-dealer operator or an affiliate, we believe that market participants are still likely to consider information about such arrangements relevant to their evaluation of an NMS Stock ATS as a potential trading venue and such an arrangement may raise concerns about conflicts of interest or information leakage.
Additionally, Part III, Item 4 of proposed Form ATS-N would also have required the disclosure of mutual access arrangements between an NMS Stock
Finally, in Part II, Item 4 of adopted Form ATS-N, the Commission has divided the request into two subparts—one subpart addressing the broker-dealer operator's arrangements, and another subpart addressing its affiliates' arrangements. This is a technical edit so that the format of Part II, Item 4 of Form ATS-N is consistent with the format of Part II, Items 1-3 above.
Part III, Item 3 of proposed Form ATS-N would have required disclosures about products and services offered to subscribers used in connection with trading on the NMS Stock ATS. We are adopting Part III, Item 3 of proposed Form ATS-N as Part II, Item 5 of adopted Form ATS-N; however, we are modifying the proposed disclosure request in response to commenter concerns.
One commenter states that the proposed requests would have helped investment funds assess an NMS Stock ATS as a potential execution venue by improving their ability to understand all functionality offered by the broker-dealer operator and whether the broker-dealer operator makes all services available in a fair and impartial manner.
Broker-dealer operators of NMS Stock ATSs may, directly or indirectly through an affiliate, offer products or services to subscribers for the purpose of, for example, submitting orders, or receiving information about displayed interest, in the ATS.
We note that many broker-dealer operators are multi-service broker-dealers and provide routing and execution services in NMS stocks separate from their ATS services. We further note that customers of a broker-dealer operator could be both subscribers to its ATS and customers of the broker-dealer operator that use trading products and services outside of the ATS. To the extent that a customer is a subscriber to the NMS Stock ATS and is offered use of products and services by the broker-dealer operator or its affiliate for the purpose of effecting transactions or submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS, Part II, Item 5 of adopted Form ATS-N would require disclosures about those products or services. However, the adopted requests in Part II, Item 5 would not encompass trading products or services offered by the broker-dealer operator to customers that are not for the purpose of effecting transactions or submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS.
Two commenters express opinions about how the scope of the proposed requests relate to the scope of an NMS Stock ATS's operations. One commenter states that the Proposal does not draw sufficient distinction between the operations of the NMS Stock ATS and other products and services of the broker-dealer operator, including agency execution services, market making and algorithms.
Another commenter states that Form ATS-N should only require disclosure
To reduce redundancy and streamline disclosures, we are requiring NMS Stock ATSs to provide a narrative explaining the use of the product or service required to be disclosed in Part II, Item 5 in the relevant item in Part III of adopted Form ATS-N. We are also adding to Part II, Item 5 of adopted Form ATS-N the language “for the purpose of” before effecting transactions, or submitting, disseminating, or displaying orders and trading interest on the NMS Stock ATS to make clear that this Item requests information about those products or services offered by the broker-dealer operator or its affiliate that have a nexus to the ATS services. We believe that the disclosure requests in Part III of adopted Form ATS-N are limited to information that we believe is necessary for market participants to understand the operation of the ATS, without requiring a level of detail that would normally require the disclosure of commercially sensitive information.
In summary, we are modifying the proposed requests being adopted as Part II, Item 5 of Form ATS-N to clarify that the NMS Stock ATS is only required to provide information about products and services offered to subscribers for the purpose of effecting transactions, or submitting, disseminating, or displaying orders and trading interest on the NMS Stock ATS. Specifically, we have modified the proposed language to state that the broker-dealer operator must disclose any products or services offered to subscribers for the purpose of effecting transactions or for submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS (
In addition, we have divided the disclosure requests into four subparts: (i) One subpart addresses the products or services that the broker-dealer operator offers to subscribers for the purpose of effecting transactions or for submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS; (ii) another subpart addresses products or services that the broker-dealer operator's affiliates offer to subscribers for the purpose of effecting transactions or for submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS; and (iii) the other two subparts address any differences between the terms and conditions of the services or products required to be identified in Item 5 among the broker-dealer operator, affiliates, and unaffiliated subscribers.
Part III, Item 7 of proposed Form ATS-N would have required disclosures about employees of the broker-dealer operator that service the operations of the NMS Stock ATS and also service other business units of the broker-dealer operator or any of its affiliates (“shared employees”). We received several comments on Part III, Item 7 of proposed Form ATS-N. We are adopting Part III, Item 7 of proposed Form ATS-N with modifications in response to commenters' concerns, as further explained below, and we are also renumbering Part III, Items 7 of proposed Form ATS-N as Part II, Item 6(a) of adopted Form ATS-N.
One commenter recommends eliminating the requests related to shared employees because the commenter believes that keeping the item up-to-date would be too burdensome and unnecessary as employee roles and responsibility shift periodically.
Some commenters believe that the Commission should narrow the scope of the shared employee request to shared employees who may have access to or knowledge of confidential subscriber information or orders.
Furthermore, some commenters state that information about shared employees should not contain certain personal information about the employee, such as the employees name, title, or position.
One of the above commenters also states that, while it supports disclosure to the Commission of relevant information concerning individuals responsible for ATS functions, it believes that the request concerning shared employees should be limited to “categories of service” as opposed to individual positions and titles.
Two commenters express support for Part III, Item 7 of proposed Form ATS-N by noting that current Form ATS Exhibit E calls for the disclosure of other entities relevant to the operation of the ATS, which the commenters believe would be helpful in determining whether there are apparent conflicts of interest that could come into play in terms of how orders are executed in the ATS.
Another commenter recommends that the Commission ensure that the requests provide meaningful narrative information about the role and duties of each shared employee, both at the NMS Stock ATS and the other business unit or affiliate of the broker-dealer operator.
Part III, Item 8 of proposed Form ATS-N would have required disclosures about third-party service providers to the NMS Stock ATS. The Commission received several comments on Part III, Item 8 of proposed Form ATS-N. The Commission is adopting Part III, Item 8 of proposed Form ATS-N with modifications in response to commenters' concerns, as further explained below, and is renumbering Part III, Item 8 of proposed Form ATS-N as Part II, Items 6(b), 6(c), and 6(d) of adopted Form ATS-N.
Two commenters support the Commission's proposal to require the disclosure of information related to third-party service providers because such disclosures would provide information related to potential information leakage on the NMS Stock ATS.
Several commenters believe that aspects of the request under Part III, Item 8 of proposed Form ATS-N related to third-party service providers are unnecessary to evaluating an NMS
We disagree that the proposed request regarding third party service providers to the NMS Stock ATS is unnecessary, would not be meaningful to market participants, or, when compared to the current requirements on Form ATS, would be overly burdensome. As noted in the Proposal,
Some commenters recommend clarifying or more narrowly tailoring the scope of the requests in Part III, Item 8 of proposed Form ATS-N related to service providers so as not to capture information about vendors that only provide administrative services to the ATS or other overhead, such as utility companies.
A commenter also states that it is very difficult for a broker-dealer to know the structure of all of its vendors, much less whether the vendor has an affiliate that may enter orders in the subject ATS.
Furthermore, the adopted requests under Part II, Items 6(c)-(d) require the NMS Stock ATS to disclose whether any service providers or their affiliates use the services of the NMS Stock ATS and if they do, the ATS is required to identify the service providers, the service(s) used, and whether there is any disparate treatment between those service providers and other subscribers. Thus, an NMS Stock ATS would only be required to obtain and disclose information about third-party vendors and their affiliates that actively use the services of the ATS; the ATS should be aware of all parties the use its services under its current recordkeeping obligations.
This commenter also states that if the Commission's concern is whether a service provider is receiving preferential treatment from an ATS, the Proposal should have mandated disclosure of whether there is any preferential and/or differentiated treatment.
One commenter questions the feasibility of providing “a detailed description of information technology services, including both hardware and software” in Part III, Item 8 of proposed Form ATS-N, which the commenter opines can be taken to the extreme of requiring an ATS operator to disassemble a server to enumerate the manufacturer of various components. The commenter believes that a general—but thorough—description of the information technology services would be more practical.
As guidance for this request, we would view, for example, an NMS Stock ATS simply stating that a third-party provides technology or hardware to the ATS as not responsive to the required summary of the service provider's role. But we would not expect the ATS to provide information about the manufacturer of certain components of its hardware. This request for summary information is designed to provide market participants with a general understanding of the types of technology or hardware provided by the service provider as part of its responsibilities, and how that hardware or technology is used by the NMS Stock ATS. The purpose of this disclosure is to provide market participants with information to better understand whether the service provider might be able to access confidential trading information, so NMS Stock ATSs should draft its disclosure with the goal of conveying such information.
Furthermore, to reduce redundant disclosures on Form ATS-N, adopted Form ATS-N will only require this in Part III, unless there are no disclosure requests in Part III that would encompass these types of services. The disclosure requests in Part III will likely require the NMS Stock ATS to describe the services provided by third-parties, and we believe that a summary narrative about the roles and responsibilities of third-party service providers will likely be included in that description of the services. We do not believe that it is not necessary to also provide a redundant summary narrative of the roles and responsibilities of service providers in Part II.
A commenter also recommends eliminating the disclosures of third-party service providers from the publicly available Form ATS-N and requiring that the information requested be made available only to the Commission on a confidential basis.
Finally, we are replacing the proposed word “person” with the word “entity” in Part II, Item 6(b) of adopted Form ATS-N. The Commission does not believe that an NMS Stock ATS is likely to contract with a natural person who is not associated with a legal entity (
Part III, Item 10 of proposed Form ATS-N would have required an NMS Stock ATS to provide disclosures about its confidential treatment of trading information. One commenter states its belief that the proposed requests under Part III, Item 10 of proposed Form ATS-N seemed appropriate given the risk of misuse of confidential information.
Part II, Item 7(a) of adopted Form ATS-N requires an NMS Stock ATS to describe its written safeguards and written procedures to protect the confidential trading information of subscribers to the NMS Stock ATS, including: (i) Written standards controlling employees of the ATS that trade for employees' accounts; and (ii) written oversight procedures to ensure that the safeguards and procedures described above are implemented and followed. The protection of confidential trading information is a bedrock component of the regulation of ATSs and is essential to ensuring the integrity of ATSs as an execution venue. If such information is not protected, many of the advantages or purposes for which a subscriber may choose to send its orders to an ATS (
We are adopting Part II, Items 7(b) and (c) to require an NMS Stock ATS to disclose whether a subscriber can consent and withdraw consent, respectively, to the disclosure of its confidential trading information to any person (not including those employees of the NMS Stock ATS who are operating the system or responsible for its compliance with applicable rules). Subscribers should be able to give consent if they so choose to share their confidential trading information.
Part II, Items 7(b) and 7(c) contain requests similar to those in Part III, Item 10(a) of proposed Form ATS-N, but we are modifying the format of these requests so that they are in the form of a “yes” or “no” question, and if the NMS Stock ATS answers “yes,” the NMS Stock ATS must explain how and under what conditions consent can be given and withdrawn. We are also adding the phrase “not including those employees of the NMS Stock ATS who are operating the system or responsible for its compliance with applicable rule” to Part II, Item 7(b) of adopted Form ATS-N. This change is to clarify that the request does not cover such employees that may need access to such information in the course of their responsibilities to service the system. As noted above, Regulation ATS requires that access to confidential subscriber information be available only to those employees of the ATS that operate the ATS's system or are responsible for the ATS's compliance with applicable rules.
Finally, we are adopting Part II, Item 7(d) to require an NMS Stock ATS to provide a summary of the roles and responsibilities of any persons that have access to confidential trading information, the confidential trading information that is accessible by them, and the basis for the access. Part III, Item 10(b) of proposed Form ATS-N would have required the NMS Stock ATS to identify the position or title of any person who has access to confidential trading information, describe the confidential information to which the person has access, and describe the circumstances under which the person can access confidential trading information. Some commenters express concerns regarding the potential disclosure of personally identifiable information under proposed Part III, Item 10(b).
Part III, Item 9 of proposed Form ATS-N would have required an NMS Stock ATS to disclose information regarding the differences in the availability of services, functionalities, or procedures of the NMS Stock ATS that are available or apply to the broker-dealer operator or its affiliates that are not available or do not apply to other subscribers.
In general, several commenters support requests for information about differences between subscribers and the broker-dealer with respect to their use of the NMS Stock ATS.
We continue to believe that the disclosure about differences in treatment are important to market participants and will better allow them to decide whether submitting order flow to that NMS Stock ATS aligns with their trading or investment objectives. To more closely tailor the Form ATS-N disclosures about differences in treatment to the subject matter covered in relevant conflicts-of-interest requests, we are removing Part III, Item 9 of proposed Form ATS-N as a stand-alone question and incorporating the request into Part II, Items 1, 2, 3, and 6 of adopted Form ATS-N. We believe that under this format, disclosures regarding the differences in the availability of services, functionalities, or procedures of the NMS Stock ATS will relate to the specific subject matter covered by each of the aforementioned disclosure requests that relate to services, functionalities, or procedures that may differ among subscribers or the broker-dealer operator and subscribers.
The requests in Part II of adopted Form ATS-N focus on the ATS-related activities of the broker-dealer operator and its affiliates and are designed to inform market participants about the competing interests between the broker-dealer operator or its affiliates and other subscribers and the potential for information leakage of subscribers' confidential trading information. In response to a commenter's concern,
The Commission received comments recommending additional regulation or disclosures for NMS Stock ATSs related to conflicts of interests. In the Proposal, the Commission considered alternatives to address conflicts of interests between the broker-dealer operator and the NMS Stock ATS. One alternative the Commission considered was to eliminate any potential conflicts of interest by requiring the NMS Stock ATS to operate with a single business function—operating the NMS Stock ATS—and by eliminating any other function of the broker-dealer, such as principal trading.
Several commenters recommend that the Commission prohibit conflicts of interest altogether on NMS Stock ATSs, which would include a prohibition on trading on the NMS Stock ATS by the broker-dealer operator and its affiliates, rather than simply increasing the disclosure requirements for conflicts of interest.
Also, one commenter recommends that, for any conflicts of interest that are permitted, at a minimum Form ATS-N should include clear disclosures of conflicts of interest under a section titled “conflicts of interest.”
We also received a comment requesting the Commission to require NMS Stock ATSs to disclose in Part II of Form ATS-N any proceeding within the last 10 years against the NMS Stock ATS, the broker-dealer operator or officers or employees of the broker-dealer operator that relates to the handling of equity orders or the operation of the NMS Stock ATS.
Part III of adopted Form ATS-N is designed to provide public disclosures to help market participants understand, among other things, how subscribers' orders and trading interest are handled, matched, and executed on the NMS Stock ATS. In response to comments, we are revising the format of several requests in Part IV of proposed Form ATS-N (renumbered as Part III in the adopted Form) to help NMS Stock ATSs provide disclosures that would be useful to market participants. For example, in response to commenters that believe the Commission's use of the term “describe” is vague and would lead to discursive disclosures and obscure key information, we are revising requests to be more explicit, adding specificity to clarify the meaning of the requests, and providing non-exhaustive examples for NMS Stock ATSs to better understand what would be responsive to the Form ATS-N.
Part IV, Item 1(c) of proposed Form ATS-N would have required disclosures about types of subscribers to the NMS Stock ATS. We are adopting Part IV, Item 1(c) of proposed Form ATS-N with modifications as Part III Item 1 (“Types of Subscribers”) of adopted Form ATS-N.
One commenter recommends that the Commission consider eliminating or consolidating this request because it is redundant to the request in Part IV, Item 5 of proposed Form ATS-N regarding segmentation.
Another commenter believes that the phrase “types of subscribers” should be specifically defined.
Furthermore, in response to general comments that the Form ATS-N should be formatted to facilitate comparisons across NMS Stock ATSs,
Part IV, Item 1(a) of proposed Form ATS-N would have required disclosures about eligibility requirements of the NMS Stock ATS.
We also received comment seeking modifications to the proposed Item. One commenter suggests that the term “eligibility requirements” under Part IV, Item 1(a) of proposed Form ATS-N is unclear and suggests using eligibility “standards” as a more accurate way to capture the various subscriber criteria an ATS might evaluate.
Also, commenters express confusion over the difference between Part IV, Item 1(a) and 1(e) (adopted as Part III, Items 2 and 3, respectively) of proposed Form ATS-N and whether they overlapped.
We are not imposing new requirements for NMS Stock ATSs to have certain eligibility requirements, either by implicating the fair access rule under Rule 301(b)(5) (as suggested by a commenter), or otherwise.
In Part III, Item 2(a) of adopted Form ATS-N, we are requiring the NMS Stock ATS to state whether it requires subscribers to be registered broker-dealers. This request is similar to the
If the NMS Stock ATS indicates that it does have conditions that a person must satisfy before accessing the ATS services, the request, as modified, requires an NMS Stock ATS to list and provide a “summary” of those conditions. We believe a summary of those conditions would provide sufficient disclosure (in conjunction with Part III, Item 1 of adopted Form ATS-N) for market participants to discern the type of order flow that they are likely to interact with on the NMS Stock ATS, while at the same time, not impairing the ATS's ability to reasonably control the activities and quality of flow on its platform.
We also received comment unfavorable to Part IV, Item 1(b) of proposed Form ATS-N.
We are not adopting the provision requiring the disclosure of the terms and conditions of any contractual agreements in Part IV, Item 1(b) of proposed Form ATS-N.
Part IV, Item 1(e) of proposed Form ATS-N would have required disclosures about limitation and denial of ATS services. We are adopting Part IV, Item 1(e) of proposed Form ATS-N, with certain modifications discussed below, including adopting a “yes” or “no” format to questions, as Item 3 of adopted Form ATS-N, and naming the request “Exclusion from ATS Services.”
One commenter states that requiring an NMS Stock ATS to disclose additional details about why the ATS would limit or deny ATS services could affect the ATS's ability to reasonably control the activities and quality of flow on its platform; the commenter suggests, therefore, that such disclosure remain confidential with the Commission.
Another commenter suggests that it is unclear whether Part IV, Item 1(e) of proposed Form ATS-N requests disclosure of instances where a subscriber requests not to interact with certain counterparties.
This commenter also expresses concern about the implications for fair access raised by Part IV, Item 1(e) of proposed Form ATS-N.
We are not implicating or changing Rule 301(b)(5) of Regulation ATS, the so-called fair access rule, by requiring NMS Stock ATSs to disclose information about when the ATS can exclude, in whole or in part, a subscriber from the services of the ATSs. Pursuant to Rule 300(a)(2) of Regulation ATS, an ATS cannot set rules governing the conduct of subscribers other than the conduct of subscribers' trading on the system and cannot discipline subscribers other than by exclusion from trading.
One commenter requests guidance about the ability of an ATS to deny access pursuant to Rule 301(b)(5) of Regulation ATS when such ATS has not exceeded the fair access threshold requirements under Rule 301(b)(5)(i).
In this rulemaking, we are requiring NMS Stock ATSs to identify and explain on Form ATS-N any instances where the ATS differs in how it treats subscribers and the broker-dealer operator so market participants can have additional information to consider when evaluating an ATS. More favorable service or pricing for certain ATS subscribers necessarily implies less favorable service or pricing for others.
We are adopting Part III, Item 3 of Form ATS-N with certain language to reduce potential confusion with the application of Rule 301(b)(5) of Regulation ATS. As indicated above, to meet the definition of an ATS, a system
Part IV, Item 2 of proposed Form ATS-N would have required disclosures about the hours of operations. We did not receive comment on Part IV, Item 2 of proposed Form ATS-N. We are adopting the Item with modifications as Part III, Item 4 (“Hours of Operations”) of adopted Form ATS-N, as discussed below. We continue to believe that it is important for market participants and the Commission to understand when an NMS Stock ATS operates and when orders can be entered, including when an NMS Stock ATS will accept orders outside of regular trading hours. Making such information publicly available would enable market participants to more easily compare when trading interest can be entered on NMS stock trading centers. We are modifying the example provided in this Item by replacing references in the Proposal to hours when “pre-opening or after-hours
In Part III, Item 6 of proposed Form ATS-N we proposed a similar request to Part IV, Item 4(a) of proposed Form ATS-N that focused on the activities of the broker-dealer operator and its affiliates. Part III, Item 6 of proposed Form ATS-N would have required disclosures about the broker-dealer operator's, or any of its affiliates', use of a SOR(s) (or similar functionality) or an algorithm. Part IV, Item 4(a) of proposed Form ATS-N would have required disclosures about connectivity and order entry to the NMS Stock ATS. We are adopting both requests with modifications and combining them into Part III, Item 5 (“Means of Entry”) of adopted Form ATS-N.
One commenter asserts that the information sought in Part III, Item 6 of proposed Form ATS-N is generally duplicative of the requests in Part III, Item 3 (“Products or Services Offered to Subscribers”) and Part III, Item 5 (“Trading Activities on the NMS Stock ATS”) of proposed Form ATS-N and that the requests in Part III, Item 6 of proposed Form ATS-N (“Smart Order Router (`SOR') (or Similar Functionality of Algorithm)”) should be either consolidated into those requests or eliminated altogether.
With regard to Part IV, Item 4(a) of proposed Form ATS-N, one commenter states that the requirement to “describe” the means of connectivity by “other persons” is potentially overbroad—particularly for ATSs with affiliated broker-dealers or other business units that may connect directly or indirectly to the ATS.
In response to this comment, Part III, Item 5 of adopted Form ATS-N first requires an NMS Stock ATS to identify and explain the protocol that can be used to directly enter orders and trading interest into the ATS. In a separate subpart to Part III, Item 5 of adopted Form ATS-N, the NMS Stock ATS must identify and explain any other means for entering orders and trading interest into the NMS Stock ATS (
We note that subscribers may submit orders or trading interest to the NMS Stock ATS both directly and indirectly.
We also received several other comments on the request for information in Part III, Item 6 of proposed Form ATS-N, which as
Some commenters, however, express concern that Part III, Item 6 of proposed Form ATS-N would require the NMS Stock ATS to publicly disclose proprietary information about its SOR and/or algorithms.
We did not intend for the proposed requests regarding SORs (or other functionalities) and algorithms used by the broker-dealer operator or its affiliates to enter orders or trading interest into an NMS Stock ATS to mandate the public disclosure of information that could place the broker-dealer operator or its affiliates at a competitive disadvantage with other broker-dealers. To clarify the scope of the adopted disclosure requirements, Part III, Item 5(c) of adopted Form ATS-N no longer contains the proposed language “[d]escribe the interaction and coordination.” Rather, Part III, Item 5(c) only requires the NMS Stock ATS to “list and explain” sources of order flow other than those used for direct entry into the ATS, which could include SORs or algorithms offered by the broker-dealer operator. Furthermore, the adopted disclosure requirements only require the NMS Stock ATS to “list and provide a summary description of the terms and conditions for entering orders or trading interest into the ATS” through these sources. This revised language is intended to clarify that the NMS Stock ATS need not provide a detailed description of the programming for its SOR (or other similar functionality), algorithms, or other non-direct means for entering order and trading interests that could put the ATS at a competitive disadvantage with competitors. For example, NMS Stock ATSs need not disclose their SORs' routing tables or other information about how the SOR may route orders.
Another commenter states that there are numerous questions in the proposed Form ATS-N that would require ATS operators “to act as de facto agents of the SEC” by asking the ATS operators to seek information relating to the operations of certain trading algorithms or SORs that the ATS operators have nothing to do with and may be blocked via firm information barriers from knowing anything about.
