83_FR_171
Page Range | 44815-45030 | |
FR Document |
Page and Subject | |
---|---|
83 FR 45025 - Adjusting Imports of Steel Into the United States | |
83 FR 45019 - Adjusting Imports of Aluminum Into the United States | |
83 FR 44876 - Sunshine Act Meeting | |
83 FR 44877 - Sunshine Act Meeting | |
83 FR 44896 - Sunshine Act Meetings | |
83 FR 45015 - Proposed Extension of Information Collection Request Submitted for Public Comment; Transitional Guidance Under Sections 162(f) and 6050X With Respect to Certain Fines, Penalties, and Other Amounts | |
83 FR 44906 - Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019 | |
83 FR 44910 - Proposed Extension of Existing Collection; Comment Request | |
83 FR 44894 - Notice of Issuance of Final Determination Concerning the Visionary Advanced 2 Dietary Supplement Tablets | |
83 FR 44875 - Proposed Information Collection Request; Comment Request; Ambient Air Quality Surveillance (Renewal) | |
83 FR 44874 - Proposed Information Collection Request; Comment Request; Recordkeeping and Reporting Requirements for Diesel Fuels (Renewal) | |
83 FR 44876 - Public Meeting on EPA's Study of Oil and Gas Extraction Wastewater Management | |
83 FR 44872 - Proposed Information Collection Request; Comment Request; “ICR Supporting Statement Information Collection Request for National Pollutant Discharge Elimination System (NPDES): Specific Provisions Affecting Applications and Program Updates Final Rule” | |
83 FR 45002 - Revocation of License of Small Business Investment Company | |
83 FR 44873 - Request for Nominations for the 2019 Clean Air Excellence Awards Program | |
83 FR 44873 - Alternate Energy Resources, Inc. Superfund Site; Augusta, Richmond County, Georgia; Notice of Settlement | |
83 FR 45003 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Pilot Schools-FAR 141 | |
83 FR 45002 - Meeting of the Interagency Task Force on Veterans Small Business Development | |
83 FR 44896 - Notice of Competitive Coal Lease Sale ALES-55199, Alabama | |
83 FR 44927 - FirstEnergy Nuclear Operating Company; FirstEnergy Nuclear Generation Company, LLC; Perry Nuclear Power Plant, Unit No. 1 | |
83 FR 44914 - FirstEnergy Nuclear Operating Company; FirstEnergy Nuclear Generation, LLC; Davis-Besse Nuclear Power Station, Unit No. 1 | |
83 FR 44923 - FirstEnergy Nuclear Operating Company; FirstEnergy Nuclear Generation, LLC; Beaver Valley Power Station, Units 1 and 2 | |
83 FR 44897 - Cape Cod National Seashore Advisory Commission Notice of Public Meeting | |
83 FR 44897 - Tule Springs Fossil Beds National Monument Advisory Council; Notice of Public Meeting | |
83 FR 44864 - Post-Disaster Research Methods Meeting | |
83 FR 45001 - Meeting of the Advisory Committee on Veterans Business Affairs | |
83 FR 45001 - Surrender of License of Small Business Investment Company | |
83 FR 44858 - Notice of Public Meetings of the New York Advisory Committee | |
83 FR 45001 - Administrative Declaration of an Economic Injury Disaster for the State of California | |
83 FR 45001 - Administrative Declaration of an Economic Injury Disaster for the State of Colorado | |
83 FR 44905 - Notice of Lodging Proposed Consent Decree | |
83 FR 44867 - Uniform Formulary Beneficiary Advisory Panel; Notice of Federal Advisory Committee Meeting | |
83 FR 45004 - Petition for Waiver of Compliance | |
83 FR 45005 - Petition for Waiver of Compliance | |
83 FR 45006 - Petition for Waiver of Compliance | |
83 FR 44905 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Employee Retirement Income Security Act of 1974 Technical Release 1991-1 | |
83 FR 44859 - Foreign-Trade Zone (FTZ) 127-West Columbia, South Carolina; Notification of Proposed Production Activity; Constantia Blythewood, LLC; (Flexible Packaging and Engineered Industrial Films); Blythewood, South Carolina | |
83 FR 44861 - Glycine From Thailand: Preliminary Negative Countervailing Duty Determination, Preliminary Negative Critical Circumstances Determination, and Alignment of Final Determination With Final Antidumping Duty Determination | |
83 FR 44863 - Glycine From the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination | |
83 FR 44859 - Glycine From India: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination | |
83 FR 44865 - Submission for OMB Review; Comment Request | |
83 FR 44866 - Proposed Information Collection; Comment Request; Southeast Region Vessel Monitoring System (VMS) and Related Requirements | |
83 FR 44865 - Proposed Information Collection; Comment Request; Annual Economic Survey of Federal Gulf and South Atlantic Shrimp Permit Holders | |
83 FR 44867 - Submission for OMB Review; Comment Request | |
83 FR 44888 - Agency Information Collection Activities; Proposed Collection; Comment Request; Generic Clearance for Quantitative Testing for the Development of FDA Communications | |
83 FR 44872 - L.P. Athol Corporation, MassGrow, LLC; Notice of Transfer of Exemption | |
83 FR 44884 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Medical Device Labeling Regulations | |
83 FR 44891 - Agency Information Collection Request; 30-Day Public Comment Request | |
83 FR 44871 - Agency Information Collection Activities; Comment Request; Student Assistance General Provisions-Subpart K-Cash Management | |
83 FR 44830 - Safety Zone, Coast Guard Exercise Area, Hood Canal, Washington | |
83 FR 44828 - Special Local Regulation; Olympia Harbor Days Tug Boat Races, Budd Inlet, WA | |
83 FR 44828 - Safety Zone, Swim Around Charleston; Charleston, SC | |
83 FR 44883 - Notice of Closed Meeting | |
83 FR 44870 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; The College Assistance Migrant Program (CAMP) Annual Performance Report (APR) | |
83 FR 44868 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; High School Equivalency Program (HEP) Annual Performance Report | |
83 FR 44892 - Current List of HHS-Certified Laboratories and Instrumented Initial Testing Facilities Which Meet Minimum Standards To Engage in Urine Drug Testing for Federal Agencies | |
83 FR 44904 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-3D PDF Consortium, Inc. | |
83 FR 44904 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Countering Weapons of Mass Destuction | |
83 FR 44904 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Cooperative Research Group on ROS-Indusrial Consortium-Americas | |
83 FR 44903 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-DVD Copy Control Association | |
83 FR 44903 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Pistoia Alliance, Inc. | |
83 FR 44913 - Records Schedules; Availability and Request for Comments | |
83 FR 44887 - Advisory Committee; Cardiovascular and Renal Drugs Advisory Committee; Renewal | |
83 FR 44888 - Advisory Committee; Endocrinologic and Metabolic Drugs Advisory Committee, Renewal | |
83 FR 44883 - Physiologically Based Pharmacokinetic Analyses-Format and Content; Guidance for Industry; Availability | |
83 FR 44890 - Food for Human Consumption; Export Certificates; Food and Drug Administration Food Safety Modernization Act of 2011; Certification Fees | |
83 FR 44929 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Loss Allocation Rules and Make Other Changes | |
83 FR 44955 - Self-Regulatory Organizations; The Depository Trust Company; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Loss Allocation Rules and Make Other Changes | |
83 FR 44938 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Exchange Rule 6.49A, Transfer of Positions | |
83 FR 44984 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31-E Relating To Reserve Orders, To Re-Name Two Order Types, and To Delete Inoperative Rule Text | |
83 FR 44922 - Interim Storage Partners LLC's Consolidated Interim Spent Fuel Storage Facility | |
83 FR 44929 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To List and Trade Options on the SPIKESTM | |
83 FR 44988 - Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Adopt a Recovery & Wind-Down Plan and Related Rules | |
83 FR 44942 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Adopt a Recovery & Wind-Down Plan and Related Rules | |
83 FR 44964 - Self-Regulatory Organizations; The Depository Trust Company; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Adopt a Recovery & Wind-Down Plan and Related Rules | |
83 FR 44977 - Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Loss Allocation Rules and Make Other Changes | |
83 FR 44892 - National Cancer Institute; Notice of Closed Meetings | |
83 FR 44868 - Board of Advisors to the Presidents of the Naval Postgraduate School and the Naval War College; Notice of Federal Advisory Committee Meeting | |
83 FR 45013 - Deepwater Port License: Amendment of the Neptune LNG LLC Deepwater Port License and Temporary Suspension of Operations at the Neptune LNG Deepwater Port | |
83 FR 45008 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel TO-MAR-O; Invitation for Public Comments | |
83 FR 45010 - Request for Comments on the Renewal of a Previously Approved Information Collection: U.S. Merchant Marine Academy Candidate Application for Admission | |
83 FR 45006 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel SERENITY; Invitation for Public Comments | |
83 FR 45009 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel SAILFISH; Invitation for Public Comments | |
83 FR 45011 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel MAKARA; Invitation for Public Comments | |
83 FR 45012 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel COOL RUNNINGS; Invitation for Public Comments | |
83 FR 45013 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel PIPER; Invitation for Public Comments | |
83 FR 45007 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel MIDNIGHT SUN; Invitation for Public Comments | |
83 FR 44911 - Establishment of MCC Economic Advisory Council and Call for Nominations | |
83 FR 45016 - Agency Information Collection Activity Under OMB Review: Request for Substitution of Claimant Upon Death of Claimant | |
83 FR 44857 - Agenda and Notice of a Public Meeting of the Vermont Advisory Committee | |
83 FR 44857 - Agenda and Notice of Public Meeting of the New Hampshire Advisory Committee | |
83 FR 44858 - Agenda and Notice of Public Meeting of the Massachusetts Advisory Committee | |
83 FR 45014 - Mutual Savings Association Advisory Committee; Meeting | |
83 FR 44846 - Fees for Governance, Oversight, and Processing of Environmental Reviews and Authorizations by the Federal Permitting Improvement Steering Council | |
83 FR 45015 - Proposed Collection; Comment Request | |
83 FR 45002 - Charging Standard Administrative Fees for Non-Program Information | |
83 FR 44877 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
83 FR 44881 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
83 FR 44925 - Protective Order Templates for Hearings on Conformance With the Acceptance Criteria in Combined Licenses | |
83 FR 44869 - Office of Postsecondary Education; Call for Written Third-Party Comments | |
83 FR 44844 - Airworthiness Directives; Airbus SAS Airplanes | |
83 FR 44815 - Airworthiness Directives; Linstrandt Propane Cylinders | |
83 FR 44911 - Notice of Centennial Challenges CO2 | |
83 FR 44819 - Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments | |
83 FR 44816 - Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments | |
83 FR 44900 - Certain Welded Large Diameter Line Pipe From Japan; Institution of a Five-Year Review | |
83 FR 44898 - Silicomanganese From India, Kazakhstan, and Venezuela; Institution of Five-Year Reviews | |
83 FR 44821 - Addition of Certain Entities to the Entity List, Revision of Entries on the Entity List and Removal of Certain Entities From the Entity List | |
83 FR 44831 - Formal Complaint Proceedings to the Enforcement Bureau | |
83 FR 44916 - 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 |
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Navy Department
Federal Energy Regulatory Commission
Agency for Healthcare Research and Quality
Centers for Disease Control and Prevention
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
U.S. Customs and Border Protection
Land Management Bureau
National Park Service
Antitrust Division
Wage and Hour Division
Workers Compensation Programs Office
Federal Aviation Administration
Federal Railroad Administration
Maritime Administration
Comptroller of the Currency
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 Linstrandt T30 propane cylinders installed on hot air balloons. This AD results from mandatory continuing airworthiness information (MCAI) issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as welding defects on the propane cylinder that could result in leaking of liquid propane. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective September 24, 2018.
We must receive comments on this AD by October 19, 2018.
You may send comments by any of the following methods:
•
•
•
•
You may examine the AD docket on the internet at
Mike Kiesov, Aerospace Engineer, FAA, Small Airplane Standards Branch, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4144; fax: (816) 329-4090; email:
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD No. 2018-0107, dated May 15, 2018, corrected on May 22, 2018 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
A review of cylinder production records has shown that the affected cylinders have unacceptable welding defects.
This condition, if not detected and corrected, could result in an uncontrolled release of liquid propane and consequent fire or explosion, with consequent injury to balloon occupants and persons on the ground.
To address this potential unsafe condition, Cameron Balloons Limited issued the SB, providing instructions to remove the affected cylinders from service.
For the reasons described above, this [EASA] AD requires replacement of the affected cylinders with serviceable parts.
This [EASA] AD is re-published to correct the list of TCDS numbers. The TCDS EASA.SAS.BA.001 was erroneously introduced, and has been removed, as it is not for a hot air balloon.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI. We are issuing this AD because we evaluated all information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.
An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because replacement of the propane cylinders is required within 30 days. Therefore, we find good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reason 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 we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD will affect 10 propane cylinders. We also estimate that it would take about 2 work-hours to replace a cylinder, at an average labor rate of $85 per work-hour, and required parts would cost about $3,000 per product. Based on these figures, we estimate a total cost of $3,170 per balloon.
We know the unsafe condition affects 10 propane cylinders worldwide; however, we have no way of knowing the number of hot air balloons on the U.S. Registry that may have an affected propane cylinder installed. As such, we have no way of estimating the potential costs of compliance on U.S. operators.
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.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have 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.
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 the 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 becomes effective September 24, 2018.
None.
This AD applies to Linstrandt T30 part number (P/N) CY050001 propane cylinders, serial numbers (S/N) 0227/0158, 0316/-, 0321/-, 0322/0150, 0446/0152, 0534/0145, 0539/-, 0543/0154, 0626/0153, and 0638/0151; installed on hot air balloons.
Air Transport Association of America (ATA) Code 28: Fuel.
This AD was prompted by mandatory continuing airworthiness information (MCAI) issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as welding defects on the propane cylinders that could result in leaking of liquid propane. We are issuing this AD to prevent leaking of liquid propane that could lead to fire or explosion.
(1) If any hot air balloon has an affected P/N and serial number propane cylinder, as listed in paragraph (c) of this AD, within 30 days after September 24, 2018 (the effective date of this AD), remove from service Linstrandt T30 propane cylinder P/N CY050001 and replace with a propane cylinder that is not listed in paragraph (c) of this AD.
(2) After September 24, 2018 (the effective date of this AD), do not install on any hot air balloon a propane cylinder listed in paragraph (c) of this AD.
The following provision also applies to this AD:
(1)
(2) Reserved.
Refer to MCAI EASA AD No. 2018-0107, dated May 15, 2018, corrected on May 22, 2018, for related information. You may examine the MCAI on the internet at
None.
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule amends, suspends, or removes Standard Instrument
This rule is effective September 4, 2018. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of September 4, 2018.
Availability of matter incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001;
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center online at
Thomas J. Nichols, Flight Procedure Standards Branch (AFS-420) Flight Technologies and Procedures Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) telephone: (405) 954-4164.
This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.
The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.
The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.
Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(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); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air Traffic Control, Airports, Incorporation by reference, Navigation (Air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, (14 CFR part 97), is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide for the safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective September 4, 2018. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of September 4, 2018.
Availability of matter incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001;
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center online at
Thomas J. Nichols, Flight Procedure Standards Branch (AFS-420) Flight Technologies and Procedures Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK 73125) telephone: (405) 954-4164.
This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the
This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.
The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.
The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.
Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(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) ; and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air Traffic Control, Airports, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, (14 CFR part 97), is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:
Bureau of Industry and Security, Commerce.
Final rule.
This final rule amends the Export Administration Regulations (EAR) by adding fifteen entities under seventeen entries to the Entity List. These fifteen entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States and will be listed on the Entity List under the destinations of the People's Republic of China, Hong Kong, Pakistan, Russia, Saudi Arabia, Turkey, the United Arab Emirates and the United Kingdom. This final rule also modifies two entries on the entity list: One entry under the destination of Hong Kong and one entry under the destination of Russia. Lastly, this final rule removes one entity under the destination of Greece from the Entity List. The removal is the result of a request for removal BIS received pursuant to the EAR and a review of information provided in the removal request.
This rule is effective September 4, 2018.
Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email:
The Entity List (15 CFR, subchapter C, part 744, Supplement No. 4) identifies entities reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. The Export Administration Regulations (EAR) (15 CFR, Subchapter C, parts 730-774) imposes additional license requirements on, and limits the availability of most license exceptions for, exports, reexports, and transfers (in-country) to those listed. The license review policy for each listed entity is identified in the “License review policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant
The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote, and makes all decisions to remove or modify an entry by unanimous vote.
This rule implements the decision of the ERC to add fifteen entities under seventeen entries to the Entity List. These fifteen entities are being added based on § 744.11 (License requirements that apply to entities acting contrary to the national security or foreign policy interests of the United States) of the EAR. The seventeen entries added to the Entity List consist of two entries located in the People's Republic of China (China), five entries located in Hong Kong, two entries located in Pakistan, one entry located in Russia, one entry located in Saudi Arabia, two entries located in Turkey, three entries located in the United Arab Emirates (U.A.E.), and one entry located in the United Kingdom. There are seventeen entries for the fifteen entities because one entry is listed in three locations, resulting in two additional entries.
The ERC reviewed § 744.11(b) (Criteria for revising the Entity List) in making the determination to add these fifteen entities under seventeen entries to the Entity List. Under that paragraph, persons for whom there is reasonable cause to believe, based on specific and articulable facts, that they have been involved, are involved, or pose a significant risk of being or becoming involved in, activities that are contrary to the national security or foreign policy interests of the United States, along with those acting on behalf of such persons, may be added to the Entity List. Paragraphs (b)(1) through (5) of § 744.11 provide an illustrative list of activities that could be contrary to the national security or foreign policy interests of the United States.
The ERC determined that the two entities located in China (Ma Yunong and Seajet Company Limited), as well as one entity located in Hong Kong (ZM International Company Ltd.) have been involved in activities that are contrary to the national security and foreign policy interests of the United States as set forth in § 744.11(b). Specifically, the ERC determined that these parties unlawfully procured and diverted U.S.-origin armored vehicles to the Democratic People's Republic of Korea (North Korea) in violation of the EAR. For the remaining four entities located in Hong Kong (Calvin Law, CLC Holdings Limited, LHI Technology (H.K.) Company Limited, and Ray Hui), the ERC determined that these entities have been involved in activities that are contrary to the national security and foreign policy interests of the United States as set forth in § 744.11(b). These four entities procured U.S.-origin items for reexport to entities in China and other countries without obtaining the necessary license(s).
The ERC determined that the U.A.E.-based company Good Luck Shipping LLC has been involved in activities contrary to the national security and foreign policy interests of the United States as set forth in § 744.11(b) of the EAR; this entity has transshipped U.S.-origin items to sanctioned destinations without the required authorizations. The ERC determined that Technology Links Pvt. Ltd., located in Pakistan, be added to the Entity List based on the company's involvement in the supply of items subject to the EAR to nuclear and missile-related Entity List parties in Pakistan without the license required under § 744.11 of the EAR. In addition, the ERC determined that Techcare Services FZ LLC, located in the U.A.E., and UEC (Pvt.) Ltd., located in Pakistan, Saudi Arabia and the U.A.E., made multiple attempts to acquire U.S.-origin commodities ultimately destined for Pakistan's unsafeguarded nuclear program and have provided false and misleading information to BIS during an end-use check.
The ERC also determined that the two entities located in Turkey, Huseyin Engin Borluca and 3K Aviation Consulting and Logistics, along with Evans Meridians Ltd., located in the British Virgin Islands, have engaged in transactions in violation of the U.S. embargo against Iran by transferring, or attempting to transfer, U.S.-origin
Pursuant to § 744.11(b) of the EAR, the ERC determined that the conduct of these fifteen entities raises sufficient concern that prior review of exports, reexports or transfers (in-country) of all items subject to the EAR involving these entities, and the possible imposition of license conditions or license denials on shipments to the persons, will enhance BIS's ability to prevent violations of the EAR.
For the fifteen entities under seventeen entries added to the Entity List, BIS imposes a license requirement for all items subject to the EAR, and a license review policy of presumption of denial. The license requirements apply to any transaction in which items are to be exported, reexported, or transferred (in-country) to any of the entities or in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the entities being added to the Entity List in this rule. The acronym “a.k.a.” (also known as) is used in entries on the Entity List to identify aliases, thereby assisting exporters, reexporters and transferors in identifying entities on the Entity List.
This final rule adds the following fifteen entities under seventeen entries to the Entity List:
(1)
B-804 SOHO New Town, 88 Jianguo Road, Chaoyang District, Beijing, 100022, China;
(2)
B-804 SOHO New Town, 88 Jianguo Road, Chaoyang District, Beijing, 100022, China;
(1)
Flat 2808, 28/F, Asia Trade Centre, 79 Lei Muk Road, Kwai Chung, N.T., Hong Kong;
(2)
Flat 2808, 28/F, Asia Trade Centre, 79 Lei Muk Road, Kwai Chung, N.T., Hong Kong;
(3)
Units 801-803 and 805, Park Sun Building, No. 97-107 Wo Yi Hop Road, Kwai Chung, Hong Kong;
(4)
Units 801-803 and 805, Park Sun Building, No. 97-107 Wo Yi Hop Road, Kwai Chung, N.T., Hong Kong;
(5)
4/F Enterprise Bldg 228-238, Queen's Road Central, Hong Kong;
(1)
4/10-11-12 Rimpa Plaza, M.A. Jinnah Road, Karachi, Pakistan;
Khalid bin Waleed Road, P.E.C.H.S., Karachi, Pakistan;
(2)
29-M, Civic Centre, Model Town Ext. Lahore-43700, Pakistan;
(1)
1st Zapadniy Proezd 12/1, Zelenograd, Russia, 124460.
(1)
P.O. Box 245221, Riyadh 11312, Kingdom of Saudi Arabia (See alternate addresses under Pakistan and U.A.E.).
(1)
Biniciler Apt. Savas Cad. No. 18/5, Sirinyali Mah. 07160, Antalya, Turkey;
(2)
Biniciler Apt. Savas Cad. No. 18/5, Sirinyali Mah. 07160, Antalya, Turkey;
(1)
Office 206/207 Malik Saeed, Ahmad Ghabbash, Bur Dubai, UAE;
(2)
No. 1, Ground Floor Office 8/D, P.O. Box 312391, Al-Jazeera Al Hamra, UAE;
(3)
P.O. Box 97, Abu Dhabi, UAE (See alternate addresses under Pakistan and Saudi Arabia).
(1)
Drake Chambers, 1st Floor Yamraj Building, P.O. Box 3321, Road Town, Tortola, British Virgin Islands.
This final rule implements the decision of the ERC to modify two existing entries on the Entity List under the destination of Hong Kong and Russia. BIS is revising the entry for Joinus Freight Systems (H.K.) Ltd. by adding an additional alias and address and modifying the entity name and an existing address. In addition, the ERC determined, with the addition of JSC NIIME to the Entity List, the existing entry for “Joint Stock Company Mikron” be revised by modifying the entity name to “PJSC Mikron” and removing its alias.
This final rule makes the following modifications to two entries on the Entity List:
(1)
Unit 07-07, 25F, Tower B, Regent Centre, 63 Wo Yi Hop Road, Kwai Chung, N.T. Hong Kong
(1)
1st Zapadniy Proezd 12/1, Zelenograd, Russia, 124460.
This rule implements a decision of the ERC to remove the following entry from the Entity List on the basis of a removal request BIS received: Top Electronics Components S.A., located in Greece. This entry was added to the Entity List on October 9, 2012 (77 FR 61256). The ERC decided to remove this entry based on information BIS received pursuant to § 744.16 of the EAR and the additional review the ERC conducted.
This final rule implements the decision to remove the following one entity located in Greece from the Entity List:
(1)
66 Alkminis & Aristovoulov Str, Kato Petralona, Athens, Greece 11853.
Shipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on September 4, 2018, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).
On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (Title XVII, Subtitle B of Pub. L. 115-232) that provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. As set forth in Section 1768 of ECRA, all delegations, rules, regulations, orders, determinations, licenses, or other forms of administrative action that have been made, issued, conducted, or allowed to become effective under the Export Administration Act of 1979 (50 U.S.C. 4601
1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.
2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule. You may send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by email to
3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.
4. For the fifteen entities under seventeen entries added to the Entity List in this final rule, the provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation and a 30-day delay in effective date are inapplicable, because this regulation involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)). BIS implementation of this rule is necessary to protect U.S. national security or foreign policy interests by preventing items subject to the EAR from being exported, reexported, or transferred (in-country) to the entities being added to the Entity List. If this rule were delayed to allow for notice and comment and a delay in effective date, the entities being added to the Entity List by this action would continue to be able to receive items subject to the EAR without a license and to conduct activities contrary to the national security or foreign policy interests of the United States. In addition, publishing a proposed rule would give these entities notice of the U.S. Government's intention to place them on the Entity List, which could create an incentive for them to accelerate their receipt of items subject to the EAR to conduct activities that are contrary to the national security or foreign policy interests of the United States, including taking steps to set up additional aliases, change addresses, and engaging in other measures to try to limit the impact of the listing on the Entity List once a final rule is published.
5. For the one entity removed from the Entity List in this final rule, pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B), BIS finds good cause to waive requirements that this rule be subject to notice and the opportunity for public comment because it would be contrary to the public interest. In determining whether to grant a request for removal from the Entity List, a committee of U.S. Government agencies (the End-User Review Committee (ERC)) evaluates information about and commitments made by listed entities requesting removal from the Entity List, the nature and terms of which are set
Removals from the Entity List involve interagency deliberation and result from review of public and non-public sources, including, where applicable, sensitive law enforcement information and classified information, and the measurement of such information against the Entity List removal criteria. This information is extensively reviewed according to the criteria for evaluating removal requests from the Entity List, as set out in 15 CFR part 744, Supplement No. 5, and 15 CFR 744.16(b). For reasons of national security, BIS is not at liberty to provide to the public detailed information on which the ERC relied to make the decisions to remove these entities. In addition, the information included in the removal request is information exchanged between the applicant and the ERC, which by law (section 12(c) of the Export Administration Act of 1979), BIS is restricted from sharing with the public. Moreover, removal requests from the Entity List contain confidential business information, which is necessary for the extensive review conducted by the U.S. Government in assessing such requests.
Section 553(d) of the APA generally provides that rules may not take effect earlier than thirty (30) days after they are published in the
6. The Department finds that there is good cause under 5 U.S.C. 553(b)(3)(B) to waive the provisions of the APA regarding notice of proposed rulemaking, the opportunity for public comment, and a 30-day delay in effective date for the modifications included in this rule because, as described above, they are impracticable and are contrary to the public interest. In addition, the changes are limited to providing additional information that will assist the public in more easily identifying the listed entities on the Entity List.
7. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
Exports, Reporting and recordkeeping requirements, Terrorism.
Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:
Pub. L. 115-232, Title XVII, Subtitle B. 50 U.S.C. 4601
The additions and revisions read as follows:
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce Special Local Regulations for the Olympia Harbor Days Tug Boat Races, Budd Inlet, WA, from 11 a.m. through 4 p.m. on September 2, 2018. This action is necessary to limit vessel movement within the specified race area immediately prior to, during, and immediately after racing activity in order to ensure the safety of participants, spectators and the maritime public. Entry into, transit through, mooring, or anchoring within the specified race area is prohibited unless authorized by the Captain of the Port Puget Sound or Designated Representatives.
The regulations in 33 CFR 100.1309 will be enforced from 11 a.m. through 4 p.m. on September 2, 2018.
If you have questions about this notice of enforcement, call or email Petty Officer Zachary Spence, Sector Puget Sound Waterways Management Division, U.S. Coast Guard; telephone 206-217-6051, email
The Coast Guard will enforce Special Local Regulations for Olympia Harbor Days Tug Boat Races, Budd Inlet, WA in 33 CFR 100.1309 on September 2, 2018, from 11 a.m. until 4 p.m.
The boundaries of the race area, as specified in 33 CFR 100.1309(a), enclose approximately 2 nautical miles of the navigable waters in Budd Inlet south of Big Tykle Cove to west of Priest Point.
Under the provisions of 33 CFR 100.1309, the regulated area shall be closed immediately prior to, during, and immediately after the event to all persons and vessels not participating in the event and authorized by the event sponsor. This action is necessary to ensure the safety of participants, spectators, and the maritime public. Entry into, transit through, mooring or anchoring within the specified race area is prohibited unless authorized by the Captain of the Port Puget Sound or Designated Representatives. All persons or vessels who desire to enter the race area while it is enforced must obtain permission from the on-scene patrol craft on VHF channel 13.
In addition to this published document, the Coast Guard will provide the maritime community with advance notification of this enforcement period via the Local Notice to Mariners. If the Captain of the Port determines that the regulated area need not be enforced for the full duration stated in this notice, she may use a Broadcast Notice to Mariners to grant general permission to enter the regulated area.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary moving safety zone during the Swim Around Charleston, a swimming race occurring on the Wando River, the Cooper River, Charleston Harbor, and the Ashley River, in Charleston, South Carolina. The temporary moving safety zone is necessary to protect swimmers, participant vessels, spectators, and the general public during the event. Persons and vessels will be prohibited from entering the safety zone unless authorized by the Captain of the Port Charleston or a designated representative.
This rule is effective from 7:45 a.m. until 2 p.m. on September 16, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rule, call or email Lieutenant Justin Heck, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email
On April 9, 2018, Kathleen Wilson notified the Coast Guard that she will be sponsoring the Swim Around Charleston on September 16, 2018 which will impact waters of the Wando River, Cooper River, Charleston Harbor, and Ashley River, in Charleston, South Carolina. In response, on June 26, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone, Swim Around Charleston; Charleston, SC (83 FR 29719). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this event. During the comment period that ended July 26, 2018, we received one comment.
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 (COTP) Charleston has determined that potential hazards associated with the large number of participants and spectators during the swim will be a safety concern. The purpose of the rule is to ensure the safety of participants, spectators, the general public, vessels and the navigable waters in the safety zone before, during and after the scheduled event.
The Coast Guard received one comment from the public in favor of the rule. We acknowledge this comment. 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 7:45 a.m. until 2 p.m. on September 16, 2018. The safety zone will cover certain navigable waters on the Wando River, Cooper River, Charleston Harbor, and Ashley River, in Charleston, South Carolina. The duration of the zone is intended to ensure the safety of the participants, spectators, and the general public. No vessel or person will be permitted to enter, transit through, anchor in or remain within the safety zone without obtaining permission from the COTP or a designated representative. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the COTP or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the COTP or a designated representative. The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, or by on-scene designated representatives.
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: (1) The safety zone will be enforced for only seven hours; (2) the safety zone will move with the participant vessels so that once the swimmers clear a portion of the waterway, the safety zone will no longer be enforced in that portion of the waterway; (3) although persons and vessels will not be able to enter or transit through the safety zone without authorization from the COTP or a designated representative, they will be able to operate in the surrounding area during the enforcement period; (4) persons and vessels will still be able to enter or transit through the safety zone if authorized by the COTP or a designated representative; and (5) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Broadcast Notice to Mariners, or by on-scene designated representatives.
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 no 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 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
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) Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the COTP by telephone at (843)740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within the regulated area is granted, all persons and vessels receiving such authorization must comply with the instructions of the COTP or a designated representative.
(3) The Coast Guard will provide notice of the regulated area by Marine Safety Information Bulletins, Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.
(d)
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce safety zones surrounding vessels involved in Coast Guard training exercises in Hood Canal, WA from October 22 through 26, 2018. This enforcement is necessary to ensure the safety of the maritime public and vessels near these exercises. During the enforcement period, entry into the safety zones is prohibited unless authorized by the Captain of the Port or her Designated Representative.
The regulations in 33 CFR 165.1339 will be enforced from 8 a.m. on October 22, 2018, through 5 p.m. on October 26, 2018.
If you have questions about this notice of enforcement, call or email Petty Officer Zachary Spence, Sector Puget Sound Waterways Management Division, Coast Guard; telephone 206-217-6051, email
The Coast Guard will enforce the safety zones around vessels involved in Coast Guard training exercises in Hood Canal, WA set forth in 33 CFR 165.1339, from 8 a.m. on October 22, 2018, through 5 p.m. on October 26, 2018. Under the provisions of 33 CFR 165.1339, no person or vessel may enter or remain within 500 yards of any vessel involved in Coast Guard training exercises while such vessel is transiting Hood Canal, WA, between Foul Weather Bluff and the entrance to Dabob Bay, unless authorized by the Captain of the Port or her Designated Representative. In addition, the regulation requires all vessels to obtain permission for entry during the enforcement period by contacting the on-scene patrol commander on VHF channel 13 or 16, or the Sector Puget Sound Joint Harbor Operations Center at 206-217-6001. Members of the maritime public will be able to identify participating vessels as those flying the Coast Guard Ensign. The Captain of the Port may also be assisted in the enforcement of the zone by other federal, state, or local agencies. In addition to this notice of enforcement in the
Federal Communications Commission.
Final rule.
In this document, the Federal Communications Commission (Commission) considers creating a uniform set of procedural rules for formal complaint proceedings delegated to the Enforcement Bureau and currently handled by its Market Disputes Resolution Division and Telecommunications Consumers Division. This document streamlines and consolidates the procedural rules governing formal complaints filed under section 208 of the Communications Act of 1934, as amended (Act); pole attachment complaints filed under section 224 of the Act; and formal advanced communications services and equipment complaints filed under sections 255, 716, and 718 of the Act.
Effective October 4, 2018.
Michael Engel, Federal Communications Commission Enforcement Bureau, Market Disputes Resolution Division, at (202) 418-7330.
This is a summary of the Commission's Report and Order in EB Docket No. 17-245, FCC 18-96 adopted July 12, 2018 and released July 18, 2018. The full text of this document is available for public inspection during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. It also is available on the Commission's website at
This document contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act,
Common carriers, Communications, Telecommunications, Telephone.
For the reasons discussed in this preamble, the Federal Communications Commission amends 47 CFR parts 1, 6, 7, 14, 20, 64, and 68 as follows:
47 U.S.C. 151, 154(i), 155, 157, 160, 201, 225, 227, 303, 309, 332, 1403, 1404, 1451, 1452, and 1455, unless otherwise noted.
(d) Except in formal complaint proceedings against common carriers under §§ 1.720 through 1.740 of this chapter, documents may be served upon a party, his attorney, or other duly constituted agent by delivering a copy or by mailing a copy to the last known address. Documents that are required to be served must be served in paper form, even if documents are filed in electronic form with the Commission, unless the party to be served agrees to accept service in some other form.
(f) * * *
(1) * * *
(i) Formal complaint proceedings under section 208 of the Act and rules in §§ 1.720 through 1.740, and pole attachment complaint proceedings under section 224 of the Act and rules in §§ 1.1401 through 1.1415;
The Commission will forward informal complaints to the appropriate carrier for investigation and may set a due date for the carrier to provide a written response to the informal complaint to the Commission, with a copy to the complainant. The response will advise the Commission of the carrier's satisfaction of the complaint or of its refusal or inability to do so. Where there are clear indications from the carrier's response or from other communications with the parties that the complaint has been satisfied, the Commission may, in its discretion, consider a complaint proceeding to be closed. In all other cases, the Commission will notify the complainant that if the complainant is not satisfied by the carrier's response, or if the carrier has failed to submit a response by the due date, the complainant may file a formal complaint in accordance with § 1.721.
When an informal complaint has not been satisfied pursuant to § 1.717, the complainant may file a formal complaint with this Commission in the form specified in § 1.721. Such filing will be deemed to relate back to the filing date of the informal complaint:
The following procedural rules apply to formal complaint proceedings under 47 U.S.C. 208, pole attachment complaint proceedings under 47 U.S.C. 224, and advanced communications services and equipment formal complaint proceedings under 47 U.S.C. 255, 617, and 619, and part 14 of this chapter. Additional rules relevant only to pole attachment complaint proceedings are provided in subpart J of this part.
Formal complaint proceedings are generally resolved on a written record consisting of a complaint, answer, reply, and joint statement of stipulated facts, disputed facts and key legal issues, along with all associated evidence in the record. The Commission may also require or permit other written submissions such as briefs, proposed findings of fact and conclusions of law, or other supplementary documents or pleadings.
(a) All papers filed in any proceeding subject to this part must be drawn in conformity with the requirements of §§ 1.49, 1.50, and 1.52.
(b) Pleadings must be clear, concise, and direct. All matters concerning a claim, defense or requested remedy, including damages, should be pleaded fully and with specificity.
(c) Pleadings must contain facts which, if true, are sufficient to constitute a violation of the Act or a Commission regulation or order, or a defense to an alleged violation.
(d) Averred facts, claims, or defenses shall be made in numbered paragraphs and must be supported by relevant evidence. The contents of each paragraph shall be limited as far as practicable to a statement of a single set of circumstances. Each claim founded on a separate transaction or occurrence and each affirmative defense shall be separately stated to facilitate the clear presentation of the matters set forth. Assertions based on information and belief are prohibited unless made in good faith and accompanied by a declaration or affidavit explaining the basis for the party's belief and why the party could not reasonably ascertain the facts from any other source.
(e) Legal arguments must be supported by appropriate statutory, judicial, or administrative authority.
(f) Opposing authorities must be distinguished.
(g) Copies must be provided of all non-Commission authorities relied upon which are not routinely available in national reporting systems, such as unpublished decisions or slip opinions of courts or administrative agencies. In addition, copies of state authorities relied upon shall be provided.
(h) Parties are responsible for the continuing accuracy and completeness of all information and supporting authority furnished in a pending complaint proceeding. Information submitted, as well as relevant legal authorities, must be current and updated as necessary and in a timely manner before a decision is rendered on the merits of the complaint.
(i) Specific reference shall be made to any tariff or contract provision relied on in support of a claim or defense. Copies of relevant tariffs, contracts, or relevant portions that are referred to or relied upon in a complaint, answer, or other pleading shall be appended to such pleading.
(j) Pleadings shall identify the name, address, telephone number, and email address for either the filing party's attorney or, where a party is not represented by an attorney, the filing party. Pleadings may be signed by a party's attorney.
(k) All attachments shall be Bates-stamped or otherwise numbered sequentially. Parties shall cite to Bates-stamped page numbers in their pleadings.
(l) Pleadings shall be served on all parties to the proceeding in accordance with § 1.734 and shall include a certificate of service.
(m) Each pleading or other submission must contain a written verification that the signatory has read the submission and, to the best of his or her knowledge, information and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of the proceeding. If any pleading or other submission is signed in violation of this provision, the Commission may upon motion or upon its own initiative impose appropriate sanctions.
(n) Parties may petition the staff, pursuant to § 1.3, for a waiver of any of the rules governing formal complaints. Such waiver may be granted for good cause shown.
(o) A complaint may, on request of the filing party, be dismissed without prejudice as a matter of right prior to the adoption date of any final action taken by the Commission with respect to the complaint. A request for the return of an initiating document will be regarded as a request for dismissal.
(p) Amendments or supplements to complaints to add new claims or requests for relief are prohibited.
(q) Failure to prosecute a complaint will be cause for dismissal.
(r) Any document purporting to be a formal complaint which does not state a cause of action under the Communications Act, or a Commission regulation or order, will be dismissed. In such case, any amendment or supplement to such document will be considered a new filing which must be made within any applicable statutory limitations of actions.
(s) Any other pleading that does not conform with the requirements of the applicable rules may be deemed defective. In such case the Commission may strike the pleading or request that specified defects be corrected and that
(t) Pleadings shall be construed so as to do justice.
(u) Any party that fails to respond to official correspondence, a request for additional information, or an order or directive from the Commission may be subject to appropriate sanctions.
A formal complaint shall contain:
(a) The name of each complainant and defendant;
(b) The occupation, address and telephone number of each complainant and, to the extent known, each defendant;
(c) The name, address, telephone number, and email address of complainant's attorney, if represented by counsel;
(d) Citation to the section of the Communications Act or Commission regulation or order alleged to have been violated; each such alleged violation shall be stated in a separate count;
(e) Legal analysis relevant to the claims and arguments set forth therein;
(f) The relief sought, including recovery of damages and the amount of damages claimed, if known;
(g) Certification that the complainant has, in good faith, discussed or attempted to discuss the possibility of settlement with each defendant prior to the filing of the formal complaint. In disputes between businesses, associations, or other organizations, the certification shall include a statement that the complainant has engaged or attempted to engage in executive-level discussions concerning the possibility of settlement. Executive-level discussions are discussions among representatives of the parties who have sufficient authority to make binding decisions on behalf of the entity they represent regarding the subject matter of the discussions. Such certification shall include a statement that, prior to the filing of the complaint, the complainant notified each defendant in writing of the allegations that form the basis of the complaint and invited a response within a reasonable period of time. A refusal by a defendant to engage in discussions contemplated by this rule may constitute an unreasonable practice under the Act. The certification shall also include a brief summary of all additional steps taken to resolve the dispute prior to the filing of the formal complaint;
(h) A statement explaining whether a separate action has been filed with the Commission, any court, or other government agency that is based on the same claim or same set of facts, in whole or in part, or whether the complaint seeks prospective relief identical to the relief proposed or at issue in a notice-and-comment rulemaking proceeding that is concurrently before the Commission;
(i) An information designation containing:
(1) The name and, if known, the address and telephone number of each individual likely to have information relevant to the proceeding, along with the subjects of that information, excluding individuals otherwise identified in the complaint or exhibits thereto, and individuals employed by another party; and
(2) A copy—or a description by category and location—of all relevant documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control, excluding documents submitted with the complaint.
(j) A completed Formal Complaint Intake Form;
(k) A declaration, under penalty of perjury, by the complainant or complainant's counsel describing the amount, method, and date of the complainant's payment of the filing fee required under § 1.1106 and the complainant's 10-digit FCC Registration Number, as required by subpart W of this part. Submission of a complaint without the FCC Registration Number will result in dismissal of the complaint.
(a) If a complainant in a formal complaint proceeding wishes to recover damages, the complaint must contain a clear and unequivocal request for damages.
(b) In all cases in which recovery of damages is sought, the complaint must include either:
(1) A computation of each and every category of damages for which recovery is sought, along with an identification of all relevant documents and materials or such other evidence to be used by the complainant to prove the amount of such damages; or
(2) If any information not in the possession of the complainant is necessary to develop a detailed computation of damages, an explanation of:
(i) Why such information is unavailable to the complaining party;
(ii) The factual basis the complainant has for believing that such evidence of damages exists; and
(iii) A detailed outline of the methodology that would be used to create a computation of damages with such evidence.
(c) If a complainant wishes a determination of damages to be made in a proceeding that is separate from and subsequent to the proceeding in which the determinations of liability and prospective relief are made, the complainant must:
(1) Comply with paragraph (a) of this section, and
(2) State clearly and unequivocally that the complainant wishes a determination of damages to be made in a proceeding that is separate from and subsequent to the proceeding in which the determinations of liability and prospective relief will be made.
(d) If the Commission decides that a determination of damages would best be made in a proceeding that is separate from and subsequent to the proceeding in which the determinations of liability and prospective relief are made, the Commission may at any time bifurcate the case and order that the initial proceeding will determine only liability and prospective relief, and that a separate, subsequent proceeding initiated in accordance with paragraph (e) of this section will determine damages.
(e) If a complainant exercises its right under paragraph (c) of this section, or the Commission invokes its authority under paragraph (d) of this section, the complainant may initiate a separate proceeding to obtain a determination of damages by filing a supplemental complaint within sixty days after public notice (as defined in § 1.4(b)) of a decision that contains a finding of liability on the merits of the original complaint. Supplemental complaints filed pursuant to this section need not comply with the requirements in §§ 1.721(c) or 1.722(d), (g), (h), (j), and (k). The supplemental complaint shall be deemed, for statutory limitations purposes, to relate back to the date of the original complaint.
(f) The Commission may, in its discretion, order the defendant either to post a bond for, or deposit into an interest bearing escrow account, a sum equal to the amount of damages which the Commission finds, upon preliminary investigation, is likely to be ordered after the issue of damages is fully litigated, or some lesser sum which may be appropriate, provided the Commission finds that the grant of this relief is favored on balance upon consideration of the following factors:
(1) The complainant's potential irreparable injury in the absence of such deposit;
(2) The extent to which damages can be accurately calculated;
(3) The balance of the hardships between the complainant and the defendant; and
(4) Whether public interest considerations favor the posting of the bond or ordering of the deposit.
(g) The Commission may, in its discretion, end adjudication of damages by adopting a damages computation method or formula. In such cases, the parties shall negotiate in good faith to reach an agreement on the exact amount of damages pursuant to the Commission-mandated method or formula. Within 30 days of the release date of the damages order, parties shall submit jointly to the Commission either:
(1) A statement detailing the parties' agreement as to the amount of damages;
(2) A statement that the parties are continuing to negotiate in good faith and a request that the parties be given an extension of time to continue negotiations; or
(3) A statement detailing the bases for the continuing dispute and the reasons why no agreement can be reached.
(h) In any proceeding to which no statutory deadline applies, the Commission may, in its discretion, suspend ongoing damages proceedings to provide the parties with time to pursue settlement negotiations or mediation under § 1.737.
(a) Any party that intends to file a complaint subject to the 5-month deadline in 47 U.S.C. 208(b)(1) must comply with the pre-complaint procedures below. The Enforcement Bureau's Market Disputes Resolution Division will not process complaints subject to the 5-month deadline unless the filer complies with these procedures.
(b) A party seeking to file a complaint subject to 47 U.S.C. 208(b)(1) shall notify the Chief of the Market Disputes Resolution Division in writing of its intent to file the complaint, and provide a copy of the letter to the defendant. Commission staff will convene a conference with both parties as soon as practicable. During that conference, the staff may discuss, among other things:
(1) Scheduling in the case;
(2) Narrowing factual and legal issues in dispute;
(3) Information exchange and discovery necessary to adjudicate the dispute;
(4) Entry of a protective order governing confidential material; and
(5) Preparation for and scheduling a mandatory settlement negotiation session at the Commission.
(c) Staff will endeavor to complete the pre-complaint process as expeditiously as possible. Staff may direct the parties to exchange relevant information during the pre-complaint period.
(a) Two or more complainants may join in one complaint if their respective causes of action are against the same defendant and concern substantially the same facts and alleged violation of the Communications Act or Commission regulation or order.
(b) Two or more grounds of complaint involving substantially the same facts may be included in one complaint, but should be separately stated and numbered.
(a) Any defendant upon which a copy of a formal complaint is served shall answer such complaint in the manner prescribed under this section within 30 calendar days of service of the formal complaint by the complainant, unless otherwise directed by the Commission.
(b) The answer shall advise the complainant and the Commission fully and completely of the nature of any defense, and shall respond specifically to all material allegations of the complaint. Every effort shall be made to narrow the issues in the answer. The defendant shall state concisely its defense to each claim asserted, admit or deny the averments on which the complainant relies, and state in detail the basis for admitting or denying such averment. General denials are prohibited. Denials based on information and belief are prohibited unless made in good faith and accompanied by a declaration or affidavit explaining the basis for the defendant's belief and why the defendant could not reasonably ascertain the facts from the complainant or any other source. If the defendant is without knowledge or information sufficient to form a belief as to the truth of an averment, the defendant shall so state and this has the effect of a denial. When a defendant intends in good faith to deny only part of an averment, the defendant shall specify so much of it as is true and shall deny only the remainder. The defendant may deny the allegations of the complaint as specific denials of either designated averments or paragraphs.
(c) The answer shall include legal analysis relevant to the claims and arguments set forth therein.
(d) Averments in a complaint or supplemental complaint filed pursuant to § 1.723(d) are deemed to be admitted when not denied in the answer.
(e) Affirmative defenses to allegations in the complaint shall be specifically captioned as such and presented separately from any denials made in accordance with paragraph (b) of this section.
(f) The answer shall include an information designation containing:
(1) The name and, if known, the address and telephone number of each individual likely to have information relevant to the proceeding, along with the subjects of that information, excluding individuals otherwise identified in the complaint, answer, or exhibits thereto, and individuals employed by another party; and
(2) A copy—or a description by category and location—of all relevant documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control, excluding documents submitted with the complaint or answer.
(g) Failure to file an answer may be deemed an admission of the material facts alleged in the complaint. Any defendant that fails to file and serve an answer within the time and in the manner prescribed by this part may be deemed in default and an order may be entered against such defendant in accordance with the allegations contained in the complaint.
Cross-complaints seeking any relief within the jurisdiction of the Commission against any party (complainant or defendant) to that proceeding are prohibited. Any claim that might otherwise meet the requirements of a cross-complaint may be filed as a separate complaint in accordance with §§ 1.720 through 1.740. For purposes of this subpart, the term “cross-complaint” shall include counterclaims.
(a) A complainant shall file and serve a reply within 10 calendar days of service of the answer, unless otherwise directed by the Commission. The reply shall contain statements of relevant, material facts and legal arguments that respond to the factual allegations and legal arguments made by the defendant. Other allegations or arguments will not be considered by the Commission.
(b) Failure to reply will not be deemed an admission of any allegations contained in the responsive pleading, except with respect to any affirmative defense set forth therein. Failure to
(c) The reply shall include legal analysis relevant to the claims and arguments set forth therein.
(d) The reply shall include an information designation containing:
(1) The name and, if known, the address and telephone number of each individual likely to have information relevant to the proceeding and addressed in the reply, along with the subjects of that information, excluding individuals otherwise identified in the complaint, answer, reply, or exhibits thereto, and individuals employed by another party; and
(2) A copy—or a description by category and location—of all relevant documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control that are addressed in the reply, excluding documents submitted with the complaint or answer.
(a) A request for a Commission order shall be by written motion, stating with particularity the grounds and authority therefor, including any supporting legal analysis, and setting forth the relief sought.
(b) Motions to compel discovery must contain a certification by the moving party that a good faith attempt to resolve the dispute was made prior to filing the motion.
(c) Motions seeking an order that the allegations in the complaint be made more definite and certain are prohibited.
(d) Motions to dismiss all or part of a complaint are permitted. The filing of a motion to dismiss does not suspend any other filing deadlines under the Commission's rules, unless staff issues an order suspending such deadlines.
(e) Oppositions to motions shall be filed and served within 5 business days after the motion is served. Oppositions shall be limited to the specific issues and allegations contained in the motion; when a motion is incorporated in an answer to a complaint, the opposition to such motion shall not address any issues presented in the answer that are not also specifically raised in the motion. Failure to oppose any motion may constitute grounds for granting the motion.
(f) No reply may be filed to an opposition to a motion, except under direction of Commission staff.
(a) A complainant may file with the Commission and serve on a defendant, concurrently with its complaint, up to 10 written interrogatories. A defendant may file with the Commission and serve on a complainant, concurrently with its answer, up to 10 written interrogatories. A complainant may file with the Commission and serve on a defendant, concurrently with its reply, up to five additional written interrogatories. Subparts of any interrogatory will be counted as separate interrogatories for purposes of compliance with this limit. Interrogatories filed and served pursuant to this procedure may be used to seek discovery of any non-privileged matter that is relevant to the material facts in dispute in the pending proceeding. This procedure may not be employed for the purpose of delay, harassment, or obtaining information that is beyond the scope of permissible inquiry related to the material facts in dispute in the proceeding.
(b) Interrogatories filed and served pursuant to paragraph (a) of this section shall contain an explanation of why the information sought in each interrogatory is both necessary to the resolution of the dispute and not available from any other source.
(c) Unless otherwise directed by the Commission, within seven calendar days, a responding party shall file with the Commission and serve on the propounding party any opposition and objections to interrogatories. The grounds for objecting to an interrogatory must be stated with specificity. Unless otherwise directed by the Commission, any interrogatories to which no opposition or objection is raised shall be answered within 20 calendar days.