We agree that it is outside of the scope of this rulemaking for us to require NMS Stock ATSs to obtain detailed information about how the SORs and algorithms of third parties operate when such information does not pertain to the operation of the ATS. However, if an affiliate of the broker-dealer operator provides a means of entry into the ATS for its customers or its principal orders, we believe that market participants should understand certain details about the interaction between that affiliate and the ATS, which are solicited in Part III, Item 6, to properly evaluate potential conflicts of interest and information leakage on the ATS.
For example, among the advantages and disadvantages that market participants should be able to discern from the disclosure of Part III, Item 5(b) is any differences in the latency of the alternative means for entering orders and trading interest into the NMS Stock ATS. We understand that alternative means of entering orders and trading interest may have different latencies associated with each alternative. For instance, in some cases, a direct connection to the NMS Stock ATS may have reduced latencies as compared to indirect means where orders and trading interest pass through an intermediate functionality. Alternatively, a broker-dealer operator could, for example, configure the NMS Stock ATS to provide reduced latencies for certain means of order entry used by itself or its affiliates, such as through a SOR or algorithm.
We also believe that it is important for subscribers and market participants to understand a means of entry provided by an affiliate, such as the use of an affiliate's SOR, even if it does not provide an advantage to a particular entity. Specifically, we continue to believe that disclosures about a broker-dealer operator's use of its or an affiliate's SOR (or similar functionality) or algorithms to enter orders into the NMS Stock ATS are important to market participants when evaluating NMS Stock ATSs.
As discussed in the Proposal, we believe that market participants would benefit from increased disclosures about the use of a SOR(s) (or similar functionality) or algorithm(s) by the broker-dealer operator or its affiliates in connection with the NMS Stock ATS because of the potential for information leakage.
A system may consist of various functionalities, mechanisms, or protocols that operate collectively to bring together the orders for securities of multiple buyers and sellers using non-discretionary methods under the criteria of Rule 3b-16(a). In some circumstances, the various functionalities, mechanisms, or protocols may be offered or performed by another business unit of the broker-dealer operator or by a separate entity.
Finally, some commenters suggest reducing the level of detail solicited in the proposed disclosures about the use of SORs (or other functionalities) or algorithms. One commenter suggests reframing the proposed requests regarding the use of SORs (or other functionality) or algorithms to “yes” or “no” questions or attestations of “no advantage,” and in situations where the broker-dealer operators or its affiliates does have an advantage, the NMS Stock ATS should disclose that advantage publicly and in similar detail to what was proposed in Part III, Item 6.
We do not believe that the requests about the means for entering orders and trading interests on the NMS Stock ATS will be overly burdensome to keep up-to-date on Form ATS-N because the requests do not require a level of detail that would mandate an amendment for every programming change to these services, such as an update to the routing table. Furthermore, to the extent that an NMS Stock ATS is unable to use a means for entering order and trading interests due to unexpected circumstances, such as a power failure or act of nature, the NMS Stock ATS could state in its Form ATS-N information about the alternative procedures that the ATS would use for the entry of orders and trading interests into the NMS Stock ATS under such exigent circumstances; this would obviate the need for an amendment when such alternative procedures are used. Finally, as explained in detail above, we believe that the information solicited in adopted Form ATS-N about the use of SORs (or similar functionalities) or algorithms by the ATS is very important for market participants when evaluating potential conflicts of interest on the ATS, so we do not think it would be helpful to reduce the level of detail required by the adopted form as suggested by these commenters.
Part IV, Item 4(b) of proposed Form ATS-N would have required disclosures about co-location. We are adopting Part IV, Item 4(b) of proposed Form ATS-N, with modifications, and renumbering the request as Part III, Item 6 (“Connectivity and Co-location”) of adopted Form ATS-N.
A commenter recommends that the Part IV, Item 4(b) co-location request could be reworded as two “yes” or “no” questions, provides recommended questions, and states that any further information requested should be as simple and direct as possible without requiring detailed, idiosyncratic information in the form.
We are reformatting the question regarding connectivity and co-location in Part III, Item 6 of adopted Form ATS-N to provide two sub-items that relate to speed of communication with the ATS, which were requested in Part IV, Item 4(b) of proposed Form ATS-N. As adopted, Part III, Item 6(c) of Form ATS-N requires an NMS Stock ATS to indicate whether it provides any other means besides co-location and related services described in the Item to increase the speed of communication with the ATS, and if so, to explain the means and offer a summary of the terms and conditions for its use.
We also are adopting a request in Part III, Item 6(e) for the NMS Stock ATS to indicate whether it offers any means to reduce the speed of communication with the ATS and provide a summary of the terms and conditions for its use. As indicated by commenters,
We are also providing examples in Part III, Item 6 of adopted Form ATS-N to clarify the types of services and connection options related to co-location that an NMS Stock ATS may offer. We believe that providing these examples will help NMS Stock ATSs better understand the type of information that would be responsive to the Form ATS-N requests.
We are providing further guidance as to what is required of NMS Stock ATSs when disclosing any differences in the terms and conditions among subscribers and the broker-dealer operator related to co-location and related services. Subscribers of co-location services can experience faster or slower connection speeds to an NMS Stock ATS depending on factors such as the distance of the customer servers from the matching engine, or the use or non-use of “coiling” to its matching engine to equal connection speeds among subscribers, among others. Such differences in connection speed or latency would be required to be disclosed under Part III, Item 6(a).
Part IV, Item 3(a) of proposed Form ATS-N would have required disclosures about order types and modifiers.
We continue to believe that all market participants should have full information about the operations of order types available on an NMS Stock ATS for market participants to comprehensively understand how their orders and trading interest will be handled and executed on the ATS. Accordingly, we are adopting Part IV, Item 3(a) of proposed Form ATS-N with certain modifications described below, naming the Item “Order Types and Attributes,” and relocating the request as Part III, Item 7 of adopted Form ATS-N. Order types are a primary means by which users of an NMS Stock ATS communicate their instructions for handling their trading interest to the NMS Stock ATS. Moreover, order types can be complex and operate in various ways. Given the importance of order types and their complex nature, we are requiring NMS Stock ATSs to disclose the information called for by Part III, Item 7 on adopted Form ATS-N.
One commenter suggests that Part IV, Item 3 of proposed Form ATS-N would require excessive information that would be unnecessarily burdensome and duplicative, and offers several suggestions on how to streamline the Item, including defining a set of order type terminology for completing the form, allowing a table template for responses, and suggested “yes” or “no” questions.
We do not believe that it would be practical to define or standardize order types because the operation and naming of order types is not consistent across NMS Stock ATSs or trading centers, and broadly similar order types can have many permutations.
For similar reasons, we are declining to adopt the commenter's suggestions that Part IV, Item 3(a)(vi) of proposed Form ATS-N could be simplified to a “yes” or “no” question asking whether each order type is available to all subscribers. This Item specifically relates to whether every order type is available across all forms of connectivity, not to all subscribers.
An NMS Stock ATS can choose a format that it finds best to provide market participants with complete and comprehensible information, such as, for instance, a table with the relevant characteristics of each order type.
We have made several edits to remove duplicative requirements, improve readability and specificity, and remove unnecessary language.
We are adding in Part III, Item 7(a)(i) of adopted Form ATS-N that the NMS Stock ATS provide not only whether an order type can receive a new time stamp, but also, when, so that market
Finally, the Commission is providing further guidance with regard to the prompt in Item 7(a)(vii) that the NMS Stock ATS describe the circumstances under which orders types may be removed from the NMS Stock ATS as the information required relates to the disclosures required under Part III, Item 16 (Routing). While we are not requiring broker-dealers to disclose information about their handling of customer orders when such orders are not routed to the NMS Stock ATS, we believe that market participants should be aware of how a subscriber order or trading interest that has been received by and rests in the NMS Stock ATS can be subsequently removed from the ATS. Such circumstances may be as simple as the broker-dealer cancelling a customer order that it is handling from the ATS, or such circumstances could include the broker-dealer operator removing a third-party subscriber's order at its own discretion. To the extent that this information about removal of orders overlaps with the disclosures regarding routing of orders under Part III, Item 16, the NMS Stock ATS need only provide the information in Part III, Item 7 of adopted Form ATS-N. Additionally, the Part III, Item 7 requests regarding removal of orders and trading interest from the ATS will not require the broker-dealer operator to publicly disclose its routing table or other information about where the order is sent once it is removed from the NMS Stock ATS.
Part IV, Item 3(c) of proposed Form ATS-N would have required disclosures about order size requirements and odd-lot orders. We did not receive any comments directed at Part IV, Item 3(c) of proposed Form ATS-N; however, in response to commenters' general request for the Commission to use more “yes” or “no” questions to navigate information and facilitate comparisons, we are relocating Part IV, Item 3(c) of proposed Form ATS-N to Part III, Item 8 (“Order Sizes”) of adopted Form ATS-N and adopting a “yes” or “no” format.
In addition, we are adding to Part III, Item 8(a) of adopted Form ATS-N a request for the NMS Stock ATS to provide information about any maximum order or trading interest size requirements.
Furthermore, we are providing examples in a parenthetical indicating that ATSs state whether or not odd-lot and mix-lot orders and trading interest are treated the same as round lot orders and trading interest. Information regarding the treatment of odd-lot and mixed-lot orders and trading interest compared to round lot orders and trading interest could influence whether market participants submit odd-lot or mixed-lot orders to the NMS Stock ATS.
Part IV, Item 3(d) of proposed Form ATS-N would have required disclosures about conditional orders and indications of interest. We received one comment regarding Part IV, Item 3(d) of proposed Form ATS-N contending that providing additional disclosure regarding order types and handling (including the use of IOIs) is useful information for subscribers and the investing public, whose investments may be traded indirectly on ATS platforms via their third-party broker-dealers.
We are adopting Part IV, Item 3(d) of proposed Form ATS-N with modification and relocating the request to Part III, Item 9 (“Conditional Orders and Indications of Interest”) of adopted Form ATS-N. Part III, Item 9 of adopted Form ATS-N is designed to provide specific information about the use of messages on the NMS Stock ATS, in particular, IOIs, actionable IOIs, conditional orders, and similar functionalities.
Conditional orders are also messages indicating trading interest on a trading venue, and conditional orders generally function in a similar manner to IOIs. A conditional order may contain the same attributes as other order types when a subscriber enters it onto the trading venue (
In response to comment,
Part IV, Item 9(a) of proposed Form ATS-N would have required disclosures about opening and reopening processes. We received one comment on Part IV, Item 9(a) of proposed Form ATS-N stating that Part IV of proposed Form ATS-N, including requests relating to the opening and reopening procedures, is essential for investors or routing brokers who are seeking to understand how the ATS works.
As stated in the Proposal,
Furthermore, to provide additional guidance about what needs to be included in the description of the opening and reopening process, we are adding to Part III, Item 10 of adopted Form ATS-N that the ATS describe: When and how such orders and trading interest are “priced [and] prioritized” and “any order types allowed” during the opening and reopening processes. Specifically requesting information about when orders and trading interest will be priced and prioritized during the opening or reopening of the ATS will provide market participants with the information they need to plan and execute their trading strategies during these periods. The Item would also, for example, require disclosure of any procedures to match orders to set a single opening or reopening price to maximize liquidity and accurately reflect market conditions at the opening or reopening of trading.
In the Proposal, we would have required the information related to the pricing and priority of orders during the opening and reopening processes and any order types allowed during that time period under Part IV, Items 9(a) (“Opening and Reopening Process”), 7(b) (“Order Interaction Rules”) and Item 3 (“Types of Orders”). Part IV, Item 9(a) of proposed Form ATS-N required, in part, a description of “how orders or other trading interest are matched and executed” during an opening or reopening. In order to fully describe the matching and execution of orders during an opening or reopening in response to the Item, the NMS Stock ATS would necessarily have needed to disclose the pricing, priority, and order types allowed. Moreover, Part IV, Item 7(b) of proposed Form ATS requested information about the established non-discretionary methods that dictate terms of trading among multiple buyers and sellers, which included rules and procedures for priority and pricing. In addition, Part IV, Item 3 of proposed Form ATS-N would have required disclosure of “any types of orders that are entered on the NMS Stock,” which would have included any order types during an opening or reopening.
We are adding a specific question about the rules and procedures for the opening and reopening process in Part III, Item 10 of adopted Form ATS-N to help streamline responses to Form ATS-N requests and help market participants locate and understand information about the opening and reopening process on the ATS.
Part IV, Item 7 of proposed Form ATS-N would have required disclosures regarding the trading services of the
As discussed in the Proposal, ATSs that trade NMS stocks may offer subscribers various types of trading mechanisms.
We continue to believe that it would be useful to market participants to be availed information about the trading facilities, functionalities, and mechanisms offered by an NMS Stock ATS to evaluate whether the operations of the NMS Stock ATS comports with their trading and investment strategies. Part III, Item 11(a) of adopted Form ATS-N is consistent with Part IV, Item 7(a) of proposed Form ATS-N; however, we are limiting the request to require NMS Stock ATSs to provide only a summary of the structure of the NMS Stock ATS marketplace.
Part III, Item 11(c) is designed to inform market participants about the rules and procedures used to determine how orders and trading interest may interact on an NMS Stock ATS upon being entered into the system.
As discussed in the Proposal, NMS Stocks ATSs may employ various terms and conditions under which orders interact and match.
In Part III, Item 11(c) of adopted Form ATS-N, we are combining the requests in Part IV, Items 7(b) (“Order Interaction Rules”) and 7(c) (“Other Trading Procedures”) of proposed Form ATS-N. Part IV, Items 7(b) and 7(c) of proposed Form ATS-N were intended to solicit information about the ATS's established non-discretionary methods that dictate the terms of trading among the multiple buyers and sellers entering orders and trading interest. In addition to a trading facility, non-discretionary methods include rules and procedures.
A description of the “established non-discretionary rules and procedures” of the NMS Stock ATS is a principal requirement of Item 11(c) and we are requiring that any differences among subscribers and the broker-dealer operator related to these methods be identified and explained. This request was moved to Part III, 11(d) and formatted as a “yes” or “no” question in response to comment.
We seek to provide additional guidance regarding the procedures that need to be discussed in this Item.
In the Commission's experience, NMS Stock ATSs have trading procedures for executing orders that include price protections to re-price orders or prevent their execution under certain circumstances, such as Limit Up Limit Down price bands pursuant to the National Market System Plan to Address Extraordinary Market Volatility (“LULD Plan”), or short sales to be executed on its system. Thus, an NMS Stock ATS would be required to configure its system to comply with federal securities laws related to short sales, including Regulation SHO, rules and procedures governing and/or precluding the execution of orders in a locked or crossed market, or procedures governing the handling of execution errors, such as the use of an error account by the NMS Stock ATS.
Other trading procedures include protocols for time-stamping orders and executions to ensure compliance with the Exchange Act and the rules and regulations thereunder and any execution procedures related to price improvement. For example, an NMS Stock ATS may have procedures to reprice orders under its price protection mechanisms, to reprice short sale orders to ensure compliance with Regulation SHO, or to reprice orders due to price-sliding order types (such as certain pegged order types); it would be required to explain when it creates new timestamps for such re-priced orders. Trading procedures include any functionality or mechanism available on the NMS Stock ATS that allows for price improvement.
Another commenter suggests that disclosure of certain additional trading services should be required, specifically whether the NMS Stock ATS employs technology designed to detect and deter price manipulation and other disruptive trading practices,
One commenter states that Part IV, Item 7 of proposed Form ATS-N had “the potential to become quite technical and granular” and thus perhaps of limited use to end-readers, and suggests the Commission consider “requesting
We do not believe, as suggested by a commenter, that Part III, Item 11 of adopted Form ATS-N will require “discursive disclosures”
Another commenter suggests that both Part IV, Item 7 and Item 8 (relating to suspensions of trading, system disruptions or malfunctions) of proposed Form ATS-N would be better suited as a required disclosure to subscribers that could be included in contractual agreements or systematically available to subscribers on ATS operators' websites, rather than formally filed with the Commission.”
One commenter suggests that the Commission require NMS Stock ATSs to disclose precise, mathematically analyzable specifications of their algorithms to enable the Commission and financial firms to leverage formal verification techniques to automatically analyze the specifications for potential violations of regulations, and allow market participants to automatically test their connectivity and verify their routing algorithms (for best execution principles).
Part IV, Item 1(d) of proposed Form ATS-N would have required disclosures regarding liquidity providers to the NMS Stock ATS. The Commission is adopting Part IV, Item 1(d) of proposed Form ATS-N as Part III, Item 12 (“Liquidity Providers”) of adopted Form ATS-N with certain modifications, which are discussed below. As discussed in the Proposal,
One commenter suggests that the term “liquidity provider” should be specifically defined; however, the commenter did not suggest a definition.
Another commenter states that the Commission should consider eliminating or consolidating Part IV, Items 1(c) and 1(d) of proposed Form ATS-N and suggests these subparts are redundant with information about segmentation sought in Part III of proposed Form ATS-N.
After considering whether Part IV, Item 1(d) of proposed Form ATS-N may overlap with any other items on the form, we require ATSs in Part II, Items 1(c) and 2(c) of adopted Form ATS-N to indicate whether there are any formal or informal arrangements with the broker-dealer operator and affiliate of the broker-dealer operator, respectively. As discussed above, if the answer is “yes” to any of these items, the NMS Stock ATS must identify the broker-dealer operator (
Part IV, Items 5(a) and 5(b) of proposed Form ATS-N would have required disclosures regarding segmentation of order flow and notice of segmentation. We are adopting Part IV, Item 5 with certain modifications. We are also renumbering the request as Part III, Item 13 of adopted Form ATS-N and renaming it “Segmentation; Notice.” As discussed in the Proposal, some NMS Stock ATSs elect to segment order flow entered in the NMS Stock ATS according to various categories.
Several commenters express support for the Commission requiring information about order segmentation.
The Commission also received comments recommending changes to aspects of Part IV, Item 5 of proposed Form ATS-N. One commenter suggests that the Item should be converted to a series of “yes” or “no” questions and that the Item overlaps with Part IV, Item 1 of proposed Form ATS-N.
Several commenters express concern that Part IV, Item 5 of proposed Form ATS-N would have required the publication of precise metrics used to segment trading interest that could result in the gaming of those metrics to the detriment of order flow on the ATS.
Commenters suggest that the information requested by Part IV, Item 5 of proposed Form ATS-N could be provided to the Commission confidentially,
Another commenter suggests that information barriers between the ATS and other affiliates would “make it challenging or inappropriate for the ATS itself to seek some of this information.”
Another commenter recommends that an NMS Stock ATS should be required to disclose whether it identifies customer orders of broker-dealers as customer orders (which it views as a form of segmentation).
Another commenter states that Part IV, Item 5 of proposed Form ATS-N would be more meaningful if there was a quantitative component, such as the percentage of orders and trades per segmented class.
We also are modifying certain components of Part IV, Item 5 proposed Form ATS-N (as adopted in Part III, Item 13). First, we are adding the terms “classifications, tiers, or levels” in addition to “categories” to describe the groupings into which an NMS Stock ATS elects to segment subscriber orders to better reflect the language used by commenters and in existing Form ATS disclosures. Second, we are providing two additional examples, order size and duration,
Finally, we are requiring under Part III, Item 13(d) of adopted Form ATS-N that the NMS Stock ATS describe “whether and how [a designated segmented category] can be contested” (if applicable). This request is generally consistent with Part IV, Item 5 of proposed Form ATS-N which would have required information on the changing or overriding of segmented categories, as well as notice provided to subscribers of their segmented category.
Part IV, Item 5(c) of proposed Form ATS-N would have required disclosures regarding order preferencing. The Commission did not receive specific comment on Part IV, Item 5(c) of proposed Form ATS-N.
Part IV, Item 6(a) of proposed Form ATS-N would have required disclosures about the display of order and trading interest, including recipients. We received several comments on Part IV, Item 6(a) of proposed Form ATS-N. We are adopting Part IV, Item 6(a) of proposed Form ATS-N with modifications, as discussed more fully below, and renumbering the request as Part III, Item 15 (“Display”) of adopted Form ATS-N. The display of subscriber orders and trading interest can occur in a number of ways. For instance, as
One commenter supports this item.
In response to these commenters' suggestions, we are changing the request to “subscriber orders and trading interest.” We did not intend for the Proposal to, in the commenter's words, entangle the ordinary situation where a multi-service broker-dealer uses a tool to manage child orders across multiple trading venues.
A commenter suggests a better way of phrasing Part IV, Item 6(a) of proposed Form ATS-N would be to ask whether orders or IOIs are ever displayed in external venues, with which venues, and what information is shared.
One commenter suggests that the Commission revise this Item to distinguish between orders or other trading interest displayed in external venues with real-time access to systems designed to take advantage of this information, such as liquidity providers and SORs, and orders or other trading interest displayed in external venues
Differences in the latencies associated with the NMS Stock ATS displaying subscriber orders and trading interest due to a functionality of the ATS would be responsive to the request in Part III, Item 15(c).
Part IV, Item 6(b) of proposed Form ATS-N, requested the identity of any individuals in responding to whom the order and trading interest would be displayed or made known. One commenter raises confidentiality concerns with the requirement to publicly identify the position and title of the natural person to whom orders or other trading interest are displayed, because it believes that it would be relatively easy through social media to reverse engineer certain identities, and such information would require frequent updates with little market utility.
We have revised the request so that Part III, Item 15 of adopted FormATS-N does not require the NMS Stock ATS to identify natural persons. We understand commenters' potential confidentiality concerns and had modified the request to make clear that the request does not seek the names of natural persons or their identity. Instead, it requires the NMS Stock ATS to only identify the recipient of displayed information, by functionality of the broker-dealer operator or the type of market participant, or both.
We are revising Part III, Item 15 of adopted Form ATS-N to address another commenter's concern that certain persons at the ATS in technical or quality assurance roles would need to be disclosed even though they may not be involved with trading activity.
Finally, we are adding a “yes” or “no” questions in Part III, Item 15(a) that asks if the NMS Stock ATS operates as an ECN as defined in Rule 600(a)(23) of Regulation NMS. In the Proposal, the Commission noted that NMS Stock ATSs that are also ECNs may differ in how and where orders or other trading interest are displayed, and that Part IV, Item 6 of proposed Form ATS-N was designed inform market participants about how ECN display orders.
Part IV, Item 10(a) of proposed Form ATS-N would have required disclosures about outbound routing. We are adopting Part IV, Item 10(a) of proposed Form ATS-N with modifications, renaming the request as “Routing,” and renumbering the request as Part III, Item 16 of adopted Form ATS-N.
One commenter sought to understand whether the description of outbound routing required by the Item was limited to outbound routing performed as a functionality of the ATS itself rather than routing of client orders by the broker-dealer operator to third-party execution venues.