(d) Commission staff shall rule in writing on the scope of, and schedule for answering, any disputed interrogatories based upon the justification for the interrogatories properly filed and served pursuant to paragraph (a) of this section, and any objections or oppositions thereto, properly filed and served pursuant to paragraph (c) of this section.
(e) Interrogatories shall be answered separately and fully in writing under oath or affirmation by the party served, or if such party is a public or private corporation or partnership or association, by any officer or agent who shall furnish such information as is available to the party. The answers shall be signed by the person making them, and the attorney who objects must sign any objections. The answers shall be filed with the Commission and served on the propounding party.
(f) The Commission, in its discretion, may allow additional discovery, including, but not limited to, document production and/or depositions, and it may modify the scope, means and scheduling of discovery in light of the needs of a particular case and the requirements of applicable statutory deadlines.
(g) The Commission may, in its discretion, require parties to provide documents to the Commission in a scanned or other electronic format that:
(1) Indexes the documents by useful identifying information; and
(2) Allows staff to annotate the index so as to make the format an efficient means of reviewing the documents.
(h) A propounding party asserting that a responding party has provided an inadequate or insufficient response to a discovery request may file a motion to compel within ten days of the service of such response, or as otherwise directed by Commission staff, pursuant to the requirements of § 1.729.
(a) Any information produced in the course of a formal complaint proceeding may be designated as confidential by either party to the proceeding or a third party if the party believes in good faith that the materials fall within an exemption to disclosure contained in the Freedom of Information Act (FOIA), 5 U.S.C. 552(b)(1) through (9), and under § 0.459 of this chapter. Any party asserting confidentiality for such materials must:
(1) Clearly mark each page, or portion thereof, for which a confidential designation is claimed. The party claiming confidentiality should restrict its designations to encompass only the specific information that it asserts is confidential. If a confidential designation is challenged, the party claiming confidentiality shall have the burden of demonstrating, by a preponderance of the evidence, that the materials designated as confidential fall under the standards for nondisclosure enunciated in the FOIA and that the designation is narrowly tailored to encompass only confidential information.
(2) File with the Commission, using the Commission's Electronic Comment Filing System, a public version of the materials that redacts any confidential information and clearly marks each page of the redacted public version with a header stating “Public Version.” The redacted document shall be machine-readable whenever technically possible. Where the document to be filed electronically contains metadata that is
(3) File with the Secretary's Office an unredacted hard copy version of the materials that contains the confidential information and clearly marks each page of the unredacted confidential version with a header stating “Confidential Version.” The unredacted version must be filed on the same day as the redacted version.
(4) Serve one hard copy of the filed unredacted materials and one hard copy of the filed redacted materials on the attorney of record for each party to the proceeding, or, where a party is not represented by an attorney, each party to the proceeding either by hand delivery, overnight delivery, or email, together with a proof of such service in accordance with the requirements of §§ 1.47(g) and 1.734(f).
(b) An attorney of record for a party or a party that receives unredacted materials marked as confidential may disclose such materials solely to the following persons, only for use in prosecuting or defending a party to the complaint action, and only to the extent necessary to assist in the prosecution or defense of the case:
(1) Support personnel for counsel of record representing the parties in the complaint action;
(2) Officers or employees of the receiving party who are directly involved in the prosecution or defense of the case;
(3) Consultants or expert witnesses retained by the parties; and
(4) Court reporters and stenographers in accordance with the terms and conditions of this section.
(c) The individuals identified in paragraph (b) of this section shall not disclose information designated as confidential to any person who is not authorized under this section to receive such information, and shall not use the information in any activity or function other than the prosecution or defense in the case before the Commission. Each such individual who is provided access to the information shall sign a declaration or affidavit stating that the individual has personally reviewed the Commission's rules and understands the limitations they impose on the signing party.
(d) Parties may make copies of materials marked confidential solely for use by the Commission or persons designated in paragraph (b) of this section. Each party shall maintain a log recording the number of copies made of all confidential material and the persons to whom the copies have been provided.
(e) The Commission may adopt a protective order with further restrictions as appropriate.
(f) Upon termination of a formal complaint proceeding, including all appeals and petitions, the parties shall ensure that all originals and reproductions of any confidential materials, along with the log recording persons who received copies of such materials, shall be provided to the producing party. In addition, upon final termination of the proceeding, any notes or other work product derived in whole or in part from the confidential materials of an opposing or third party shall be destroyed.
(a) The Commission may, in its discretion, require the parties to file briefs summarizing the facts and issues presented in the pleadings and other record evidence and presenting relevant legal authority and analysis. The Commission may limit the scope of any briefs to certain subjects or issues. Unless otherwise directed by the Commission, all briefs shall include all legal and factual claims and defenses previously set forth in the complaint, answer, or any other pleading submitted in the proceeding.
(b) Claims and defenses previously made but not reflected in the briefs will be deemed abandoned.
(c) The Commission may require the parties to submit any additional information it deems appropriate for a full, fair, and expeditious resolution of the proceeding.
(a) In any complaint proceeding, the Commission may, in its discretion, direct the attorneys and/or the parties to appear before it for a status conference. A status conference may include discussion of:
(1) Simplification or narrowing of the issues;
(2) The necessity for or desirability of additional pleadings or evidentiary submissions;
(3) Obtaining admissions of fact or stipulations between the parties as to any or all of the matters in controversy;
(4) Settlement of all or some of the matters in controversy by agreement of the parties;
(5) Whether discovery is necessary and, if so, the scope, type, and schedule for such discovery;
(6) The schedule for the remainder of the case and the dates for any further status conferences; and
(7) Such other matters that may aid in the disposition of the complaint.
(b)(1) Parties shall meet and confer prior to the initial status conference to discuss:
(i) Settlement prospects;
(ii) Discovery;
(iii) Issues in dispute;
(iv) Schedules for pleadings;
(v) Joint statement of stipulated facts, disputed facts, and key legal issues; and
(2) Parties shall submit a joint statement of all proposals agreed to and disputes remaining as a result of such meeting to Commission staff on a date specified by the Commission.
(c) In addition to the initial status conference referenced in paragraph (a) of this section, any party may also request that a conference be held at any time after the complaint has been filed.
(d) During a status conference, the Commission staff may issue oral rulings pertaining to a variety of matters relevant to the conduct of a formal complaint proceeding including,
(e) Status conferences will be scheduled by the Commission staff at such time and place as it may designate to be conducted in person or by telephone conference call.
(f) The failure of any attorney or party, following reasonable notice, to appear at a scheduled conference will be deemed a waiver by that party and will not preclude the Commission staff from conferring with those parties or counsel present.
(a) Complaints may not be brought against multiple defendants unless they are commonly owned or controlled, are alleged to have acted in concert, are alleged to be jointly liable to complainant, or the complaint concerns common questions of law or fact. Complaints may, however, be consolidated by the Commission for disposition.
(b) The complainant shall remit separately the correct fee either by check, wire transfer, or electronically, in accordance with part 1, subpart G (see § 1.1106) and, shall file an original copy of the complaint, using the Commission's Electronic Comment Filing System. If a complaint is addressed against multiple defendants, the complainant shall pay a separate fee for each additional defendant.
(c) The complainant shall serve the complaint by hand delivery on either the named defendant or one of the
(d) Upon receipt of the complaint by the Commission, the Commission shall promptly send, by email, to each defendant named in the complaint, notice of the filing of the complaint. The Commission shall additionally send by email, to all parties, a schedule detailing the date the answer and any other applicable pleading will be due and the date, time, and location of the initial status conference.
(e) Parties shall provide hard copies of all submissions to staff in the Enforcement Bureau upon request.
(f) All subsequent pleadings and briefs filed in any formal complaint proceeding, as well as all letters, documents, or other written submissions, shall be filed using the Commission's Electronic Comment Filing System, excluding confidential material as set forth in § 1.731. In addition, all pleadings and briefs filed in any formal complaint proceeding, as well as all letters, documents, or other written submissions, shall be served by the filing party on the attorney of record for each party to the proceeding, or, where a party is not represented by an attorney, each party to the proceeding either by hand delivery, overnight delivery, or email, together with a proof of such service in accordance with the requirements of § 1.47(g). Service is deemed effective as follows:
(1) Service by hand delivery that is delivered to the office of the recipient by 5:30 p.m., local time of the recipient, on a business day will be deemed served that day. Service by hand delivery that is delivered to the office of the recipient after 5:30 p.m., local time of the recipient, on a business day will be deemed served on the following business day;
(2) Service by overnight delivery will be deemed served the business day following the day it is accepted for overnight delivery by a reputable overnight delivery service; or
(3) Service by email that is fully transmitted to the office of the recipient by 5:30 p.m., local time of the recipient, on a business day will be deemed served that day. Service by email that is fully transmitted to the office of the recipient after 5:30 p.m., local time of the recipient, on a business day will be deemed served on the following business day.
(g) Supplemental complaints filed pursuant to § 1.723 shall conform to the requirements set forth in this section, except that the complainant need not submit a filing fee.
(a) The Commission may issue such orders and conduct its proceedings as will best conduce to the proper dispatch of business and the ends of justice.
(b) The Commission may decide each complaint upon the filings and information before it, may request additional information from the parties, and may require one or more informal meetings with the parties to clarify the issues or to consider settlement of the dispute.
(a) With the exception of complaint proceedings under 47 U.S.C. 255, 617, and 619, and part 14 of this chapter, parties to a formal complaint proceeding against a common carrier, or a pole attachment complaint proceeding against a cable television system operator, a utility, or a telecommunications carrier, may request inclusion on the Accelerated Docket. Proceedings on the Accelerated Docket must be concluded within 60 days, and are therefore subject to shorter pleading deadlines and other modifications to the procedural rules that govern formal complaint proceedings.
(b) A complainant that seeks inclusion of a proceeding on the Accelerated Docket shall submit a request to the Chief of the Enforcement Bureau's Market Disputes Resolution Division, by phone and in writing, prior to filing the complaint.
(c) Within five days of receiving service of any formal complaint against a common carrier, or a pole attachment complaint against a cable television system operator, a utility, or a telecommunications carrier, a defendant may submit a request seeking inclusion of the proceeding on the Accelerated Docket to the Chief of the Enforcement Bureau's Market Disputes Resolution Division. The defendant shall submit such request by phone and in writing, and contemporaneously transmit a copy of the written request to all parties to the proceeding.
(d) Commission staff has discretion to decide whether a complaint, or portion of a complaint, is suitable for inclusion on the Accelerated Docket.
(e) In appropriate cases, Commission staff may require that the parties participate in pre-filing settlement negotiations or mediation under § 1.737.
(f) If the parties do not resolve their dispute and the matter is accepted for handling on the Accelerated Docket, staff will establish the schedule and process for the proceeding.
(g) If it appears at any time that a proceeding on the Accelerated Docket is no longer appropriate for such treatment, Commission staff may remove the matter from the Accelerated Docket either on its own motion or at the request of any party.
(h) In Accelerated Docket proceedings, the Commission may conduct a minitrial, or a trial-type hearing, as an alternative to deciding a case on a written record. Minitrials shall take place no later than between 40 and 45 days after the filing of the complaint. A Commission Administrative Law Judge (“ALJ”) or staff may preside at the minitrial.
(i) Applications for review of staff decisions issued on delegated authority in Accelerated Docket proceedings shall comply with the filing and service requirements in § 1.115(e)(4). In Accelerated Docket proceedings which raise issues that may not be decided on delegated authority (see 47 U.S.C. 155(c)(1); 47 CFR 0.331(c)), the staff decision will be a recommended decision subject to adoption or modification by the Commission. Any party to the proceeding that seeks modification of the recommended decision shall do so by filing comments challenging the decision within 15 days of its release. Opposition comments, shall be filed within 15 days of the comments challenging the decision; reply comments shall may be filed 10 days thereafter and shall be limited to issues raised in the opposition comments.
(j) If no party files comments challenging the recommended decision, the Commission will issue its decision adopting or modifying the recommended decision within 45 days of its release. If parties to the proceeding file comments to the recommended decision, the Commission will issue its decision adopting or modifying the recommended decision within 30 days of the filing of the final comments.
(a) The Commission encourages parties to attempt to settle or narrow their disputes. To that end, staff in the Enforcement Bureau's Market Disputes Resolution Division are available to conduct mediations. Staff will determine whether a matter is appropriate for mediation. Participation in mediation is generally voluntary, but may be required as a condition for including a matter on the Accelerated Docket.
(b) Parties may request mediation of a dispute before the filing of a complaint. After a complaint has been filed, parties may request mediation as long as a proceeding is pending before the Commission.
(c) Parties may request mediation by: Calling the Chief of the Enforcement Bureau's Market Disputes Resolution Division; submitting a written request in a letter addressed to the Chief of the Market Disputes Resolution Division; or including a mediation request in any pleading in a formal complaint proceeding, or an informal complaint proceeding under § 1.717. Any party requesting mediation must verify that it has attempted to contact all other parties to determine whether they are amenable to mediation, and shall state the response of each party, if any.
(d) Staff will schedule the mediation in consultation with the parties. Staff may request written statements and other information from the parties to assist in the mediation.
(e) In any proceeding to which no statutory deadline applies, staff may, in its discretion, hold a case in abeyance pending mediation.
(f) The parties and Commission staff shall keep confidential all written and oral communications prepared or made for purposes of the mediation, including mediation submissions, offers of compromise, and staff and party comments made during the course of the mediation (Mediation Communications). Neither staff nor the parties may use, disclose or seek to disclose Mediation Communications in any proceeding before the Commission (including an arbitration or a formal complaint proceeding involving the instant dispute) or before any other tribunal, unless compelled to do so by law. Documents and information that are otherwise discoverable do not become Mediation Communications merely because they are disclosed or discussed during the mediation. Unless otherwise directed by Commission staff, the existence of the mediation will not be treated as confidential. A party may request that the existence of the mediation be treated as confidential in a case where this fact has not previously been publicly disclosed, and staff may grant such a request for good cause shown.
(g) Any party or Commission staff may terminate a mediation by notifying other participants of their decision to terminate. Staff shall promptly confirm in writing that the mediation has ended. The confidentiality rules in paragraph (f) of this section shall continue to apply to any Mediation Communications. Further, unless otherwise directed, any staff ruling requiring that the existence of the mediation be treated as confidential will continue to apply after the mediation has ended.
(h) For disputes arising under 47 U.S.C. 255, 617, and 619, and the advanced communications services and equipment rules, parties shall submit the Request for Dispute Assistance in accordance with § 14.32 of this chapter.
(a) Where a complaint is filed pursuant to 47 U.S.C. 271(d)(6)(B), parties shall indicate whether they are willing to waive the 90 day resolution deadline contained in 47 U.S.C. 271(d)(6)(B) in the following manner:
(1) The complainant shall so indicate in both the complaint itself and in the Formal Complaint Intake Form, and the defendant shall so indicate in its answer; or
(2) The parties shall indicate their agreement to waive the 90 day resolution deadline to the Commission staff at the initial status conference, to be held in accordance with § 1.733.
(b) Requests for waiver of the 90 day resolution deadline for complaints filed pursuant to 47 U.S.C. 271(d)(6)(B) will not be entertained by the Commission staff subsequent to the initial status conference, absent a showing by the complainant and defendant that such waiver is in the public interest.
(a) Any party to a case involving claims under the Act that has been referred to the Commission by a court pursuant to the primary jurisdiction doctrine must contact the Market Disputes Resolution Division of the Enforcement Bureau for guidance before filing any pleadings or otherwise proceeding before the Commission.
(b) Based upon an assessment of the procedural history and the nature of the issues involved, the Market Disputes Resolution Division will determine the procedural means by which the Commission will handle the primary jurisdiction referral.
(c) Failure to contact the Market Disputes Resolution Division prior to filing any pleadings or otherwise proceeding before the Commission, or failure to abide by the Division's determinations regarding the referral, may result in dismissal.
(a) Except in extraordinary circumstances, final action on a formal complaint filed pursuant to section 208 of the Act, and not governed by section 208(b)(1), should be expected no later than 270 days from the date the complaint is filed with the Commission.
(b) The Enforcement Bureau shall have the discretion to pause the 270-day review period in situations where actions outside the Commission's control are responsible for unreasonably delaying Commission review of a complaint referenced in paragraph (a) of this section.
The rules and regulations contained in subpart J of this part provide complaint and enforcement procedures to ensure that telecommunications carriers and cable system operators have nondiscriminatory access to utility poles, ducts, conduits, and rights-of-way on rates, terms, and conditions that are just and reasonable. They also provide complaint and enforcement procedures for incumbent local exchange carriers (as defined in 47 U.S.C. 251(h)) to ensure that the rates, terms, and conditions of their access to pole attachments are just and reasonable.
(f) The term
(c) * * *
(1) Removal of facilities or termination of any service to those facilities, such removal or termination arising out of a rate, term or condition of the cable television system operator's or telecommunications carrier's pole attachment agreement;
(d) A cable television system operator or telecommunications carrier may file a “Petition for Temporary Stay” of the action contained in a notice received pursuant to paragraph (c) of this section within 15 days of receipt of such notice. Such submission shall not be considered unless it includes, in concise terms, the relief sought, the reasons for such relief, including a showing of irreparable harm and likely cessation of cable television service or telecommunication service, a copy of the notice, and certification of service as required by § 1.1404(b). The named may file an answer within 7 days of the date the Petition for Temporary Stay was filed. No further filings under this section will be considered unless requested or authorized by the Commission and no extensions of time will be granted unless justified pursuant to § 1.46.
(a) Pole attachment complaint proceedings shall be governed by the formal complaint rules in subpart E of this part, §§ 1.720-1.740, except as otherwise provided in this subpart J.
(b) The complaint shall be accompanied by a certification of service on the named defendant, and each of the Federal, State, and local governmental agencies that regulate any aspect of the services provided by the complainant or defendant.
(c) In a case where it is claimed that a rate, term, or condition is unjust or unreasonable, the complaint shall contain a statement that the State has not certified to the Commission that it regulates the rates, terms and conditions for pole attachments. The complaint shall include a statement that the utility is not owned by any railroad, any person who is cooperatively organized or any person owned by the Federal Government or any State.
(d) The complaint shall be accompanied by a copy of the pole attachment agreement, if any, between the cable television system operator or telecommunications carrier and the utility. If there is no present pole attachment agreement, the complaint shall contain:
(1) A statement that the utility uses or controls poles, ducts, or conduits used or designated, in whole or in part, for wire communication; and
(2) A statement that the cable television system operator or telecommunications carrier currently has attachments on the poles, ducts, conduits, or rights-of-way.
(e) The complaint shall state with specificity the pole attachment rate, term or condition which is claimed to be unjust or unreasonable and provide all data and information supporting such claim. Data and information supporting the complaint (including all information necessary for the Commission to apply the rate formulas in § 1.1406 should be based upon historical or original cost methodology, insofar as possible. Data should be derived from ARMIS, FERC 1, or other reports filed with state or federal regulatory agencies (identify source). The complainant shall also specify any other information and argument relied upon to attempt to establish that a rate, term, or condition is not just and reasonable.
(f) A utility must supply a cable television system operator or telecommunications carrier the information required in paragraph (e) of this section, as applicable, along with the supporting pages from its ARMIS, FERC Form 1, or other report to a regulatory body, and calculations made in connection with these figures, within 30 days of the request by the cable television system operator or telecommunications carrier.
(g) If any of the information and data required in paragraphs (e) and (f) of this section is not provided to the cable television system operator or telecommunications carrier by the utility upon reasonable request, the cable television system operator or telecommunications carrier shall include a statement indicating the steps taken to obtain the information from the utility, including the dates of all requests. No complaint filed by a cable television system operator or telecommunications carrier shall be dismissed where the utility has failed to provide the information required under paragraphs (e) and (f) after such reasonable request.
(a) The complaint shall be dismissed for lack of jurisdiction in any case where a suitable certificate has been filed by a State pursuant to paragraph (b) of this section. Such certificate shall be conclusive proof of lack of jurisdiction of this Commission. A complaint alleging a denial of access shall be dismissed for lack of jurisdiction in any case where the defendant or a State offers proof that the State is regulating such access matters. Such proof should include a citation to state laws and regulations governing access and establishing a procedure for resolving access complaints in a state forum. A complaint against a utility shall also be dismissed if the utility does not use or control poles, ducts, or conduits used or designated, in whole or in part, for wire communication or if the utility does not meet the criteria of § 1.1402(a).
(b) It will be rebuttably presumed that the state is not regulating pole attachments if the Commission does not receive certification from a state that:
(1) It regulates rates, terms and conditions for pole attachments;
(2) In so regulating such rates, terms and conditions, the state has the authority to consider and does consider the interests of the consumers of the services offered via such attachments, as well as the interests of the consumers of the utility services; and
(3) It has issued and made effective rules and regulations implementing the state's regulatory authority over pole attachments (including a specific methodology for such regulation which has been made publicly available in the state).
(c) Upon receipt of such certification, the Commission shall give public notice. In addition, the Commission shall compile and publish from time to time, a listing of states which have provided certification.
(d) Upon receipt of such certification, the Commission shall forward any pending case thereby affected to the state regulatory authority, shall so notify the parties involved and shall give public notice thereof.
(e) Certification shall be by order of the state regulatory body or by a person having lawful delegated authority under provisions of state law to submit such certification. Said person shall provide in writing a statement that he or she has such authority and shall cite the law,
(f) Notwithstanding any such certification, jurisdiction will revert to this Commission with respect to any individual matter, unless the state takes final action on a complaint regarding such matter:
(1) Within 180 days after the complaint is filed with the state, or
(2) Within the applicable periods prescribed for such final action in such rules and regulations of the state, if the prescribed period does not extend beyond 360 days after the filing of such complaint.
(a) The complainant shall have the burden of establishing a
(b) The Commission shall determine whether the rate, term or condition complained of is just and reasonable. For the purposes of this paragraph, a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way. The Commission shall exclude from actual capital costs those reimbursements received by the utility from cable operators and telecommunications carriers for non-recurring costs.
(c) The Commission shall deny the complaint if it determines that the complainant has not established a
(d) The Commission will apply the following formulas for determining a maximum just and reasonable rate:
(1) The following formula shall apply to attachments to poles by cable operators providing cable services. This formula shall also apply to attachments to poles by any telecommunications carrier (to the extent such carrier is not a party to a pole attachment agreement) or cable operator providing telecommunications services until February 8, 2001:
(2) With respect to attachments to poles by any telecommunications carrier or cable operator providing telecommunications services, the maximum just and reasonable rate shall be the higher of the rate yielded by paragraphs (d)(2)(i) or (d)(2)(ii) of this section.
(i) The following formula applies to the extent that it yields a rate higher than that yielded by the applicable formula in paragraph (d)(2)(ii) of this section:
(ii) The following formula applies to the extent that it yields a rate higher than that yielded by the applicable formula in paragraph (d)(2)(i) of this section:
(3) The following formula shall apply to attachments to conduit by cable operators and telecommunications carriers:
simplified as:
(4) If no inner-duct is installed the fraction, “1 Duct divided by the No. of Inner-Ducts” is presumed to be
(a) If the Commission determines that the rate, term, or condition complained of is not just and reasonable, it may prescribe a just and reasonable rate, term, or condition and may:
(1) Terminate the unjust and/or unreasonable rate, term, or condition;
(2) Substitute in the pole attachment agreement the just and reasonable rate, term, or condition established by the Commission; and/or
(3) Order a refund, or payment, if appropriate. The refund or payment will normally be the difference between the amount paid under the unjust and/or unreasonable rate, term, or condition and the amount that would have been paid under the rate, term, or condition established by the Commission, plus interest, consistent with the applicable statute of limitations.
(b) If the Commission determines that access to a pole, duct, conduit, or right-of-way has been unlawfully denied or delayed, it may order that access be permitted within a specified time frame and in accordance with specified rates, terms, and conditions.
(a) With respect to the formula referenced in § 1.1406(d)(2), a utility shall apportion the cost of providing unusable space on a pole so that such apportionment equals two-thirds of the costs of providing unusable space that would be allocated to such entity under an equal apportionment of such costs among all attaching entities.
(c) Utilities may use the following rebuttable presumptive averages when calculating the number of attaching entities with respect to the formula referenced in § 1.1406(d)(2). For non-urbanized service areas (under 50,000 population), a presumptive average number of attaching entities of three. For urbanized service areas (50,000 or higher population), a presumptive average number of attaching entities of five. If any part of the utility's service area within the state has a designation of urbanized (50,000 or higher population) by the Bureau of Census, United States Department of Commerce, then all of that service area shall be designated as urbanized for purposes of determining the presumptive average number of attaching entities.
With respect to the formulas referenced in § 1.1406(d)(1) and (d)(2), the space occupied by an attachment is presumed to be one foot. The amount of usable space is presumed to be 13.5 feet. The amount of unusable space is presumed to be 24 feet. The pole height is presumed to be 37.5 feet. These presumptions may be rebutted by either party.
(d)
(1) A utility may withdraw an outstanding estimate of charges to perform make-ready work beginning 14 days after the estimate is presented.
(2) A cable operator or telecommunications carrier may accept a valid estimate and make payment any time after receipt of an estimate but before the estimate is withdrawn.
(i) If a utility fails to respond as specified in paragraph (c) of this section, a cable operator or telecommunications carrier requesting attachment in the communications space may, as specified in § 1.1412, hire a contractor to complete a survey. If make-ready is not complete by the date specified in paragraph (e)(1)(ii) of this section, a cable operator or telecommunications carrier requesting attachment in the communications space may hire a contractor to complete the make-ready:
(a) A utility shall make available and keep up-to-date a reasonably sufficient list of contractors it authorizes to perform surveys and make-ready in the communications space on its utility poles in cases where the utility has failed to meet deadlines specified in § 1.1411.
(b) If a cable operator or telecommunications carrier hires a contractor for purposes specified in § 1.1411, it shall choose from among a utility's list of authorized contractors.
(a)
(b)
47 U.S.C. 151-154, 208, 255, and 303(r).
(a) All manufacturers of telecommunications equipment or customer premises equipment and all providers of telecommunications services, as defined under this subpart are subject to the enforcement provisions specified in the Act and the rules in this chapter.
(b) For purposes of §§ 6.15-6.16, the term “manufacturers” shall denote manufacturers of telecommunications equipment or customer premises equipment and the term “providers” shall denote providers of telecommunications services.
Any person may file either a formal or informal complaint against a manufacturer or provider alleging violations of section 255 of the Act or this part subject to the enforcement requirements set forth in §§ 14.30 through 14.38 of this chapter.
47 U.S.C. 151-154, 208, 255, and 303(r).
(a) For purposes of §§ 7.15 through 7.16, the term “manufacturers” shall denote any manufacturer of telecommunications equipment or customer premises equipment which performs a voicemail or interactive menu function.
(b) All manufacturers of telecommunications equipment or customer premises equipment and all providers of voicemail and interactive menu services, as defined under this subpart, are subject to the enforcement provisions specified in the Act and the rules in this chapter.
(c) The term “provider” shall denote any provider of voicemail or interactive menu service.
Any person may file either a formal or informal complaint against a manufacturer or provider alleging violations of section 255 or this part subject to the enforcement requirements set forth in §§ 14.30 through 14.38 of this chapter.
47 U.S.C. 151-154, 255, 303, 403, 503, 617, 618, 619 unless otherwise noted.
Formal complaint proceedings alleging a violation of 47 U.S.C. 255, 617, or 619, or parts 6, 7, or 14 of this chapter, shall be governed by the formal
47 U.S.C. 151, 152(a) 154(i), 157, 160, 201, 214, 222, 251(e), 301, 302, 303, 303(b), 303(r), 307, 307(a), 309, 309(j)(3), 316, 316(a), 332, 610, 615, 615a, 615b, 615c, unless otherwise noted.
(m) * * *
(4) * * *
(vii) A copy of the certification must be served on the PSAP in accordance with § 1.47 of this chapter. The PSAP may challenge in writing the accuracy of the carrier's certification and shall serve a copy of such challenge on the carrier.
47 U.S.C. 154, 201, 202, 218, 222, 225, 226, 227, 228, 251(e), 254(k), 403(b)(2)(B), (c), 616, 620, 1401-1473, unless otherwise noted.
(e) The Federal Communications Commission will not adjudicate a complaint filed pursuant to §§ 1.719 or §§ 1.720-1.740 of this chapter, involving an alleged unauthorized change, as defined by § 64.1100(e), while a complaint based on the same set of facts is pending with a state commission.
(c)
47 U.S.C. 154, 303, 610.
(d) * * *
(3) In any multiunit premises where the demarcation point is not already at the MPOE, the provider of wireline telecommunications services must comply with a request from the premises owner to relocate the demarcation point to the MPOE. The provider of wireline telecommunications services must negotiate terms in good faith and complete the negotiations within forty-five days from said request. Premises owners may file complaints with the Commission for resolution of allegations of bad faith bargaining by provider of wireline telecommunications services.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A350-941 airplanes. This proposed AD was prompted by reports that, for multimaterial (hybrid) joints of the passenger door frame fittings, the interfay sealant was not applied between all surfaces of the joint parts. This proposed AD would require modification of the hybrid joints of the passenger doors by applying additional corrosion protection to the hybrid joints of the passenger door frame fittings. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by October 19, 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 NPRM, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email
You may examine the AD docket on the internet at
Kathleen Arrigotti, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218.
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0108, dated May 15, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS model A350-941 airplanes. The MCAI states:
Due to the misinterpretation of the prevailing requirements for multimaterial (hybrid) joints of the passenger door frame fittings, the interfay sealant, which prevents water ingress, was only applied on the surface in direct contact with the aluminum parts and not between all surfaces of the joint parts. For sealing of multi-material-stacks involving aluminum, application of interfay sealant is necessary between all assembled parts, even between parts made of corrosion resistant material, in order to ensure a double barrier to prevent water ingress in the joint and subsequent potential galvanic corrosion on the aluminum holes.
This condition, if not corrected, could lead to failure of the door to perform its intended function, possibly resulting in reduced evacuation capacity from the aeroplane during an emergency and consequent injury to occupants.
To address this unsafe condition, Airbus developed production mod 110790 and mod 109554 to improve protection against corrosion, and issued the SB [Airbus Service Bulletin A350-52-P012, Revision 00, dated September 7, 2017] to provide modification instructions for in-service pre-mod aeroplanes.
For the reasons described above, this [EASA] AD requires a modification by adding sealant and protective treatment on the affected passenger doors.
You may examine the MCAI in the AD docket on the internet at
Airbus SAS has issued Service Bulletin A350-52-P012, Revision 00, dated September 7, 2017. This service information describes procedures for modification of the hybrid joints of the left-hand and right-hand sides of the passenger door frame fittings at doors 1, 2, 3 and 4, by applying additional corrosion protection. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require accomplishing the actions specified in the service information described previously.
We estimate that this proposed AD affects 1 airplane of U.S. registry. We estimate the following costs to comply with this proposed AD:
According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all known costs in our cost estimate.
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 proposed 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 transport category airplanes to the Director of the System Oversight Division.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have 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.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the 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 proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by October 19, 2018.
None.
This AD applies to Airbus SAS Model A350-941 airplanes, certificated in any category, as identified in Airbus Service Bulletin A350-52-P012, Revision 00, dated September 7, 2017.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by reports that, for multimaterial (hybrid) joints of the passenger door frame fittings, the interfay sealant was not applied between all surfaces of the joint parts. We are issuing this AD to prevent water ingress in the hybrid joints and subsequent galvanic corrosion of the aluminum holes. This condition, if not corrected, could lead to failure of the door, resulting in reduced evacuation capacity from the airplane during an emergency and consequent injury to occupants.
Comply with this AD within the compliance times specified, unless already done.
Within 48 months after the date of issuance of the original certificate of airworthiness or the original export certificate of airworthiness, whichever occurs earlier: Apply additional corrosion protection (
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2018-0108, dated May 15, 2018, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Kathleen Arrigotti, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218.
(3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email
Federal Permitting Improvement Steering Council.
Notice of proposed rulemaking.
This notice of proposed rulemaking proposes to establish an initiation fee for project sponsors to reimburse the Federal Permitting Improvement Steering Council—Office of the Executive Director (FPISC-OED) for reasonable costs to implement certain requirements and authorities required under Title 41 of the Fixing America's Surface Transportation Act (FAST-41) and costs of operating FPISC-OED. FAST-41 creates a new authority to establish a fee structure to reimburse reasonable costs incurred in implementing certain requirements and authorities including the costs to agencies and the costs of operating the Permitting Council. In this rulemaking, we propose an initiation fee that would cover only reasonable costs for FPISC-OED's operations and costs to provide oversight and support to implement FAST-41. We seek comments on all aspects of the proposed rulemaking.
We will accept comments, data, and information regarding this proposed rule no later than November 5, 2018.
Submit comments in response to FPISC Case 2018-001 by any of the following methods:
•
•
Amber Levofsky, Federal Permitting Improvement Steering Council—Office of the Executive Director, 1800 F Street NW, Washington, DC 20504; telephone number: 202-412-2064; email address:
Title 41 of the Fixing America's Surface Transportation Act (Pub. L. 114-94, secs. 41001
To become a new covered project under FAST-41, the project sponsor must submit a complete FAST-41 initiation notice (FIN) and send it to the facilitating agency, as designated in the OMB and CEQ Guidance to Federal Agencies Regarding the Environmental Review and Authorization Process for Infrastructure Projects (FAST-41 Implementation Guidance, published January 13, 2017) at
If a FIN is approved and the project becomes a covered project under FAST-41, FPISC-OED supports the relevant Federal agencies and project sponsor during the Federal environmental review and authorization process. This support can include managing the integrity and content of data on the publicly-available Permitting Dashboard regarding schedules for the specific permits during the permitting process, verifying the accuracy of the data on a routine basis, assessing and determining the viability of modifications to schedules after they are posted on the Permitting Dashboard, and handling disputes between Federal agencies or between a project sponsor and a Federal agency related to the schedules (42 U.S.C. 4370m-2(c)(2)). In addition, FPISC-OED facilitates regularly scheduled Permitting Council meetings, consultations with the Department of Transportation (DOT) on Permitting Dashboard management, and meetings with project sponsors regarding project status and any updates related to agency coordination.
The duties of the Executive Director include, but are not limited to:
• Developing, in consultation with the Permitting Council, “recommended performance schedules, including intermediate and final completion dates, for environmental reviews and authorizations most commonly required for each category of covered projects” (42 U.S.C. 4370m-1(c)(1)(C));
• Recommending, in consultation with the Permitting Council, to the Director of OMB or to CEQ, guidance for agencies to carry out the responsibilities of FAST-41(42 U.S.C. 4370m-1(c)(1)(D));
• Coordinating with the Permitting Council to issue yearly recommendations on best practices for the categories outlined in 42 U.S.C. 4370m-1(c)(2)(B);
• Coordinating with the Permitting Council to meet annually with groups or individuals representing State, tribal, and local governments that are engaged in the infrastructure permitting process (42 U.S.C. 4370m-1(c)(2)(C));
• Reviewing and approving any modifications of more than 30 days to the permitting schedule of covered projects to prevent undue delays and ensure a realistic and concurred-upon schedule has been developed, upon which all parties will act moving forward (42 U.S.C. 4370m-2(c)(2)(D)(i)(III)); and
• Mediating disputes between project sponsors and relevant agencies related to the permitting timetable. If no conclusions are made after a total of 60 days, the Office of Management and Budget will make a final decision (42 U.S.C. 4370m-2(c)(2)(C).
Pursuant to 42 U.S.C. 4370m-8(a), the heads of Permitting Council agencies, with the guidance of the Director of OMB and in consultation with the Executive Director, may issue regulations establishing a fee structure to recover, from project sponsors, reasonable costs incurred in conducting environmental reviews and authorizations for infrastructure projects covered by FAST-41. Reasonable costs include costs to implement the requirements and authorities of 42 U.S.C. 4370m-1 and 4370m-2, including (1) the costs to agencies and (2) the costs of operating the Council (42 U.S.C. 4370m-8(b)), which includes FPISC-OED.
FAST-41 established a new governance structure, set of procedures, and authorities to improve the timeliness, predictability, and transparency of the Federal environmental review and authorization process for covered infrastructure projects. Section 1900.1 of this proposed
We propose the effective date to be one day following publication of a final rule because we estimate that project sponsors will take only 2.5 hours to familiarize themselves with the rule, complete the FIN, and ensure that their accounting system(s) can transfer the appropriate initiation fee with the FIN. FAST-41 was signed into law in December 2015; since then, seven projects have submitted FINs and gone through the process of becoming covered projects. We request comment on the effective date of the proposed rule and whether the proposed effective date would provide project sponsors sufficient time to adequately comply with the regulations.
Section 1900.2 would define key terms used throughout the proposed regulations, many of which were derived from FAST-41, with modifications where further clarification was needed. We propose to adopt the same definition of the following terms as they are defined in 42 U.S.C. 4370m: “Agency,” “Covered project,” “Executive Director,” “Facilitating agency,” “Lead agency,” “NEPA,” and “Project sponsor.” In addition, we propose to add the following terms that have not been defined in FAST-41 to provide clarity for the regulations:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
In proposed section 1900.3(a), we propose an initiation fee of $200,000 per FIN submitted for each project by a project sponsor of a proposed covered project. An explanation of how this amount was determined is discussed in section B.iii of this proposed rule. The initiation fee would be due in two parts—$5,000 would be due at the time the project sponsor submits the FIN and $195,000 would be due within 10 business days of a determination that the project is a covered project for purposes of FAST-41. The $5,000 non-refundable portion was determined through analysis of FPISC-OED's costs incurred on pre-coordination with project sponsors, pre-coordination with lead and cooperating agencies, and FIN review. If the project is determined not to be a covered project, the $5,000 portion of the initiation fee would not be refunded and the $195,000 would not be assessed. We determined that 10 business days was an appropriate balance of providing sponsors with sufficient time to prepare the necessary funds and wanting to start providing FPISC-OED services as soon as possible. That being said, we solicit public comment on whether we should consider a different period of time.
In the future, we may need to adjust the amount of the initiation fee based on changes to program costs and the number of new FINs received. Section 1900.3(b) sets out the mechanism by which the Permitting Council would be able to change the fee. The fee being set in this regulation is based, in part, on the fact that in fiscal year (FY) 2017 FPISC-OED supported 35 covered projects. In the next few years, FPISC-OED anticipates additional projects becoming covered at the beginning of or in the early stages of project implementation. As a result, more coordination may be necessary between FPISC-OED, the Permitting Council agencies, and project sponsors. In addition, FPISC-OED's costs are anticipated to increase based on the number of projects that are accepted as covered projects as a greater number of projects will require additional staff for support. If necessary, FPISC-OED would adjust the fee by developing an average hourly rate for government staff using the number of full time employees multiplied by the salary of each employee (based on the General Schedule classification and pay system), which also includes overhead and operational costs. For contractor support costs, FPISC-OED would use total contract costs divided by full time employees to develop an average hourly rate that also includes salary, overhead, and operational costs. A change in the initiation fee would not change the non-refundable portion of the fee, only the portion due at the time the project was determined to be a covered project under FAST-41. The regulation would require FPISC to publish the new amount of the initiation fee in the
In proposed section 1900.3(c), any Indian tribe proposing covered projects on trust property are exempted from paying the initiation fee. This is consistent with the trust relationship as well as the government-to-government relationship between the Federal Government and federally-recognized Indian tribes, and will enable FPISC-OED to provide services, without
In addition to Indian tribes, the fee structure allows the Permitting Council to exempt other parties for which the fee would impose an undue financial burden or is otherwise determined to be inappropriate. Therefore, on a case-by-case basis, FPISC-OED would grant exemptions, in whole or in part, to project sponsors demonstrating that the fee would impose undue financial burden or was otherwise inappropriate. A petition for an exemption would require sufficient supporting evidence to demonstrate that the fee would be economically burdensome or inappropriate. FPISC-OED would consider the following factors in making an exemption determination:
(a) The nature and cost of the infrastructure project;
(b) The financial impact of the fee on the project sponsor;
(c) The financial resources of the project sponsor; and
(d) The type of operations of the project sponsor.
In proposed section 1900.3(d), the Executive Director would review a project sponsor's petition for an exemption and based on the factors listed above and would either approve or deny the petition for exemption. We are proposing the Executive Director have 30 days to review the petition for exemption and make a written determination. Once a determination is made, the Executive Director will transmit the written determination, including a statement of reasons, to the project sponsor. This proposal solicits public comment on the specific exemptions it is proposing and on the conditions by which it would review such exemptions.
In proposed section 1900.3(e), as allowed by FAST-41, the initiation fee would be used by FPISC-OED to cover its costs in implementing the requirements and authorities of 42 U.S.C. 4370m-1 and 4370m-2 and the operational costs of FPISC-OED (42 U.S.C. 4370m-8(a)). For example, activities undertaken by FPISC-OED that may be covered by the initiation fee could include, without being limited to, pre-coordination with project sponsors; pre-coordination with lead and cooperating agencies; FIN review; maintenance and enhancements of the Permitting Dashboard including operations, security, and the development and provision of training; outreach to stakeholders through conferences and meetings; producing handouts, flyers, and information materials for project sponsors related to FAST-41; developing recommended performance schedules including intermediate and final completion dates for environmental reviews and authorizations; assisting with development of coordinated project plans (CPPs); reviewing and approving any modifications of more than 30 days to the permitting schedule of covered projects; mediating disputes between projects sponsors and relevant agencies related to the permitting timetable; assessing Permitting Council agency updates to the CPPs and Permitting Dashboard; tracking compliance with permitting timetable dates; writing reports and implementation guidance; writing standard operating procedures; and conducting Permitting Council, Chief Environmental Review and Permitting Officer (CERPO), and Permitting Council Working Group meetings. The initiation fee would also cover FPISC-OED's costs of operations including, but not limited to, staffing and personnel, office space and equipment, and program support contracts. The proposed initiation fee would have no impact on fee requirements of other Federal agencies under their existing processes and is not intended to be allotted to Permitting Council agencies to facilitate their reviews and/or participation in the FAST-41 process.
In proposed section 1900.3(f), we would ensure that all initiation fees collected were deposited into the Environmental Review and Improvement Fund as required by FAST-41 (42 U.S.C. 4370m-8(d)(1)). Amounts collected under the initiation fee final rule would be available to the Permitting Council Executive Director, without appropriation or fiscal year limitation, for the purpose of administering FAST-41 and operating the FPISC-OED (42 U.S.C. 4370m-8(d)(2)). The use of funds accepted under this fee structure shall not impact impartial decision-making with respect to environmental reviews or authorizations, either substantively or procedurally, because FPISC-OED does not have any authority in the decision-making with respect to environmental reviews and authorizations (42 U.S.C. 4370m-8(e)). FPISC-OED ensures enhanced coordination, visibility, predictability, and accountability in the environmental review and authorization process. The outcome of the environmental review and authorization process remains with the lead, cooperating, and participating agencies, as applicable, that conduct and issue environmental reviews and authorizations.
In considering the potential impacts of the proposed rule, we anticipate that there will be no change in potential benefits associated with this rule. Benefits are not quantified in this analysis. However, the proposed rule is associated with benefits in that it allows for the continuation of the FPISC-OED's services. An initiation fee is necessary because as an oversight council, FPISC-OED is responsible for implementing the provisions of FAST-41 by facilitating and institutionalizing the transparency, accountability, and coordination among Federal agencies related to the Federal environmental review and authorization process. The fee allows FPISC-OED to carry out its obligations to improve the infrastructure permitting process. Specifically, an initiation fee would allow FPISC to continue to produce the following benefits for projects covered under FAST-41:
•
•
•
•
•
We evaluated potential costs and transfer provisions associated with this rulemaking. Cost provisions include consideration of time associated with rule familiarization for stakeholders and time required to complete the FIN. We concluded that the proposed rule would result in a 10-year total cost of $20,637 undiscounted, $18,290 discounted at 3 percent, and $15,847 discounted at 7 percent. The transfer provision accounts for the non-refundable portion of the initiation fee for all FINs as well as the additional fee required from successful project sponsors. We determined that over a 10-year period, the proposed rule would transfer funds from project sponsors to FPISC totaling $78,692,000 undiscounted, $67,963,353 discounted at 3 percent, and $56,794,754 discounted at 7 percent. The costs of the fee are described in greater detail in section IV.A.ii below.
The initiation fee amount was determined based on an analysis of current and projected FPISC-OED expenditures, a review of the existing portfolio of covered projects, and estimates of the number of new covered projects that will be added in future years. In FY 2017, FPISC-OED had expenditures of approximately $4.75 million and supported 35 projects on the Permitting Dashboard. Of those 35 covered projects, 25 were still in progress while 10 were listed as “Complete” at the end of FY 2017. Based on this data, we estimate the FY 2017 cost per FAST-41 covered project was approximately $190,000 ($4.75M/25 covered projects still in progress).
It is important to note that most of the initial set of 35 covered projects were existing projects that were already far along in the environmental review and authorization process when FAST-41 was enacted. As new projects are added, we anticipate additional support and coordination will be needed for newly designated covered projects that are in the early stages of development or the environmental review and authorization process. This enhanced level of support includes early coordination and stakeholder outreach, assisting in the development of CPPs and permitting timetables for the entire permitting process, consulting and facilitating throughout the Federal environmental review and authorization process, and monitoring and assessing Federal agency performance in meeting Federal permitting timetable goals. We estimated that the proposed $200,000 initiation fee per project for project sponsors is sufficient for FPISC-OED to fully carry out its responsibilities under FAST-41, including the additional level of support and coordination needed for newly designated covered projects.
At the beginning of FY 2018, FPISC-OED was overseeing 37 covered projects. Based on estimates of the number of projects that would be completed each year and the number of new covered projects each year, we estimate that FPISC-OED will support 24 new covered projects in FY 2019; 26 new covered projects in FY 2020; 33 new covered projects in FY 2021; 41 new covered projects in FY 2022; and 48 new covered projects each year in FY 2023-2028. Therefore, the annual fee collected would range from $4.80 million in FY 2019 to $9.60 million by FY 2023. This estimate comes from the anticipated increase in visibility of the program from projects successfully going through the FAST-41 process. In addition, we anticipate that by FY 2023 the number of new projects will stay steady at 48 new projects a year because there are a limited number of projects in the country that would be eligible to be covered under FAST-41. Furthermore, FPISC-OED anticipates not all eligible projects will apply to become covered projects.
The analysis assumes a 5 percent charge to provide a reserve fund for the program. OMB established Circular A-25 (User Charges), which promulgated Federal policy regarding the self-sufficiency of all projects.
Public demand for such services varies from year to year. This variation creates challenges because agencies seek to recover the costs of managing programs and the associated services provided to recipients. For this reason, many agencies maintain reserve funds to ensure that sufficient agency funding is available for the continued operation of the agency. In
The proposed initiation fee would not apply to covered projects that were already identified under FAST-41 and posted to the Permitting Dashboard prior to the effective date of this rule. The effective date would be one day after publication of the final rule. We propose the effective date because it estimates that project sponsors would take only 2.5 hours to familiarize themselves with the rule, complete the FIN, and ensure that their accounting system(s) can transfer the appropriate initiation fee with the FIN. For FY 2019 and beyond, we may reassess the amount of the initiation fee based on early program implementation experience and the number of FINs submitted by project sponsors for proposed covered projects, and to adequately cover the reasonable costs of FPISC-OED.
In addition, FAST-41 places a limit on the fee structure that requires the fee to “be established in a manner that ensures that the aggregate amount of fees collected for a fiscal year is estimated not to exceed 20 percent of the total estimated costs for the fiscal year for the resources allocated for the conduct of environmental reviews and authorizations covered by this subchapter, as determined by the Director of the Office of Management and Budget” (42 U.S.C. 4370m-8(c)(3)). Therefore, the total estimated costs for the fiscal year for the conduct of environmental reviews and authorizations covered by the subchapter was calculated by adding the cost for all environmental reviews under the National Environmental Policy Act (NEPA), all authorizations
• Environmental reviews costs (low range): Number of FEISs Published in FY 2014 * Low Range for Average Cost of EIS = 162 * $250,000 = $40.5 million
• Environmental reviews costs (high range): Number of FEISs Published in FY 2014 * High Range for Average Cost of EIS = 162 * $2 million = $324 million
• Average cost: (High range + Low rage)/2 = ($40.5 million + $324 million)/2 = $182.25 million
The data for the cost of authorizations for covered projects under FAST-41 is derived from an OMB data call to the Department of Agriculture, the Department of Commerce, the Department of Defense, the Department of Energy, the Department of Homeland Security, the Department of Housing and Urban Development, the Department of the Interior, the Department of Transportation, the Environmental Protection Agency, the Advisory Council on Historic Preservation, and the U.S. Army Corps of Engineers on August 19, 2014 regarding agencies' budgets for infrastructure permitting and review and other existing agency authorities for financing infrastructure permitting activities. The data collected from agencies is current as of August 17, 2015. The average cost in FY 2014 for authorizations for projects that likely would have been covered under FAST-41 was estimated to be approximately $106.33 million. In addition, the costs for FPISC-OED in FY 2017 were $4.75 million. FY 2017 numbers were used to estimate FPISC-OED costs since the office was not in existence in FY 2014. Therefore, the aggregate amount of fees collected for a fiscal year could not exceed $58.67 million (20 percent of $293.33 million). We estimate that FPISC-OED will have 24 new projects in FY 2019 and by FY 2023 there will be 48 new projects. Therefore, in FY 2019 the aggregate amount of fees collected by FPISC-OED would be $4.80 million ($200,000 * 24 new projects) and by FY 2023 the aggregate amount of fees collected by FPISC-OED would be $9.60 million ($200,000 * 48 new projects). Thus, the aggregate amount of fees would be far less than the 20 percent limit of $58.67 million. We request comments on the calculation of the proposed initiation fee and proposed calculation of future initiation fees.
Although we welcome comment on any aspect of this proposal, FPISC is particularly interested in receiving comments and views of interested parties concerning the following issues:
1.
2.
3.
We will accept comments, data, and information regarding this proposed rule no later than the date provided in the
1.
However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.
Do not submit to
FPISC-OED and GSA processes submissions made through
2.
Include contact information each time you submit comments, data, documents, and other information to FPISC-OED and GSA. Email submissions are preferred. If you submit via mail or hand delivery, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted electronically should be provided in PDF (preferred), Microsoft Word, or Excel file format. Provide documents that are not secured, written in English, and are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.
(a)
(b)
Factors of interest to us when evaluating requests to treat submitted information as confidential include: (1) A description of the items, (2) whether and why such items are customarily treated as confidential within the industry, (3) whether the information is generally known by or available from other sources, (4) whether the information has previously been made available to others without obligation concerning its confidentiality, (5) an explanation of the competitive injury to the submitting person which would result from public disclosure, (6) when such information might lose its confidential character due to the passage of time, and (7) why disclosure of the information would be contrary to the public interest.
It is our policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).
The docket is available for review at
This rule is a “significant regulatory action” under Executive Order 12866 so it was submitted to OMB for review.