As the commenter points out above, order handling and the routing of orders by the broker-dealer operator in its capacity as a broker-dealer may be separate from routing of orders in the ATS to other execution venues. As noted above,
We made several changes to Part IV, Item 10(a) of proposed Form ATS-N in response to comments (and adopted as Part III, Item 16). First, we are requiring an NMS Stock ATS to indicate whether orders and trading interest in the ATS can be routed to a destination outside the ATS, and if the answer to that question is “yes,” whether affirmative instructions from a subscriber must be obtained before their orders or trading interest is routed from the ATS. If the NMS Stock ATS indicates that “yes” instructions from a subscriber must first be obtained, the NMS Stock ATS will be required to describe the affirmative instruction and how the affirmative instruction is obtained. If instructions from a subscriber need not be first obtained, the NMS Stock ATS will be required to explain when orders in the NMS Stock ATS can be routed from the NMS Stock ATS (
In Part III, Item 16 of adopted Form ATS-N, we are removing the proposed requirement to “describe the circumstances” of outbound routing more broadly, and instead, are now requiring, as applicable, that the NMS Stock ATS “describe the affirmative instruction” of the subscriber and “explain how the affirmative instruction is obtained.” This change is consistent with the instruction in the Proposal to “describe the circumstances,” but provides more specific instruction. Moreover, if trading interest can be routed away from the NMS Stock ATS without the affirmative instruction of the subscriber, we are no longer limiting the alternative to be when it happens at the discretion of the broker-dealer, as proposed, but instead, are requiring an explanation of when orders can be routed from the NMS Stock ATS. We
We are not adopting in Part III, Item 16 of Form ATS-N the proposed requirements that the NMS Stock ATS explain the means by which routing is performed, or that the NMS Stock ATS explain any differences among subscribers in the means by which trading interest is routed, as this could expand the scope of Form ATS-N beyond ATS activity and into the other broker-dealer functions of the broker-dealer operator.
Part IV, Item 9(b) of proposed Form ATS-N would have required disclosures about the NMS Stock ATS's closing process. We did not receive specific comment on Part IV, Item 9(b) of proposed Form ATS-N. We are adopting Part IV, Item 9(b) with certain modifications discussed below, and renumbering the request as Part III, Item 17 (“Closing”) of adopted Form ATS-N. Part III, Item 17 is designed to inform market participants about whether an NMS Stock ATS uses any special procedures to match orders at the close of regular trading. The Item is designed to provide market participants with information about any special closing processes used by the NMS Stock ATS, particularly whether there are any order types used during the close.
The vast majority of requests in Part III of adopted Form ATS-N relate to trading during regular hours. Therefore, when discussing differences between trading during the close and during regular hours, the NMS Stock ATS must discuss differences as compared to relevant information disclosed in Part III Items, including, among others, order types (Item 7), order interaction, priority, matching, and execution procedures (Item 11), segmentation (Item 13), and display (Item 15). We believe this information will be important for market participants to understand in evaluating whether participating in the closing process is consistent with their trading objectives.
Part IV, Item 9(c) of proposed Form ATS-N would have required disclosures regarding after-hours trading. The Commission did not receive any comments regarding the substance of Part IV, Item 9(c) of proposed Form ATS-N. The Commission is adopting Part IV, Item 9(c) of proposed Form ATS with certain modifications, as discussed below, and relocating the request as Part III, Item 18 (“Trading Outside of Regular Trading Hours”) of adopted FormATS-N.
The Commission is merging requests from Part IV, Item 9(a), which requested information about pre-opening executions,
This Item will require NMS Stock ATSs to indicate in Part III, Items 18(a) and 18(b) whether the ATS conducts trading outside regular trading hours, and indicate whether there are any differences between trading outside of regular trading hours and trading during regular hours. To the extent that there are differences, the NMS Stock ATS must describe those differences. Similar to Item 17 (requesting differences between the closing and regular trading hours), an NMS Stock ATS must discuss differences in trading outside of regular trading hours as compared to the relevant information disclosed in Part III Items, including, among others, order types (Item 7), order interaction, priority, matching, and execution procedures (Item 11), segmentation (Item 13), and display (Item 15). Many of the disclosures discussed elsewhere in Form ATS-N will relate to regular trading hours so the ATS can simply discuss any differences between trading during regular hours and trading outside regular trading hours in Part III, Item 18(b).
Part IV, Item 12 of proposed Form ATS-N would have required disclosures about fees. We are adopting Part IV, Item 12 of proposed Form ATS-N with modifications, which are discussed below, and renumbering the request as Part III, Item 19 (“Fees”) of adopted Form ATS-N. Some commenters suggest that the Commission exercise restraint in the area of fees given that they are the product of negotiations between sophisticated financial institutions and leave to market competition the setting of appropriate fees.
The Commission continues to believe that disclosures regarding fees on Form ATS-N are necessary and important, and should not be voluntary for NMS Stock ATSs. Fee disclosures on Form ATS-N are designed to allow all market participants to analyze the fee structures across NMS Stock ATSs in an expedited manner and decide which ATS offers them the best pricing according to the characteristics of their order flow, the type of participant they are (if relevant), or any other aspects of an ATS's fee structure that serves to provide incentives or disincentives for specific market participants or trading behaviors. As NMS Stock ATSs have become a significant source of liquidity in NMS Stocks,
In addition, given commenters' concerns that the use of the term “describe” in Form ATS-N is vague and would lead to discursive disclosures and obscure key information,
One commenter recommends that the Commission require that any description of a differential fee structure contain enough information for a market participant to understand exactly which, or which level, of fees/rebates/charges apply to each type of subscriber or other person and the criteria that the NMS Stock ATS uses to sort subscribers into different fee categories so that market participants can assess eligibility requirements for different fee tiers.
The Commission recognizes that the fee structures of NMS Stock ATSs can vary and that not all NMS Stock ATSs apply set tiers or categories of fees for subscribers;
One commenter suggests that a description of the mechanisms and categories of fee structures would offer an appropriate level of clarity and transparency, and that the disclosure of the existence of rebates or commission relating to volume is workable, but a high/low range of fees or more client-specific descriptions affect registrants' ability to negotiate custom agreements with subscribers.
A commenter states that the Commission also should require an NMS Stock ATS to explain whether it discriminates among different types of subscribers in establishing fees, rebates, or other charges.
Another commenter suggests that the Commission should require NMS Stock ATSs to provide complete information about their sources of revenue, including revenue arrangements the ATS may have with other trading centers.
Other commenters express various reasons for why they believe the Commission should not require some or all of the disclosures on fees of Part IV, Item 12 of proposed Form ATS-N. Commenters state that NMS Stock ATSs, and especially NMS Stock ATSs of multi-service broker-dealers, may establish fees based on a number of factors, including the depth and breadth of a client relationship, or the full suite of brokerage services made available to
To avoid potential confusion about fees charged by an NMS Stock ATS, and to account for bundled service fees charged to a subscribers by multi-service broker-dealer operators of NMS Stock ATSs, the Commission is adding a separate and specific request to Part III, Item 19(b) of adopted Form ATS-N. Specifically, the Commission is requiring that the NMS Stock ATS describe any bundled fees, including a summary of the bundled services and products offered by the broker-dealer operator or its affiliates, the structure of the fee, variables that impact the fee (including, for example, whether the particular broker-dealer services selected would impact the fee), differentiation among types of subscribers, and range of fees. Part III, Item 19(b) is designed to allow market participants to better evaluate fees for bundled services that include access to the NMS Stock ATS. NMS Stock ATSs will be required to provide information, including the relevant services and products offered by the broker-dealer operator and its affiliates for each bundled fee offered, that will provide context to market participants with which to assess how fees could apply to them as subscribers.
Another commenter states its understanding that the disclosures required would relate only to the fees that the ATS charges for its services, and not include brokerage services, because otherwise, it believes there would be unfair discrimination relative to broker-dealers that do not operate an ATS.
A commenter also suggests the Item be expressly limited to fees set by the ATS operator and not include fees from other affiliates or third parties (
On the other hand, Part III, Item 19(a) of adopted Form ATS-N does not request information on fees charged for non-ATS services by a third party not in contract with the broker-dealer operator. If, for example, the NMS Stock ATS is located in a facility owned by a third party, and in order to co-locate to the NMS Stock ATS a subscriber would be required to lease physical space from the third-party facility owner, a fee for the space rental would not be required to be disclosed on Form ATS-N by the NMS Stock ATS. On the other hand, if an NMS Stock ATS provides co-location services for subscribers and charges a fee to those subscribers for the co-location services, such fee would be responsive to Part III, Item 19 of Form ATS-N. In addition, to the extent that a broker-dealer operator enters into an agreement or arrangement with a third party for that third party to provide a service of the NMS Stock ATS to subscribers and charge a fee that is passed back to the broker-dealer operator in any form, the broker-dealer operator would be required to disclose that fee in response to Part III, Item 19 of Form ATS-N. In such a case, to prevent an NMS Stock ATS from circumventing disclosure otherwise responsive to Part III, Item 19(b) of adopted Form ATS-N, the pass-backed fee by the third party is a fee “for the use of NMS Stock ATS services.”
Another commenter suggests that clients are highly interested in understanding whether an ATS offers rebates to subscribers and would support the inclusion of this question.
Part IV, Item 8 of proposed Form ATS-N would have required disclosures regarding any procedures governing trading during a suspension of trading, disruption or malfunction. The Commission is adopting Part IV, Item 8 with certain modifications, renaming it “Suspension of Trading,” and renumbering the request to Part III, Item 20 in adopted Form ATS-N. Part III, Item 20 is designed to, for example, inform market participants of whether, among other things, an NMS Stock ATS
We received two comments regarding Part IV, Item 8 of proposed FormATS-N. One commenter suggests that this information would be better suited as a disclosure to subscribers rather than formally filed with the Commission and publicly disclosed.
Another commenter requests that the Commission consider harmonizing any definitions used in the Item with those found in Regulation SCI.
Part IV, Item 13(a) of proposed Form ATS-N would have required disclosures regarding trade reporting. We are adopting Part IV, Item 13(a) of proposed Form ATS-N with certain modifications discussed below, and renumbering the request as Part III, Item 21 of adopted Form ATS-N. One commenter suggests that the prompt to disclose “any arrangements” is broad and poses challenges to keep current and recommends it would be more useful to limit the requested arrangements to those that are material to or a core feature of the operations of the ATS.
In addition, we are adding a phrase to the Item to make clear that the explanation of procedures or material arrangements required includes “where an ATS reports transactions and under what circumstances.” We believe this language will help NMS Stock ATSs better understand what would be responsive to Part III, Item 21 of adopted Form ATS-N and focus their responses accordingly, and is consistent with the request in Part IV, Item 13(a) of proposed Form ATS-N. For example, the NMS Stock ATS will be required to disclose the SRO to which it reports transactions, and any alternative trade reporting destinations, if applicable. Information about where an NMS Stock ATS reports transactions and under what circumstances would have been responsive to Part IV, Item 13(a) of proposed Form ATS-N, which required the NMS Stock ATS to “describe any arrangements or procedures for reporting transactions on the NMS Stock ATS.” The addition of the phrase to Item 21(a) clarifies those procedures that would be responsive to the request. Finally, we are revising the proposed Item to clarify that the NMS Stock ATS explain any “procedures
Part IV, Item 13(b) of proposed Form ATS-N would have required disclosures regarding clearance and settlement. The Commission is adopting Part IV, Item 13(b) of proposed Form ATS-N with certain modifications discussed below, and renumbering it as Part III, Item 22 of adopted Form ATS-N. The integrity of the trading markets depends on the prompt and accurate clearance and settlement of securities transactions.
One commenter suggests that the prompt to disclose “any arrangements” is broad and poses challenges to keep current and recommends it would be more useful to limit the requested arrangements to those that are material to or a core feature of the operations of the ATS.
For similar reasons as stated above for Part III, Item 21 (“Trade Reporting”), we are revising this request to state that the NMS Stock ATS describe any “procedures
Part IV, Item 11 of proposed Form ATS-N would have required disclosures regarding market data. The Commission is adopting Part IV, Item 11 of proposed Form ATS-N with certain modifications and renumbering the request as Part III, Item 23 of adopted Form ATS-N. Market data is a critical component to understanding the operations of an NMS Stock ATS. For instance, the market data received by an NMS Stock ATS might affect the price at which orders and trading interest is prioritized and executed in the ATS, including orders that are pegged to an outside reference price. The source of an NMS Stock ATS's market data could impact the execution price received by a subscriber. Disclosures about the NMS Stock ATS's sources of market data, and how the ATS uses such data, can help to inform market participants about how their orders would be handled and executed by the NMS Stock ATS.
One commenter recommends the elimination of prompts that it suggests request proprietary, sensitive, or duplicative information. The commenter instead recommends a general, high-level description regarding the determination of NBBO and pricing.
An NMS Stock ATS would also be required to provide information about how the ATS uses market data to provide the services it offers. Among other things, for example, the NMS Stock ATS would need to disclose in response to Part III, Item 23, of adopted Form ATS-N, its use of market data to display, price, prioritize, execute, and remove trading interest. As part of its explanation for how the NMS Stock ATS uses market data, the ATS would be required to specify, if applicable, when the ATS may change between its use of different sources of market data to provide its services.
Given commenters' concerns that the use of the term “describe” in Form ATS-N is vague and would lead to discursive disclosures and obscure key information,
One commenter believes that the form should require annual disclosures of an NMS Stock ATS's approximate latency (in microseconds) to receive market data feeds, assemble the NBBO, and deliver the updated NBBO to the matching engine.
Part IV, Item 14 of proposed Form ATS-N would have required disclosures regarding order display and execution access pursuant to Rule 301(b)(3). The Commission is adopting Part IV, Item 14 in proposed Form ATS-N, with certain modifications, and renumbering this Item as Part III, Item 24 in adopted Form ATS-N.
One commenter recommends eliminating this request altogether on the grounds that it is unclear how subscribers would benefit from the detailed information under this Item or how it would be used.
We recognize that an NMS Stock ATS may not be subject to Rule 301(b)(3)(ii) of Regulation ATS even if the ATS displays subscriber orders in an NMS stock to any person (other than employees of the ATS) (Rule 301(b)(3)(i)(A)), and executes 5% or
To ensure consistency with Rule 301(b)(3) of Regulation ATS, the Commission is making minor modifications to the request to better comport with requirements of Rule 301(b)(3), and in response to the commenter's concerns regarding proposed Form ATS-N's disclosure requirements for NMS Stock ATSs that meet the threshold requirements of Rule 301(b)(3)(i), but may not be subject to Rules 301(b)(ii) and (iii).
Part IV, Item 15 of proposed Form ATS-N would have required disclosures regarding the fair access requirement of Rule 301(b)(5). The Commission is adopting Part IV, Item 15 of proposed Form ATS-N, with certain modifications, and renumbering this Item as Part III, Item 25 in adopted Form ATS-N. The Commission received comment recommending the elimination of the request altogether on the grounds that it is unclear how subscribers would benefit from the detailed information under the Item or how it would be used.
The Commission does not agree for the same reason discussed above in connection with Part III, Item 24. As noted in the Proposal, although triggering the fair access provision requires the NMS Stock ATSs to provide certain information confidentially to the Commission under Exhibit C of Form ATS-R,
Similar to Part IV, Item 14 of proposed Form ATS-N as discussed above,
To ensure consistency with Rule 301(b)(5) of Regulation ATS, the Commission is making minor modifications to the request to better comport with requirements of Rule 301(b)(5), and for consistency with the modifications the Commission is making to Part III, Item 24 described above.
Part IV, Item 16 of proposed Form ATS-N would have required disclosures regarding market quality statistics published or provided to subscribers. The disclosure requests in Part IV, Item 16 of proposed Form ATS-N are now contained in Part III, Item 26 of adopted Form ATS-N.
We received several comments on Part IV, Item 16 of proposed FormATS-N. Some commenters express concerns about the potential effects that the public disclosure of the information under Part IV, Item 16 would have on the flow of information to
We continue to believe that it is appropriate to require an NMS Stock ATS to make public aggregate, platform-wide order flow and execution statistics it already otherwise collects and publishes or provides to one or more subscribers to the NMS Stock ATS. We believe that an NMS Stock ATS may choose to create and publish or provide to one or more subscribers or persons information concerning order flow and execution quality for different reasons. Certain performance metrics and statistics may be important factors for market participants in comparing and selecting an ATS that is most appropriate for their investment objectives.
We acknowledge a commenter's point that that these disclosures might limit communication between NMS Stock ATSs and their participants to the extent that an NMS Stock ATS chooses to cease providing such statistics to subscribers due to the Form ATS-N requirements.
Another commenter believes this request should not require the disclosure of “bespoke” statistics for a subscriber.
In addition, one commenter believes that broker-dealer operators and their affiliated broker-dealers should be permitted to respond to individualized questions from subscribers and to continue to provide customized reports in the course of responding to those individualized questions without attendant Form ATS-N revisions or amendment requirements.
Commenters also recommend changes and/or other clarifications to the requests under Part IV, Item 16 of proposed Form ATS-N. One of these commenters recommends that the Commission eliminate the public disclosure requirements under Item 16 and instead propose a revised report on aggregate order flow and execution that is to be filed on an annual and confidential basis with the Commission as an exhibit to Form ATS-N.
Another commenter recommends revising Part IV, Item 16 of proposed Form ATS-N to only mandate the disclosure of the required market quality statistics when the NMS Stock ATS publishes or otherwise provides such statistics to a substantial portion of its subscribers (
As an alternative to the proposed requirements for the disclosure of aggregate platform-wide statistics on Form ATS-N, a commenter recommends that the Commission designate specific execution statistics for
We confirm that Part III, Item 26 of adopted Form ATS-N only requires the disclosure of order flow and execution statistics, and that trade-specific data that does not include aggregate, platform-wide information would not be covered by this request. We note, however, that whether or not a specific type of statistic should be categorized as an order and execution statistic or considered aggregate, platform-wide data will depend on the nature of the specific statistics being compiled by the NMS Stock ATS. An NMS Stock ATS should independently evaluate any statistics that it compiles and distributes to determine whether they are responsive to this disclosure request. We also agree that protecting customer anonymity should be a priority with any public disclosure under this Item, and thus, an ATS would not be required to publicly file customer communications associated with the responsive statistics.
While we are not changing the substance of the proposed data request being adopted in Part III, Item 26, we are making technical modifications to improve the means by which the disclosures are filed on Form ATS-N. We believe that these modifications will make it easier for market participants to review and compare the filed information. In addition to changing the proposed request into a “yes” or “no” question in adopted Form ATS-N, Part III, Item 26 requires the NMS Stock ATS to attach both the responsive statistics and its explanation of the categories or metrics of those statistics as Exhibits 4 and 5, respectively, rather than including such information as part of the form, as was proposed. We believe it will be easier for market participants to review the disclosures as stand-alone documents than it would be if they were filed and publicly posted as narratives in the form. Also, in lieu of filing Exhibits 4 and 5, the NMS Stock ATS may certify that the information requested under Exhibits 4 and 5 is available at the website provided in Part I, Item 5 of the form and is accurate as of the date of the filing.
In the Proposal, we solicited comment on whether other standardized statistical disclosures should be required from NMS Stock ATSs and the nature and extent of any such metrics or statistics that commenters believe should be disclosed.
We also received comments advocating that this rulemaking include amendments to Rule 605 of Regulation NMS.
Current Rule 301(b)(10) of Regulation ATS
We proposed to amend Rule 301(b)(10)(i) to require that all ATSs (including both NMS Stock ATSs and non-NMS Stock ATSs) adopt written safeguards and written procedures that limit access to the confidential trading information of subscribers to those employees of the ATS who are operating the system or are responsible for its compliance with Regulation ATS or any other applicable rules,
We received five comments on the proposed amendment to Rule 301(b)(10).
We are adopting the amendments to Rule 301(b)(10) as proposed. We continue to believe that safeguards and procedures to ensure the confidential treatment of ATS subscribers' trading information are important, and that the potential for misuse of such information continues to exist. We also continue to believe that requiring an ATS to reduce to writing those safeguards and procedures, as well as its oversight procedures to ensure that such safeguards and procedures are followed, will strengthen the effectiveness of the ATS's safeguards and procedures and will better enable the ATS to protect confidential subscriber trading information and implement and monitor the adequacy of, and the ATS's compliance with, its safeguards and procedures.
We also proposed to amend the record preservation requirements of Rule 303(a)(1) to incorporate the amendments to Rule 301(b)(10).
Form ATS-N would be filed electronically in a structured format through EDGAR. By filing in EDGAR, NMS Stock ATSs will be given the option of filing using a web-fillable Form ATS-N which will render into XML in EDGAR, or to file directly in XML using the XML schema for NMS Stock ATSs as published on the Commission's website. With both options, the Commission will receive the Form ATS-N information in XML format. For those NMS Stock ATSs that would prefer to manually key in all of their Form ATS-N responses, as had been originally proposed by us, those NMS Stock ATSs can do so using the Commission's web-fillable Form ATS-N, which will render into XML in EDGAR. For those NMS Stock ATSs that would prefer to map the information in their existing systems so that filing of Form ATS-N can be more automated and more efficient for them, those NMS Stock ATS can file in XML using the XML schema as published on the Commission's website. The Commission's XML schema and the Commission's web-fillable Form ATS-N both reflect the same set of custom XML tags and XML restrictions designed by the Commission to submit the disclosures in Form ATS-N.
As we proposed, all effective Forms ATS-N and all properly filed Form ATS-N amendments will be made publicly available. Because Form ATS-N will be filed in an XML format (either using the Commission's web-fillable form or as an XML file submitted according to the Commission's XML schema) in EDGAR, once effective, all Forms ATS-N will be centrally located on EDGAR for the public to access in the same XML format in which the Form ATS-N was received by the Commission.
The XML format is a text-searchable format that does not require the use of optical character recognition and will enhance the Commission's and the public's abilities to better gather, analyze, aggregate, compare, and use the Form ATS-N data. Requiring XML should result in the Form ATS-N data being provided in a consistent, structured format. XML is an open
In addition, XML is an open standard that is maintained by a consensus based market standards organization, rather than the Commission, and undergoes constant review. As updates to XML or industry practice develop, the Commission's XML schema and web-fillable XML architecture may also have to be updated to reflect the updates in technology. If that occurs, the supported version of the XML schema would be made available on the Commission's website and the outdated version of the schema would be removed in order to maintain data quality and consistency with the standard, while the web-fillable Form ATS-N would be updated in EDGAR to reflect the same changes in technology as the Commission's XML schema.
The Commission's XML schema and architecture for the web-fillable Form ATS-N would also incorporate certain validations to help ensure consistent formatting and completeness among all Forms ATS-N, in other words, to help ensure data quality. Validations are restrictions placed on the formatting for each data element so that comparable data is presented comparably. However, these validations would not be designed to ensure the underlying accuracy of the data. Any Form ATS-N filed in EDGAR would have to comply with validations that are incorporated within the XML schema, otherwise the Form ATS-N will not be accepted by EDGAR.
We believe that requiring FormATS-N be provided in an XML format would provide the Commission and the public with data about NMS Stock ATSs in a format that facilitates search capabilities, and comparative analyses across NMS Stock ATSs and across filings, including more advanced text analytics for the more narrative responses of Form ATS-N. Absent this requirement, users of the Form ATS-N data that wanted to aggregate the data or search across filings or filers would need to spend additional time transferring the data into a consistent format before it could be analyzed, or incur the cost of a service provider that specializes in this data aggregation and comparison process. Further, unrestricted manual entry of data may lead to errors, thereby potentially reducing data quality and usability.
We understand that there are costs associated with structuring and that these costs may vary depending on the filer and the type of structuring. By offering two options for filers to submit Form ATS-N in EDGAR, filers will be able to select the method best suited to their situation. Overall, the we believe that the XML format of Form ATS-N will have enhanced benefits for the Commission's and the public's use of Form ATS-N while minimizing costs relative to filers having to file Form ATS-N using other structured formats.
End users will be able to download the consistently structured information directly into databases and analyze it using various software. This would enhance their ability to conduct large-scale analysis and immediate cross-filing comparisons of NMS Stock ATSs, as well as comparisons across reporting periods within the same and among different NMS Stock ATSs. Moreover, as an open standard, XML is widely available to the public at no cost. By comparison, viewing information in the current EFFS system requires a license of a commercial proprietary viewer, which currently is not separately available to every member of the public without licensing.