We evaluated the potential costs and benefits that could result from this rulemaking. As presented in Table 1, we estimate that the proposed rule would result in a 10-year total cost of $20,637 undiscounted, $18,290 discounted at 3 percent, and $15,847 discounted at 7 percent. On an annualized basis, the proposed rule would result in a cost of $2,064 undiscounted, $2,144 discounted at 3 percent, and $2,256 discounted at 7 percent. The transfer provision accounts for the non-refundable portion of the initiation fee for all FINs as well as the additional fee required from successful project sponsors. We determined that over a 10-year period, the proposed rule will tranfer funds from project sponsors to FPISC-OED totaling $78.692 million undiscounted, $67.963 million discounted at 3 percent, and $56.795 million discounted at 7 percent. On an annualized basis, the transfer provision amounts to $7.869 million undiscounted, $7.967 million discounted at 3 percent, and $8.086 million discounted at 7 percent. Although we were unable to quantify benefits directly attributable to the fee, we do understand that there are significant benefits from FPISC-OED's services and the fee will allow the program to continue in future years. We invite comments from the public on how to estimate these benefits.
We estimated that rule familiarization would occur only during the first year of the analysis period and would require familiarization by a manager and by an environmental engineer. When determining the initiation fee, we assumed there would be 48 projects
We evaluated changes in the opportunity cost of time for project sponsors and other stakeholders using wage rates to represent the value of managers' or engineers' time that, in the absence of the rule, would not have been spent on rule familiarization or completing FINs to gather fee amounts. This analysis uses wage rates for General and Operations Managers (occupation code 11-1021) in the Utilities sector (North American Industry Classification System code 22) as well as wage rates for Environmental Engineers (occupation code 17-2081) in the Utilities sector (NAICS code 22). The source for wages is the median hourly wage data (May 2016) from the U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS), Occupational Employment Statistics (OES).
Rule familiarization is expected to require one hour of a manager's time and one hour of an environmental engineer's time for each project sponsor or other interested stakeholder. Because 24 FINs are expected in FY 2019, and because rule familiarization only takes place in FY 2019, the proposed rule will require a total of 24 hours of managers' time and 24 hours of environmental engineers' time at the appropriate wage rates (as discussed in the “
There are also costs associated with the additional time required for project sponsors to complete the FIN as a result of the changes introduced by this proposed rule, namely gathering an initiation fee. We estimate that program sponsors in each year will require 0.5 hours of a manager's time at the appropriate wage rate (as discussed in the “
Table 1 of this proposed rule shows the combined costs of rule familiarization and FIN completion. As presented in Table 1, the proposed rule would result in a 10-year total cost of $20,637 undiscounted, $18,290 discounted at 3 percent, and $15,847 discounted at 7 percent. On an annualized basis, the proposed rule would result in an undiscounted cost of $2,064, $2,144 discounted at 3 percent, and $2,256 discounted at 7 percent. Rule famliarization costs are assumed to occur only in FY 2019, and therefore are not discounted at either 3 percent or 7 percent. Costs associated with FIN completion occur each year and are discounted.
In considering the potential impacts of the proposed rule, we anticipate that there will be no change in potential benefits associated with this rule. Benefits are not quantified in this analysis. However, the proposed rule is associated with benefits in that it allows for the continuation of the FPISC-OED's services. An initiation fee is necessary because as an oversight council, FPISC-OED is responsible for implementing the provisions of FAST-41 by facilitating and institutionalizing the transparency, accountability, and coordination among Federal agencies related to the Federal environmental review and authorization process. The fee allows FPISC-OED to carry out its obligations to improve the infrastructure permitting process. Specifically, an initiation fee would allow FPISC to continue to produce the following benefits for projects found to be “covered” under FAST-41:
•
•
•
•
•
This rulemaking does not include any information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Regulatory Flexibility Act (5 U.S.C. 601
This proposed rule establishes a user fee for voluntary use of Permitting Council services for the purposes of streamlining Federal environmental reviews and authorizations for covered infrastructure projects. Entities may still receive Federal environmental reviews and authorizations without the use of Permitting Council services.
This proposed rule may affect up to several dozen entities at any given time. Based on the current list of 37 covered projects in NAICS codes 2211 (Electric power generation, transmission and distribution) and 2212 (Natural gas distribution), approximately one third count as small entities according to Small Business Administration (SBA) size standards. Therefore, this rule will have an impact on a substantial number of small entities. However, this rule will not have a significant economic impact on those entities. The costs of the rule occur across two categories (rule familiarization and application completion) and at most, have an impact of $185 per firm ($143 for rule familiarization and $42 for application completion). The standard threshold for a significant economic impact is considered 1 percent of a firm's revenue. Of the 37 current covered projects, no project sponsor has revenue less than $42 million.
For the reasons stated above, we certify that this proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.
Title II of the Unfunded Mandates Reform Act of 1995 (URMA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector (Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531)). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy (2 U.S.C. 1532(a) and (b)). The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. This proposed rule does not contain a Federal intergovernmental or private sector mandate, as those terms are defined in UMRA.
Executive Order 13132, “Federalism,” published at 64 FR 43255, on August 4, 1999, imposes certain requirements on agencies formulating and implementing policies and regulations that preempt State law or that have federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the states and then carefully assess the necessity for such actions. The Executive Order also requires agencies to have a process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. We examined this proposed rule and have determined that, if promulgated, it will not pre-empt State law. This action impacts project sponsors of FAST-41 covered projects. Accordingly, no further action is required by Executive Order 13132.
Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” published at 65 FR 67249, on Nov. 9, 2000, reaffirms the Federal government's commitment to tribal sovereignty, self-determination, and self-government. Its purpose is to ensure that all agencies consult with the Indian tribes and respect tribal sovereignty as they develop policy on issues that impact Indian communities. This proposed rule will allow a tribal government, or a consortium of tribal governments, to apply as project sponsors for an infrastructure project to become a FAST-41 covered project, and covered projects may be implemented on tribal lands. In addition, a tribal government or a consortium of tribal governments may be asked by a lead agency to become a cooperating or participating agency on a FAST-41 covered project. On November 30, 2017, the Executive Director of the Permitting Council sent letters to 567 federally-recognized tribes requesting consultation on this proposed rule. The Muscogee (CREEK) Nation provided a comment that requested an automatic exemption from the initiation fee for tribal governments proposing projects on trust property under FAST-41.
The United States government has specific responsibilities to each Tribe based on treaties, statutes, or other sources. Consistent with these responsibilities, the trust relationship, and the government-to-government relationship between the Federal government and federally-recognized tribes, the Federal government often provides services to tribes relating to the protection of trust assets at no cost. Therefore, the proposed rule includes an exemption for tribal grants proposing projects on trust property under FAST-41.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” published at 66 FR 28355 on May 22, 2001, requires Federal agencies to prepare and submit to OMB's Office of Information and Regulatory Affairs (OIRA) a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule or regulation, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
We have preliminarily concluded that this regulatory action is not a “significant energy action” because the proposed rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, we have not prepared a Statement of Energy Effects for this proposed rule.
Each infrastructure project that is covered under FAST-41 requires Federal agencies to render certain decisions. Such Federal agencies are required to adhere to the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321
This rule is not expected to be subject to the requirements of Executive Order 13771, published at 82 FR 9339, on February 3, 2017.
Administrative practice and procedure, Fees, Reporting and recordkeeping requirements.
42 U.S.C. 4370m
The purpose of this part is to establish an initiation fee to reimburse the Federal Permitting Improvement Steering Council-Office of the Executive Director (FPISC-OED) for costs incurred in the coordination of environmental reviews and authorizations under Title 41 of the Fixing America's Surface Transportation Act of 2015 (FAST-41) (42 U.S.C. 4370m
As used in this part—
(a)
(b)
(c)
(1) Indian tribe proposing covered projects on trust property; and
(2) Other parties determined by FPISC-OED, in whole or in part, for which an initiation fee would impose an undue financial burden or is otherwise determined to be inappropriate. A project sponsor must submit a petition for exemption which provides sufficient evidence to demonstrate that the initiation fee would be economically burdensome or inappropriate. FPISC-OED will consider the following factors in making an exemption determination:
(i) The nature and cost of the infrastructure project;
(ii) The financial impact of the initiation fee on the project sponsor;
(iii) The financial resources of the project sponsor; and
(iv) The type of operations of the project sponsor.
(d) On or before 30 days from the date that a project sponsor submits a complete petition for exemption, the Executive Director shall decide whether FPISC-OED will approve the petition for exemption based on the factors set forth in paragraph (c)(2) of this section. Upon a determination, the Executive Director shall notify in writing a project sponsor of the determination, including a statement of reasons.
(e)
(f)
Commission on Civil Rights.
Announcement of mini-briefing.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a mini-briefing of the Vermont Advisory Committee to the Commission will convene on Tuesday, September 18, 2018, at 11:00 a.m. (EDT) in Room 11 at the Vermont State House, 115 State Street, Montpelier, VT 05633. The purpose of the mini-briefing is to hear presentations from advocates and experts on judicial disparities in Vermont and continue project planning.
Tuesday, September 18, 2018 (EDT) at 11:00 a.m. (EDT).
Vermont State House, Room 11, 115 State Street, Montpelier, VT 05633.
Evelyn Bohor, at
If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at
Time will be set aside at the end of the meeting so that members of the public may address the Committee after the planning meeting. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Thursday, October 18, 2018. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Commission on Civil Rights.
Announcement of meetings.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting of the New Hampshire Advisory Committee to the Commission will convene at 4:00 p.m. (EDT) on Tuesday, September 11, 2018, in Room P435, University of New Hampshire, 88 Commercial Street, Manchester, NH. The purpose of the meeting is for project planning.
Tuesday, September 11, 2018, at 4:00 p.m. (EDT).
University of New Hampshire, Room P435, 88 Commercial St., Manchester, NH 03101.
Barbara J. Delaviez, Designated Federal Official (DFO),
If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at
Members of the public are invited to make statements during the open comment period of the meeting or submit written comments. The comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Commission on Civil Rights.
Announcement of meetings.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a meeting of the New York Advisory Committee to the Commission will convene by conference call at 12:00 p.m. (EDT) on: Friday, September 14, 2018. The purpose of the meeting is to discuss topics of study.
Friday, September 14, 2018 at 12:00 p.m. EDT.
David Barreras, at
Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-888-417-8465 and conference ID# 5308701. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-977-8339 and providing the operator with the toll-free conference call-in number: 1-888-417-8465 and conference ID# 5308701.
Members of the public are invited to make statements during the open comment period of the meetings or submit written comments. The comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Midwest Regional Office, U.S. Commission on Civil Rights, 230 S. Dearborn Street, Suite 2120, Chicago, IL 60604, faxed to (312) 353-8324, or emailed to David Barreras at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Commission on Civil Rights.
Announcement of roundtable meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a roundtable meeting of the Massachusetts Advisory Committee to the Commission will convene on Friday, September 14, 2018, at 12:00 p.m. (EDT) at McCarter & English, LLP, 265 Franklin Street, Boston, MA 02110. The purpose of the roundtable meeting is to hear presentations from advocates and experts on human trafficking and continue project planning.
Friday, September 14, 2018 (EDT) at 12:00 p.m. (EDT).
McCarter & English, LLP, 265 Franklin Street, Boston, MA 02110.
Evelyn Bohor, at
If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at
Time will be set aside at the end of the meeting so that members of the public may address the Committee after the planning meeting. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Monday, October 15, 2018. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
The Richland-Lexington Airport District, Columbia Metropolitan Airport, grantee of FTZ 127, submitted a notification of proposed production activity to the FTZ Board on behalf of Constantia Blythewood, LLC (Constantia Blythewood), located in Blythewood, South Carolina. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on August 27, 2018.
The Constantia Blythewood facility is located within Subzone 127E. The facility is used for the production of flexible packaging, engineered industrial films and related items for the food, beverage and personal care industries. Pursuant to 15 CFR 400.14(b), FTZ activity would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt Constantia Blythewood from customs duty payments on the foreign-status components used in export production. On its domestic sales, for the foreign-status materials/components noted below, Constantia Blythewood would be able to choose the duty rates during customs entry procedures that apply to: Paints and varnishes based on synthetic polymers; acrylic polymers; plastic films; self-adhesive paperboard; coated, impregnated, or covered printing paper and paperboard; foil-backed paperboard; backed and decorated aluminum foil; and, aluminum foil rolled with underlay (duty rate ranges from duty-free to 4.2%). Constantia Blythewood would be able to avoid duty on foreign-status components which become scrap/waste. Customs duties also could possibly be deferred or reduced on foreign-status production equipment.
The components and materials sourced from abroad include: Paints and varnishes based on polyester; paints and varnishes based on chemically modified natural polymers and dissolved in a non-aqueous medium; acrylic polymers; acrylic polymer plates; propylene polymer plates, sheets, films, foils and strips; polymers of vinyl chloride; plastic plates, sheets, films, foils and strips with textile components; plastic articles for decoration; paperboard; condenser paper; rolls of embossed paper; self-adhesive paper; paper covered with a substrate that will allow for lamination to another material; printing paper weighing over 30g; aluminum can body and lid stock; rolled aluminum foil of a thickness exceeding 0.01mm; embossed aluminum foil, not backed; etched capacitor foil; backed aluminum that has been covered or decorated; and, photographic films and dry plates (duty rate ranges from duty-free to 5.3%). The request indicates that certain materials/components are subject to special duties under Section 232 of the Trade Expansion Act of 1962 (Section 232) or Section 301 of the Trade Act of 1974 (Section 301), depending on the country of origin. The applicable Section 232 and Section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is October 15, 2018.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230-0002, and in the “Reading Room” section of the Board's website, which is accessible via
For further information, contact Elizabeth Whiteman at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of glycine from India. The period of investigation (POI) is January 1, 2017, through December 31, 2017. Interested parties are invited to comment on this preliminary determination.
Applicable September 4, 2018.
Davina Friedmann or Chelsey Simonovich, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0698 or (202) 482-1979, respectively.
This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on April 25, 2018.
The product covered by this investigation is glycine from India. For a complete description of the scope of the investigation,
In accordance with the preamble to Commerce's regulations,
For a summary of the product coverage comments and rebuttal responses submitted to the record for this preliminary determination and accompanying discussion and analysis of all comments timely received,
Commerce is conducting this investigation in accordance with section 701 of the Act. For each of the subsidy programs found countervailable, Commerce preliminarily determines that there is a subsidy,
In accordance with section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is aligning the final countervailing duty (CVD) determination in this investigation with the final determination in the companion antidumping duty (AD) investigation of glycine from India based on a request made by GEO Specialty Chemicals, Inc. and Chattem Chemicals, Inc. (the petitioners).
Sections 703(d) and 705(c)(5)(A) of the Act provide that in the preliminary determination, Commerce shall determine an estimated all-others rate for companies not individually examined. This rate shall be an amount equal to the weighted average of the estimated subsidy rates established for those companies individually examined, excluding any zero and
We preliminarily determine that the following estimated countervailable subsidy rates exist:
In accordance with section 703(d)(1)(B) and (d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the
Commerce intends to disclose its calculations and analysis performed to interested parties in this preliminary determination within five days of its public announcement, or if there is no public announcement, within five days of the date of this notice, in accordance with 19 CFR 351.224(b).
As provided in section 782(i)(1) of the Act, we intend to verify the information submitted by the respondents prior to making our final determination.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party's name,
In accordance with section 703(f) of the Act, we will notify the International Trade Commission (ITC) of its determination. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination.
This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act and 19 CFR 351.205(c).
The merchandise covered by this investigation is glycine at any purity level or grade. This includes glycine of all purity levels, which covers all forms of crude or technical glycine including, but not limited to, sodium glycinate, glycine slurry and any other forms of amino acetic acid or glycine. Subject merchandise also includes glycine and precursors of dried crystalline glycine that are processed in a third country, including, but not limited to, refining or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope glycine or precursors of dried crystalline glycine. Glycine has the Chemical Abstracts Service (CAS) registry number of 56-40-6. Glycine and glycine slurry are classified under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.49.4300. Sodium glycinate is classified in the HTSUS under 2922.49.8000. While the HTSUS subheadings and CAS registry number are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are not being provided to producers and exporters of glycine from Thailand. The period of investigation is January 1, 2017, through December 31, 2017. Interested parties are invited to comment on this preliminary determination.
Applicable September 4, 2018.
George Ayache, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2623.
This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on April 25, 2018.
The product covered by this investigation is glycine from Thailand. For a complete description of the scope of this investigation,
In accordance with the preamble to Commerce's regulations,
For a summary of the product coverage comments and rebuttal responses submitted to the record for this preliminary determination and accompanying discussion and analysis of all comments timely received,
Commerce is conducting this investigation in accordance with section 701 of the Act. For each of the subsidy programs at issue in this investigation, Commerce examined whether there is a subsidy,
In accordance with section 703(e)(1) of the Act, we preliminary determine that critical circumstances do not exist with respect to imports of glycine from Thailand. For a full description of the methodology and results of Commerce's analysis,
In accordance with section 705(a)(1) of the Act and 19 CFR 351.210(b)(4), Commerce is aligning the final countervailing duty (CVD) determination in this investigation with the final determination in the companion antidumping duty (AD) investigation of glycine from Thailand based on a request made by GEO Specialty Chemicals, Inc. and Chattem Chemicals, Inc. (the petitioners).
We preliminarily determine that the following estimated countervailable subsidy rates exist:
Consistent with section 703(d) of the Act, Commerce has not calculated an estimated weighted-average subsidy rate for all other producers/exporters because it has not made an affirmative preliminary determination.
Because Commerce preliminarily determines that no countervailable subsidies are being provided to the production or exportation of subject merchandise, Commerce will not direct U.S. Customs and Border Protection to suspend liquidation of any such entries.
Normally, Commerce discloses to interested parties the calculations performed in connection with a preliminary determination within five days of the public announcement of, or, where there is no public announcement, within five days of the date of publication of, the notice of preliminary determination in the
As provided in section 782(i)(1) of the Act, we intend to verify the information relied upon in making its final determination.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than seven days after the date on which the last verification report is issued in this investigation. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce within 30 days after the date of publication of this notice. Requests should contain the party's name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
In accordance with section 703(f) of the Act, we will notify the International Trade Commission (ITC) of its determination. If the final determination is affirmative, the ITC will make its final injury determination 75 days after the final determination.
This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act and 19 CFR 351.205(c).
The merchandise covered by this investigation is glycine at any purity level or grade. This includes glycine of all purity levels, which covers all forms of crude or technical glycine including but not limited to sodium glycinate, glycine slurry and any other forms of amino acetic acid or glycine. Subject merchandise also includes glycine and precursors of dried crystalline glycine that are processed in a third country, including, but not limited to, refining or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope glycine or precursors of dried crystalline glycine. Glycine has the Chemical Abstracts Service (CAS) registry number of 56-40-6. Glycine and glycine slurry are classified under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.49.4300. Sodium glycinate is classified in the HTSUS under 2922.49.8000. While the HTSUS subheadings and CAS registry number are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of glycine from the People's Republic of China (China) for the period of investigation January 1, 2017, through December 31, 2017. Interested parties are invited to comment on this preliminary determination.
Applicable September 4, 2018.
Yasmin Bordas or Tyler Weinhold, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3813 or (202) 482-1121, respectively.
This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on April 25, 2018.
The product covered by this investigation is glycine from China. For a complete description of the scope of this investigation,
In accordance with the preamble to Commerce's regulations,
For a summary of the product coverage comments and rebuttal responses submitted to the record for this preliminary determination and accompanying discussion and analysis of all comments timely received,
Commerce is conducting this investigation in accordance with section 701 of the Act. For each of the subsidy programs found countervailable, Commerce preliminarily determines that there is a subsidy,
Sections 703(d)(1)(A) and 705(c)(5)(A) of the Act provide that, in the preliminary determination, Commerce shall determine an estimated all-others rate for companies not individually examined. This rate shall be an amount equal to the weighted average of the estimated subsidy rates established for those companies individually examined, excluding any zero and
We preliminarily determine that the following estimated countervailable subsidy rates exist:
In accordance with section 703(d)(1)(B) and (d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend
Commerce intends to disclose its calculations and analysis performed to interested parties in this preliminary determination within five days of its public announcement, or if there is no public announcement, within five days of the date of this notice, in accordance with 19 CFR 351.224(b).
Because the examined respondents in this investigation did not provide information requested by Commerce and we preliminarily determine each of the examined respondents to have been uncooperative, we will not conduct verification.
Case briefs or other written comments may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 25 days after the date of publication of the preliminary determination. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than five days after the deadline date for case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party's name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at the U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
In accordance with section 703(f) of the Act, we will notify the International Trade Commission (ITC) of its determination. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination.
This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act and 19 CFR 351.205(c).
The merchandise covered by this investigation is glycine at any purity level or grade. This includes glycine of all purity levels, which covers all forms of crude or technical glycine including but not limited to sodium glycinate, glycine slurry and any other forms of amino acetic acid or glycine. Subject merchandise also includes glycine and precursors of dried crystalline glycine that are processed in a third country, including, but not limited to, refining or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope glycine or precursors of dried crystalline glycine. Glycine has the Chemical Abstracts Service (CAS) registry number of 56-40-6. Glycine and glycine slurry are classified under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.49.4300. Sodium glycinate is classified in the HTSUS under 2922.49.8000. While the HTSUS subheadings and CAS registry number are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
National Institute of Standards and Technology, Department of Commerce.
Notice of open meeting.
The National Institute of Standards and Technology (NIST) and the National Center for Disaster Medicine and Public Health (NCDMPH) will hold an open meeting on Thursday, September 6, 2018 from 8:30 a.m. to 5:00 p.m. Eastern Time and on Friday, September 7, 2018 from 8:30 a.m. to 12:00 p.m. Eastern Time. The primary purpose of this meeting is to discuss the state-of-the-practice in post-disaster field data collection methods, including sampling methodologies across multiple disciplines. The agenda will be posted on the NIST website at
The meeting will be held on Thursday, September 6, 2018 from 8:30 a.m. to 5:00 p.m. Eastern Time and on Friday, September 7, 2018 from 8:30 a.m. to 12:00 p.m. Eastern Time.
The meeting will be held in person and via teleconference at the Henry M. Jackson Foundation Headquarters, 6720A Rockledge Drive, Bethesda, Maryland 20817. For instructions on how to participate in the meeting, please see the
Melissa Banner, Administrative Office Assistant, Community Resilience Program, Engineering Laboratory, NIST, 100 Bureau Drive, Mail Stop 8615, Gaithersburg, Maryland 20899-8604. Ms. Banner's email address is
The National Institute of Standards and Technology (NIST) and the National Center for Disaster Medicine and Public Health (NCDMPH) will hold an open meeting on Thursday, September 6, 2018 from 8:30 a.m. to 5:00 p.m. Eastern Time and on Friday, September 7, 2018 from 8:30 a.m. to 12:00 p.m. Eastern Time. The primary purpose of this meeting is to discuss the state-of-the-practice in post-disaster field data collection methods including sampling methodologies across multiple disciplines. The agenda will be posted on the NIST website at
To participate in the meeting, please submit your first and last name, email address, and phone number to Melissa Banner at
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
This action would continue the reporting measure requiring all Virginia Chesapeake Bay pound net fishermen to report interactions with endangered and threatened sea turtles, found both live and dead, in their pound net operations. When a live or dead sea turtle is discovered during a pound net trip, the Virginia pound net fisherman is required to report the incidental take to National Marine Fisheries Service (NMFS) and, if necessary, the appropriate rehabilitation and stranding network. This information will be used to monitor the level of incidental take in the state-managed Virginia pound net fishery and ensure that the seasonal pound net leader restrictions (50 CFR 223.206(d)(10)) are adequately protecting listed sea turtles. Based on the number of sea turtle takes anticipated in the Virginia pound net fishery and the available number of Virginia pound net fishermen and pound nets, the number of responses anticipated on an annual basis is 988. This is an increase from the previous information collection (n=483) as we used the maximum number of possible licensed pound net sites per Virginia fishery regulations (n=161) on which to base our information collection estimate, rather than the number of documented sites from NMFS monitoring efforts (n=80), as the latter is outdated and may be an underestimate.
This information collection request may be viewed at reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before November 5, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Christopher Liese, Industry Economist, SEFSC, NMFS, 75 Virginia Beach Drive, Miami FL 33149, (305) 365-4109 or
This request is for extension of this information collection.
NOAA Fisheries, Southeast Fisheries Science Center, annually collects socioeconomic data from commercial fishermen in the Gulf of Mexico and South Atlantic shrimp fisheries who hold one or more permits for harvesting shrimp from federal waters (U.S. Exclusive Economic Zone). Information about revenues, variable and fixed costs, capital investment and other socioeconomic information is collected from a random sample of permit holders. These data are needed to conduct socioeconomic analyses in support of management of the shrimp fishery and to satisfy legal requirements. The data will be used to assess how fishermen will be impacted by and respond to federal regulation likely to be considered by fishery managers.
The information will be collected on paper using a mail survey.
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 (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before November 5, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230, or via email at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Adam Bailey, National Marine Fisheries Service (NMFS), Southeast Regional Office, 263 13th Avenue South, St. Petersburg, FL 33701, (727) 824-5305,
This request is for an extension of a currently approved information collection.
The Magnuson-Stevens Fishery Conservation and Management Act authorizes the Gulf of Mexico Fishery Management Council (Gulf Council) and South Atlantic Fishery Management Council (South Atlantic Council) to prepare and amend fishery management plans for any fishery in Federal waters under their respective jurisdictions. NMFS and the Gulf Council manage the reef fish fishery in the Gulf of Mexico (Gulf) under the Fishery Management Plan (FMP) for Reef Fish Resources of the Gulf of Mexico. NMFS and the South Atlantic Council manage the fishery for rock shrimp in the South Atlantic under the FMP for the Shrimp Fishery in the South Atlantic Region. The vessel monitoring system (VMS) regulations for the Gulf reef fish fishery and the South Atlantic rock shrimp fishery may be found at 50 CFR 622.28 and 622.205, respectively.
The FMPs and the implementing regulations contain several specific management areas where fishing is restricted or prohibited to protect habitat or spawning aggregations, or to control fishing pressure. Unlike size, bag, and trip limits, where the catch can be monitored on shore when a vessel returns to port, area restrictions require at-sea enforcement. However, at-sea enforcement of offshore areas is difficult due to the distance from shore and the limited number of patrol vessels, resulting in a need to improve enforceability of area fishing restrictions through remote sensing methods. In addition, all fishing gears are subject to some area fishing restrictions. Because of the sizes of these areas and the distances from shore, the effectiveness of enforcement through over flights and at-sea interception is limited. An electronic VMS allows a more effective means to monitor vessels for intrusions into restricted areas.
The VMS provides effort data and significantly aids in enforcement of areas closed to fishing. All position reports are treated in accordance with NMFS existing guidelines for confidential data. As a condition of authorized fishing for or possession of Gulf reef fish or South Atlantic rock shrimp in or from Federal waters, vessel owners or operators subject to VMS requirements must allow NMFS, the United States Coast Guard, and their authorized officers and designees, access to the vessel's position data obtained from the VMS.
Respondents have a choice of either electronic or paper forms. Methods of submittal include email of electronic forms, and mail and facsimile transmission of paper forms.
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 (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
National Marine Fisheries Service (NMFS) has issued regulations under authority of the Western and Central Pacific Fisheries Convention Implementation Act (WCPFCIA; 16 U.S.C. 6901
The application for WCPFC Area Endorsements calls for specified information about the vessel and its operator that is not already collected via the application for high seas fishing permits issued under 50 CFR 300.333. The Foreign EEZ Form calls for specified information about the vessel, its owners and operators and any fishing authorizations issued by other nations. The information required to obtain an IMO number is not submitted to NMFS directly, but to a third party and serves to ensure that IMO numbers are issued for certain categories of vessels.
This information collected under the three requirements is used by NOAA, the U.S. Coast Guard, and the Commission to monitor the size and composition of the HMS fleets in the Convention Area for compliance-related and scientific purposes and to ensure that IMO numbers are issued for certain categories of vessels.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Under Secretary of Defense for Personnel and Readiness, Uniform Formulary Beneficiary Advisory Panel, Department of Defense.
Notice of Federal Advisory Committee meeting.
The Department of Defense (DoD) is publishing this notice to announce that the following Federal Advisory Committee meeting of the Uniform Formulary Beneficiary Advisory Panel will take place.
Open to the public Thursday, September 27, 2018, from 9 a.m. to 12 p.m.
The address of the open meeting is the Naval Heritage Center Theater, 701 Pennsylvania Avenue NW, Washington, DC 20004.
Colonel Paul J. Hoerner, USAF, 703-681-2890 (Voice), None (Facsimile),
This meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.140 and 102-3.150.
The Department of Defense is publishing this notice to announce a Federal Advisory Committee meeting of the Uniform Formulary Beneficiary Advisory Panel (hereafter referred to as the Panel) will take place.
Board of Advisors to the Presidents of the Naval Postgraduate School and the Naval War College, Department of the Navy, Department of Defense.
Notice of Federal Advisory Committee meeting.
The Department of Defense is publishing this notice to announce that the following Federal Advisory Committee meeting of the Board of Advisors to the Presidents of the Naval Postgraduate School and the Naval War College will take place.
Open to the public October 17-18, 2018.
The meeting will be held at 3003 Washington Boulevard, Arlington, VA.
Jacquelyn (Jaye) Panza, 831-656-2514 (Voice), 831-656-2789 (Facsimile),
This meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.140 and 102-3.150.
Office of Elementary and Secondary Education (OESE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of an existing information collection.
Interested persons are invited to submit comments on or before October 4, 2018.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Lisa Gillette, 202-260-1426.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
U.S. Department of Education, Accreditation Group, Office of Postsecondary Education.
Call for written third-party comments.
This notice provides information to members of the public on submitting written comments for accrediting agencies currently undergoing review for purposes of recognition by the U.S. Secretary of Education.
Herman Bounds, Director, Accreditation Group, Office of Postsecondary Education, U.S. Department of Education, 400 Maryland Avenue SW, Room 270-01, Washington, DC 20202, telephone: (202) 453-7615, or email:
This solicitation of third-party comments concerning the performance of accrediting agencies under review by the Secretary of Education is required by § 496(n)(1)(A) of the Higher Education Act (HEA) of 1965, as amended. These accrediting agencies will be on the agenda for the Winter 2019 National Advisory Committee on Institutional Quality and Integrity meeting. The meeting date has not been determined, but will be announced in a separate
1. Accrediting Council for Continuing Education and Training. Scope of Recognition: The accreditation throughout the United States of institutions of higher education that offer continuing education and vocational programs that confer certificates or occupational associate degrees, including those programs offered via distance education.
2. American Veterinary Medical Association, Council on Education. Scope of Recognition: The accreditation and preaccreditation (“Provisional Accreditation”) in the United States of programs leading to professional degrees (D.V.M. or D.M.D.) in veterinary medicine.
3. Council on Education for Public Health. Scope of Recognition: The accreditation within the United States of schools of public health and public health programs outside schools of public health, at the baccalaureate and graduate degree levels, including those offered via distance education.
4. Western Association of Schools and Colleges, Accrediting Commission for Community and Junior Colleges. Scope of Recognition: The accreditation and preaccreditation (“Candidate for Accreditation”) of community and other colleges with a primarily pre-baccalaureate mission located in California, Hawaii, the United States territories of Guam and American Samoa, the Republic of Palau, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, and the Republic of the Marshall Islands, which offer certificates, associate degrees, and the first baccalaureate degree by means of a substantive change review offered by institutions that are already accredited by the agency, and such programs offered via distance education and correspondence education at these colleges. This recognition also extends to the Committee on Substantive Change of the Commission, for decisions on substantive changes, and the Appeals Panel.
1. The Council on Chiropractic Education compliance report includes the following: finding identified in the May 25, 2017 letter from the senior Department official following the February 22, 2017 NACIQI meeting available at:
2. Commission on English Language Program Accreditation Compliance report includes the following: Finding identified in the May 25, 2017 letter from the senior Department official following the February 22, 2017 NACIQI meeting available at:
1. Western Association of Schools and Colleges, Accrediting Commission for Community and Junior Colleges. Scope of Recognition: The accreditation and preaccreditation (“Candidate for Accreditation”) of community and other colleges with a primarily pre-baccalaureate mission located in California, Hawaii, the United States territories of Guam and American Samoa, the Republic of Palau, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, and the Republic of the Marshall Islands, which offer certificates, associate degrees, and the first baccalaureate degree by means of a substantive change review offered by institutions that are already accredited by the agency, and such programs offered via distance education and correspondence education at these colleges. This recognition also extends to the Committee on Substantive Change of the Commission, for decisions on substantive changes, and the Appeals Panel.
The accreditation and preaccreditation (“Candidate for Accreditation”) of community and other colleges in California, Hawaii, the United States territories of Guam and American Samoa, the Republic of Palau, the Federated States of Micronesia, the Commonwealth of the Northern Marianas, and the Republic of the Marshall Islands, which have as a primary mission the granting of associate degrees, but which may also award certificates and other credentials, including bachelor's degrees, where the provision of such credentials is within the institution's mission and, if applicable, is authorized by their governmental authorities, and the accreditation of such programs offered via distance education and correspondence education at these colleges. This recognition also extends to the Committee on Substantive Change of the Commission, for decisions on substantive changes.
Written comments about the recognition of a specific accrediting or State agency must be received by September 30, 2018, in the
Only written material submitted by the deadline to the email address listed in this notice, and in accordance with these instructions, become part of the official record concerning agencies scheduled for review and are considered by the Department and NACIQI in their deliberations.
A later
20 U.S.C. 1011c.
Office of Elementary and Secondary Education (OESE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of an existing information collection.
Interested persons are invited to submit comments on or before October 4, 2018.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Lisa Gillette, 202-260-1426.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before November 5, 2018.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
1. By letter filed August 22, 2018, Vincent J. Purple, President, L.P. Athol Corporation, exemptee informed the Commission that the exemption from licensing for the Cresticon Project No. 10163, originally issued February 12, 1988
2. MassGrow, LLC is now the exemptee of the Cresticon Project No. 10163. All correspondence should be forwarded to: Mr. Frank Perullo, COO, MassGrow, LLC, 137 Lewis Wharf, Boston, MA 02110, Phone: 617-721-5844, Email:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency is planning to submit an information collection request (ICR), “ICR Supporting Statement Information Collection Request for National Pollutant Discharge Elimination System (NPDES): Specific Provisions Affecting Applications and Program Updates Final Rule” (EPA ICR No. 2575.01, OMB Control No. 2040-NEW) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. Before doing so, the EPA is soliciting public comments on specific aspects of the proposed information collection as described below. This is a request for approval of a new collection. 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.
Comments must be submitted on or before November 5, 2018.
Submit your comments, referencing Docket ID No. EPA-HQ-OW-2018-0629 online using
The EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Janita Aguirre, Water Permits Division, Office of Wastewater Management, Mail Code 4203M, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: 202-566-1149; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, the EPA is soliciting comments and information to enable it to: (i) 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; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) 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,
Environmental Protection Agency (EPA).
Request for nominations for Clean Air Excellence Awards.
This notice announces the competition for the 2019 Clean Air Excellence Awards Program. EPA established the Clean Air Excellence Awards Program in February 2000 to recognize outstanding and innovative efforts that support progress in achieving clean air.
All submissions of entries for the Clean Air Excellence Awards Program must be postmarked by November 2, 2018.
Additional information on this awards program, including the entry form, can be found on EPA's Clean Air Act Advisory Committee (CAAAC) website:
Awards Project Notice, Pursuant to 42 U.S.C. 7403(a)(1) and (2) and sections 103(a)(1) and (2) of the Clean Air Act (CAA), notice is hereby given that the EPA's Office of Air and Radiation (OAR) announces the opening of competition for the 2019 Clean Air Excellence Awards Program (CAEAP). The intent of the program is to recognize and honor outstanding, innovative efforts that help to make progress in achieving cleaner air. The CAEAP is open to both public and private entities. Entries are limited to efforts related to air quality in the United States. There are five general award categories: (1) Clean Air Technology; (2) Community Action; (3) Education/Outreach; (4) State/Tribal/Local Air Quality Policy Innovations; and (5) Transportation Efficiency Innovations. There are also two special awards categories: (1) Thomas W. Zosel Outstanding Individual Achievement Award; and (2) Gregg Cooke Visionary Program Award. Awards are given periodically and are for recognition only.
Environmental Protection Agency (EPA).
Notice of settlement.
Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the United States Environmental Protection Agency (EPA) has entered into a settlement with the Whitaker Oil Company concerning
The Agency will consider public comments on the settlement until October 4, 2018. The Agency will consider all comments received and may modify or withdraw its consent to the proposed settlement if comments received disclose facts or considerations which indicate that the proposed settlement is inappropriate, improper, or inadequate.
Copies of the settlement are available from the Agency by contacting Ms. Paula V. Painter, Program Analyst, using the contact information provided in this notice. Comments may also be submitted by referencing the Site's name through one of the following methods:
•
•
Paula V. Painter at 404/562-8887.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency is planning to submit an information collection request (ICR), “Recordkeeping and Reporting Requirements for Diesel Fuels” (EPA ICR No 1718.11, OMB Control No. 2060-0308) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. Before doing so, EPA is soliciting public comments on specific aspects of the proposed information collection as described below. This is a proposed extension of the ICR, which is currently approved through March 31, 2019. 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.
Comments must be submitted on or before November 5, 2018.
Submit your comments, referencing Docket ID No. EPA-HQ-OAR-2007-1121, online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
James W. Caldwell, Compliance Division, Office of Transportation and Air Quality, 6405A, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: 202-343-9303; fax number: 202-343-2802; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting comments and information to enable it to: (i) 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; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) 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,
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is planning to submit an information collection request (ICR), “Ambient Air Quality Surveillance” (EPA ICR No. 0940.28, OMB Control No. 2060-0084), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. Before doing so, the EPA is soliciting public comments on specific aspects of the proposed information collection as described below. This is a proposed extension of the ICR, which is currently approved through March 31, 2019. 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.
Comments must be submitted on or before November 5, 2018.
Submit your comments, referencing Docket ID No. EPA-HQ-OAR-2002-0091, online using
The EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Laurie Trinca, Air Quality Assessment Division, Office of Air Quality Planning and Standards, C304-06, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: 919-541-0520; fax number: 919-541-1903: email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, the EPA is soliciting comments and information to enable it to: (i) 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; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) 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 (
This ICR reflects revisions of the previous ICR update of 2013, and covers the period of 2019-2021. The number of monitoring stations, sampling parameters, and frequency of data collection and submittal is expected to remain relatively stable for 2019-2021, with minor increases and decreases expected for several ambient air monitoring networks as air monitoring agencies review their monitoring networks.
The data collected through this information collection consist of ambient air concentration measurements for the seven air pollutants with national ambient air quality standards (
The EPA and others (
The state and local agencies and tribal entities with responsibility for reporting ambient air quality data and information as requested in this ICR submit these data electronically to the EPA's Air Quality System (AQS) database. Quality assurance/quality control records and monitoring network documentation are also maintained by each state and local agency, in AQS electronic format where possible.
Although the state and local air pollution control agencies and tribal entities are responsible for the operation of the air monitoring networks, the EPA funds a portion of the total costs through federal grants. These grants generally require an appropriate level of contribution, or “match,” from the state/local agencies or tribal entities. The costs shown in this renewal are the total costs incurred for the monitoring program regardless of the source of the funding. This practice of using the total cost is consistent with prior ICR submittals and renewals.
Environmental Protection Agency (EPA).
Notice of public meeting.
The Environmental Protection Agency (EPA) will host a public meeting to obtain input on its Study of Oil and Gas Extraction Wastewater Management. In May 2018, EPA initiated a study to evaluate approaches to managing both conventional and unconventional oil and gas extraction wastewaters generated at onshore facilities. EPA's study will address questions such as how existing federal approaches to produced water management under the Clean Water Act can interact more effectively with state and tribal regulations, what requirements or policy updates are needed, and whether support exists for potential federal regulations that may allow for broader discharge of treated produced water to surface waters. A key component of the study is to engage with stakeholders to solicit information from their individual perspectives on topics surrounding produced water management. This spring and summer, EPA met with various stakeholders across the country. This public meeting is the next step in EPA's outreach. During this meeting, EPA will report on what it has learned to date and provide stakeholders the opportunity to provide additional input. For more information on the meeting and the study, see the
The public meeting will be held on October 9, 2018, from 10:30 a.m. to 4 p.m., Eastern Time. The meeting will begin with EPA's status report on the study. This will be followed by a panel discussion on the work happening across the federal family to coordinate federal resources and reduce duplication on cross-cutting water issues. The public input session will begin at 12:30 p.m.
The meeting will be held at William J. Clinton Building—East, Room 1153, 1201 Constitution Avenue NW, Washington, DC.
Jan Matuszko, Engineering and Analysis Division, Office of Water, email
For more information about the study, see EPA's website at
If you are unable to attend, you can submit a written statement at:
Do not submit electronically any information you consider to be Confidential Business Information (CBI). For additional submission methods, information about CBI, and general guidance on effective written submissions, please visit
Thursday, September 6, 2018 at 2:00 p.m.
1050 First Street NE, Washington, DC.
This meeting will be closed to the public.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
Thursday, September 6, 2018 at 3:00 p.m.
1050 First Street NE, Washington, DC (12th Floor).
This meeting will be open to the public.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
Individuals who plan to attend and require special assistance, such as sign language interpretation or other reasonable accommodations, should contact Dayna C. Brown, Secretary and Clerk, at (202) 694-1040, at least 72 hours prior to the meeting date.
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project “Medical Expenditure Panel Survey (MEPS) Household Component and the MEPS Medical Provider Component.”
This proposed information collection was previously published in the
Comments on this notice must be received by October 4, 2018.
Written comments should be submitted to: AHRQ's OMB Desk Officer by fax at (202) 395-6974 (attention: AHRQ's desk officer) or by email at
Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427-1477, or by email at
In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501-3521, AHRQ invites the public the comment on this proposed information collection. For over thirty years, results from the MEPS and its predecessor surveys (the 1977 National Medical Care Expenditure Survey, the 1980 National Medical Care Utilization and Expenditure Survey and the 1987 National Medical Expenditure Survey) have been used by OMB, DHHS, Congress and a wide number of health services researchers to analyze health care use, expenses and health policy.
Major changes continue to take place in the health care delivery system. The MEPS is needed to provide information about the current state of the health care system as well as to track changes over time. The MEPS permits annual estimates of use of health care and expenditures and sources of payment for that health care. It also permits tracking individual change in employment, income, health insurance and health status over two years. The use of the NHIS as a sampling frame expands the MEPS analytic capacity by providing another data point for comparisons over time.
Households selected for participation in the MEPS-HC are interviewed five times in person. These rounds of interviewing are spaced about 5 months apart. The interview will take place with a family respondent who will report for him/herself and for other family members.
The MEPS-HC has the following goal:
To provide nationally representative estimates for the U.S. civilian noninstitutionalized population for:
The MEPS-MPC will contact medical providers (hospitals, physicians, home health agencies and institutions) identified by household respondents in the MEPS-HC as sources of medical care for the time period covered by the interview, and all pharmacies providing prescription drugs to household members during the covered time period. The MEPS-MPC is not designed to yield national estimates as a stand-alone survey. The sample is designed to target the types of individuals and providers for whom household reported expenditure data was expected to be insufficient. For example, Medicaid enrollees are targeted for inclusion in the MEPS-MPC because this group is expected to have limited information about payments for their medical care.
The MEPS-MPC collects event level data about medical care received by sampled persons during the relevant time period. The data collected from medical providers include:
Data collected from pharmacies include:
The MEPS-MPC has the following goal:
• To serve as an imputation source for and to supplement/replace household reported expenditure and source of payment information. This data will supplement, replace and verify information provided by household respondents about the charges,
This study is being conducted by AHRQ through its contractors, Westat and RTI International, pursuant to AHRQ's statutory authority to conduct and support research on health care and on systems for the delivery of such care, including activities with respect to the cost and use of health care services and with respect to health statistics and surveys. 42 U.S.C. 299a(a)(3) and (8); 42 U.S.C. 299b-2.
To achieve the goals of the MEPS-HC the following data collections are implemented:
1. Household Component Core Instrument. The core instrument collects data about persons in sample households. Topical areas asked in each round of interviewing include priority condition enumeration, health status, health care utilization including prescribed medicines, expenses and payments, employment, and health insurance. Other topical areas that are asked only once a year include access to care, income, assets, satisfaction with providers, and children's health. While many of the questions are asked about the entire reporting unit (RU), which is typically a family, only one person normally provides this information. All sections of the current core instrument are available on the AHRQ website at
2. Adult Self-Administered Questionnaire. A brief self-administered questionnaire (SAQ) will be used to collect self-reported (rather than through household proxy) on health opinions and satisfaction with health care, and information on health status, preventive care and health care quality measures for adults 18 and. The satisfaction with health care items are a subset of items from the Consumer Assessment of Healthcare Providers and Systems (CAHPS®). The health status items are from the Veterans Rand 12 item health survey (VR-12), a generic instrument developed with the support of the Department of Veterans Affairs and the Centers for Medicare and Medicaid Services. Additionally, there are questions addressing adult preventive care for both males and females. This questionnaire is revised from the previous OMB clearance.
3. Veteran SAQ. MEPS includes a new self-administered questionnaire for spring of 2019 data collection targeting the veteran population. The questionnaire asks questions in the following domains of interest: If a veteran is eligible for VA health care; if a Veteran is enrolled in VA health care; coordination of care in and out of the VA health care system, services provided to Veterans in and out of the VA health care system, and VA eligibility priority groups, for Veterans enrolled in VA health care and for Veterans eligible for VA health care. To assist in the correct identification of priority groups, the questionnaire may also include items assessing the following: Presence of service-connected disability; service-connected disability rating; presence of presumptive-conditions; timing and era of active duty; and VA receipt of disability compensation benefits. AHRQ worked with the Veteran Health Administration to develop the questionnaire content.
4. Diabetes Care SAQ. A brief self-administered paper-and-pencil questionnaire on the quality of diabetes care is administered once a year (during rounds 3 and 5) to persons identified as having diabetes. Included are questions about the number of times the respondent reported having a hemoglobin A1c blood test, whether the respondent reported having his or her feet checked for sores or irritations, whether the respondent reported having an eye exam in which the pupils were dilated, the last time the respondent had his or her blood cholesterol checked and whether the diabetes has caused kidney or eye problems. Respondents are also asked if their diabetes is being treated with diet, oral medications or insulin. This questionnaire is unchanged from the previous OMB clearance.
5. Authorization forms for the MEPS-MPC Provider and Pharmacy Survey. As in previous panels of the MEPS, we will ask respondents for authorization to obtain supplemental information from their medical providers (hospitals, physicians, home health agencies and institutions) and pharmacies.
6. MEPS Validation Interview. Each interviewer is required to have at least 15 percent of his/her caseload validated to insure that the computer assisted personal interview (CAPI) questionnaire content was asked appropriately and procedures followed, for example the use of show cards. Validation flags are set programmatically for cases pre-selected by data processing staff before each round of interviewing. Home office and field management may also request that other cases be validated throughout the field period. When an interviewer fails a validation their work is subject to 100 percent validation. Additionally, any case completed in less than 30 minutes is validated. A validation abstract form containing selected data collected in the CAPI interview is generated and used by the validator to guide the validation interview.
To achieve the goal of the MEPS-MPC the following data collections are implemented:
1. MPC Contact Guide/Screening Call. An initial screening call is placed to determine the type of facility, whether the practice or facility is in scope for the MEPS-MPC, the appropriate MEPS-MPC respondent and some details about the organization and availability of medical records and billing at the practice/facility. All hospitals, physician offices, home health agencies, institutions and pharmacies are screened by telephone. A unique screening instrument is used for each of these seven provider types in the MEPS-MPC, except for the two home care provider types which use the same screening form.
2. Home Care Provider Questionnaire for Health Care Providers. This questionnaire is used to collect data from home health care agencies which provide medical care services to household respondents. Information collected includes type of personnel providing care, hours or visits provided per month, and the charges and payments for services received. Some HMOs may be included in this provider type.
3. Home Care Provider Questionnaire for Non-Health Care Providers. This questionnaire is used to collect information about services provided in the home by non-health care workers to household respondents because of a medical condition; for example, cleaning or yard work, transportation, shopping, or child care.
4. Medical Event Questionnaire for Office-Based Providers. This questionnaire is for office-based physicians, including doctors of medicine (MDs) and osteopathy (DOs), as well as providers practicing under the direction or supervision of an MD or DO (
5. Medical Event Questionnaire for Separately Billing Doctors. This questionnaire collects information from physicians identified by hospitals (during the Hospital Event data collection) as providing care to sampled persons during the course of inpatient, outpatient department or emergency room care, but who bill separately from the hospital.
6. Hospital Event Questionnaire. This questionnaire is used to collect information about hospital events, including inpatient stays, outpatient
7. Institutions Event Questionnaire. This questionnaire is used to collect information about institution events, including nursing homes, rehabilitation facilities and skilled nursing facilities. Institution data are collected not only from the billing department, but from medical records and administrative records departments as well. Medical records departments are contacted to determine the names of all the doctors who treated the patient during a stay. In many cases, the institution's administrative office also has to be contacted to determine whether the doctors identified by medical records billed separately from the institution itself. Some HMOs may be included in this provider type.
8. Pharmacy Data Collection Questionnaire. This questionnaire requests the NDC and when that is not available the prescription name, strength and form as well as the date prescription was filled, payments by source, the quantity, and person for whom the prescription was filled. When the NDC is available, we do not ask for prescription name, strength or form because that information is embedded in the NDC; this reduces burden on the respondent. Most pharmacies have the requested information available in electronic format and respond by providing a computer generated printout of the patient's prescription information. If the computerized form is unavailable, the pharmacy can report their data to a telephone interviewer. Pharmacies are also able to provide a CD-ROM with the requested information if that is preferred. HMOs are included in this provider type.
Dentists, optometrists, psychologists, podiatrists, chiropractors, and others not providing care under the supervision of a MD or DO are considered out of scope for the MEPS-MPC.
Exhibit 1 shows the estimated annualized burden hours for the respondents' time to participate in the MEPS-HC and the MEPS-MPC.
The MEPS-HC Core Interview will be completed by 13,338* (see note below Exhibit 1) “family level” respondents, also referred to as RU respondents. Since the MEPS-HC consists of 5 rounds of interviewing covering a full two years of data, the annual average number of responses per respondent is 2.5 responses per year. The MEPS-HC core requires an average response time of 92 minutes to administer. The Adult Female SAQ will be completed once a year by each female person in the RU that is 18 years old and older, an estimated 12,984 persons. The Adult Male SAQ will be completed once a year by each male person in the RU that is 18 years old and older, an estimated 11,985 persons. The Adult SAQs each require an average of 7 minutes to complete. The Diabetes care SAQ will be completed once a year by each person in the RU identified as having diabetes, an estimated 2,072 persons, and takes about 3 minutes to complete. The Veteran SAQ will be completed once by each in-scope person who is a veteran of the U.S. military identified in the Round 1, Panel 23 interview, an estimated 1,350 persons. The Veteran SAQ requires an average of 15 minutes to complete. The authorization form for the MEPS-MPC Provider Survey will be completed once for each medical provider seen by any RU member. The 12,804 RUs in the MEPS-HC will complete an average of 5.4 forms, which require about 3 minutes each to complete. The authorization form for the MEPS-MPC Pharmacy Survey will be completed once for each pharmacy for any RU member who has obtained a prescription medication. RUs will complete an average of 3.1 forms, which take about 3 minutes to complete. About one third of all interviewed RUs will complete a validation interview as part of the MEPS-HC quality control, which takes an average of 5 minutes to complete. The total annual burden hours for the MEPS-HC are estimated to be 60,278 hours.