Commenters who supported the standardization of Form ATS-N information also underscored the importance of making the information comparable.
Because Form ATS-N filings will be submitted electronically,
We did not receive any comments about the effective date for the amendments. The rules being adopted today will become effective 60 days after the date of publication in the
With regard to the adopted amendments to Rules 301(b)(10) and 303(a)(1)(v) of Regulation ATS,
We believe that the compliance dates provided in Rules 304 and 301(b)(2)(viii) provide sufficient time for NMS Stock ATSs to prepare and file Form ATS-N disclosures with the Commission. Rule 304(a)(1)(iv)(A) requires a Legacy NMS Stock ATS to file with the Commission an initial Form ATS-N, in accordance with Rule 304, no earlier than January 7, 2019, and no later than February 8, 2019.
Certain provisions of the proposal contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
• Requirements for Alternative Trading Systems That Are Not National Securities Exchanges—Rule 301, Form ATS and Form ATS-R, 17 CFR 242.301 (OMB Control No. 3235-0509);
• Rule 303 (17 CFR 242.303) Record Preservation Requirements for Alternative Trading Systems (OMB Control No. 3235-0505); and
• Rule 304 and Form ATS-N (a new collection of information).
In accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11, we submitted these requirements to the Office of Management and Budget (“OMB”) for review and approval in accordance with the PRA and its implementing regulations.
In the Proposal, we solicited comments on the proposed collection of information burdens and asked whether commenters agree with our estimate of the number of respondents and burdens of the Proposal. We received one comment on our estimates of the collection of information burden included in the Proposal, which is addressed below.
The amendments to Regulation ATS include two new categories of obligations that require a collection of information within the meaning of the PRA. The first category relates to Rule 301(b)(10) and Rule 303 of Regulation ATS
The amendments to Regulation ATS will require an ATS to place in writing the safeguards and procedures required by Rule 301(b)(10) to protect subscribers' confidential trading information and oversight procedures to ensure that the safeguards and procedures are followed. In addition, we are amending Rule 303(a)(1)
Any ATS that meets the definition of an NMS Stock ATS is required to complete an initial Form ATS-N, file it with the Commission via EDGAR, and make public via posting on its website a direct URL hyperlink to the Commission's website that contains the documents enumerated in Rule 304(b)(2).
Form ATS-N requires that the entity submitting the filing would indicate whether the NMS Stock ATS currently operates pursuant to a Form ATS, and the type of Form ATS-N filing—whether the Form ATS-N is an initial Form ATS-N, a Form ATS-N amendment (whether a material amendment, updating amendment, correcting amendment, or order display and fair access amendment), a notice of cessation, and if it is a notice of cessation, the date the NMS Stock ATS will cease to operate, or if it is a withdrawal. If the filing is a Form ATS-N amendment, the NMS Stock ATS is also required to provide a brief summary of the amendment and the EDGAR accession number for the Form ATS-N filing to be amended. If the filing is a withdrawal, the NMS Stock ATS is required to provide the EDGAR accession number for the Form ATS-N filing to be withdrawn.
Part I requires information about the broker-dealer operator.
We are also amending Rule 303(a)(2)(ii) to require that an NMS Stock ATS preserve, for the life of the enterprise and of any successor enterprise, copies of reports filed pursuant to Rule 304.
Furthermore, an ATS that trades both NMS stocks and non-NMS stocks will be required to file both a Form ATS-N with respect to its trading of NMS stocks and a revised Form ATS that removes discussion of those aspects of the ATS related to the trading of NMS stocks. The ATS will also be required to file two Forms ATS-R filings—one to report its trading volume in NMS stocks and another to report its trading volume in non-NMS stocks.
We continue to believe that both the Commission and the SRO of which the ATS's broker-dealer operator is a member will use the written safeguards and written procedures required by the amendments to Rule 301(b)(10) to better understand how each ATS protects subscribers' confidential trading information from unauthorized disclosure and access. We continue to believe that the information contained in the records required to be preserved by Rule 303(a)(1)(v) will be used by examiners and other representatives of the Commission, state securities regulatory authorities, and SROs to evaluate whether ATSs are in compliance with Regulation ATS as well as other applicable rules and regulations. We also believe that the requirement to memorialize in writing the safeguards and procedures to protect subscribers' confidential trading information will help assist ATSs in more effectively complying with their existing legal requirements under Regulation ATS; in particular, the requirements to protect the confidentiality of subscribers' trading information under Rule 301(b)(10) of Regulation ATS.
We believe that market participants will use the information publicly disclosed on Form ATS-N to compare and evaluate NMS Stock ATSs when making their routing decisions.
The “collection of information” requirements under the amendments to Regulation ATS relating to Rule 301(b)(10) and Rule 303(a)(1)(v) would apply to all ATSs, including NMS Stock ATSs. The “collection of information” requirements under the amendments to Regulation ATS relating to Rule 304, Form ATS-N, and the amendments to Rule 303(a)(2)(ii) would apply only to NMS Stock ATSs, and the “collection of information” requirements under the amendments to Rule 301(b)(9) would apply to NMS Stock ATSs that also transact in both NMS stocks and non-NMS stocks. Currently, there are 87 ATSs that have filed Form ATS with us. Of these 87 ATSs, 41 would meet the definition of an NMS Stock ATS.
In addition, there are currently 10 ATSs that trade, or have indicated in Exhibit B to their Form ATS that they expect to trade, both NMS stocks and non-NMS stocks on the ATS.
With respect to Form ATS-N, we recognize there may be entities that might file a Form ATS-N to operate an NMS Stock ATS in the future. From January 2014 through March 2018, an average of 2 new ATSs per year disclose that they trade or expect to trade NMS stocks on their Form ATS initial operation reports, and would therefore fall within the definition of an NMS Stock ATS. Similarly, some ATSs that currently trade NMS stocks may choose to cease operations rather than comply with the amendments requiring them to file Form ATS-N. Other ATSs may choose to cease operations in the normal course of business. From January 2014 through March 2018, an average of 9 ATSs that trade NMS stocks have ceased operations each year.
We believe that most ATSs that currently trade NMS stocks would continue to operate notwithstanding the amendments to Regulation ATS. For the purposes of this analysis of the paperwork burden associated with the amendments to Regulation ATS, we assume that there will be 41 respondents. This number assumes that most ATSs that currently trade NMS
We believe that ATSs—in particular, ATSs whose broker-dealer operators are large, multi-service broker-dealers—generally have and maintain in writing their safeguards and procedures to protect subscribers' confidential trading information, as well as the oversight procedures to ensure such safeguards and procedures are followed.
We recognize that Rules 301(b)(10) and 303(a)(1)(v) of Regulation ATS would impose certain burdens on respondents. For ATSs that currently have and preserve in written format the safeguards and procedures to protect subscribers' confidential trading information and written oversight procedures to ensure such safeguards and procedures are followed, we believe that there will be no increased burden under the amendments to Rules 301(b)(10) and 303(a)(1)(v) of Regulation ATS. We believe that the current practices of those ATSs would already be in compliance with the rules and the amendments should not require these ATSs to take any actions in addition to those currently undertaken.
For ATSs that have not recorded in writing their safeguards and procedures to protect subscribers' confidential trading information and oversight procedures to ensure such safeguards and procedures are followed, there will be an initial, one-time burden to memorialize them in a written document(s). In the Proposal, we estimated that an ATS's initial, one-time burden to put in writing its safeguards and procedures to protect subscribers' confidential trading information and the oversight procedures to ensure such safeguards and procedures are followed would be 8 hours.
We estimate that the average annual, ongoing burden per ATS to update and preserve written safeguards and written procedures to protect subscribers' confidential trading information, as well as to update and preserve the written standards controlling employees of the ATS trading for their own account and the written oversight procedures, would be 4 hours.
Currently, Rule 301(b)(2)(i) of Regulation ATS
Our currently approved estimate for an initial operation report on current Form ATS is 20 hours to gather the necessary information, provide the required disclosures in Exhibits A through I, and submit the Form ATS to the Commission.
We recognize that Rules 301(b)(2)(viii) and 304 of Regulation ATS, including Form ATS-N, would impose certain burdens on respondents.
In the Proposal, we estimated that preparing Parts I and II for a Form ATS-N would add 0.5 hours to the current baseline for an NMS Stock ATS to prepare an initial operation report on current Form ATS.
As explained above, Part II, Items 1 and 2 contain disclosure requests about the broker-dealer operator's and affiliates', respectively, trading activity on the NMS Stock ATS. For Part II, Item 1(a), to the extent that the broker-dealer operator is not permitted to enter or direct orders and trading interest to the NMS Stock ATS, the NMS Stock ATS would only be required to check “no.” In addition, to the extent the broker-dealer operator enters or directs the entry of orders and trading interest into the NMS Stock ATS, but such orders and trading interest is treated the same as trading interest from other subscribers and persons, Part II, Item 1(b) would require that the NMS Stock ATS check “no.”
Part II, Item 1(a) of adopted Form ATS-N incorporates aspects of several proposed disclosures that addressed the activity of the broker-dealer operator's trading activity on the NMS Stock ATS. First, Part II, Item 1(a) of adopted Form ATS-N incorporates requirements of Part III, Items 1 and 2 of proposed Form ATS-N, which would have requested disclosures about the non-ATS trading centers and other NMS Stock ATSs operated by the broker-dealer operator and its affiliates. In the Proposal, we estimated that preparing Part III, Item 1 for proposed Form ATS-N would add 10 hours to the current baseline of Form ATS and Part III, Item 2 would add 4 hours to the current baseline of Form ATS, for a total estimated burden of 14 hours for Part III, Items 1 and 2.
Adopted Part II, Item 1(a) more narrowly tailors those proposed requests by focusing on the actual trading activities of the broker-dealer operator on the NMS Stock ATS and its use of the ATS's services. Primarily, the request under adopted Item 1(a): (i) Does not require an NMS Stock ATS to list all non-ATS trading centers and NMS Stock ATSs operated by the broker-dealer operator, regardless of whether those entities trade on the NMS Stock ATS; and (ii) replaces what some commenters perceived as potentially broad narrative requests to describe the “interaction and coordination” between
Second, the request under Part II, Items 1(a) of adopted Form ATS-N also incorporates aspects of the disclosures proposed under Part III, Item 5(a) of proposed Form ATS-N. We estimated that preparing proposed Part III, Item 5(a) would add 5 hours to the current baseline.
The information sought under Part II, Item 1(b) of adopted Form ATS-N would have been requested under Part III, Item 9 of proposed Form ATS-N. We estimated that completing Part III, Item 9 of proposed Form ATS-N would add 2 hours to the current baseline of Form ATS.
Similarly, Part II, Items 1(c) and 1(d) of adopted Form ATS-N include requests for information that are intended to highlight disclosures about conflicts of interests and potential information leakage in Part III, Items 12 and 16, respectively, of adopted Form ATS-N. Part IV, Item 1(d) of proposed Form ATS-N set forth the proposed disclosure requirements regarding liquidity providers on the NMS Stock ATS. This request for information is now set forth in Part III, Item 12 of adopted Form ATS-N. In Part II, Item 1(c) of adopted Form ATS-N, we have now added the additional disclosure requirements for the NMS Stock ATS to answer a “yes” or “no” question and provide a list of any internal business units that trade on the NMS Stock ATS as liquidity providers in order to highlight information about potential conflicts of interest that might be disclosed in Part III, Item 12 of adopted Form ATS-N. We therefore estimate that, on average, preparing Part II, Item 1(c) for a Form ATS-N would add 1 hour to the current baseline for an initial operation report on current Form ATS. This would result in an aggregate initial burden of 41 hours above the baseline for all NMS Stock ATSs to complete Part II, Item 1(c) of Form ATS-N.
Part III, Items 1(b)(iii) and 2(b)(iii) of proposed Form ATS-N would have required the NMS Stock ATS to explain the circumstances under which subscriber orders or trading interest received by the NMS Stock ATS may be removed from the NMS Stock ATS and sent to non-ATS trading centers or other NMS Stock ATSs operated or controlled by the broker-dealer operator, respectively. These disclosures are now incorporated into Part III, Item 16 of adopted Form ATS-N. However, we believe that information about the routing or removal of orders from the NMS Stock ATS to a trading center operated or controlled by the broker-dealer operator may include information that market participants find necessary to evaluate potential conflicts of interest or information leakage on the NMS Stock ATS, so we have added Part II, Item 1(d) to Part II of adopted Form ATS-N. Part II, Item 1(d) of adopted Form ATS-N requires the NMS Stock ATS to answer a “yes” or “no” question. The narrative associated with this disclosure will be set forth in Part III, Item 16. We therefore estimate that, on average, preparing Part II, Item 1(d) for a Form ATS-N would add 0.5 hour to the current baseline for an initial operation report on current Form ATS. This would result in an aggregate initial
The requests under Part II, Item 2 of adopted Form ATS-N mirror those of Part II, Item 2 of adopted Form ATS-N, except that the former requires disclosures about the trading activity of the broker-dealer operator and the latter require disclosures about the trading activities of affiliates.
Likewise, as with Part II, Item 1(a) of adopted Form ATS-N, the disclosure requests in Part II, Item 2(a) of adopted Form ATS-N are more narrowly tailored than those which were proposed, and the disclosure requests about trading activities of the broker-dealer operator are no longer contained in the same questions as those regarding affiliate trading in adopted Form ATS-N. Most significantly, we believe that the burden for an NMS Stocks ATS to provide information about each of its broker-dealer operator's affiliates that trades on the NMS Stock ATS will be less than it would have been to provide: (i) A comprehensive list of all non-ATS trading centers and NMS Stock ATSs operated by affiliates, as was proposed under Part III, Items 1 and 2, respectively; and (ii) a list of each affiliate that may enter orders or other trading interest on the NMS Stock ATS, as was proposed under Part III, Item 5(a). Under their current disclosure requirements pursuant to Regulation ATS, ATSs must compile a list of subscribers that were participants on the ATS for its quarterly reports on current Form ATS-R.
Additionally, the burden to complete Item 2(a) will likely vary significantly among NMS Stock ATSs because the number of affiliates of each broker-dealer operator—and the number of those affiliates that trade on the NMS Stock ATS—may vary significantly among ATSs. However, even though the wording of the disclosure requests are almost identical, Part II, Item 2(a) of adopted Form ATS-N will likely impose a greater burden than that of Part II, Item 1(a) because we believe it will take an NMS Stock ATS longer to compile the necessary information about affiliated third-party entities than it will to compile that information for internal business units of the broker-dealer operator. Accordingly, we estimate that, on average, preparing adopted Part II, Item 2(a) would add approximately 6.25 hours to the current baseline for an initial operation report on current Form ATS. This will result in an aggregate initial burden of 256.25 hours above the baseline for all NMS Stock ATSs to complete Part II, Item 2(a) of Form ATS-N.
Like Part II, Item 1(b) of adopted Form ATS-N, the disclosure request in Part II, Item 2(b) will usually require the NMS Stock ATS to answer “yes” or “no” and list applicable item numbers in Part III of adopted Form ATS-N. An NMS Stock ATS must provide a narrative under Item 2(b) only if there are differences that are not applicable to Part III. Accordingly, we estimate that Part II, Item 2(b) of adopted Form ATS-N would add .25 hours out of the proposed 2 hours for Part III, Item 9 to the current baseline for an initial operation report on Form ATS because in most instances, the NMS Stock ATS will be required to check the “yes” or “no” box and provide a list of relevant requests in Part III. This would result in an aggregate initial burden of 10.25 hours above the baseline for all NMS Stock ATSs to complete Part II, Item 1(b) of Form ATS-N.
Furthermore, as is the case with Part II, Item 1 of adopted Form ATS-N, Part II, Items 2(c) and 2(d) of adopted Form ATS-N includes requests for information that are intended to highlight potential conflicts of interests and information leakage that will be disclosed in Part III, Items 12 and 16, respectively, of adopted Form ATS-N. Accordingly, similar to Part II, Item 1(c), we estimate that, on average, preparing Part II, Item 2(c) for a Form ATS-N would add 1 hour to the current baseline for an initial operation report on current Form ATS. This would result in an aggregate initial burden of 41 hours above the baseline for all NMS Stock ATSs to complete Part II, Item 1(c) of Form ATS-N.
As explained above, Part II, Item 3 of adopted Form ATS-N contains disclosure requests about order interaction with the broker-dealer operator and its affiliates. To the extent that the NMS Stock ATS does not allow subscribers to opt out of interacting with the broker-dealer operator, the NMS Stock ATS must check “no” to Part II, Item 3(a). Similarly, to the extent that the NMS Stock ATS does not allow subscribers to opt out of interacting with the broker-dealer operator, the NMS Stock ATS must check “no” to Part II, Item 3(b). In addition, to the extent that the terms and conditions of the opt out processes are the same for all subscribers, the NMS Stock ATS must check “no” to Part II, Item 3(c).
The requirements under Part II, Items 3(a) and (b) of adopted Form ATS-N are intended to cover the subject matter originally proposed under Part III, Item 5(d) of proposed Form ATS-N.
In addition, we have incorporated the disclosure request from Part III, Item 9 regarding differentiated and preferential treatment into the disclosure request under Part II, Item 3(c) of adopted Form ATS-N. We estimate that Item 3(c) would add approximately .5 hours out of the proposed 2 hours for Part III, Item 9 to the baseline for an initial operation report on Form ATS. To the extent there are such differences, the NMS Stock ATS would be required to provide a narrative under Part II, Item 3(c) regarding services or functionalities of the NMS Stock ATS in addition to the narratives about manner of operations required under Part III. Accordingly, we estimate that, on average, preparing Part II, Item 3 for adopted Form ATS-N would add 1.5 hours to the baseline for an initial operation report on current Form ATS. This will result in an aggregate initial burden of 61.5 hours above the baseline for all NMS Stock ATSs to complete Part II, Item 3 of adopted Form ATS-N.
As explained above, Part II, Item 4 of adopted Form ATS-N contains disclosure requests about arrangements with other trading centers. In the Proposal, we estimated that the requirements of Part III, Item 4 of proposed Form ATS-N—which set forth the proposed requests regarding arrangements with unaffiliated trading centers—would add 4 hours to the current baseline for an initial operation report on current Form ATS.
As explained above, Part II, Item 5 of adopted Form ATS-N contains disclosure requests about other products or services. To the extent that that the broker-dealer operator or any of its affiliates does not offer subscribers any products or services for the purpose of effecting transactions or for submitting, disseminating, or displaying orders and trading interest in the NMS Stock ATS, the NMS Stock ATS would need to check “no” on Part II, Items 5(a) and 5(b) and Items 5(c) and 5(d), respectively.
Part II, Item 5 of adopted Form ATS-N adopts, with modifications, the disclosure requests in Part III, Item 3 of proposed Form ATS-N, which would have required an NMS Stock ATS to disclose whether the broker-dealer operator, or any of its affiliates, offers subscribers any products or services used in connection with trading on the NMS Stock ATS (
As explained above, Part II, Item 6 of adopted Form ATS-N contains disclosure requests about the activities of service providers. Part II, Item 6(a) is similar to the request contained in Part III, Item 7 of proposed Form ATS-N, and Part II, Items 6(b) and (c) of adopted Form ATS-N are similar to the requests in Part III, Item 8 of proposed Form ATS-N. In the Proposal, we estimated that, on average, preparing Part III, Item 7 of proposed Form ATS-N would add 4 hours to the current baseline for an initial operation report on current Form ATS.
Part III, Item 8 of proposed Form ATS-N would have required an NMS Stock ATS to disclose information about whether any operation, service, or function of the NMS Stock ATS is
Furthermore, as with Part II, Items 1, 2, and 3 of adopted Form ATS-N, we have incorporated aspects of Part III, Item 9 of proposed Form ATS-N regarding differentiated and preferential treatment into Part II, Item 6(d) of adopted Form ATS-N.
As explained above, Part II, Item 7 of adopted Form ATS-N contains disclosure requests about the NMS Stock ATS's protection of confidential subscriber trading information. Part II, Item 7 of adopted Form ATS-N is similar to Part III, Item 10 of proposed Form ATS-N, which would have required certain disclosures related to the NMS Stock ATS's written safeguards and written procedures to protect the confidential trading information of subscribers pursuant to Rule 301(b)(10) of Regulation ATS.
Part III, Item 1 of adopted FormATS-N is based on Part IV, Item 1(c) of proposed Form ATS-N, although certain information from the proposed item is not required to be disclosed in this item. Specifically, the requirement to describe any criteria for distinguishing among types of subscribers, classes of subscribers, or other persons is being removed from the item because such information is covered under Part III, Item 13 of adopted Form ATS-N on “Segmentation; Notice.”
Part IV, Item 1 of proposed Form ATS-N is, in large part, already required under current Form ATS.
Part III, Item 2 of adopted FormATS-N requires similar information to that required under Part IV, Items 1(a) and 1(b) of proposed Form ATS-N.
Part III, Item 3 of adopted Form ATS-N requires similar information to that required under Part IV, Item 1(e) of proposed Form ATS-N, with certain clarifications to reduce potential confusion with the application of Rule 301(b)(5) of Regulation ATS. First, Item 3(a) as adopted asks for a summary description of the conditions for excluding, in whole or in part, a subscriber from the ATS's services rather than the more detailed proposed requirement that the NMS Stock ATS describe the circumstances by which access for a subscriber or other person may be limited or denied. Second, we are no longer requiring that the NMS Stock ATS describe its procedures or standards to determine whether to exclude. Third, we are changing the language in the request to correspond closely with the definition of ATS in Regulation ATS.
Part III, Item 4 of adopted FormATS-N is substantially similar to Part IV, Item 2 of proposed Form ATS-N, except that we are modifying the example provided in this item by replacing references in the Proposal to hours when “pre-opening or after-hours
Part III, Item 5 of adopted FormATS-N is based on Part IV, Item 4(a) of proposed Form ATS-N, although we have made modifications to the proposed item, and also are incorporating Part III, Item 6 proposed Form ATS-N. First, we are separating the requests regarding direct and indirect means of entry for orders and trading interest into the NMS Stock ATS so that information regarding direct means of entry will be disclosed in Part III, Item 5(a) of adopted Form ATS-N and information about other means of entry for orders and trading interest will be disclosed in adopted Part III, Item 5(c) of adopted Form ATS-N. Also, the information required by Part III, Item 5(a) on the direct means of order entry is being revised from the Proposal to be in a “yes” or “no” format. We are also moving and revising Part III, Item 6 of proposed Form ATS-N to adopted Part III, Item 5(c) regarding the means available for entering orders other than entering orders directly.
In the Proposal, we estimated that, on average, preparing Part IV, Item 4, which includes both subparts (a) (related to order entry) and (b) (related to co-location) would add 5 hours to the current baseline for an initial operation report on current Form ATS.
We have made various revisions to the proposed item in adopted Part III, Item 6 of adopted Form ATS-N. Part III, Item 6(a) is limiting the proposed request by allowing for a “summary” of the terms and conditions for co-location and related services. We are also converting the information required by Part IV, Item 4(b) of proposed Form ATS-N into a series of “yes” or “no” questions, with accompanying explanations as applicable, in Part III, Item 6 of adopted Form ATS-N.
In the Proposal, the we estimated that, on average, preparing Part IV, Item 4 of proposed Form ATS-N, which included subparts (a) (connectivity and order entry) and (b) (co-location), would add 5 hours to the current baseline for an initial operation report on current Form ATS.