All medical providers and pharmacies included in the MEPS-MPC will receive a screening call and the MEPS-MPC uses 7 different questionnaires; 6 for medical providers and 1 for pharmacies. Each questionnaire is relatively short and requires 2 to 19 minutes to complete. The total annual burden hours for the MEPS-MPC are estimated to be 17,388 hours. The total annual burden for the MEPS-HC and MPC is estimated to be 77,666 hours.
Exhibit 2 shows the estimated annual cost burden associated with the respondents' time to participate in this information collection. The annual cost burden for the MEPS-HC is estimated to be $1,467,167; the annual cost burden for the MEPS-MPC is estimated to be $298,580. The total annual cost burden for the MEPS-HC and MPC is estimated to be $1,765,746.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) Whether the proposed collection of information is necessary for the proper performance of AHRQ's health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) of information; (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 upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project “Nursing Home Survey on Patient Safety Culture Database.”
This proposed information collection was previously published in the
Comments on this notice must be received by October 4, 2018.
Written comments should be submitted to: AHRQ's OMB Desk Officer by fax at (202) 395-6974 (attention: AHRQ's desk officer) or by email at
Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427-1477, or by email at
In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501-3521, AHRQ invites the public the comment on this proposed information collection. In 1999, the Institute of Medicine called for health care organizations to develop a “culture of safety” such that their workforce and processes focus on improving the reliability and safety of care for patients (IOM, 1999;
The survey is designed to enable nursing homes to assess provider and staff perspectives about patient safety issues, medical error, and error reporting and includes 42 items that measure 12 composites of patient safety culture. AHRQ made the survey publicly available along with a Survey User's Guide and other toolkit materials in November 2008 on the AHRQ website.
The AHRQ Nursing Home SOPS Database consists of data from the AHRQ Nursing Home Survey on Patient Safety Culture. Nursing homes in the U.S. can voluntarily submit data from the survey to AHRQ through its contractor, Westat. The Nursing Home SOPS Database (OMB NO. 0935-0195, last approved on September 30, 2015) was developed by AHRQ in 2011 in response to requests from nursing homes interested in viewing their organizations' patient safety culture survey results. Those organizations submitting data receive a feedback report, as well as a report on the aggregated de-identified findings of the other nursing homes submitting data. These reports are used to assist nursing home staff in their efforts to improve patient safety culture in their organizations.
Rationale for the information collection. The Nursing Home SOPS and Nursing Home SOPS Database support AHRQ's goals of promoting improvements in the quality and safety of health care in nursing home settings. The survey, toolkit materials, and database results are all made publicly available on AHRQ's website. Technical assistance is provided by AHRQ through its contractor at no charge to nursing homes, to facilitate the use of these materials for nursing home patient safety and quality improvement.
This database will:
(1) Present results from nursing homes that voluntarily submit their data,
(2) Provide data to nursing homes to facilitate internal assessment and learning in the patient safety improvement process, and
(3) Provide supplemental information to help nursing homes identify their strengths and areas with potential for improvement in patient safety culture.
This study is being conducted by AHRQ through its contractor, Westat, pursuant to AHRQ's statutory authority to conduct and support research on health care and on systems for the delivery of such care, including activities with respect to the quality, effectiveness, efficiency, appropriateness and value of health care services and with respect to quality measurement and improvement. 42 U.S.C 299a(a)(1) and (2)
To achieve the goal of this project the following activities and data collections will be implemented:
(1) Eligibility and Registration Form—The nursing home (or parent organization) point-of-contact (POC) completes a number of data submission steps and forms, beginning with the completion of an online Eligibility and Registration Form. The purpose of this form is to collect basic demographic information about the nursing home and initiate the registration process.
(2) Data Use Agreement—The purpose of the data use agreement, completed by the nursing home POC, is to state how data submitted by nursing homes will be used and provides privacy assurances.
(3) Nursing Home Site Information Form—The purpose of the site information form, completed by the nursing home POC, is to collect background characteristics of the nursing home. This information will be used to analyze data collected with the Nursing Home SOPS survey.
(4) Data File(s) Submission—POCs upload their data file(s) using the data file specifications, to ensure that users submit standardized and consistent data in the way variables are named, coded and formatted. The number of submissions to the database is likely to vary each year because nursing homes do not administer the survey and submit data every year. Data submission is typically handled by one POC who is either a corporate level health care manager for a Quality Improvement Organization (QIO), a survey vendor who contracts with a nursing home to collect their data, or a nursing home Director of Nursing or nurse manager. POCs submit data on behalf of 5 nursing homes, on average, because many nursing homes are part of a QIO or larger nursing home or health system that includes many nursing home sites, or the POC is a vendor that is submitting data for multiple nursing homes.
Survey data from the AHRQ Nursing Home Survey on Patient Safety Culture are used to produce three types of products:
(1) A Nursing Home SOPS User Database Report that is made publicly available on the AHRQ website;
(2) Individual Nursing Home Survey Feedback Reports are individualized reports produced for each nursing home that submits data to the database; and
(3) Research data sets of individual-level and nursing home-level de-identified data to enable researchers to conduct analyses. All data released in a data set are de-identified at the individual-level and the nursing home-level.
Nursing homes will be invited to voluntarily submit their Nursing Home SOPS survey data to the database. The data are then cleaned and aggregated and used to produce a Database Report in PDF format that displays averages, standard deviations, and percentile scores on the survey's 42 items and 12 patient safety culture composites, as well as displaying these results by nursing home characteristics (bed size, urbanicity, ownership, and region) and respondent characteristics (work area/unit, staff position, interaction with residents, shift worked most often, and tenure in nursing home).
Each nursing home that submits data receives an individualized survey feedback report that presents their results alongside the aggregate results from other participating nursing homes.
Nursing homes use the Nursing Home SOPS Database Reports and Individual Nursing Home Survey Feedback Reports for a number of purposes, to:
• Raise staff awareness about patient safety.
• Elucidate and assess the current status of patient safety culture in their nursing home.
• Identify strengths and areas for patient safety culture improvement.
• Evaluate trends in patient safety culture change over time.
• Evaluate the cultural impact of patient safety initiatives and interventions.
Exhibit 1 shows the estimated annualized burden hours for the respondents' time to participate in the database. An estimated 60 POCs, each representing an average of 5 individual nursing homes, will complete the database submission steps and forms. Each POC will submit the following:
• Eligibility and registration form (completion is estimated to take about 3 minutes).
• Data Use Agreement (completion is estimated to take about 3 minutes).
• Nursing Home Site Information Form (completion is estimated to take about 5 minutes).
• Survey data submission will take an average of one hour.
The total annual burden hours are estimated to be 91 hours.
Exhibit 2 shows the estimated annualized cost burden based on the respondents' time to submit their data. The cost burden is estimated to be $4,085 annually.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) Whether the proposed collection of information is necessary for the proper performance of AHRQ's health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) of information; (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 upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All comments will become a matter of public record.
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, and the Determination of the Director, Management Analysis and Services Office, CDC, pursuant to Public Law 92-463. 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.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a final guidance for industry entitled “Physiologically Based Pharmacokinetic Analyses—Format and Content.” This guidance outlines the recommended format and content for a sponsor or applicant to submit physiologically based pharmacokinetic (PBPK) analyses to FDA to support applications including, but not limited to, investigational new drug applications (INDs), new drug applications (NDAs), biologics license applications (BLAs), or abbreviated new drug applications (ANDAs). This guidance does not address methodological considerations and best practices for the conduct of PBPK modeling and simulation or the appropriateness of PBPK analyses for a particular drug or a drug product.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of this 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
Xinyuan Zhang, Office of Clinical Pharmacology, Office of Translational Sciences, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 2128, Silver Spring, MD 20993-0002, 240-402-7971.
FDA is announcing the availability of a final guidance for industry entitled “Physiologically Based Pharmacokinetic Analyses—Format and Content.” A PBPK analysis uses models and simulations that combine physiology, population, and drug characteristics to mechanistically describe the pharmacokinetic behaviors of a drug or drug product. Throughout a drug's life cycle, PBPK model predictions can be used to support decisions on whether, when, and how to conduct certain clinical pharmacology studies, and to support dosing recommendations in product labeling. Because of the lack of regulatory guidance, the format and content of PBPK analysis reports that are submitted to FDA vary significantly. The goal of this guidance is to standardize the content and format of these reports to facilitate FDA's efficient assessment, consistent application, and timely decision making during regulatory review.
This guidance outlines the recommended format and content for a sponsor or applicant to submit PBPK analyses to FDA to support applications including, but not limited to, INDs, NDAs, BLAs, and ANDAs. This guidance does not address methodological considerations and best practices for the conduct of PBPK modeling and simulation or the appropriateness of PBPK analyses for a particular drug or a drug product.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “Physiologically Based Pharmacokinetic Analyses—Format and Content.” 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 found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collection of information in 21 CFR 314.50(d) has been approved under OMB control number 0910-0001.
Persons with access to the internet may obtain the guidance at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by October 4, 2018.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 502 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 352), among other things, establishes requirements for the label or labeling of a medical device so that it is not misbranded and subject to a regulatory action. Certain provisions under section 502 of the FD&C Act require manufacturers, importers, and distributors of medical devices to disclose information about themselves or the devices on the labels or labeling for the devices.
Section 502(b) of the FD&C Act requires that for packaged devices, the label must bear the name and place of business of the manufacturer, packer, or distributor; and an accurate statement of the quantity of the contents. Section 502(f) of the FD&C Act requires that the labeling for a device must contain adequate directions for use. FDA may, however, grant an exemption if the Agency determines that the adequate directions for use labeling requirements are not necessary for the particular case as it relates to protection of the public health.
FDA regulations under parts 800, 801, and 809 (21 CFR parts 800, 801, and 809) require disclosure of specific
Section 801.150(a)(2) establishes recordkeeping requirements for manufacturers of devices to retain a copy of the agreement containing the specifications for the processing, labeling, or repacking of the device for 2 years after the final shipment or delivery of the device. Section 801.150(a)(2) also requires that the subject respondents make copies of this agreement available for inspection at any reasonable hour to any officer or employee of the Department of Health and Human Services (HHS) who requests them.
Section 801.410(e) requires copies of invoices, shipping documents, and records of sale or distribution of all impact resistant lenses, including finished eyeglasses and sunglasses, be maintained for 3 years by the retailer and made available upon request by any officer or employee of FDA or by any other officer or employee acting on behalf of the Secretary of HHS.
Section 801.410(f) requires that the results of impact tests and description of the test method and apparatus be retained for a period of 3 years.
Section 801.421(d) establishes requirements for hearing aid dispensers to retain copies of all physician statements or any waivers of medical evaluation for 3 years after dispensing the hearing aid.
Section 801.430(f) requires manufacturers of menstrual tampons to devise and follow an ongoing sampling plan for measuring the absorbency of menstrual tampons. In addition, manufacturers must use the method and testing parameters described in § 801.430(f).
Section 801.435(g) requires latex condom manufacturers to document and provide, upon request, an appropriate justification for the application of the testing data from one product on any variation of that product to support expiration dating in the user labeling.
Sections 800.10(a)(3) and 800.12(c) require that the label for contact lens cleaning solutions bear a prominent statement alerting consumers of the tamper-resistant feature. Further, § 800.12 requires that packaged contact lens cleaning solutions contain a tamper-resistant feature to prevent malicious adulteration.
Section 800.10(b)(2) requires that the labeling for liquid ophthalmic preparations packed in multiple-dose containers provide information on the duration of use and the necessary warning information to afford adequate protection from contamination during use.
Section 801.1 requires that the label for a device in package form contain the name and place of business of the manufacturer, packer, or distributor.
Section 801.5 requires that labeling for a device include information on intended use as defined under § 801.4 and provide adequate directions to assure safe use by the lay consumers.
Section 801.61 requires that the principal display panel of an over-the-counter (OTC) device in package form must bear a statement of the identity of the device. The statement of identity of the device must include the common name of the device followed by an accurate statement of the principal intended actions of the device. Section 801.62 requires that the label for an OTC device in package form shall bear a declaration of the net quantity of contents. The label must express the net quantity in terms of weight, measure, numerical count, or a combination of numerical count and weight, measure, or size.
Section 801.109 establishes labeling requirements for prescription devices, in which the label for the device must describe the application or use of the device and contain a cautionary statement restricting the device for sale by, or on the order of, an appropriate professional.
Section 801.110 establishes labeling requirements for a prescription device delivered to the ultimate purchaser or user, by a licensed practitioner. The device must be accompanied by labeling bearing the name and address of the licensed practitioner, directions for use, and cautionary statements, if any, provided by the order.
Section 801.150(e) requires a written agreement between firms involved in the assembling or packaging of a nonsterile device containing labeling that identifies the final finished device as sterile and then shipping such device in interstate commerce prior to sterilization. In addition, § 801.150(e) requires that each pallet, carton, or other designated unit be conspicuously marked to show its nonsterile nature when introduced into interstate commerce and while being held prior to sterilization. When both requirements are met, FDA will take no regulatory action against the device as being misbranded or adulterated.
Section 801.405(b)(1) provides for labeling requirements for articles, including repair kits, re-liners, pads, and cushions, intended for use in temporary repairs and refitting of dentures for lay persons. Section 801.405(b)(1) also requires that the labeling contain the word “emergency” preceding and modifying each indication-for-use statement for denture repair kits, and the word “temporary” preceding and modifying each indication-for-use statement for re-liners, pads, and cushions.
Section 801.405(c) provides for labeling requirements that contain essentially the same information described under § 801.405(b)(1). The information is intended to enable a lay person to understand the limitations of using OTC denture repair kits and denture re-liners, pads, and cushions.
Section 801.420(c)(1) requires that manufacturers or distributors of hearing aids develop a user instructional brochure to be provided by the dispenser of the hearing aid to prospective users. The brochure must contain detailed information on the use and maintenance of the hearing aid.
Section 801.420(c)(4) establishes requirements that the user instructional brochure or separate labeling provide for technical data elements useful for selecting, fitting, and checking the performance of a hearing aid. In addition, § 801.420(c)(4) provides for testing requirements to determine that the required data elements must be conducted in accordance with the American National Standards Institute (ANSI) “Specification of Hearing Aid Characteristics,” ANSI S3.22-2003 (Revision of ANSI S3.22-1996), which is incorporated by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Section 801.421(b) establishes requirements for the hearing aid dispenser to provide prospective users with a copy of the user instructional brochure along with an opportunity to review content, either orally or by the predominant method of communication used during the sale.
Section 801.421(c) establishes requirements for the hearing aid dispenser to provide a copy of the user instructional brochure to the
Section 801.430(d) establishes labeling requirements for menstrual tampons to provide information on signs, risk factors, and ways to reduce the risk of Toxic Shock Syndrome (TSS).
Section 801.430(e)(2) requires menstrual tampon package labels to provide information on the ranges of absorbency and absorbency term based on testing required under § 801.430(f) and an explanation of selecting absorbencies that reduce the risk of contracting TSS.
Section 801.435(b), (c), and (h) establishes requirements for condom labeling to bear an expiration date that is supported by testing that demonstrates the integrity of three random lots of the product.
Section 809.10(a) and (b) establishes requirements that a label for an in vitro diagnostic (IVD) device and the accompanying labeling (package insert) must contain information identifying its intended use, instructions for use, lot or control number, and source.
Section 809.10(d) provides that the labeling requirements for general purpose laboratory reagents may be exempt from the requirements of § 809.10(a) and (b) if the labeling contains information to include, identifying its intended use, instructions for use, lot or control number, and source.
Section 809.10(e) provides that the labeling for analyte specific reagents (ASRs) shall provide information to include, identifying the quantity, proportion, or concentration of each reagent ingredient, instructions for use, lot or control number, and source.
Section 809.10(f) provides that the labeling for OTC test sample collection systems for drugs of abuse shall include, among other things, information on the intended use, specimen collection instructions, identification system, and information about use of the test results.
Section 809.30(d) requires that advertising and promotional materials for ASRs include the identity and purity of the ASR and the identity of the analyte.
Section 1040.20(d) (21 CFR 1040.20) provides that manufacturers of sunlamp products and ultraviolet lamps are subject to the labeling regulations under part 801.
The burden estimates are based on FDA's current registration and listing data and shipment information.
In the
FDA estimates the burden of this collection of information as follows:
The number of recordkeepers/respondents and records/disclosures has been adjusted to reflect updated Agency data. These adjustments result in an increase of 1,598,48 hours since the last OMB approval.
Food and Drug Administration, HHS.
Notice; renewal of advisory committee.
The Food and Drug Administration (FDA) is announcing the renewal of the Cardiovascular and Renal Drugs Advisory Committee by the Commissioner of Food and Drugs (the Commissioner). The Commissioner has determined that it is in the public interest to renew the Cardiovascular and Renal Drugs Advisory Committee for an additional 2 years beyond the charter expiration date. The new charter will be in effect until August 27, 2020.
Authority for the Cardiovascular and Renal Drugs Advisory Committee will expire on August 27, 2020, unless the Commissioner formally determines that renewal is in the public interest.
Jennifer Shepherd, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993-0002, 301-796-9001, email:
Pursuant to 41 CFR 102-3.65 and approval by the Department of Health and Human Services pursuant to 45 CFR part 11 and by the General Services Administration, FDA is announcing the renewal of the Cardiovascular and Renal Drugs Advisory Committee. The committee is a discretionary Federal advisory committee established to provide advice to the Commissioner.
The Cardiovascular and Renal Drugs Advisory Committee advises the Commissioner or designee in discharging responsibilities as they relate to helping to ensure safe and effective drugs for human use and, as required, any other product for which FDA has regulatory responsibility.
The committee reviews and evaluates available data concerning the safety and effectiveness of marketed and investigational human drug products for use in the treatment of cardiovascular and renal disorders and makes appropriate recommendations to the Commissioner.
The committee shall consist of a core of 11 voting members including the Chair. Members and the Chair are selected by the Commissioner or designee from among authorities knowledgeable in the fields of cardiology, hypertension, arrhythmia, angina, congestive heart failure, diuresis, and biostatistics. Members will be invited to serve for overlapping terms of up to 4 years. Almost all non-Federal members of this committee serve as Special Government Employees. The core of voting members may include one technically qualified member, selected by the Commissioner or designee, who is identified with consumer interests and is recommended by either a consortium of consumer-oriented organizations or other interested persons. In addition to the voting members, the committee may include
Further information regarding the most recent charter and other information can be found at
This document is issued under the Federal Advisory Committee Act (5 U.S.C. app.). For general information related to FDA advisory committees, please check
Food and Drug Administration, HHS.
Notice; renewal of advisory committee.
The Food and Drug Administration (FDA) is announcing the renewal of the Endocrinologic and Metabolic Drugs Advisory Committee by the Commissioner of Food and Drugs (the Commissioner). The Commissioner has determined that it is in the public interest to renew the Endocrinologic and Metabolic Drugs Advisory Committee for an additional 2 years beyond the charter expiration date. The new charter will be in effect until August 27, 2020.
Authority for the Endocrinologic and Metabolic Drugs Advisory Committee will expire on August 27, 2020, unless the Commissioner formally determines that renewal is in the public interest.
LaToya Bonner, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993-0002, 301-796-9001, email:
Pursuant to 41 CFR 102-3.65 and approval by the Department of Health and Human Services pursuant to 45 CFR part 11 and by the General Services Administration, FDA is announcing the renewal of the Endocrinologic and Metabolic Drugs Advisory Committee (the Committee). The Committee is a discretionary Federal advisory committee established to provide advice to the Commissioner.
The Committee advises the Commissioner or designee in discharging responsibilities as they relate to helping to ensure safe and effective drugs for human use and, as required, any other product for which the Food and Drug Administration has regulatory responsibility.
The Committee reviews and evaluates data concerning the safety and effectiveness of marketed and investigational human drug products for use in the treatment of endocrine and metabolic disorders, and makes appropriate recommendations to the Commissioner.
The Committee shall consist of a core of 11 voting members including the Chair. Members and the Chair are selected by the Commissioner or designee from among authorities knowledgeable in the fields of endocrinology, metabolism, epidemiology or statistics, and related specialties. Members will be invited to serve for overlapping terms of up to 4 years. Almost all non-Federal members of this committee serve as Special Government Employees. The core of voting members may include one technically qualified member, selected by the Commissioner or designee, who is identified with consumer interests and is recommended by either a consortium of consumer-oriented organizations or other interested persons. In addition to the voting members, the Committee may include one non-voting member who is identified with industry interests.
Further information regarding the most recent charter and other information can be found at
This document is issued under the Federal Advisory Committee Act (5 U.S.C. app.). For general information related to FDA advisory committees, please check
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by November 5, 2018.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before November 5, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Ila S. Mizrachi, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-7726,
Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This notice announces the FDA information collection request from OMB for a generic clearance that will allow FDA to use quantitative social/behavioral science data collection techniques (
If the following conditions are not met, FDA will submit an information collection request to OMB for approval through the normal PRA process:
• The collections are voluntary;
• The collections are low burden for participants (based on considerations of total burden hours, total number of participants, or burden hours per participant) and are low cost for both the participants and the Federal Government;
• The collections are noncontroversial;
• Personally identifiable information (PII) is collected only to the extent necessary
• Information gathered will not be used for the purpose of substantially informing influential policy decisions;
• Information gathered will yield qualitative findings; the collections will not be designed or expected to yield statistical data or used as though the results are generalizable to the population of study.
To obtain approval for a collection that meets the conditions of this generic clearance, an abbreviated supporting statement will be submitted to OMB along with supporting documentation (
FDA will submit individual quantitative collections under this generic clearance to OMB. Individual quantitative collections will also undergo review by FDA's Research Involving Human Subjects Committee, senior leadership in the Center for Food Safety and Applied Nutrition, and PRA specialists.
Respondents to this collection of information may include a wide range of consumers and other FDA stakeholders such as producers and manufacturers who are regulated under FDA-regulated food and cosmetic products, dietary supplements, and animal food and feed.
FDA estimates the burden of this collection of information as follows:
The total estimated annual burden is 10,498 hours. Current estimates are based on both historical numbers of participants from past projects as well as estimates for projects to be conducted in the next 3 years. The number of participants to be included in each new survey will vary, depending on the nature of the compliance efforts and the target audience.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or we) is announcing the fees we will assess for issuing export certificates for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use. The FDA Food Safety Modernization Act (FSMA) of 2011 authorizes us to charge fees to cover our costs associated with issuing export certificates for food. This notice provides the fee schedule for issuing these certificates and the basis for the fees. We have not previously exercised our FSMA authority to collect fees for export certificates issued for food for human consumption.
The fees described in this document for export certificates for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use, will be effective October 1, 2018.
Kate Meck, International Affairs Staff, Center for Food Safety and Applied Nutrition (HFS-550), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2307,
In April 1996, the “FDA Export Reform and Enhancement Act of 1996” (Pub. L. 104-134, amended by Pub. L. 104-180) amended sections 801 and 802 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 381 and 382). As a result of the 1996 amendments, section 801(e)(4) of the FD&C Act provides that persons exporting a drug, animal drug, or device may request FDA to certify that the product meets the requirements of section 801(e)(1), section 802, or other applicable requirements of the FD&C Act. Upon a showing that the product meets the applicable requirements, the law provides that FDA shall issue export certification within 20 days of the receipt of a request for such certification. The law also authorizes us to charge up to $175 for each certification issued within the 20-day period.
In January 2011, section 801(e)(4) of the FD&C Act was further amended by FSMA (Pub. L. 111-353) to authorize FDA to issue, and charge fees for, export certificates for food. Under section 801(e)(4)(C) of the FD&C Act, an export certification can be made in such form (including a publicly available listing) as FDA determines appropriate.
This notice focuses on the fees to be assessed with respect to export certificates issued by the Center for Food Safety and Applied Nutrition (CFSAN) for food for human
CFSAN estimates the annual costs of the export certification program for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use, to be approximately $975,000 per year for preparing and issuing export certificates. The costs are due to payroll and operating expenses. Specifically, there are four cost categories for preparing and issuing export certificates in general: (1) Direct personnel for research, review, tracking, writing, and assembly; (2) an information technology system used for tracking and processing certificates; (3) billing and collection of fees; and (4) overhead and administrative support. In fiscal year (FY) 2017 CFSAN issued approximately 4,072 export certificates for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use. Because CFSAN has not been charging fees for issuing these export certificates, the program has been covered by appropriated funds.
As mentioned previously, FDA may charge up to $175 for each certificate. Certificates for some of the foods that are the subject of this notice cost us more than $175 to prepare. Subsequent certificates issued for the same product(s) in response to the same request generally cost FDA less than $175 to prepare. The fee for all subsequent certificates for the same product(s) issued in response to the same request reflects reduced FDA costs for preparing those certificates.
The following fees will be assessed starting October 1, 2018, for export certificates for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use:
The fee for issuing the first export certificate for food for human consumption, with the exception of dietary supplements, medical foods, and foods for special dietary use, will be at the maximum allowable amount and consistent with the export certification fees assessed since FY 1997 by other FDA Centers that provide export certification for drugs and devices. It is also consistent with the export certification fees assessed by the Center for Veterinary Medicine (CVM) for certificates for animal food, which CVM began assessing in FY 2016 because the FSMA amendments to section 801(e)(4) of the FD&C Act also apply to animal food. The fees for issuing subsequent certificates continue to differ among the Centers, based on varying costs.
Office of the Secretary, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed collection for public comment.
Comments on the ICR must be received on or before October 4, 2018.
Submit your comments to
Sherrette Funn,
Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
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.
Substance Abuse and Mental Health Services Administration, HHS.
Notice.
The Department of Health and Human Services (HHS) notifies federal agencies of the laboratories and Instrumented Initial Testing Facilities (IITF) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs (Mandatory Guidelines).
A notice listing all currently HHS-certified laboratories and IITFs is published in the
If any laboratory or IITF has withdrawn from the HHS National Laboratory Certification Program (NLCP) during the past month, it will be listed at the end and will be omitted from the monthly listing thereafter.
This notice is also available on the internet at
Charles LoDico, Division of Workplace Programs, SAMHSA/CSAP, 5600 Fishers Lane, Room 16N02C, Rockville, Maryland 20857; 240-276-2600 (voice).