The disclosure requirements in Part III, Item 7 of adopted Form ATS-N are substantially the same as those set forth in Part IV, Item 3(a) and(b) of proposed Form ATS-N. ATSs that currently trade NMS stocks vary in the depth of their disclosures related to order types. We estimated in the Proposal that, on average, preparing Part IV, Item 3 of proposed Form ATS-N, which also included Items 3(c) and 3(d) that have been moved to other items in the adopted form,
Part III, Item 8 of adopted FormATS-N is based on Part IV, Item 3(c) of proposed Form ATS-N. In adopted Form ATS-N, Part III, Item 8, we separated the requests proposed under Item 3(c) into six sub-parts. However, the requirements have not changed significantly.
Part III, Item 9 of adopted FormATS-N is based on Part IV, Item 3(d) of proposed Form ATS-N. We separated Part IV, Item 3(d) of proposed Form ATS-N into two sub-parts in adopted Part III, Item 9. However, the requirements have not changed substantially. We are adding “price or size minimums” as examples of information that could be contained in the messages and “order management system, smart order router and FIX” to illustrate the types of mechanisms that could transmit messages, such as IOIs and conditional orders. Because the requirements in Part III, Item 9 of adopted Form ATS-N are substantially the same as the corresponding requirements set forth in Part IV, Item 3(d) of proposed Form ATS-N, we estimate that the burden hours in adopted Part III, Item 9 that correspond to the information required in Part IV, Item 3(d) of proposed Form ATS-N are substantially similar. While we did not provide estimates for each individual subpart of Part IV, Item 3 of proposed Form ATS-N, subpart (d) would have accounted for 1 hour (of the 6 burden hours estimated for Part IV, Item 3). Accordingly, we estimate that the burden hours in adopted Part III, Item 9 would add 1 hour to the current baseline for an initial operation report on current Form ATS, resulting in the aggregate initial burden of 41 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 9 of adopted Form ATS-N.
Part III, Item 10 of adopted Form ATS-N corresponds with Part IV, Item 9(a) of proposed Form ATS-N. We separated what was proposed in Part IV, Item 9(a) into five sub-parts in adopted Part III, Item 10. We are adding to Part III, Item 10(a) of adopted Form ATS-N requirements regarding “when” and how such orders and trading interest are “priced [and] prioritized” and “any order types allowed” during the opening and reopening processes.
Part III, Item 11 of adopted Form ATS-N is substantively similar to Part IV, Item 7 of proposed Form ATS-N, but we are making various revisions to the Item. We are limiting the request to require NMS Stock ATSs to provide a summary of the structure of the NMS Stock ATS marketplace instead of describing the means or facilities used by the NMS Stock ATS to bring together the orders of multiple buyers and sellers. In Part III, Item 11(c) of adopted Form ATS-N, we are combining the requests in the Proposal in Part IV, Items 7(b) (“Order Interaction Rules”) and 7(c) (“Other Trading Procedures”). Part IV, Items 7(b) and 7(c) of proposed Form ATS-N were intended to solicit information about the ATS's established non-discretionary methods that dictate the terms of trading among the multiple buyers and sellers entering orders and trading interest. In addition to a trading facility, non-discretionary methods include rules and procedures. We are revising the language in adopted Item 11(c) to recognize this overlap by requiring the NMS Stock ATS to “explain the established, non-discretionary rules and procedures of the NMS Stock ATS, including order interaction rules,” which requires the same information as the proposed subparts. As another component of an NMS Stock ATS's non-discretionary methods, we are moving the trading procedures description required in proposed Item 7(c) into adopted Item 11(c) and including the examples of the trading procedures of an NMS Stock ATS (
Consistent with the estimate in the Proposal, we estimate that, on average, preparing Part III, Item 11 for a Form ATS-N will add 6 hours to the current baseline for an initial operation report on current Form ATS to provide a description of the NMS Stock ATS's trading services. This will result in an aggregate initial burden of 246 hours
The requirements of Part III, Item 12 were proposed as Part IV, Item 1(d) of proposed Form ATS-N. In the Proposal, we estimated that the entire Part IV, Item 1 (which also would have addressed eligibility, terms and conditions of use, types of subscribers, and liquidity providers)
Part III, Item 13 of adopted Form ATS-N corresponds with Part IV, Item 5(a) and (b) of proposed Form ATS-N. The requirements of Part III, Item 13 of adopted Form ATS-N cover the requirements proposed under Part IV, Items 5(a) and 5(b), although we have modified the proposed requirements.
We are also modifying certain components of Part IV, Item 5 of proposed Form ATS-N. First, we are adding the terms “classifications, tiers, or levels” to adopted Part III, Item 13(a) through (e) in addition to “categories” to describe the groupings that an NMS Stock ATS may segment subscriber orders. Second, we are providing two additional examples, order size and duration, of criteria for segmentation of subscribers' orders and trading interest. Third, we are providing additional specificity around what “changing segmented categories” means by requiring NMS Stock ATSs to provide a discussion around overriding a determination of segmented category. Fourth, we are requiring a description of how segmentation affects order interaction on Part III, Item 13 of adopted Form ATS-N. Finally, we are requiring under Part III, Item 13(d) of adopted Form ATS-N that the NMS Stock ATS describe “whether and how such designation can be contested.”
In the Proposal, we estimated that, on average, preparing Part IV, Item 5 for a Form ATS-N would add 7 hours to the current baseline for an initial operation report on current Form ATS to provide a detailed description of how, if at all, the NMS Stock ATS segments order flow, provides any notice to those trading on the NMS Stock ATS regarding segmentation, and allows order preferencing. The proposed requirement regarding order preferencing is broken out into a separate item, Part III, Item 14 of adopted Form ATS-N, which is described below. We also are adding a “yes” or “no” question in adopted Part III, Item 13(b) regarding identifying orders by a customer of a broker-dealer as a customer order. We believe the aforementioned minor modifications to the proposed question will slightly increase the burden for the adopted item. Therefore, we believe that Part III, Item 13 of adopted Form ATS-N will add 6 hours to the current baseline for an initial operation report on current Form ATS. This would result in an aggregate initial burden of 205 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 13 of adopted Form ATS-N.
Part III, Item 14(a) is substantially similar to Part IV, Item 5(c) of proposed Form ATS-N. However, we have added a requirement in Item 14(b), that if counter-party selection functionality is not the same for all subscribers and the broker-dealer operator, that the NMS Stock ATS identify and explain any differences. The burden associated with this change is likely to vary among NMS Stock ATS depending on their complexity and the extent to which they treat all subscribers and the broker-dealer operator the same or differently. We estimated that, on average, preparing all of Part IV, Item 5 (including subparts (a), (b), and (c)) for a Form ATS-N would add 7 hours to the current baseline for an initial operation report on current Form ATS to provide a detailed description of how, if at all, the NMS Stock ATS segments order flow, provides any notice to those trading on the NMS Stock ATS regarding segmentation, and allows counter-party selection.
Part III, Item 15 is modified from a similar requirement of Part IV, Item 6 of proposed Form ATS-N, which asked about order display and the subscribers and persons to which orders and trading interest are displayed or otherwise made known. We are changing the language in this item from “order information or other trading interest” to “subscriber orders and trading interest.” We are also revising the proposed requests to make clear that it only applies to the display of the NMS Stock ATS's subscriber orders and trading interest as opposed to non-ATS orders and trading interest handled or otherwise displayed to the broker-dealer operator. Accordingly, the disclosure of non-ATS orders by affiliates of the NMS Stock ATS and others external to the ATS of non-ATS orders would not have to be disclosed. However, if for example, an affiliate of the NMS Stock ATS is displaying an order that is simultaneously bound for or resting in the NMS Stock ATS, then Item 15 would apply. In addition, we have revised the request so that Part III, Item 15(b) of adopted Form ATS-N makes clear that the request does not
Depending on the variety of trading interest that shares some trading information outside of the NMS Stock ATS and the complexity of such information sharing, the disclosure burden in responding to Part III, Item 15 would likely vary among NMS Stock ATSs. In the Proposal, we estimated that, on average, preparing Part IV, Item 6 of proposed Form ATS-N would add 5 hours to the current baseline for an initial operation report on current Form ATS, depending on such factors as described above. Although we are revising the item text to provide more specificity so NMS Stock ATSs better understand the requirements and scope of the request and provide sufficient information to market participants in Part III, Item 15 of adopted Form ATS-N, we are also simplifying responses to the item by no longer requiring NMS Stock ATSs to identify the subscriber or person to whom order and trading interest is displayed and instead requiring disclosure of the types of market participants that receive the information. Thus, we believe these changes would, in total, provide no additional burden from proposed Form ATS-N. We therefore believe that preparing Part III, Item 15 of adopted Form ATS-N will add 5 hours to the current baseline for an initial Form ATS. This will result in an aggregate initial burden of 205 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 15 of adopted Form ATS-N.
Part III, Item 16(a) relates to disclosures surrounding orders and trading interest in the NMS Stock ATS being routed to a destination outside the ATS. We understand, based on disclosures in Form ATS submissions, that some ATSs that currently trade NMS stocks do not route orders out of the ATS. Consequently, the disclosure burden related to Part III, Item 16 of adopted Form ATS-N will likely vary among NMS Stock ATSs depending on whether they route orders at all. In the Proposal, we estimated that, on average, preparing Part IV, Item 10 for proposed Form ATS-N would add 6 hours to the current baseline for an initial operation report on current Form ATS, depending on such factors as described above. We, however, are substantially simplifying the item as adopted by converting subpart (a) into a “yes” or “no” question that no longer requires a description of the circumstances under which orders are routed, and also removes the requirement to describe the means by which routing is performed and the requirement to describe any differences among subscribers and persons. We therefore estimate that Part III, Item 16 of adopted Form ATS-N will add 2 hours to the current baseline for an initial operation report, depending on the extent to which the ATS routes orders and trading interest. This will result in an aggregate initial burden of 82 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 16 of adopted Form ATS-N.
The requirements of Part III, Item 17(a) are similar to those proposed in Part IV, Item 9(b) of the proposed Form ATS-N.
Subparts (a) and (b) of Part III, Item 18 of adopted Form ATS-N are substantially similar to Part IV, Item 9(c) of proposed Form ATS-N. We estimated that, on average, preparing all of Part IV, Item 9 for a proposed Form ATS-N would add 3 hours to the current baseline for an initial operation report on current Form ATS to describe its opening, reopening, or closing processes, and after-hours trading procedures.
Part III, Item 19 of adopted Form ATS-N is similar to Part IV, Item 12 of proposed Form ATS-N. In the Proposal, we estimated that, on average, preparing Part IV, Item 12 for a Form ATS-N would add 5 hours to the current baseline for an initial operation report on current Form ATS to describe the NMS Stock ATS's fee structure and any differences among subscribers relating to fees, rebates, or other charges. As discussed in the Proposal,
However, we are requiring additional specificity related to the description of fees of the NMS Stock ATS that are based on or bundled with the use of non-ATS services or products offered by the broker-dealer operator or its affiliates. These were not previously explicitly specified by Part IV, Item 12 of proposed Form ATS-N, and the adopted item will likely require additional burden hours for NMS Stock ATSs that are operated by multi-service broker-dealers that bundle their ATS fees with other non-ATS services or products. In contrast, we are narrowing the request for NMS Stock ATSs to describe any differences in fees or rebates charged to different “subscribers,” and instead asking for NMS Stock ATSs to disclose any differentiation between fees and/or rebates charged among “types” of subscribers, which should reduce the burden of responding as differences among individual subscribers need not be explained. Accordingly, we estimate that, on average, preparing Part III, Item 19 of Form ATS-N would add 6 hours to the current baseline for an initial operation report on current Form ATS. This will result in an aggregate initial burden of 246 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 19 of Form ATS-N.
Part III, Item 20 of adopted Form ATS-N is substantially similar to Part IV, Item 8 of proposed Form ATS-N with certain modifications. We are renaming the item “Suspension of Trading,” converting the prompt in Part IV, Item 8(a) of proposed Form ATS-N to identify and explain any differences among subscribers and persons into a “yes” or “no” question in Part III, Item 20(b) of adopted Form ATS-N, revising the language to refer to procedures for stopping trading, and clarifying that suspensions of trading in an NMS stock are responsive. In the Proposal, we estimated that, on average, preparing Part IV, Item 8 for a Form ATS-N would add 2.5 hours to the current baseline for an initial operation report on current Form ATS to provide a detailed description of the NMS Stock ATS's procedures for system disruptions, malfunctions, or other suspensions.
We believe that NMS Stock ATSs should be able to provide the disclosures in Part III, Item 20 of adopted Form ATS-N as they should already be aware of how the ATS operates, handles system disruptions, malfunctions or other suspensions based on the information required in Exhibits G and F of current Form ATS. We recognize, however, that Part III, Item 20 is significantly more specific and detailed in its disclosure requirements than current Form ATS.
Accordingly, we estimate that respondents would incur an additional burden above the current baseline when preparing the disclosures required under Part III, Item 20 of Form ATS-N, consistent with the estimated burden for proposed Item IV, Part 8. We estimate that, on average, preparing Part III, Item 20 for a Form ATS-N would add 2.5 hours to the current baseline for an initial operation report on current Form ATS to provide a detailed description of the NMS Stock ATS's procedures for suspending or stopping trading on the NMS Stock ATS. This would result in an aggregate initial burden of 102.5 hours above the current baseline for all NMS Stock ATSs to complete Part III, Item 20 of proposed Form ATS-N.
Part III, Item 21 is substantially the same as Part IV, Item 13(a) of proposed Form ATS-N with certain modifications. We are limiting the description of any arrangements for reporting transactions on the NMS Stock ATS to only “material arrangements” in the adopted item, and converting the prompt in the proposed Part IV, Item 13(a) to describe any differences among subscribers and persons into a “yes” or “no” question in Part III, Item 21(b) of adopted Form ATS-N.
Part III, Item 22 is substantially the same as Part IV, Item 13(b) of proposed Form ATS-N with certain modifications. We are limiting the description of any arrangements to facilitate the clearance and settlement of transactions on the NMS Stock ATS to only “material arrangements” in the adopted item, and converting the prompt in Part IV, Item 13(b) of proposed Form ATS-N to describe any differences among subscribers and persons into a “yes” or “no” question in Part III, Item 22(b) of adopted Form ATS-N. In addition, we are removing the phrase “undertaken by the NMS Stock ATS” from the proposed requirement to describe any procedures or arrangements by the NMS Stock ATS to facilitate clearance and settlement on the ATS.
In the Proposal, we estimated that, on average, preparing Part IV, Item 13 for a Form ATS-N would add 0.5 hours to the current baseline for an initial operation report on current Form ATS.
Part III, Item 23 of adopted Form ATS-N is substantially the same as Part IV, Item 11 of proposed Form ATS-N with certain modifications. We are revising the request to make clear that an NMS Stock ATS would not be
We believe that the disclosures under Part III, Item 23 will not impose any significant additional burden on NMS Stock ATSs, which should already be aware of the market data that they use and the manner in which they use it. The information requested in Part III, Item 23 of adopted Form ATS-N is similar to that required by Part IV, Item 11 of proposed Form ATS-N. In the Proposal, we estimated that, on average, preparing Part IV, Item 11 for a Form ATS-N would add 4 hours to the current baseline for an initial operation report on current Form ATS to describe the sources of market data and the manner in which the NMS Stock ATS uses market data.
Part III, Items 24 and 25 of adopted Form ATS-N correspond with of Part IV, Item 14 and 15 of proposed Form ATS-N. Current Form ATS does not require an ATS to disclose the information that would be required under Part III, Items 24 and 25 of Form ATS-N. However, based on the experience of the Commission and its staff, we continue to believe that no ATSs currently executed 5% or more of the average daily volume in an NMS Stock as reported by an effective transaction reporting plan for four of the preceding six calendar months, and we believe that most—if not all—ATSs that currently trade NMS stocks already have procedures in place to prevent that threshold from being crossed on the ATS's system. Historically, ATSs have crossed these thresholds very rarely, with at most three ATSs that trade NMS stocks crossing either of the thresholds in any given year.
If, however, an NMS Stock ATS were to cross these 5% thresholds, a disclosure burden related to amending a Form ATS-N to complete Part III, Items 24 and 25 of Form ATS-N may result. Because Items 24 and 25 of Part III are tied to existing obligations that arise pursuant to Rule 301(b)(3) and Rule 301(b)(5) of Regulation ATS, respectively, we believe that NMS Stock ATSs should already be generally aware of the procedures they would follow pursuant to those rules, which should reduce the burden associated with the disclosures that would be required under Items 24 and 25. An NMS Stock ATS would only have to respond to Part III, Items 24 or 25 of a Form ATS-N if the NMS Stock ATS previously operated as an ATS, triggered the applicable 5% thresholds, and was subject to Rules 301(b)(3) and 301(b)(5). Further, NMS Stock ATSs would be less likely to have to complete Item 24 as compared to Item 25 because Item 24 requires as an additional precondition that the NMS Stock ATS displays orders in an NMS stock to more than one person in the system (other than employees of the NMS Stock ATS). For new NMS Stock ATSs (
Triggering the 5% threshold, a precondition necessary to require completion of Part III, Items 24 and 25 of Form ATS-N, currently occurs, and we estimate would continue to occur, very infrequently. Based on the review of Form ATS and Form ATS-R disclosures by the Commission and its staff, we estimate that 1 NMS Stock ATS would have to complete Item 24, and 2 NMS Stock ATSs would have to complete Item 25 in any given year. Accordingly, we estimate that the disclosures that would be required under Part III, Items 24 and 25 of adopted Form ATS-N would result in an aggregate initial burden of 15 hours above the current baseline.
Part III, Item 26 of adopted Form ATS-N corresponds with of Part IV, Item 16 of proposed Form ATS-N. An NMS Stock ATS will not be required to develop or publish any new statistics for purposes of making the required disclosures under Item 26. It is only be required to make the disclosures for statistics it already otherwise publishes or provides in the course of its operations. Thus, NMS Stock ATSs that do not publish or otherwise provide aggregate platform-wide market quality statistics, other than those currently required under Rule 605 of Regulation NMS, would not incur any additional burden due to the adopted disclosure request under Item 26. For NMS Stock ATSs that do publish or provide such statistics, Item 26 imposes an additional burden above the baseline because current Form ATS does not require the disclosure of market quality statistics. In the Proposal, we estimated that preparing Part IV, Item 16 of proposed Form ATS-N would add 7 hours to the current baseline for an initial operation report on current Form ATS.
Based on the above analysis, we estimate that an initial Form ATS-N will, on average, require approximately 107.4 burden hours above the baseline for an initial operation report on current Form ATS. This results in an estimated 127.4 hours in total, including the current baseline.
As previously noted, we estimate that ATSs that trade NMS stocks submit 2 amendments on Form ATS, on average, each year.
We currently estimate that the hourly burden related to an amendment to Form ATS is 6 hours.
Rule 304(a)(2) of Regulation ATS will contain the same three general categories of required amendments for Form ATS-N as Rule 301(b)(2) of Regulation ATS currently requires for current Form ATS;
With respect to Form ATS-N amendments, one commenter expresses concern that due to the breadth of Form ATS-N disclosures, the estimated amount of time and resources required to keep Form ATS-N “evergreen” is “daunting,” and asserts that the Commission did not fully consider in the Proposal the amount of time and resources that would be required to keep Form ATS-N current.
Therefore, we continue to believe that the requirements for Form ATS-N amendments will add 3 hours above the current baseline of 6 hours for amendments to Form ATS, as set forth in the Proposal. We estimate that the 41 respondents will file 3 Form ATS-N amendments each year, for a total of 123
Under the Proposal, a Legacy NMS Stock ATS would have continued to operate pursuant to its existing Form ATS initial operation report pending our review of the Legacy NMS Stock ATS's filed Form ATS-N and would have been required to continue filing amendments on Form ATS to provide notice of changes to the operations of its system.
From January 2014 through March 2018, an average of 9 ATSs that trade NMS stocks ceased operations each year.
ATSs that trade both NMS stocks and non-NMS stocks would incur: (1) The above baseline burdens related to filing a Form ATS-N and Form ATS-N amendments;
We estimate that the total burden for completing and filing two Forms ATS-R would be 4.5 hours, which is 0.5 hours
The Proposal contemplated the use of an online filing system, the EFFS, but the adopted amendments to Regulation ATS will require NMS Stock ATSs to submit certain Form ATS-N filings through the Commission's EDGAR system. Based on the widespread use and availability of the internet, we believe that filing Form ATS-N in an electronic format will be a less burdensome and more efficient filing process for NMS Stock ATSs and the Commission, as it is likely to be less expensive and cumbersome than mailing and filing paper forms to the Commission.
For a Form ATS-N filer to gain access to make filings on the EDGAR system, the filer must submit a Form ID as required by Regulation S-T Rule 11 (B) and submit the Form ID following the processes detailed in Volume I of the EDGAR Filer Manual. Once a Form ID has been successfully completed and processed, EDGAR will establish a Central Index Key (“CIK”) number which enables each authorized user to create EDGAR access codes, which will enable the NMS Stock ATS to use EDGAR. We estimate that the burden associated with receiving access to EDGAR by submitting a Form ID is 0.15 burden hours per response. All registered broker-dealers have been assigned a CIK number and do not need to submit a Form ID to access EDGAR.
Rule 304(b)(3) will require each NMS Stock ATS to make public via posting on the NMS Stock ATS's website, a direct URL hyperlink to the Commission's website that contains the documents enumerated in Rule 304(b)(2). We estimate that each NMS Stock ATS will incur an initial, one-time burden to program and configure its website to post the required direct URL hyperlink pursuant to Rule 304(b)(3). We estimate that this initial, one-time burden would be approximately 2 hours, in part because many broker-dealer operators currently maintain a website for their NMS Stock ATSs.
Because NMS Stock ATSs that solely trade NMS stocks will file Form ATS-N in lieu of Form ATS, we believe that the amendment to Rule 303(a)(2)(ii) will not result in any burden for those ATSs that are not already accounted for under the current baseline burden estimate for Rule 303.
All collections of information pursuant to the amended rules and Form ATS-N are mandatory for entities that meet the definition of NMS Stock ATS.
With respect to the amendments to Rules 301(b)(2)(viii) and 304 of Regulation ATS, including Form ATS-N, the Commission will make publicly available on its website all effective Forms ATS-N, all properly filed Form ATS-N amendments to effective Forms ATS-N, and notices of cessation on Form ATS-N. The Commission will not make publicly available on its website initial Forms ATS-N that the Commission has declared ineffective, but these forms will be available for examination and inspection by the Commission and its staff, state securities authorities, and self-regulatory organizations. Form ATS-N amendments also require each NMS Stock ATS that has a website to post on the NMS Stock ATS's website a direct URL hyperlink to the Commission's website that contains the documents enumerated in Rule 304(b)(2). The collection of information required by the amendments to Rules 301(b)(10), 303(a)(1)(v), 301(b)(9), and 303(a)(2)(ii) will not be made public, but would be used for regulatory purposes by the Commission and the SRO(s) of which the ATS's broker-dealer operator is a member. In Part II, Item 7 of Form ATS-N, however, NMS Stock ATSs must describe the written safeguards and written procedures to ensure confidential treatment of trading information that will be required under Rule 301(b)(10) as amended. To the extent that the Commission receives confidential information pursuant to this collection of information, such information will be kept confidential, subject to the provisions of applicable law.
All reports required to be made under Rules 301(b)(2)(viii), 301(b)(9), and 304 of Regulation ATS, including Form ATS-N, will be required to be preserved during the life of the enterprise and any successor enterprise, pursuant to the amendment to Rule 303(a)(2) of Regulation ATS. In addition, ATSs will be required to preserve a copy of their written safeguards and written procedures to protect subscribers' confidential trading information under Rule 301(b)(10) of Regulation ATS for not less than 3 years, the first 2 years in an easily accessible place, pursuant to Rule 303(a)(1)(v) of Regulation ATS.
We are concerned that the current regulatory requirements relating to operational transparency for NMS Stock ATSs may no longer fully meet the goals of furthering the public interest and protecting investors.
We are adopting amendments to Regulation ATS to require NMS Stock ATSs to publicly file Form ATS-N, which would require NMS Stock ATSs to provide detailed disclosures about their trading operations and the ATS-related activities of their broker-dealer operators and their affiliates. In addition, we are adopting new Rule 304 as part of Regulation ATS, which provides a process for the Commission to review Form ATS-N filings and declare an NMS Stock ATS's initial Form ATS-N, after notice and opportunity for hearing, ineffective.
The adopted amendments and Form ATS-N seek to make information regarding the operations of NMS Stock ATSs available to market participants, which will increase the operational transparency for NMS Stock ATSs, bringing it more in line with the operational transparency for national securities exchanges. The amendments also seek to improve the quality of information regarding different NMS Stock ATSs' operations and the ATS-related activities of their broker-dealer operators and their affiliates. As discussed in more detail below, we believe that this would help market participants make better-informed decisions about where to route their orders in order to achieve their trading or investment objectives, thereby improving the efficiency of capital allocation and enhancing execution quality. Additionally, we believe that requiring NMS Stock ATSs to memorialize their safeguards and written procedures in writing will improve Commission oversight by helping it better understand, monitor, and evaluate how each ATS protects subscribers' confidential trading information from unauthorized disclosure and access, which in turn could increase investor protection. On the other hand, creation of responses to aid disclosure of Form ATS-N and the possibility that we may declare the Form ATS-N ineffective would entail costs to NMS Stock ATSs, which could result in some of them ceasing to operate as ATSs. If some NMS Stock ATSs cease operating as ATSs, it could impact the competitive dynamics between NMS Stock ATSs and national securities exchanges, as well as the competitive dynamics among NMS Stock ATSs and between NMS Stock ATSs and broker-dealers who trade NMS stocks but do not operate an ATS.
We are sensitive to the economic consequences and effects, including the costs and benefits, of our rules. The following economic analysis identifies and considers the costs and benefits—including the effects on efficiency, competition, and capital formation—that would result from new Rule 304, Form ATS-N and the amendments to Rule 3a1-1(a) and Regulation ATS. These costs and benefits are discussed below and have informed the policy choices described throughout this release.
The numerous parties that would be affected by new Rule 304, Form ATS-N, and the amendments include: Existing NMS Stock ATSs; potential new NMS Stock ATSs; current and potential subscribers of NMS Stock ATSs; broker-dealers that are affiliated with NMS Stock ATSs and their customers; non-ATS affiliated broker-dealers and their customers; broker-dealers that do not operate NMS Stock ATSs but send order flow to NMS Stock ATSs; institutional investors that periodically transact large trades on NMS Stock ATSs; other persons that seek to transact in NMS stocks on ATSs; and national securities exchanges that compete for order flow with NMS Stock ATSs and other OTC trading systems.
We recognize that the economic effects of Rule 304, Form ATS-N, and the amendments, including costs and benefits and effects on efficiency, competition and capital formation, should be compared to a baseline that accounts for the current market and regulatory framework for trading NMS stocks. The baseline includes: Statistics on the number of NMS Stock ATSs; current reporting requirements for NMS Stock ATSs; the lack of public disclosure of NMS Stock ATSs' operations, as well as disparate levels of information available to market participants about NMS Stock ATSs' operations and the ATS-related activities of their broker-dealer operators and their affiliates; and the competitive environment between national securities exchanges and NMS Stock ATSs, among NMS Stock ATSs, and between broker-dealers that operate NMS Stock ATSs and broker-dealers that do not operate NMS Stock ATSs.
As of March 31, 2018 there are 41 ATSs that have noticed on their Form ATS that they expect to trade NMS stocks.
Even though ATSs directly compete for order flow in NMS stocks with national securities exchanges, ATSs are exempt from the definition of “exchange” and therefore are not required to register as national securities exchanges with the Commission.
As described in detail in the Proposal,
Subscribers to an NMS Stock ATS might have varying access to the different services of the NMS Stock
Even if having greater access to the services of an NMS Stock ATS yields additional information about the operations of the NMS Stock ATS to certain subscribers, subscribers that do not have full access to services of the NMS Stock ATS, and the resulting additional information, might still want to trade on NMS Stock ATSs in spite of their relative informational disadvantage. Had these subscribers possessed more detailed information about the operations of the NMS Stock ATS, they might have been able to make more informed—and therefore potentially different—decisions about where to route their orders for execution.
Under current Rule 301(b)(10) of Regulation ATS,
As discussed in the Proposal,
The current market for trading NMS stocks is served by national securities exchanges, ATSs, and liquidity providers (including broker-dealers who internalize), who compete to supply investors with execution services at efficient prices. These trading venues, which compete to match orders, provide a framework for price negotiation and disseminate trading information. The sections below discuss the current state of competition between NMS Stock ATSs and national securities exchanges; competition among NMS Stock ATSs; and competition between broker-dealers that operate NMS Stock ATSs and broker-dealers that do not operate NMS Stock ATSs.
In the market for NMS stock execution services, NMS Stock ATSs not only compete with other NMS Stock ATSs, they also compete with national securities exchanges. As discussed in the Proposal,
As discussed above and explained in more detail in the Proposal,
In addition to the burdens discussed above,
As discussed in more detail in the Proposal, since the adoption of Regulation NMS in 2005, the market for NMS stock execution services has become more fragmented and the number of national securities exchanges and NMS Stock ATSs has increased.
Although there are 12 national securities exchanges that trade NMS stocks, they are currently controlled by 5 exchange groups, namely, CBOE Global Markets, Inc. (which controls BZX, BYX, EDGA, and EDGX), CHX Holdings, Inc. (which controls CHX), Intercontinental Exchange, Inc. (which controls NYSE American, NYSE, and NYSE Arca), IEX Group Inc. (which controls IEX), and NASDAQ, Inc. (which controls Nasdaq, BX, and PHLX).
Several commenters state that since the inception of Regulation ATS, ATSs have operated at a competitive advantage relative to national securities exchanges, because they operate with lower transparency and greater opacity relative to national securities exchanges.
NMS Stock ATSs also compete with each other in a niche in the market for NMS stock execution services. The rise in the number of NMS Stock ATSs has not only affected competition between national securities exchanges and ATSs for order flow of NMS stocks, it has also impacted competition among NMS Stock ATSs.
Table 1, which is based on aggregated trade data reported by ATSs to the FINRA equity trade reporting facilities for 13 weeks of trading from January 1, 2018, to March 30, 2018, depicts the market share of total dollar volume for NMS stocks, and the total share volume for NMS stocks for individual ATSs.
This table shows the 33 ATSs that effected transactions in NMS stocks from January 1, 2018—March 30, 2018, ranked in descending order by dollar volume transacted. ATS data is reported weekly, and these dates approximately correspond to the first quarter of 2018. Dollar volume transacted on an ATS is calculated by multiplying the share volume for a given NMS stock on the ATS in a given week by the average trade price for that week. Dollar volume for each NMS stock is then aggregated across all NMS stocks that traded on the given ATS in that week. Also reported in this table is the number of trades, share volume, each NMS Stock ATS's market share of all NMS Stock ATS dollar volume and NMS Stock ATS share volume in that quarter.
Table 2, which is based on aggregated trade data reported by ATSs to the FINRA equity trade reporting facilities
While these NMS Stock ATSs on average execute large size trades, the combined market share of these NMS Stock ATSs is only 12.6% when measured in dollar volume, and 6.0% when measured in share volume. The vast majority of NMS Stock ATSs have average trade sizes between 100 and 460 shares. The average trade size across all 33 NMS Stock ATSs is 204 shares, while the two NMS Stock ATSs with the highest market shares (measured either in dollar volume or share volume) have average trade sizes of 155 and 163 shares, respectively. These trade sizes are not significantly different from the average trade size of 146 shares on national securities exchanges,
Table 2 in the Proposal reports that between March 30, 2015, and June 26, 2015, the average trade size on NMS Stock ATSs was 214 shares and the average trade size on national securities exchanges was 181 shares. Calculations for both of the average trade size metrics reported in the Proposal include odd lots trades. However, calculations for the average trade size on national securities exchanges reported in the Proposal also include TAQ trade volume reported from bulk trades, opening and closing trades, and intraday crosses.
This table shows 33 ATSs that effected transactions in NMS stocks from January 1, 2018-March 30, 2018, ranked in descending order by average trade size. ATS data is reported weekly, and these dates correspond approximately to the fourth quarter of 2017. Also reported in this table is the raw number of trades, share volume, dollar volume, and each NMS Stock ATS's market share of all NMS Stock ATS dollar volume and NMS Stock ATS share volume. Dollar volume transacted on an ATS is calculated by multiplying the share volume for a given NMS stock on the ATS in a given week by the average trade price for that week. Dollar volume for each NMS stock is then
One commenter mentions that because the difference in average trade size between national securities exchanges and NMS Stock ATSs is small, this is evidence that “these venues are no longer beneficial for executing block size trades between large traders.”
As discussed in more detail in the Proposal,
As explained in more detail in the Proposal, competition for NMS stock order flow also exists between the broker-dealers that operate NMS Stock ATSs and broker-dealers that do not operate NMS Stock ATSs but otherwise effect transactions in NMS stocks.
As discussed above, the current market for NMS stock execution services consists of competition for order flow among national securities exchanges, NMS Stock ATSs, and broker-dealers who operate or control non-ATS trading centers.
As described in detail in the Proposal,
Another element that may affect trading costs is order internalization by broker-dealers. As described detail in the Proposal,
The current market for NMS stock execution services—which includes NMS Stock ATSs—provides value to market participants. If all NMS Stock ATSs were to cease operating as ATSs, market participants might incur costs associated with not being able to find an adequate trading venue that offers benefits similar to those that NMS Stock ATSs provide. To the extent that market participants value these ATS-specific features, the decision of certain NMS
While the existence of NMS Stock ATSs has reduced the trading costs on average for market participants, the lack of transparency regarding ATS operations and the ATS-related activities of the ATS broker-dealer operator and its affiliates has contributed to higher search costs for market participants to find a trading venue that serves their investing or trading objectives. A by-product of these higher search costs is uncertainty pertaining to how their orders will be handled, particularly for subscribers to NMS Stock ATSs that have not made their Form ATS public.
While the increased fragmentation of trading volume associated with the current market for NMS stock execution services has been a factor in lowering trading costs for market participants, the academic literature has found that it has had a mixed impact on price discovery.
As described in more detail in the Proposal,
Other academic studies suggest that the presence of NMS Stock ATSs in the current trading environment can harm price discovery.
Currently, the coexistence of national securities exchanges and NMS Stock ATSs seems to have beneficial effects on market efficiency. One academic study suggests that while not all trades that execute on NMS Stock ATSs are large block trades, those that are have been beneficial to market efficiency.
Several commenters assert that the lack of transparency of NMS Stock ATSs has resulted in a decrease in market efficiency because more order flow executed on NMS Stock ATSs increases the difficulty investors face when identifying which venues offer them the best execution quality.
We have considered the economic effects of new Rule 304, Form ATS-N and the amendments to Rule 3a1-1(a) and Regulation ATS. This section provides an overview of the economic effects of new Rule 304, Form ATS-N, and the amendments to Rule 3a1-1(a) and Regulation ATS, including the costs, benefits, and the effects on efficiency, competition, and capital formation. This section also discusses additional economic effects, including benefits and costs related to specific requirements of new Rule 304, Form ATS-N and the amendments to Rule 3a1-1(a) and Regulation ATS.
We believe that the amendments will improve Commission oversight and thereby improve investor protection and generate greater transparency about the operations of NMS Stock ATSs and the ATS-related activities of their broker-dealer operators and their affiliates.
We have attempted, where possible, to quantify the benefits and costs and impacts on efficiency, competition, and capital information that may result from new Rule 304, Form ATS-N, and the amendments to Rule 3a1-1(a) and Regulation ATS. However, as we discussed in the Proposal and as explained more fully below,
As we further noted in the Proposal, it is similarly difficult to determine whether NMS Stock ATSs will continue or cease operating as ATSs in light of the new rule and amendments,
Commenters did not provide any additional information or analysis that would allow us to estimate the impacts on order flow or the continued operation of NMS Stock ATSs under the new rule and amendments. In light of the complexities of the market and the lack of currently available information, we are unable to quantify many of the economic effects of new Rule 304, Form ATS-N, and the amendments to Rule 3a1-1(a) and Regulation ATS. Therefore, much of the discussion below is qualitative in nature, although we try to describe, where possible, the direction of these effects.
As discussed above, we are amending Rule 3a1-1(a) and Regulation ATS to require ATSs that transact in NMS stocks to comply with the requirements of Rule 304 to operate pursuant to the exemption from the definition of “exchange.”
Rule 304 will also provide a process by which the Commission will review initial Forms ATS-N and Form ATS-N amendments and declare them ineffective if it finds that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors. We are also adopting a process by which the Commission could suspend, limit, or revoke an NMS Stock ATS's exemption from the definition of an “exchange” under Rule 3a1-1(a)(2).
As described in detail in the Proposal,
We are also adopting a requirement that Form ATS-N and Form ATS-N amendments be filed electronically in a XML text-searchable format. We believe that requiring Form ATS-N and Form ATS-N amendments to be filed in a XML text-searchable format, coupled with the enhanced disclosure requirements, will facilitate a more effective and thorough review and analysis of NMS Stock ATSs by regulators, which should yield greater insights into the operations of NMS Stock ATSs and the ATS-related activities of their broker-dealer operators and their affiliates. Such benefits could increase investor protection by improving the effectiveness and efficiency of the examination process.
We believe that the process of reviewing an initial Form ATS-N or Form ATS-N amendments will allow the Commission to evaluate, among other things, the completeness and comprehensibility of the NMS Stock ATSs' disclosures and, if necessary, declare the Form ATS-N ineffective.
We received several comment letters regarding whether the proposed amendments would adequately protect investors. One commenter was optimistic, stating the amendments are aimed at “bolstering transparency in capital markets, which should enable and enhance investor protections.”
As described in detail in the Proposal,
We also understand that both new and existing NMS Stock ATSs will incur implementation costs in order to comply with the amendments to Regulation ATS. NMS Stock ATSs will need to develop internal processes to ensure correct and complete reporting on Form ATS-N, which can be viewed as a fixed setup cost, which NMS Stock ATSs may have to incur, regardless of the amount of trading activity that takes place on them. As a result, these implementation costs will fall more heavily on lower-dollar volume NMS Stock ATSs (as opposed to ATSs transacting greater dollar volume), because these ATSs have a smaller revenue base to accommodate the largely fixed implementation costs. However, smaller NMS Stock ATSs that are not operated by multi-service broker-dealer operators and do not engage in other brokerage or dealing activities in addition to their NMS Stock ATSs will likely incur lower implementation costs because certain sections of Form ATS-N (such as
In addition to affecting NMS Stock ATSs, the implementation costs could also indirectly affect market participants by potentially causing some NMS Stock ATSs to alter or reduce the services they offer to certain subscribers. For example, the adopted amendments might cause some NMS Stock ATSs to reduce or stop offering customized reports to certain subscribers in order to redirect resources to support the standardized reports.
Relative to the baseline, the amendments to Regulation ATS will also impose implementation costs for all NMS Stock ATSs, including Legacy NMS Stock ATSs, in that they will require NMS Stock ATSs to adhere to heightened disclosure and reporting requirements regarding their operations. Legacy NMS Stock ATSs should already comply with the current requirements of Regulation ATS. Therefore, the compliance costs of the amendments should be incremental relative to the costs associated with the existing requirements. Specifically, we believe that the incremental costs will consist largely of providing new disclosures and updating records and retention policies necessary to comply with the amendments. Based on the analysis for purposes of the PRA,
In addition to the implementation costs mentioned above, there are also expected ongoing costs for NMS Stock ATSs to comply with the amendments to Rule 3a1-1(a) and Regulation ATS. For instance, NMS Stock ATSs will incur ongoing costs associated with amending their Form ATS-N prior to material changes in their operations, or to correct any material information that has become inaccurate. Regardless of the reason for filing a Form ATS-N amendment, we estimate for the purposes of the PRA that it will take an NMS Stock ATS approximately 28.2 hours annually
Some existing NMS Stock ATSs that also trade non-NMS stocks might incur additional costs due to the amendments. As discussed above,
The amendments to Regulation ATS will require Form ATS-N be filed electronically in a structured format
In order to electronically file a Form ATS-N, a broker-dealer operator of an NMS Stock ATS will need to access the EDGAR system. As discussed above,
Rule 304(b)(3) will require each NMS Stock ATS to make public via posting on the NMS Stock ATS's website, a direct URL hyperlink to the Commission's website that contains the documents enumerated in Rule 304(b)(2). For the purposes of the PRA, we estimate that each NMS Stock ATS will incur an initial, one-time burden of approximately 2 hours to program and configure its website in order to post the required direct URL hyperlink pursuant to Rule 304(b)(3),
We believe that the amendments requiring public disclosure of Form ATS-N will improve the information available to market participants and make that information consistent, which would assist market participants in evaluating and choosing the NMS Stock ATSs to which they may route orders or become a subscriber due to the enhanced disclosure requirements. Requiring such public disclosure will increase the operational transparency requirements of NMS Stock ATSs to bring those requirements more in line with the operational transparency requirements of national securities exchanges.
We believe that the public disclosure of Form ATS-N will generate greater transparency about the operations of NMS Stock ATSs and the ATS-related activities of their broker-dealer operators and their affiliates. This will aid market participants by reducing search costs when evaluating potential NMS stock trading venues to decide which venue best suits their trading purposes. This section discusses specific economic benefits of the public disclosure of Form ATS-N including: The economic benefits of public disclosure of standardized information about the operations of NMS Stock ATSs; the economic benefits of public disclosure of the ATS-related activities of the broker-dealer operator and its affiliates; the economic benefits of public disclosure of aggregate platform-wide order flow and execution statistics regarding the NMS Stock ATS; and the economic benefits of filing Form ATS-N in a structured format.
We believe that requiring detailed, public disclosures about the operations of NMS Stock ATSs will, among other things, better standardize the type of information market participants receive about those operations. As a result, search costs for market participants will be lower relative to the baseline, as homogenous disclosure requirements for all NMS Stock ATSs as part of the amendments to Regulation ATS should facilitate market participants' comparison of NMS Stock ATSs when deciding which venue most suits their trading purposes. Accordingly, as described in detail in the Proposal,
One commenter states that “[f]ailing to extend enhanced transparency requirements to Exchanges for activities commensurate with those of ATSs would result in an incomplete picture of market quality, making it difficult for investors to conduct meaningful comparisons to inform their decisions and protect their own interests.”
The adopted amendments modify the process for publicly disclosing a material amendment to a Form ATS-N from the process originally detailed in the Proposal.
Most NMS Stock ATSs are operated by broker-dealers that also engage in other brokerage and dealing activities.
The adopted amendments modify the requests for information on Form ATS-N regarding the activities of the NMS Stock ATS broker-dealer operator and its affiliates from those in Proposed Form ATS-N.
This modification means that, relative to the disclosures on proposed Form ATS-N, market participants will receive less information concerning the non-ATS related operations of the NMS Stock ATS broker-dealer operator and its affiliates. However, we believe that the disclosures in adopted Form ATS-N concerning the ATS-related activities of the broker-dealer operator or its affiliates will still allow market participants to better evaluate any potential conflicts of interest that may arise on the NMS Stock ATS. Therefore, we do not believe that the benefits from the public disclosure of the ATS-related
Part III, Item 26 of adopted Form ATS-N requests that an NMS Stock ATS explain and provide the most recent disclosure of aggregate platform-wide order flow and execution statistics regarding the NMS Stock ATS that are not otherwise required disclosures under Exchange Act Rule 605 of Regulation NMS and that the NMS Stock ATS provided to one or more subscribers by the NMS Stock ATS at the end of calendar quarter. As described in detail in the Proposal, this disclosure request could benefit market participants.
NMS Stock ATSs that currently provide these aggregate platform-wide order flow and execution statistics to one or more subscribers could continue to provide their subscribers with these market quality statistics, in which case, the NMS Stock ATS will publicly disclose these statistics and how they are calculated in Form ATS-N, and all market participants, not just subscribers, would have access to the information. We believe this would reduce the discrepancy in information that subscribers receive and provide the opportunity for more market participants to benefit from this information which may be useful to market participants when evaluating an NMS Stock ATS as a possible venue to which to route orders in order to accomplish their investing or trading objectives.
Two commenters agree with us that the requirement to disclose aggregate platform-wide order flow and execution statistics on Form ATS-N, if they are otherwise disclosed to subscribers, could cause NMS Stock ATSs to stop providing these statistics to their subscribers.
We believe that benefits will accrue to both the Commission and market participants as a result of having a structured format for Form ATS-N. Specifically, having Form ATS-N filed in the XML text-searchable format will allow the Commission and its staff and market participants to efficiently review and analyze information provided on Form ATS-N. In particular, the XML format will allow the Commission and the public to better gather, analyze, aggregate, compare, and use the Form ATS-N data. Requiring XML should result in the Form ATS-N data being provided in a consistent, structured format. XML is an open standard that defines, or “tags,” data using standard definitions. The tags establish a consistent structure of identity and context. This consistent structure can be automatically recognized and processed by a variety of software applications such as databases, financial reporting systems, and spreadsheets, and then made immediately available to the end user to search, aggregate, compare, and analyze.
We believe that requiring Form ATS-N be provided in an XML format will provide the Commission and the public with data about NMS Stock ATSs in a format that facilitates search capabilities, and comparative analyses across NMS Stock ATSs and across filings, including more advanced text analytics for the more narrative responses of Form ATS-N. Absent this requirement of a specified format, users of the Form ATS-N data that wanted to aggregate the data or search across filings or filers would need to spend additional time transferring the data into a consistent format before it could be analyzed, or incur the cost of a service provider that specializes in this data aggregation and comparison process. Further, unrestricted manual entry of data could lead to errors, thereby potentially reducing data quality and usability.
Commenters who supported the standardization of Form ATS-N information also underscored the importance of making the information comparable.
We recognize that the filing and public disclosure of Form ATS-N and Form ATS-N amendments could impose costs on NMS Stock ATSs as well as costs on market participants. This section discusses specific costs associated with the filing and public disclosure of Form ATS-N including: the costs to NMS Stock ATSs; the effects of public disclosure of Form ATS-N on
We recognize that there would be costs that accrue to NMS Stock ATSs as a result of the adopted amendments. For NMS Stock ATSs, disclosure of previously non-public information could have some impact on the direction of order flow in the market. If this previously non-public information is valuable to certain NMS Stock ATSs—to the extent that it drives its revenues—disclosure of this information on Form ATS-N could be costly for these NMS Stock ATSs. For instance, disclosure of an NMS Stock ATS's innovations could potentially result in other ATSs implementing similar methodologies, which could cause the NMS Stock ATS to lose its technological advantage. Such an ATS may need to engage in costly research in order to develop new innovations to stay profitable in the market. If an ATS cannot innovate fast enough to regain its competitive advantage in the market, order flow may then potentially migrate to other NMS Stock ATSs, broker-dealers that operate non-ATS trading centers, or to national securities exchanges.
However, as discussed above,
We recognize that heightened disclosure requirements pertaining to the public disclosure of Form ATS-N could increase market participants' trading costs relative to the baseline if some ATSs cease operating as ATSs or if there is reduced entry of new NMS Stock ATSs. Institutional investors can elect to use NMS Stock ATSs in an attempt to minimize the price impact of their trades. Even though the size of the average order on NMS Stock ATSs has been shown to be roughly equivalent to that on national securities exchanges, smaller orders on NMS Stock ATSs can be the result of shredding larger orders.
If there is reduced entry of new NMS Stock ATSs or some NMS Stock ATSs cease operating as ATSs and shut down their ATSs as a result of the amendments, there could be a reduction in the number of trading platforms that allow institutional investors to control their price impact costs. Institutional investors who would have traded on these NMS Stock ATSs, might now have to trade on other trading venues, such as other NMS Stock ATSs, non-ATS OTC execution venues, or national securities exchanges. If institutional investors execute their orders on a national securities exchange, they might have to absorb price impact costs, because national securities exchanges may not offer a means for reducing these costs.
Additionally, if some NMS Stock ATSs cease operating as ATSs and begin operating as non-ATS OTC execution venues, such as an OTC trading venue in which the broker-dealer operator internalizes order flow, there could be an increase in the internalization of order flow. Increased internalization could reduce market depth and price informativeness and increase spreads and price impact costs.
As described in detail in the Proposal,
We understand that there are also costs associated with varying degrees of structuring Form ATS-N. By offering two options for filers to submit Form ATS-N in EDGAR, filers will be able to select the method best suited to their situation.
As explained above, we believe that the amendments to Rules 301(b)(10)
We believe that there would be implementation costs for NMS Stock ATSs that have not preserved in writing their safeguards and procedures to protect subscribers' confidential trading information and their oversight procedures to ensure that those safeguards and procedures are followed, which are required under Rule 301(b)(10) of Regulation ATS.
Furthermore, the amendments to Rules 301(b)(10) and 303(a)(1)(v) relating to written safeguards and written procedures to protect subscribers' confidential trading information would impose ongoing costs for all NMS Stock ATSs. For the purposes of the PRA, we estimate it could take approximately 4 hours annually for each ATS to update and maintain these safeguards and procedures,
We are also amending the recordkeeping rules relevant to the amendments to Rule 301 and new Rule 304. NMS Stock ATSs shall preserve Form ATS-N, Form ATS-N amendments, and a Form ATS-N notice of cessation for the life of the enterprise and any successor enterprise pursuant to Rule 303(a)(2)
We have considered the effects of the amendments on efficiency, competition, and capital formation. We believe that the amendments will help market participants make better informed decisions about where to route their orders in order to achieve their trading or investment objectives, enhance execution quality, and improve efficiency and capital allocation.
We understand that the amendments to Regulation ATS could affect the competitive dynamics in the market for NMS stock execution services.
Moreover, increased transparency regarding the operations of NMS Stock ATSs could impact competition between broker-dealers that operate NMS Stock ATSs and broker-dealers who trade NMS stocks but do not operate an NMS Stock ATS, such as internalizers. Because broker-dealers who transact in NMS stocks but do not operate ATSs are not subject to the operational transparency requirements, these broker-dealers could obtain a competitive advantage and attract and internalize order flow that would otherwise be entered and executed on NMS Stock ATSs. Furthermore, greater operational transparency of NMS Stock ATSs could also impact competition between NMS Stock ATSs and national securities exchanges, resulting in a larger amount of order flow being executed on national securities exchanges.
The adopted amendments could impact the competitive dynamics in the market for NMS stock execution services, which includes competition between national securities exchanges and NMS Stock ATSs, among NMS Stock ATSs themselves, and between broker-dealers that operate NMS Stock ATSs and those that do not.
As discussed above,
The sections below discuss specific impacts of the adopted amendments on the competitive dynamics in the market for NMS stock execution services, including: Their impact on the entry of new NMS Stock ATSs and the continuation of existing Legacy NMS Stock ATSs, the impact of changes in the number of NMS Stock ATSs on market participant trading costs, and their impact on the incentives of ATSs to innovate.
We believe that the adopted amendments could potentially raise the barriers to entry for new entities seeking to act as ATSs in the market for NMS stock execution services and could also affect the decision of Legacy NMS Stock ATSs to continue operating as ATSs. As discussed in more detail below, the uncertainty surrounding whether Form ATS-N and Form ATS-N amendment filings will be declared ineffective, the increased implementation and ongoing compliance costs associated with the adopted amendments, and the effects of public disclosure of previously non-public information required on Form ATS-N might dissuade some potential new ATSs from entering the market and could cause some Legacy NMS Stock ATSs to cease operating as ATSs.
If the costs of the adopted amendments make it unprofitable for the broker-dealer operator of a Legacy NMS Stock ATS to continue operating the ATS,
If increased barriers to entry cause fewer ATSs to enter the market or the increased costs of the adopted amendments cause some unprofitable Legacy NMS Stock ATSs to shut down operations, there could be fewer trading venues in the market for NMS Stock execution services. We believe that if the adopted amendments result in fewer trading venues in the market or cause some Legacy NMS Stock ATSs to operate as non-ATS OTC execution venues, it could affect market participants by reducing the number of NMS stock trading venues and, thus, reducing a market participant's opportunities to minimize its trading costs by sending orders to different trading platforms.
While we believe that the adopted amendments could act as a barrier to entry or dissuade some existing ATSs from continuing to operate as ATSs, we reiterate that we lack certain information necessary to quantify the extent to which entities that otherwise would seek to operate as ATSs for NMS Stocks would be dissuaded from doing so.
Commenters did not provide any additional information or analysis that would allow us to quantify the impact on Legacy NMS Stocks ATSs or other entities that might otherwise seek to operate a new NMS Stock ATS. Therefore, while we continue to believe that the costs of the adopted amendments could cause some Legacy NMS Stock ATSs to cease operating as ATSs and could dissuade some entities who would seek to operate as ATSs for NMS Stocks from doing so, we remain unable to quantify that impact.
The subsections below discuss how various elements of the adopted amendments could potentially affect the barriers to entry for new entities seeking to act as ATSs and the decision of Legacy NMS Stock ATSs to continue or cease operating as ATSs in the market for NMS stock execution services, including: The enhanced filing requirements of Form ATS-N, the implementation and ongoing compliance costs associated with the adopted amendments, and the public disclosure of previously non-public information required on Form ATS-N.
The filing requirements of Form ATS-N will impose costs on NMS Stock ATSs. An ineffectiveness declaration would impose costs on an NMS Stock ATS—such as costs from having to cease operations, roll back a change in operations, or delay the start of operations—and could impose costs on the overall market for NMS stock execution services resulting from a potential reduction in competition or the removal of a sole provider of a niche service within the market. The adopted amendments to Regulation ATS might beget uncertainty as to whether an NMS Stock ATS's Form ATS-N will be declared ineffective.
The amendments we are adopting permit a Legacy NMS Stock ATS to continue its operations, on a provisional basis, pursuant to the filed initial Form ATS-N, and any amendments thereto, during the Commission's review of its initial Form ATS-N. However, if after notice and opportunity for hearing, the Commission declares the Form ATS-N filed by a legacy NMS Stock ATS ineffective, the ATS would be required to cease its activities relating to NMS stocks. The NMS Stock ATS would then have the opportunity to address deficiencies in the previously filed form by filing a new Form ATS-N.
The Commission could also declare amendments to an effective Form ATS-N ineffective. In particular, the adopted amendments require an NMS Stock ATS to file amendments on Form ATS-N to notice a material change to its operations at least 30 days prior to implementing that material change.
The adopted amendments might also potentially raise the barriers to entry for new entities seeking to act as ATSs in the market for NMS stock execution service by delaying the start of operations for new NMS Stock ATSs. Currently, to comply with Regulation ATS, an entity seeking to operate as an ATS must, among other things, file an initial operation report with the Commission on Form ATS at least 20 days before commencing operations.
As explained above, NMS Stock ATSs will incur both implementation and ongoing costs to meet the regulatory requirements under Rule 304.
The implementation and ongoing costs associated with filing Form ATS-N could also differentially affect small and large NMS Stock ATSs. As Table 1 shows, there is a significant degree of difference in the size of NMS Stock ATSs, when measured by dollar or share volume. We believe that the estimated implementation cost is a fixed cost that would be roughly similar across NMS Stock ATSs, regardless of their dollar volume size; this implies that implementation costs will represent a larger fraction of revenue generated on a small NMS Stock ATS relative to that percentage on a large NMS Stock ATS. If the costs associated with filing Form ATS-N become disproportionately greater for smaller volume NMS Stock ATSs, some of these Legacy NMS Stock ATSs might be more likely to cease operating as ATSs. However, if the NMS Stock ATSs that decide to cease operating as ATSs due to this fixed implementation cost only transact small dollar (or share) volume, there may not be a large impact on the overall competitive structure for remaining NMS Stock ATSs. Moreover, the order flow that was being traded on these small NMS Stock ATSs might be absorbed and redistributed amongst these larger remaining NMS Stock ATSs. On the other hand, if the implementation costs cause a small NMS Stock ATS that is the sole provider of a niche service to cease operating as an ATS, it could affect market participants by requiring them to seek execution on other NMS stock trading venues that do not minimize their trading costs to the same extent.
Once an NMS Stock ATS's initial Form ATS-N has become effective, the information disclosed on Form ATS-N will be made available to the broader investing public.
While the information elicited on Form ATS-N is similar to the information that national securities exchanges are required to publicly disclose, we believe that the disclosure of this previously non-public information could have some impact on the competition for order flow in the market. For instance, to the extent that an NMS Stock ATS's competitive advantage in the market is driven by its matching methodology, other operational characteristics that are currently confidential, or the non-public disclosure of certain aggregate platform-wide market quality statistics provided to subscribers, the disclosure of this information could result in other NMS Stock ATSs implementing similar methodologies, which might cause market participants to direct more order flow to those other NMS Stock ATSs. In addition, some order flow might be directed away from NMS Stock ATSs and towards national securities exchanges or broker-dealers that operate non-ATS trading centers if market participants discover that their orders would have a greater likelihood of receiving lower execution quality on an NMS Stock ATS relative to these other trading centers. As such, this could result in lower revenues for some NMS Stock ATSs. Those ATSs might then find it unprofitable to continue operating as ATSs. This might cause the broker-dealer operator to sell the ATS to another broker-dealer or shut down the ATS. It could also cause the broker-dealer operator to switch its business strategies to increase market share or profitability, possibly by continuing to operate as a non-ATS OTC execution venue, such as OTC trading venue in which the broker-dealer operator internalizes order flow. The disclosure of previously non-public operational information required under initial Form ATS-N could erode a new NMS Stock ATS's competitive advantage and prevent it from attracting order flow. This could potentially raise the barriers to entry for new entities seeking to act as ATSs in the market for NMS stock execution services and dissuade some entities that would potentially seek to operate as ATSs for NMS stocks from doing so. We believe that a reduction in the entry of new ATSs or some Legacy NMS Stock ATSs electing to cease operating as ATSs could affect competition in the market for NMS Stock execution services, which could in turn affect market participants.
Not only could an NMS Stock ATS's competitive advantage be driven by its current matching methodology or other operational characteristics, it could also be driven by the NMS Stock ATS's ability to improve these methodologies through technological innovation or enhancements.
Both large and small NMS Stock ATSs could be affected by the detailed disclosures required under Rule 304 and Form ATS-N, though, the adopted amendments could affect the ability of each type of ATS to stay in the market differently. As noted above, to the extent that an ATS's dominance in the market—in terms of being able to attract substantial NMS stock trading volume—is driven by its matching methodology or other operational characteristics that are currently confidential, the public disclosure of this information might result in lower revenue for the NMS Stock ATS. If public disclosure reduces revenue for a small NMS Stock ATS, or a large ATS without a substantial profit margin, the broker-dealer operator might no longer view the ATS as being profitable and cease operating it as an ATS. The broker-dealer operator of a large ATS that ceases operating as an ATS might be more likely to continue to operate the system as a non-ATS OTC execution venue. However, the broker dealer of a small ATS that ceases to operate as an ATS could potentially shutdown the ATS altogether. Alternatively, if public disclosure reduces revenue for a large NMS Stock ATS or a smaller NMS Stock ATS with large profit margins, such an ATS may
The increased transparency regarding the operations of NMS Stock ATSs might impact competition between broker-dealers that operate NMS Stock ATSs and broker-dealers who trade NMS stocks but do not operate an NMS Stock ATS, such as internalizers. Because broker-dealers who transact in NMS stocks but do not operate ATSs are not subject to the operational transparency requirements, these broker-dealers could be at a competitive advantage and attract and internalize order flow that would otherwise be entered and executed on NMS Stock ATSs.
In response to commenters' concerns that proposed Form ATS-N would have required the public disclosure of proprietary or commercially sensitive information, we have revised the adopted Form ATS-N requests to not seek disclosure of certain information that could be proprietary or commercially sensitive, such as routing tables or numerical order flow segmentation metrics.
Overall, we believe that the possible decision of entities that currently are NMS Stock ATSs to cease operating as ATSs, or the reduced entry of new NMS Stock ATSs, due to the requirements under Rule 304 and Form ATS-N could affect competition in the market for NMS stock execution services and could impact market participants by reducing the number of entities that are willing to act as NMS Stock ATSs and publicly disclose how they operate. If there is a reduction in the number of trading venues, either from some Legacy NMS Stock ATSs shutting down their operations or reduced entry into the market by prospective NMS Stock ATSs, it could impact market participants by reducing the number of NMS stock trading venues and, thus, reducing market participants' opportunities to minimize its trading costs by sending orders to different trading platforms. Additionally, if some Legacy NMS Stock ATSs cease operating as ATSs and begin to operate as non-ATS OTC execution venues, there might be an increase in the internalization of order flow. Increased internalization could reduce market depth and price informativeness and increase spreads,
However, as discussed above and in the Proposal,
As discussed above, the public availability of effective Form ATS-N and Form ATS-N amendments could result in the disclosure of an NMS Stock ATS's previously non-public operational information.
The disclosure of an NMS Stock ATS's innovations in its Form ATS-N or Form ATS-N amendments could potentially result in certain NMS Stock ATSs losing their technological advantage. For example, to the extent that an NMS Stock ATS's competitive advantage in the market is driven by its matching methodology, the disclosure of this information could result in other NMS Stock ATSs implementing similar methodologies. On the one hand, this could potentially reduce the incentives for ATSs to innovate. For instance, if publicly disclosing an NMS Stock ATS's new technological innovations results in the ATS earning less revenue from new innovations it develops, relative to the baseline, the ATS might lose its incentives to innovate.
On the other hand, the increase in transparency resulting from the public disclosure of Form ATS-N could foster greater competition for order flow in the market for NMS Stock ATS execution services. This greater competition for order flow could in turn incentivize NMS Stock ATSs to innovate—particularly in terms of their technology—so that they can attract more trading volume to their venue. For example, if the public disclosure of technology giving an NMS Stock ATS a competitive advantage results in the ATS losing that competitive advantage, the ATS could be forced to innovate and develop new technology or enhancements in order to attract more trading volume to its venue. However, if some NMS Stock ATSs cannot innovate fast enough to regain their competitive advantage in the market, orders might also flow away from these NMS Stock ATSs, and as a result, these ATSs may choose to cease operating as ATSs.
We do not have information on the extent to which existing NMS Stock ATSs or potentially new ATSs rely on a technological advantage, such as a unique matching methodology, to attract order flow. Nor do we have information regarding the ability of NMS Stock ATSs to innovate and replace a competitive advantage it might lose. Additionally, commenters did not provide any further information or analysis that would allow us to estimate at what rate NMS Stock ATSs innovate. Therefore, we cannot quantify the ultimate effect the adopted amendments will have on innovation.
As discussed above, we have revised the adopted Form ATS-N requests to not seek disclosure of certain information that could be proprietary or commercially sensitive, such as routing tables or numerical order flow segmentation metrics.
Four commenters state that the proposed process for declaring a Form ATS-N ineffective would reduce the incentives to develop new technological innovations.
As discussed above, the heightened disclosure requirements for NMS Stock ATSs might cause some NMS Stock ATSs to cease operating as ATSs and either shut down their operation or instead operate as non-ATS OTC execution venues, such as an OTC trading venue in which the broker-dealer operator internalizes order flow. This could affect competition in the market for NMS Stock execution services.
Under the adopted amendments, market participants would be aware of which NMS Stock ATSs offer better execution services or better protection against the dissemination of their non-public trading information, and as a result, these NMS Stock ATSs could attract even more order flow. Furthermore, to the extent the adopted amendments appropriately calibrate the level of transparency between NMS Stock ATSs and national securities exchanges, this would foster greater competition for order flow of NMS stocks between those trading platforms. Even if some NMS Stock ATSs cease operating as ATSs, we believe the enhanced disclosure requirements of the adopted amendments will assist market participants in obtaining best execution of their orders. This could lead to lower spreads and thereby foster greater capital formation and increased market liquidity relative to the baseline.
We could allow NMS Stock ATSs to continue to describe their operations on current Form ATS, but make Form ATS public either by posting it on the Commission's website or requiring NMS Stock ATSs to publicly disclose their initial operation reports, amendments, and cessation of operations on Form ATS. Non-NMS Stock ATSs' Form ATS filings would continue to remain confidential.
As described in detail in the Proposal, this alternative would lower the cost of compliance for current and future NMS Stock ATSs compared to the adopted amendments, but market participants would continue to receive limited information regarding how orders interact, match, and execute on NMS Stock ATSs and the ATS-related activities of NMS Stock ATSs' broker-dealer operators and their affiliates.
Six commenters disagree with our analysis of this alternative.
We could require NMS Stock ATSs to file Form ATS-N with the Commission, but not make it publicly available. Form ATS-N would include detailed disclosures about the NMS Stock ATS's operations and the ATS-related activities of its broker-dealer operator and its affiliates, and the Commission could declare filings on Form ATS-N ineffective. As described in detail in the Proposal,
No commenters directly remarked on this alternative, and we continue to believe that this alternative would entail fewer benefits to market participants as compared to the adopted amendments, because it would not make NMS Stock ATSs' operations more transparent for market participants. However, a number of commenters suggest we take a tiered public disclosure approach and not publicly disclose certain information on Form ATS-N that is potentially sensitive and of a proprietary nature.
We could require NMS Stock ATSs to file Form ATS-N and make it public, but continue to use the current notice regime instead of the process for declaring Form ATS-N ineffective. As described in detail in the Proposal,
Two commenters disagree with our analysis of this alternative, and expressed concerns that the effectiveness determination of Form ATS-N would be a burdensome process for the Commission.
We could require different levels of disclosure among NMS Stock ATSs based on dollar trading volume. As described in detail in the Proposal,
At the same time, this alternative could result in a competitive advantage for small NMS Stock ATSs, because it could give them more time to innovate without having to disclose such innovation to competitors.
One commenter expressed concerns about applying different levels of disclosure based on metrics such as trading volume, mentioning that Form ATS-N is not sufficiently onerous relative to Form ATS to justify small-scale exemptions.
Requiring less disclosure from small NMS Stock ATSs might also result in greater innovation relative to the adopted amendments. However, we continue to believe that requiring less disclosure from low-volume NMS Stock ATSs could reduce the benefits market participants receive from the greater transparency about the operations of NMS Stock ATSs and the ATS-related activities of their broker-dealer operators and their affiliates. This could increase market participant search costs when evaluating potential NMS stock trading venues, which could result in market participants making less informed decisions about which trading venue aligns with their investing or trading objectives.
We could eliminate the exemption from the definition of “exchange” for NMS Stock ATSs under Exchange Act Rule 3a1-1(a) so that an NMS Stock ATS would be required to register as a national securities exchange and become an SRO. While commenters did not remark on this alternative, we continue to believe that, as described in detail in the Proposal,
However, this alternative would create high startup costs and high ongoing operational costs for NMS Stock ATSs compared to the adopted amendments.
We could amend Regulation ATS so that NMS Stock ATSs would no longer be required to file quarterly volume reports on Form ATS-R. As described in detail in the Proposal,
One commenter suggested that in light of information on FINRA's website regarding ATSs,
We could amend Regulation ATS to require an NMS Stock ATS to operate as a “stand-alone” entity, which would exist only to operate the ATS and have no affiliation with any broker-dealer that seeks to execute proprietary or agency orders on the NMS Stock ATS. Under this alternative, NMS Stock ATSs would be required to publicly disclose Form ATS-N, Form ATS-N amendments, and notices of cessation on Form ATS-N, and would be limited purpose entities that could not engage in any activities other than operation of the ATS. This alternative would prohibit the broker-dealer operator of the NMS Stock ATS from engaging in any other broker-dealer activity, and would consequently prohibit the operation of an NMS Stock ATS by a multi-service broker-dealer.
While commenters did not remark on this alternative, we continue to believe that, as described in detail in the Proposal,
Several commenters believe that the increased disclosure requirements on Form ATS-N concerning the ATS-related activities of the broker-dealer operator and its affiliates do not do enough to reduce conflicts of interest and suggested that we prohibit conflicts of interest altogether on NMS Stock ATSs.
We believe that banning conflicts of interest, as opposed to increasing disclosure of relationships between the ATS and the broker-dealer operator and the broker-dealer operator's affiliates, could be potentially harmful. Multi-service broker-dealers, that is, broker-dealers who have operations and activities in addition to the ATS may be more prone to having conflicts of interest, and therefore, banning conflicts of interest could result in these broker-dealers ceasing to operate their ATSs.
NMS Stock ATSs are not required to provide fair access to the services of the NMS Stock ATS unless the ATS reaches the 5% trading volume threshold in a stock under Rule 301(b)(5) of Regulation ATS.
As described in detail in the Proposal,
No commenters directly commented on this alternative, and we continue to believe it would result in fewer benefits than the adopted amendments. However, one commenter recommended as an alternative that, in addition to the adopted amendments, we should also eliminate the 5% fair access threshold for NMS Stock ATSs,
We could eliminate the requirement for NMS Stock ATSs to disclose aggregate platform-wide order flow and execution statistics that the ATS publishes or otherwise provides to one or more subscribers that are not disclosed pursuant to Rule 605 of Regulation NMS from Form ATS-N. An advantage of this approach is that NMS Stock ATSs may be motivated to continue to provide order flow and execution statistics to subscribers under this alternative.
The same commenters also suggest that eliminating these requirements could result in ATSs continuing to send customized reports and bespoke statistics to their clients.
We could specify alternative structured formats such as Inline XBRL, or FIXML.
We could require NMS Stock ATSs to use the EFFS/SRTS system currently used for other NMS filings instead of EDGAR. While commenters did not remark on this alternative, the primary benefit of this alternative approach would be that ATSs would likely be familiar with the web fillable forms and related filing process on EFFS/SRTS. Relative to the adopted amendments, learning the EDGAR filing process may pose an initial transition burden, although the larger NMS Stock ATSs may already be familiar with the EDGAR filing process, and the completion of web fillable forms in EDGAR would be very similar to the EFFS/SRTS experience without the additional burden of an annual digital signature certification. Finally, the time and effort of filing as proposed would be incrementally more costly to NMS Stock ATSs because each narrative response would have to be individually uploaded as a separate exhibit, as opposed to providing all of their narrative responses within one structured XML file or completing all narrative responses in one web-fillable form. Moreover, because the EFFS system does not support the open-source XML format, but rather a proprietary XML implementation called XFDL, the EFFS system has fewer validation capabilities than EDGAR, particularly at the element level. As a result, some NMS Stock ATSs might inadvertently submit incomplete or inconsistently formatted information that is not discovered until after Commission staff review, which would then require the NMS Stock ATS to spend additional time to refile the information. We believe this would result in extra costs in filing Form ATS-N through EFFS/SRTS relative to requiring NMS Stock ATSs to filing Form ATS-N through EDGAR.
The Regulatory Flexibility Act (“RFA”)
For purposes of Commission rulemaking in connection with the RFA,
All ATSs, including NMS Stock ATSs, would continue to have to
The remaining two entities include one broker-dealer that operates an ATS pursuant to an active Form ATS on file with the Commission and has reported transactions in NMS stocks to the Commission. The other broker-dealer has filed an initial operation report on Form ATS with the Commission and noticed its intention to trade NMS stocks; however, this ATS has not yet commenced operations. We do not believe that Rule 304, including the requirement for NMS Stock ATSs to file a Form ATS-N, will represent a significant economic impact on these two entities. Stand-alone broker-dealers that operate an ATS, such as these two entities, will have less complex ATS operations than multi-service broker-dealers that operate an ATS. For example, we believe that these two entities would not need to respond to all requests in Part II of Form ATS-N because they are not likely to engage in the same ATS-related activities as multi-service broker-dealers that operate an ATS. As a result, we expect that the burden associated with completing the form would be substantially lower for these two ATS.
We are also amending Rule 301(b)(10) to require that all ATSs reduce to writing their safeguards and procedures to protect subscribers' confidential trading information and their oversight procedures to ensure that such safeguards and procedures are followed. The amendment to Rule 301(b)(10) would thus apply to the 15 small entities that are ATSs (including NMS Stock and non-NMS Stock ATSs), but we believe that there would not be significant economic impact on these entities because, based on our experience, most of these ATSs already maintain their Rule 301(b)(10) safeguards and procedures in writing, and to the extent they do not, any resulting burden is small.
Consequently, for these reasons, for purposes of the RFA, we certify that the amendments to Regulation ATS would not have a significant economic impact on a substantial number of small entities.
Pursuant to Exchange Act, 15 U.S.C. 78a
Brokers, Confidential business information, Fraud, Reporting and recordkeeping requirements, Securities.
For the reasons stated in the preamble, title 17, chapter II of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78
(a) * * *
(1) * * *
(xxi) Form ATS-N (§ 249.640 of this chapter).
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78
15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2), 78i(a), 78j, 78k-1(c), 78
(k)
The addition reads as follows:
(b) * * *
(2) * * *
(viii) An NMS Stock ATS that is operating pursuant to an initial operation report on Form ATS on file with the Commission as of January 7, 2019 (“Legacy NMS Stock ATS”) shall be subject to the requirements of paragraphs (b)(2)(i) through (vii) of this section until that ATS files an initial Form ATS-N with the Commission pursuant to § 242.304(a)(1)(iv)(A). Thereafter, the Legacy NMS Stock ATS shall file reports pursuant to § 242.304. An alternative trading system that trades NMS stocks and securities other than NMS stocks shall be subject to the requirements of § 242.304 of this chapter with respect to NMS stocks and paragraph (b)(2) of this section with respect to non-NMS stocks. As of January 7, 2019, an entity seeking to operate as an NMS Stock ATS shall not be subject to the requirements of paragraphs (b)(2)(i) through (vii) of this section and shall file reports pursuant to § 242.304.
The addition reads as follows:
(a) * * *
(1) * * *
(v) At least one copy of the written safeguards and written procedures to protect subscribers' confidential trading information and the written oversight procedures created in the course of complying with paragraph (b)(10) of § 242.301.
(a)
(1)
(ii)
(
(
(B) During review by the Commission of the initial Form ATS-N, the NMS Stock ATS shall amend its initial Form ATS-N pursuant to the requirements of paragraphs (a)(2)(i)(B) and (C) of this section. To make material changes to its initial Form ATS-N during the Commission review period, the NMS Stock ATS shall withdraw its filed initial Form ATS-N and may refile an initial Form ATS-N pursuant to paragraph (a)(1) of this section.
(iii)
(
(
(B) The Commission will, by order, declare an initial Form ATS-N ineffective if it finds, after notice and opportunity for hearing, that such action is necessary or appropriate in the public interest, and is consistent with the protection of investors. If the Commission declares an initial Form ATS-N ineffective, the NMS Stock ATS shall be prohibited from operating as an NMS Stock ATS pursuant to § 240.3a1-1(a)(2). An initial Form ATS-N declared ineffective does not prevent the NMS Stock ATS from subsequently filing a new Form ATS-N.
(iv)
(
(
(B)
(
(
(C)
(2)
(A) At least 30 calendar days, except as provided by paragraph (a)(2)(i)(D) of this section, prior to the date of implementation of a material change to the operations of the NMS Stock ATS or to the activities of the broker-dealer operator or its affiliates that are subject to disclosure on Form ATS-N (“Material Amendment”);
(B) No later than 30 calendar days after the end of each calendar quarter to correct information that has become inaccurate or incomplete for any reason and was not required to be reported to the Commission as a Form ATS-N amendment pursuant to paragraphs (a)(2)(i)(A), (C), or (D) of this section (“Updating Amendment”);
(C) Promptly, to correct information in any previous disclosure on Form ATS-N, after discovery that any information previously filed on Form ATS-N was materially inaccurate or incomplete when filed (“Correcting Amendment”); or
(D) No later than seven calendar days after information required to be disclosed in Part III, Items 24 and 25 on Form ATS-N has become inaccurate or incomplete (“Order Display and Fair Access Amendment”).
(ii)
(3)
(4)
(ii) If the exemption for an NMS Stock ATS is suspended or revoked pursuant to paragraph (a)(4)(i) of this section, the NMS Stock ATS shall be prohibited from operating pursuant to the exemption pursuant to § 240.3a1-1(a)(2) of this chapter. If the exemption for an NMS Stock ATS is limited pursuant to paragraph (a)(4)(i) of this section, the NMS Stock ATS shall be prohibited from operating in a manner otherwise inconsistent with the terms and conditions of the Commission order.
(b)
(2) The Commission will make public via posting on the Commission's website, each:
(i) Effective initial Form ATS-N, as amended;
(ii) Order of ineffective initial Form ATS-N;
(iii) Form ATS-N amendment to an effective Form ATS-N:
(A)
(B)
(iv) Order of ineffective Form ATS-N amendment;
(v) Notice of cessation; and
(vi) Order suspending, limiting, or revoking the exemption for an NMS Stock ATS from the definition of an “exchange” pursuant to § 240.3a1-1(a)(2) of this chapter.
(3) Each NMS Stock ATS shall make public via posting on its website a direct URL hyperlink to the Commission's website that contains the documents enumerated in paragraph (b)(2) of this section.
(c)
(2) Any report required to be filed with the Commission under this section shall be filed on Form ATS-N, and include all information as prescribed in Form ATS-N and the instructions thereto. Such document shall be executed at, or prior to, the time Form ATS-N is filed and shall be retained by the NMS Stock ATS in accordance with §§ 242.303 and § 232.302 of this chapter, and the instructions in Form ATS-N.
15 U.S.C. 78a
This form shall be used by every NMS Stock ATS to file required reports under § 242.304(a) of this chapter.
The text of Form ATS-N will not appear in the Code of Federal Regulations.
1. Form ATS-N is a public reporting form that is designed to provide market participants and the Commission with information about the operations of the NMS Stock ATS and the ATS-related activities of its Broker-Dealer Operator and its Affiliates. Among other things, an NMS Stock ATS must file Form ATS-N to be exempt from the definition of “exchange” pursuant to Exchange Act Rule 3a1-1(a)(2).
2. A separate Form ATS-N is required for each NMS Stock ATS operated by the same Broker-Dealer Operator.
3. An NMS Stock ATS must provide all the information required by Form ATS-N, including responses to each Item, as applicable, and the Exhibits, and disclose information that is accurate, current, and complete.
4. An NMS Stock ATS must respond to each request in detail unless otherwise provided (
5. Any report required to be submitted pursuant to Rule 304 of Regulation ATS shall be prepared, formatted, and submitted in accordance with Regulation S-T and the EDGAR Filer Manual. Filers have the option of submitting the information to EDGAR using the most recent version of the XML schema for Rule 304 as specified by the EDGAR Filer Manual, or submitting the information using the web-fillable form for Rule 304 in EDGAR.
6. Initial Form ATS-N: Prior to commencing operations, an NMS Stock ATS shall file an initial Form ATS-N and the initial Form ATS-N must become effective. If an NMS Stock ATS is currently operating pursuant to a Form ATS it must indicate such on the Form ATS-N. If the NMS Stock ATS is operating pursuant to a previously filed initial operation report on Form ATS as of January 7, 2019, such NMS Stock ATS shall file with the Commission a Form ATS-N no earlier than January 7, 2019, and no later than February 8, 2019.
7. Form ATS-N Amendment
a. An NMS Stock ATS shall amend a Form ATS-N in accordance with the conditions of Rule 304.
b. A Material Amendment, except as provided by Rule 304(a)(2)(i)(D) for an
c. An Updating Amendment must be filed no later than 30 calendar days after the end of each calendar quarter to correct any other information that has become inaccurate or incomplete for any reason and was not previously required to be reported to the Commission as a Form ATS-N Amendment pursuant to Rule 304(a)(2)(i)(A), Rule 304(a)(2)(i)(C), or Rule 304(a)(2)(i)(D).
d. A Correcting Amendment must be filed promptly to correct information in any previous disclosure on Form ATS-N, after discovery that any information previously filed on Form ATS-N was materially inaccurate or incomplete when filed.
e. An Order Display and Fair Access Amendment must be filed no later than seven calendar days after information required to be disclosed in Part III, Items 24 and 25 on Form ATS-N has become inaccurate or incomplete.
f. An NMS Stock ATS must select only one “Type of Amendment” for each Form ATS-N Amendment filed with the Commission.
g. For each Amendment, indicate the Part and Item number of the Form ATS-N that is the subject of the change, provide a brief summary of the changes, and state whether or not the changes apply to all Subscribers and the Broker-Dealer Operator.
h. For each Amendment, provide the EDGAR accession number for the filing that is being amended.
8. Notice of Cessation: An NMS Stock ATS shall notice its cessation of operations on Form ATS-N at least 10 business days prior to the date the NMS Stock ATS will cease to operate as an NMS Stock ATS.
9. Withdrawal: If an NMS Stock ATS determines to withdraw a filing, it must check the “Withdrawal of Form ATS-N filing” check box for the type of filing and provide the EDGAR accession number of the Form ATS-N filing that is being withdrawn. An NMS Stock ATS may withdraw an initial Form ATS-N or an Amendment before the end of the applicable Commission review period. An NMS Stock ATS may withdraw a notice of cessation of operations at any time before the date that the NMS Stock ATS had indicated it intended to cease operating. A Legacy NMS Stock ATS may not withdraw its initial Form ATS-N at any time.
10. A filing that is defective may be rejected and not be accepted by the EDGAR system. Any filing so rejected shall be deemed not to have been filed.
• The individual listed on the NMS Stock ATS's response to Part IV of Form ATS-N as the contact representative must be authorized to receive all incoming communications and be responsible for disseminating that information, as necessary, within the NMS Stock ATS. The contact information provided in Part IV of Form ATS-N will not be made public.
• A copy of this Form ATS-N must be retained by the NMS Stock ATS in accordance with the EDGAR Filer Manual and Rule 303 of Regulation ATS and must be made available for inspection upon a regulatory request.
• Form ATS-N requires an NMS Stock ATS to provide the Commission with certain information regarding: (1) the operation of the NMS Stock ATS and the ATS-related activities of the Broker-Dealer Operator and its Affiliates; (2) material and other changes to the operations and disclosures of the NMS Stock ATS; and (3) notice upon ceasing operation of the NMS Stock ATS. Form ATS-N is designed to provide the public with information to, among other things, help them make informed decisions about whether to participate on the NMS Stock ATS. In addition, the Form ATS-N is designed to provide the Commission with information to permit it to carry out its market oversight and investor protection functions.
• The information provided on Form ATS-N will help the Commission to determine whether an NMS Stock ATS is in compliance with the federal securities laws and the rules or regulations thereunder, including Regulation ATS. An NMS Stock ATS must:
○ File an initial Form ATS-N prior to commencing operations.
○ File a Form ATS Amendment: (1) At least 30 calendar days prior to the date of implementation of a material change to the operations of the NMS Stock ATS or to the activities of the Broker-Dealer Operator or its Affiliates that are subject to disclosure on Form ATS-N (Material Amendment); (2) no later than 30 calendar days after the end of each calendar quarter to correct any other information that has become inaccurate or incomplete for any reason and was not previously required to be reported to the Commission as a Form ATS-N amendment pursuant to Rule 304(a)(2)(i)(A), Rule 304(a)(2)(i)(C), or Rule 304(a)(2)(i)(D) (Updating Amendment); (3) promptly, to correct information in any previous disclosure on Form ATS-N, after discovery that any information previously filed on Form ATS-N was materially inaccurate or incomplete when filed (Correcting Amendment); or (4) no later than seven calendar days after information required to be disclosed in Part III, Items 24 and 25 on Form ATS-N has become inaccurate or incomplete (Order Display and Fair Access Amendment). During the Commission review period of an initial Form ATS-N filing, an NMS Stock ATS that is operating as of January 7, 2019 shall amend its filed Form ATS-N pursuant to these requirements, and an NMS Stock ATS that was not operating as of January 7, 2019 shall amend its filed Form ATS-N pursuant to the requirements for Updating and Correcting Amendments. During the Commission review period of an initial Form ATS-N filing, an NMS Stock ATS shall amend a filed Material Amendment pursuant to the requirements for Updating and Correcting Amendments.
○ Notice its cessation of operations at least 10 business days before the date the NMS Stock ATS ceases to operate as an NMS Stock ATS.
• This collection of information will be reviewed by the Office of Management and Budget in accordance with the clearance requirements of 44 U.S.C. 3507. 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. We estimate that an NMS Stock ATS will spend approximately 127.4 hours completing the Form ATS-N, approximately 9 hours preparing each amendment to Form ATS-N, and approximately 2 hours preparing a notice of cessation on Form ATS-N. Any member of the public may direct to the Commission any comments concerning the accuracy of this burden estimate and any suggestions for reducing this burden.
The following terms are defined for purposes of Form ATS-N.
•
•
•
•
•
•
•
•
•
•
•
By the Commission.
Dated: July 18, 2018
The following appendix will not appear in the Code of Federal Regulations.
(A) any Iranian person included on the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Assets
(B) any other person included on the SDN List whose property and interests in property are blocked pursuant to subsection (a) of this section or Executive Order 13599 (other than an Iranian depository institution whose property and interests in property are blocked solely pursuant to Executive Order 13599); or
(A) is part of the energy, shipping, or shipbuilding sectors of Iran;
(B) operates a port in Iran; or
(C) knowingly provides significant financial, material, technological, or other support to, or goods or services in support of any activity or transaction on behalf of a person determined under section 1244(c)(2)(A) of IFCA to be a part of the energy, shipping, or shipbuilding sectors of Iran; a person determined under section 1244(c)(2)(B) of IFCA to operate a port in Iran; or an Iranian person included on the SDN List (other than a person described in section 1244(c)(3) of IFCA).
(b) With respect to any person determined by the Secretary of the Treasury in accordance with this section to meet any of the criteria set forth in subsections (a)(i)-(a)(iv) of this section, all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of such person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
(c) The prohibitions in subsection (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) With respect to any foreign financial institution determined by the Secretary of the Treasury in accordance with this section to meet any of the criteria set forth in subsections (a)(i)-(a)(v) of this section, the Secretary of the Treasury may prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States of a correspondent account or a payable-through account by such foreign financial institution.
(c) Subsections (a)(ii)-(a)(iv) of this section shall apply with respect to a significant financial transaction conducted or facilitated by a foreign financial institution for the purchase of petroleum or petroleum products from Iran only if:
(d) Subsection (a)(ii) of this section shall not apply with respect to a significant financial transaction conducted or facilitated by a foreign financial institution for the sale, supply, or transfer to or from Iran of natural gas only if the financial transaction is solely for trade between the country with primary jurisdiction over the foreign financial institution and Iran, and any funds owed to Iran as a result of such trade are credited to an account located in the country with primary jurisdiction over the foreign financial institution.
(e) Subsections (a)(ii)-(a)(v) of this section shall not apply with respect to any person for conducting or facilitating a transaction for the provision (including any sale) of agricultural commodities, food, medicine, or medical devices to Iran.
(f) The prohibitions in subsection (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) Subsection (a)(ii) of this section shall apply with respect to a person only if:
(a) the Board of Directors of the Export-Import Bank of the United States shall deny approval of the issuance of any guarantee, insurance, extension of credit, or participation in an extension of credit in connection with the export of any goods or services to the sanctioned person;
(b) agencies shall not issue any specific license or grant any other specific permission or authority under any statute or regulation that requires the prior review and approval of the United States Government as a condition for the export or reexport of goods or technology to the sanctioned person;
(c) with respect to a sanctioned person that is a financial institution:
(d) agencies shall not procure, or enter into a contract for the procurement of, any goods or services from the sanctioned person;
(e) the Secretary of State shall deny a visa to, and the Secretary of Homeland Security shall exclude from the United States, any alien that the Secretary of State determines is a corporate officer or principal of, or a shareholder with a controlling interest in, a sanctioned person; or
(f) the heads of the relevant agencies, as appropriate, shall impose on the principal executive officer or officers, or persons performing similar functions and with similar authorities, of a sanctioned person the sanctions described in subsections (a)-(e) of this section, as selected by the Secretary of State.
(g) The prohibitions in subsections (a)-(f) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) With respect to any foreign financial institution determined by the Secretary of the Treasury in accordance with this section to meet the criteria set forth in subsection (a)(i) or (a)(ii) of this section, the Secretary of the Treasury may:
(c) The prohibitions in subsection (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) With respect to any person determined by the Secretary of the Treasury in accordance with this section to meet any of the criteria set forth in subsections (a)(i)-(a)(vii) of this section, all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of such person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
(c) The prohibitions in subsection (b) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition.
(b) Penalties assessed for violations of the prohibition in subsection (a) of this section, and any related violations of section 15 of this order may be assessed against the United States person that owns or controls the entity that engaged in the prohibited transaction.
(c) The prohibitions in subsection (a) of this section apply, except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order or, where specifically provided, the effective date of the prohibition, except to the extent provided in subsection 20(c) of this order.
(a) Executive Order 13628 of October 9, 2012 (Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Threat Reduction and Syria Human Rights Act of 2012 and Additional Sanctions With Respect to Iran); and
(b) Executive Order 13716 of January 16, 2016 (Revocation of Executive Orders 13574, 13590, 13622, and 13645 With Respect to Iran, Amendment
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order or in Executive Order 12957, Executive Order 12959, Executive Order 13059, or Executive Order 13599 is prohibited.
(a) the term “automotive sector of Iran” means the manufacturing or assembling in Iran of light and heavy vehicles including passenger cars, trucks, buses, minibuses, pick-up trucks, and motorcycles, as well as original
(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c) the term “financial institution” includes (i) a depository institution (as defined in section 3(c)(1) of the Federal Deposit Insurance Act) (12 U.S.C. 1813(c)(1)), including a branch or agency of a foreign bank (as defined in section 1(b)(7) of the International Banking Act of 1978) (12 U.S.C. 3101(7)); (ii) a credit union; (iii) a securities firm, including a broker or dealer; (iv) an insurance company, including an agency or underwriter; and (v) any other company that provides financial services;
(d) the term “foreign financial institution” means any foreign entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes, but is not limited to, depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, dealers in precious metals, stones, or jewels, and holding companies, affiliates, or subsidiaries of any of the foregoing. The term does not include the international financial institutions identified in 22 U.S.C. 262r(c)(2), the International Fund for Agricultural Development, the North American Development Bank, or any other international financial institution so notified by the Secretary of the Treasury;
(e) the term “Government of Iran” includes the Government of Iran, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Iran, and any person owned or controlled by, or acting for or on behalf of, the Government of Iran;
(f) the term “Iran” means the Government of Iran and the territory of Iran and any other territory or marine area, including the exclusive economic zone and continental shelf, over which the Government of Iran claims sovereignty, sovereign rights, or jurisdiction, provided that the Government of Iran exercises partial or total de facto control over the area or derives a benefit from economic activity in the area pursuant to international arrangements;
(g) the term “Iranian depository institution” means any entity (including foreign branches), wherever located, organized under the laws of Iran or any jurisdiction within Iran, or owned or controlled by the Government of Iran, or in Iran, or owned or controlled by any of the foregoing, that is engaged primarily in the business of banking (for example, banks, savings banks, savings associations, credit unions, trust companies, and bank holding companies);
(h) the term “Iranian person” means an individual who is a citizen or national of Iran or an entity organized under the laws of Iran or otherwise subject to the jurisdiction of the Government of Iran;
(i) the terms “knowledge” and “knowingly,” with respect to conduct, a circumstance, or a result, mean that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result;
(j) the terms “Naftiran Intertrade Company” and “NICO” mean the Naftiran Intertrade Company Ltd. and any entity owned or controlled by, or operating for or on behalf of, the Naftiran Intertrade Company Ltd.;
(k) the terms “National Iranian Oil Company” and “NIOC” mean the National Iranian Oil Company and any entity owned or controlled by, or operating for or on behalf of, the National Iranian Oil Company;
(l) the term “person” means an individual or entity;
(m) the term “petrochemical products” includes any aromatic, olefin, and synthesis gas, and any of their derivatives, including ethylene, propylene, butadiene, benzene, toluene, xylene, ammonia, methanol, and urea;
(n) the term “petroleum” (also known as crude oil) means a mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities;
(o) the term “petroleum products” includes unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical feedstocks, special naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still gas, and miscellaneous products obtained from the processing of: crude oil (including lease condensate), natural gas, and other hydrocarbon compounds. The term does not include natural gas, liquefied natural gas, biofuels, methanol, and other non-petroleum fuels;
(p) the term “sanctioned person” means a person that the President, or the Secretary of State or the Secretary of the Treasury pursuant to authority delegated by the President and in accordance with the terms of such delegation, has determined is a person on whom sanctions described in section 6(a) of ISA shall be imposed pursuant to ISA, CISADA, TRA, or IFCA, and on whom the President, the Secretary of State, or the Secretary of the Treasury has imposed any of the sanctions in section 6(a) of ISA or a person on whom the Secretary of State, in accordance with the terms of section 3 of this order, has decided to impose sanctions pursuant to section 3 of this order;
(q) the term “subject to the jurisdiction of the Government of Iran” means a person organized under the laws of Iran or any jurisdiction within Iran, ordinarily resident in Iran, or in Iran, or owned or controlled by any of the foregoing;
(r) the term “United States financial institution” means a financial institution as defined in subsection (c) of this section (including its foreign branches) organized under the laws of the United States or any jurisdiction within the United States or located in the United States; and
(s) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
(b) Except to the extent provided in statutes or regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order, the following are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: all property and interests in property that were blocked pursuant to Executive Order 13628 and remained blocked immediately prior to the effective date of this order.
(c) Except to the extent provided in regulations, orders, directives, or licenses that may be issued pursuant to this order, all regulations, orders, directives, or licenses that were issued pursuant to Executive Order 13628 and remained in effect immediately prior to the effective date of this order are hereby authorized to remain in effect—subject to their existing terms and conditions—pursuant to this order, which continues in effect certain sanctions set forth in Executive Order 13628.
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 |