The Department of Health and Human Services (HHS) notifies federal agencies of the laboratories and Instrumented Initial Testing Facilities (IITF) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs (Mandatory Guidelines). The Mandatory Guidelines were first published in the
The Mandatory Guidelines were initially developed in accordance with
To become certified, an applicant laboratory or IITF must undergo three rounds of performance testing plus an on-site inspection. To maintain that certification, a laboratory or IITF must participate in a quarterly performance testing program plus undergo periodic, on-site inspections.
Laboratories and IITFs in the applicant stage of certification are not to be considered as meeting the minimum requirements described in the HHS Mandatory Guidelines. A HHS-certified laboratory or IITF must have its letter of certification from HHS/SAMHSA (formerly: HHS/NIDA), which attests that it has met minimum standards.
In accordance with the Mandatory Guidelines dated January 23, 2017 (82 FR 7920), the following HHS-certified laboratories and IITFs meet the minimum standards to conduct drug and specimen validity tests on urine specimens:
* The Standards Council of Canada (SCC) voted to end its Laboratory Accreditation Program for Substance Abuse (LAPSA) effective May 12, 1998. Laboratories certified through that program were accredited to conduct forensic urine drug testing as required by U.S. Department of Transportation (DOT) regulations. As of that date, the certification of those accredited Canadian laboratories will continue under DOT authority. The responsibility for conducting quarterly performance testing plus periodic on-site inspections of those LAPSA-accredited laboratories was transferred to the U.S. HHS, with the HHS' NLCP contractor continuing to have an active role in the performance testing and laboratory inspection processes. Other Canadian laboratories wishing to be considered for the NLCP may apply directly to the NLCP contractor just as U.S. laboratories do.
Upon finding a Canadian laboratory to be qualified, HHS will recommend that DOT certify the laboratory (
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of final determination.
This document provides notice that U.S. Customs and Border Protection (“CBP”) has issued a final determination concerning the country of origin of three Visionary Advanced 2 vitamin and mineral dietary supplement tablets. Based upon the facts presented, for purposes of U.S. Government procurement, CBP has concluded that the United States is the country of origin of the Advanced 2 vitamin and mineral dietary supplement tablets.
The final determination was issued on August 27, 2018. A copy of the final determination is attached. Any party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial review of this final determination within October 4, 2018.
Robert Dinerstein, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325-0132.
Notice is hereby given that on August 27, 2018, pursuant to subpart B of part 177, U.S. Customs and Border Protection Regulations (19 CFR part 177, subpart B), CBP issued a final determination concerning the country of origin of three versions of the Visionary Advanced 2 vitamin and mineral dietary supplement tablets which may be offered to the U.S. Government under an undesignated government procurement contract. This final determination, HQ H299717, copy attached, was issued under procedures set forth at 19 CFR part 177, subpart B, which implements Title Ill of the Trade Agreements Act of 1979, as amended (19 U.S.C. 2511-18). The three products are Visionary Advanced 2 coated tablets, Visionary Orange Advanced 2 chewable tablets, and Visionary Cherry Advanced 2 chewable tablets. Each of the dietary supplement tablets contains the same basic formula of vitamins and minerals, but with different flavorings. In the final determination, CBP concluded that the combining of the various vitamins and minerals in one tablet in the United States results in a product that has a name, character and use that is distinct from the individual ingredients that are used to make the dietary supplement.
Therefore, for purposes of U.S. Government procurement, the United States is the country of origin. Section 177.29, CBP Regulations (19 CFR 177.29), provides that a notice of final determination shall be published in the
This is in response to the Visionary Vitamin Company's (Visionary's) request of June 4, 2018, for a final determination concerning the country of origin of products known as the Visionary Advanced 2 dietary supplements pursuant to subpart B of Part 177 of the U.S. Customs and Border protection (“CBP”) Regulations (19 C.F.R. Part 177). The National Commodity Specialist Division forwarded your request to the Headquarters office of Regulations and Rulings to issue this final determination.
As an importer, Visionary is a party-at-interest within the meaning of 19 C.F.R. § 177.22(d)(1) and is entitled to request this final determination.
Visionary is a manufacturer of dietary supplements. At issue are three different multiple vitamin and mineral dietary supplement tablets. The three dietary supplement tablets are the Advanced 2 Coated tablets, the Visionary Orange Advanced 2 chewable tablets, and the Visionary Cherry Advanced 2 chewable tablets.
The vitamin and mineral tablets contain the following raw materials:
Instead of pharmaceutical glaze, the chewable orange and cherry tablets contain a natural masking flavor from the United States, either in a natural orange flavor or natural cherry flavor. In addition, the chewable cherry and orange tablets also incorporate sucralose from China. You have indicated that the most expensive single ingredient used in making the Advanced 2 dietary supplement tablets is the Zeaxanthin Omnixan from the United States.
The manufacturing processes of the three products occurs at Visionary's facility in Michigan, United States. The same basic procedures are used to manufacture the three different dietary supplement tablets. A flow chart of the processes was submitted. The active and inactive ingredients in powder form are weighed and all vital information is logged in.
Next, the ingredients are dispensed, and the dry mix is blended. A vibro sifter is used to pass the raw powder materials through a 40-mesh screen, while being added to a drum for mixing. Weight and yield are recorded. Mixing and lubrication is performed by a blender.
The approved blend is then transferred to the compression area. The blend is loaded into the hopper of a tablet press. The tablet press is set for the specified parameters and the details are noted in a start-up test during the tablet compression. The weight of the first few tablets is taken and checked against the actual weight of the product. Adjustments in the weight of the tablets are made until the right weight is obtained. The hardness of the tablets is also adjusted by carefully turning the pressure rollers by hand until the correct hardness is obtained. The tablets are then compared to previous samples. A series of in-process quality checks are performed in various intervals while the tablets are produced. These include: 1) appearance; 2) average weight per 10 tablets; 3) tablet thickness); 4) disintegration of tablet; 5) friability; 6) hardness; and 7) temperature and humidity.
The coating solution is prepared by loading the tablets in a pan and recording the actual weight. The tablets are pre-heated until the temperature reaches 100 degrees Fahrenheit. The coating solution is sprayed on the tablets until all surfaces of the tablets are covered. The tablets are unloaded into trays and placed in an oven room for drying. The tablets are then sorted and damaged tablets (such as broken, color or thickness variance, capping issues, or black/foreign material) are rejected.
Next, the product moves to the packaging line using the following equipment: an unscrambler, a conveyor, a tablet counter, a cottoner, a capper labeler, induction sealer, heat tunnel, printer coder, accumulation table and weighing balance. A system of quality controls occurs to ensure that the tablets are properly packaged, coded, and labeled.
What is the country of origin of the Visionary Advanced 2 Coated tablets, Visionary Orange Advanced 2 Chewable tablets, and Visionary Cherry Advanced 2 Chewable tablets for purposes of U.S. Government procurement?
CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. Government, pursuant to subpart B of Part 177, 19 C.F.R. § 177.21
Under the rule of origin set forth under 19 U.S.C. § 2518(4)(8):
In rendering advisory rulings and final determinations for purposes of U.S. Government procurement, CBP applies the provisions of subpart B of Part 177 consistent with Federal Acquisition Regulations. See 19 C.F.R. § 177.21. In this regard, CBP recognizes that the Federal Acquisition Regulations restrict the U.S. Government's purchase of products to U.S.-made or designated country end products for acquisitions subject to the TAA. See 48 C.F.R. § 25.403(c)(1). The Federal Acquisition Regulations define “U.S.-made end product” as:
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See
With respect to whether combining and mixing different materials results in a substantial transformation, CBP held in Headquarters Ruling Letter (“HQ”) 731685, dated March 15, 1990, that converting fruit concentrates and other ingredients into fruit drinks in Mexico constituted a substantial transformation. The manufacturing process involved mixing the juice concentrates with other ingredients including water, artificial flavor, sodium benzoate, and food coloring. CBP held that, considering the totality of the circumstances, a substantial transformation had occurred because “[t]he juice concentrates are subsumed into a product that is no longer considered a juice.” This situation is distinguished from a situation considered in
In the context of the manufacture of chemical products such as pharmaceuticals, CBP has consistently examined the complexity of the processing and whether the final article retains the essential identity and character of the raw material. CBP has generally held that the processing of pharmaceutical products from bulk form into measured doses does not result in a substantial transformation. See,
For example, in HQ 563207, CBP held that the combination of two APls to form Actoplus Met, an alternative treatment for type 2 diabetes, constituted a substantial transformation. The first API, Pioglitazone HCI sourced from Japan or other countries, functioned as an insulin sensitizer that targets insulin resistance in the body. The second API, biguanide sourced from Japan, Spain, and other countries, functioned to decrease the amount of glucose produced by the liver and to make muscle tissue more sensitive to insulin so glucose can be absorbed. In Japan, the two APls were mixed together to form the Ectoplasm Met. In holding that a substantial transformation occurred when the two APl's were combined, CBP emphasized that “[w]hile we note that pioglitazone and metformin may be prescribed separately, the final product, Actoplus Met, increases the individual effectiveness of piofliazone and metformin in treating type 2 diabetes patients.”
Similarly, in HQ H253443, dated March 13, 2015, CSP held that the combination of two APls in China to produce Prepopik, “a dual-acting osmotic and stimulant laxative bowel preparation for a colonoscopy in adults,” constituted a substantial transformation. CBP found that taking Prepopik had “a more stimulative laxative effect” than taking each of the APls individually. Further, in HQ H290684, dated July 2, 2018, CSP considered the country of origin of Malarone, a drug indicated for the prevention and treatment of acute, uncomplicated Plasmodium falciparum malaria. Two separate APls were
In this case, to make the dietary supplement tablets, various ingredients from different countries of origin are mixed together based on a specific formula. This results in a finished product that differs from any of the individual ingredients. The vitamins and minerals are put together in one tablet for the purposes of creating a product that is designed to promote certain effects that are distinct from the effects if only the individual ingredients were taken. Similar to HQ H253443, the combination of the vitamins and minerals in a single tablet creates a product with a synergistic effect that promotes benefits that otherwise would only be possible by taking the individual ingredients separately. In other words, the combination of the various vitamins and minerals in one tablet results in a product that has an identity, character and use that is different from and more convenient to use than taking the individual raw materials. Accordingly, we find that the three Visionary dietary supplement tablets have a new name, character and use different from the individual vitamins, minerals, and the inert ingredients used in the production of the finished tablets. Therefore, we find that the country of origin of the Visionary Advanced 2 multiple vitamin and mineral dietary supplement tablets is the United States, where the manufacturing process take place.
The country of origin of the Visionary Advanced 2 Coated Tablets, Visionary Orange Advanced 2 Chewable Tablets, and Visionary Cherry Advanced 2 Chewable Tablets for purpose of U.S. Government procurement is the United States.
Notice of this final determination will be given in the
September 6, 2018, 11:00 a.m.-12:00 p.m.
Via tele-conference hosted at Inter-American Foundation, 1331 Pennsylvania Ave. NW, Suite 1200, Washington, DC 20004.
Meeting of the Board of Directors, Open to the public.
Karen Vargas, Executive Assistant, (202) 524-8869.
Paul Zimmerman, General Counsel, (202) 683-7118.
Bureau of Land Management, Interior.
Notice.
Notice is hereby given that the coal resources in the lands described below in Jefferson County, Alabama, will be re-offered for competitive lease by sealed bid in accordance with the provisions of the Mineral Leasing Act of 1920, as amended.
The coal lease sale will be held at 1 p.m. Central Daylight Time (CDT) on a date to be determined by the BLM Eastern States Deputy State Director, no sooner than October 4, 2018. Sealed bids must be received on or before 10 a.m. CDT on the date of sale.
The date of the sale will be posted at
Contact Randall Mills, BLM Mining Engineer, by telephone at 601-919-4668, by email to
This coal lease sale is being held in response to a lease by application (LBA) filed by Best Coal Company. The Federal coal reserves to be re-offered consist of all reserves recoverable by surface mining methods in the following described lands located approximately 5 miles north of Mt. Olive, Alabama, in Jefferson County, Alabama:
The areas described aggregate 160.82 acres.
The Narley Mine Coal Tract contains three minable coal beds known as the New Castle, Mary Lee, and Blue Creek seams of the Mary Lee coal group. The seams are under private surface lands. The minable thickness of these coal beds for this tract are approximately 4 to 5 feet. The tract contains approximately 469,000 tons of recoverable high-volatile bituminous coal. The estimated average coal quality on an “as received basis” is as follows:
The tract will be leased to the qualified bidder of the highest cash amount, provided that the bid meets or exceeds the BLM's estimate of the fair market value of the tract. The minimum bid established by regulation is $100 per acre or fraction thereof. The minimum bid is not intended to represent fair market value. The fair-market value will be determined by the authorized officer after the sale.
The sealed bids should be sent by certified mail, return-receipt requested, or be hand delivered to the cashier, BLM Southeastern States District Office, at the address given above and clearly marked “Sealed Bid for ALES-55199 Coal Sale—Not to be opened before 1 p.m. CDT on (date of Sale), 2018.” The
A lease issued as a result of this offering will provide for payment of an annual rental of $3 per acre, or fraction thereof, and a royalty payable to the United States of 12.5 percent of the value of coal mined by surface methods and 8 percent of the value of coal mined by underground methods. Bidding instructions for the tract offered, and the terms and conditions of the proposed coal lease, are included in the Detailed Statement of Lease Sale. Copies of the statement and the proposed coal lease are available at the BLM Southeastern States District Office. Casefile ALES-55199 is also available for public inspection at the BLM Southeastern States District Office.
43 CFR 3422.3-2.
National Park Service, Interior.
Meeting notice.
In accordance with the Federal Advisory Committee Act of 1972, the National Park Service is hereby giving notice that the Tule Springs Fossil Beds National Monument Advisory Council (Council) will meet as indicated below.
The meeting will be held on Monday, October 15, 2018, at 5:00 p.m. (Pacific).
The meeting will be held at the Federal Interagency Office Building, 4701 N. Torrey Pines Road, Las Vegas, Nevada 89130-2301.
Further information concerning the meeting may be obtained from Diane Keith, Superintendent, Tule Springs Fossil Beds National Monument, 601 Nevada Way, Boulder City, Nevada 89005, via telephone at (702) 515-5462, or email at
The Council was established pursuant to Section 3092(a)(6) of Public Law 113-291 and in accordance with the provisions of the Federal Advisory Management Act (5 U.S.C. Appendix 1-16). The purpose of the Council is to advise the Secretary of the Interior with respect to the preparation and implementation of the management plan.
The meeting is open to the public. Interested persons may make oral/written presentations to the Council during the business meeting or file written statements. Such requests should be made to the Superintendent prior to the meeting.
5 U.S.C. Appendix 2.
National Park Service, Interior.
Meeting notice.
In accordance with the Federal Advisory Committee Act of 1972, the National Park Service (NPS) is hereby giving notice of the 308th meeting of the Cape Cod National Seashore Advisory Commission.
The meeting will be held on Monday, September 24, 2018, at 1:00 p.m. (Eastern).
The meeting will be held in the conference room at park headquarters, 99 Marconi Site Road, Wellfleet, Massachusetts 02667.
Further information concerning the meeting may be obtained from Brian Carlstrom, Superintendent and Designated Federal Officer, Cape Cod National Seashore, 99 Marconi Site Road, Wellfleet, Massachusetts 02667, or at (508) 771-2144 or by email at
The Commission was reestablished pursuant to Public Law 87-126, as amended by Public Law 105-280 (16 U.S.C. 459b-7). The purpose of the Commission is to consult with the Secretary of the Interior, or his designee, with respect to matters relating to the development of Cape Cod National Seashore, and with respect to carrying out the provisions of sections 4 and 5 of the Act establishing the Seashore.
The meeting is open to the public. Interested persons may make oral/written presentations to the Commission during the business meeting or file written statements. Such requests should be made to the park superintendent prior to the meeting.
5 U.S.C. Appendix 2.
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it has instituted reviews pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping duty orders on silicomanganese from India, Kazakhstan, and Venezuela would be likely to lead to continuation or recurrence of material injury. Pursuant to the Act, interested parties are requested to respond to this notice by submitting the information specified below to the Commission.
Instituted September 4, 2018. To be assured of consideration, the deadline for responses is October 4, 2018. Comments on the adequacy of responses may be filed with the Commission by November 19, 2018.
Mary Messer (202-205-3193), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
(1)
(2) The
(3) The
(4) The
(5) An
Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the
No response to this request for information is required if a currently valid Office of Management and Budget (“OMB”) number is not displayed; the OMB number is 3117 0016/USITC No. 18-5-412, expiration date June 30, 2020. Public reporting burden for the request is estimated to average 15 hours per response. Please send comments regarding the accuracy of this burden estimate to the Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and Email address of the certifying official.
(2) A statement indicating whether your firm/entity is an interested party under 19 U.S.C. 1677(9) and if so, how, including whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty orders on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company transfers of the
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. commercial shipments of
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (OPTIONAL) A statement of whether you agree with the above definitions of the
This proceeding is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.61 of the Commission's rules.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it has instituted a review pursuant to the Tariff Act of 1930 (“the Act”), as amended, to determine whether revocation of the antidumping duty order on certain welded large diameter line pipe from Japan would be likely to lead to continuation or
Instituted September 4, 2018. To be assured of consideration, the deadline for responses is October 4, 2018. Comments on the adequacy of responses may be filed with the Commission by November 19, 2018.
Mary Messer (202-205-3193), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
(1)
(2) The
(3) The
(4) The
(5) An
Former Commission employees who are seeking to appear in Commission five-year reviews are advised that they may appear in a review even if they participated personally and substantially in the corresponding underlying original investigation or an earlier review of the same underlying investigation. The Commission's designated agency ethics official has advised that a five-year review is not the same particular matter as the underlying original investigation, and a five-year review is not the same particular matter as an earlier review of the same underlying investigation for purposes of 18 U.S.C. 207, the post employment statute for Federal employees, and Commission rule 201.15(b) (19 CFR 201.15(b)), 79 FR 3246 (Jan. 17, 2014), 73 FR 24609 (May 5, 2008). Consequently, former employees are not required to seek Commission approval to appear in a review under Commission rule 19 CFR 201.15, even if the corresponding underlying original investigation or an earlier review of the same underlying investigation was pending when they were Commission employees. For further ethics advice on this matter, contact Charles Smith, Office of the General Counsel, at 202-205-3408.
No response to this request for information is required if a currently valid Office of Management and Budget (“OMB”) number is not displayed; the OMB number is 3117 0016/USITC No. 18-5-413, expiration date June 30, 2020. Public reporting burden for the request is estimated to average 15 hours per response. Please send comments regarding the accuracy of this burden estimate to the Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.
(1) The name and address of your firm or entity (including World Wide Web address) and name, telephone number, fax number, and Email address of the certifying official.
(2) A statement indicating whether your firm/entity is an interested party under 19 U.S.C. 1677(9) and if so, how, including whether your firm/entity is a U.S. producer of the
(3) A statement indicating whether your firm/entity is willing to participate in this proceeding by providing information requested by the Commission.
(4) A statement of the likely effects of the revocation of the antidumping duty order on the
(5) A list of all known and currently operating U.S. producers of the
(6) A list of all known and currently operating U.S. importers of the
(7) A list of 3-5 leading purchasers in the U.S. market for the
(8) A list of known sources of information on national or regional prices for the
(9) If you are a U.S. producer of the
(a) Production (quantity) and, if known, an estimate of the percentage of total U.S. production of the
(b) Capacity (quantity) of your firm to produce the
(c) the quantity and value of U.S. commercial shipments of the
(d) the quantity and value of U.S. internal consumption/company transfers of the
(e) the value of (i) net sales, (ii) cost of goods sold (COGS), (iii) gross profit, (iv) selling, general and administrative (SG&A) expenses, and (v) operating income of the
(10) If you are a U.S. importer or a trade/business association of U.S. importers of the
(a) The quantity and value (landed, duty-paid but not including antidumping duties) of U.S. imports and, if known, an estimate of the percentage of total U.S. imports of
(b) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. commercial shipments of
(c) the quantity and value (f.o.b. U.S. port, including antidumping duties) of U.S. internal consumption/company transfers of
(11) If you are a producer, an exporter, or a trade/business association of producers or exporters of the
(a) Production (quantity) and, if known, an estimate of the percentage of total production of
(b) Capacity (quantity) of your firm(s) to produce the
(c) the quantity and value of your firm's(s') exports to the United States of
(12) Identify significant changes, if any, in the supply and demand conditions or business cycle for the
(13) (OPTIONAL) A statement of whether you agree with the above definitions of the
This proceeding is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.61 of the Commission's rules.
By order of the Commission.
Notice is hereby given that, on August 14, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Videon Central Inc., State College, PA; Foryou General Electronics, Huizhou, PEOPLE'S REPUBLIC OF CHINA; Taiwan Sanshin Electronics Co., Tokyo, JAPAN; Teltron Baires S.A., Buenos Aires, ARGENTINA; D&M Holdings, Kawasaki, JAPAN; Seiko Epson Corporation, Suwa, JAPAN; and FMS Co., Ltd., Gwangjeok-myeon, REPUBLIC OF KOREA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and DVD CCA intends to file additional written notifications disclosing all changes in membership.
On April 11, 2001, DVD CCA filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on May 16, 2018. A notice was published in the
Notice is hereby given that, on August 10, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Context Matters, Inc., New York, NY; Richard Hather (individual), Baldock, UNITED KINGDOM; Rachel Belani Baker (individual), New York, NY; Insightomics, Lisbon, PORTUGAL; and Pine Biotech, Inc., New Orleans, LA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Pistoia Alliance, Inc. intends to file additional written notifications disclosing all changes in membership.
On May 28, 2009, Pistoia Alliance, Inc. filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on May 29, 2018. A notice was published in the
Notice is hereby given that, on August 17, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open and RIC-Americas intends to file additional written notifications disclosing all changes in membership or planned activities.
On April 30, 2014, RIC-Americas filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 11, 2018. A notice was published in the
Notice is hereby given that, on August 15, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and 3D PDF intends to file additional written notifications disclosing all changes in membership.
On March 27, 2012, 3D PDF filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on May 22, 2018. A notice was published in the
Notice is hereby given that, on August 6, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, SigNet Technologies, Cary, NC, has withdrawn as a party to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CWMD intends to file additional written notifications disclosing all changes in membership.
On January 31, 2018, CWMD filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on April 25, 2018. A notice was published in the
In accordance with Departmental Policy, 28 CFR 50.7, notice is hereby given that a proposed Consent Decree in
This proposed Consent Decree concerns a complaint filed by the United States against Dion Cumbie, pursuant to Sections 301(a), 309(b), and 309(d) of the Clean Water Act, 33 U.S.C. 1311(a), 1319(b), and 1319(d), to obtain injunctive relief from and impose civil penalties against the Defendant for violating the Clean Water Act by discharging pollutants without a permit into waters of the United States. The proposed Consent Decree resolves these allegations by requiring the Defendant to restore the impacted areas and/or perform mitigation and to pay a civil penalty.
The Department of Justice will accept written comments relating to this proposed Consent Decree for thirty (30) days from the date of publication of this Notice. Please address comments to Martin McDermott, Senior Attorney, United States Department of Justice, Environment and Natural Resources Division, Post Office Box 7611, Washington, DC 20044-7611 and refer to
The proposed Consent Decree may be examined at the Clerk's Office, United States District Court for the District of South Carolina, Charleston Division, 85 Broad Street, Charleston, SC 29401. In addition, the proposed Consent Decree may be examined electronically at
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting the Employee Benefits Security Administration (EBSA) sponsored information collection request (ICR) titled, “Employee Retirement Income Security Act of 1974 Technical Release 1991-1,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before October 4, 2018.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov website at
Submit comments about this request by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-EBSA, Office of Management and Budget, Room 10235, 725 17th Street NW, Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
This ICR seeks to extend PRA authority for the Employee Retirement Income Security Act of 1974 (ERISA) Technical Release 1991-1 information collection. The subject information collection requirements arise from ERISA section 101(e), which establishes notice requirements that must be satisfied before an employer may transfer excess assets from a defined benefit pension plan to a retiree health benefit account, as permitted under conditions set forth in Internal Revenue Code of 1986 as amended section 420.
ERISA Technical Release 91-1 provides guidance on how to satisfy the subject ERISA notice requirements. The Release made two changes in the statutory requirements for the second type of notice. First, it required the notice to include a filing date and the intended asset transfer date. The Release also simplified the statutory filing requirements by providing that filing with the DOL would be deemed sufficient notice to both the DOL and the Department of the Treasury. ERISA section 101(e) authorizes this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
Wage and Hour Division, Department of Labor.
Notice.
The Wage and Hour Division (WHD) of the U.S. Department of Labor (the Department) is issuing this notice to announce the applicable minimum wage rate for workers performing work on or in connection with federal contracts covered by Executive Order 13658, beginning January 1, 2019.
Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter as determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. The Secretary's determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage for tipped employees performing work on or in connection with covered contracts. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before the rate takes effect. The applicable minimum wage under the Executive Order is currently $10.35 per hour, in effect since January 1, 2018.
Pursuant to the Executive Order and its implementing regulations in the Code of Federal Regulations, notice is hereby given that beginning January 1, 2019, the Executive Order minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $10.60 per hour. Notice is also hereby given that, beginning January 1, 2019, the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts will increase to $7.40 per hour.
These new rates shall take effect on January 1, 2019.
Melissa Smith, Director, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape, or Disc), upon request, by calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may dial toll-free (877) 889-5627 to obtain information or request materials in alternative formats.
The Executive Order was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter in an amount determined by the Secretary pursuant to the Order.
The Executive Order and its implementing regulations require the Secretary to determine the applicable minimum wage rate for workers performing work on or in connection with covered contracts on an annual basis, beginning January 1, 2016.
(i) Not less than the amount in effect on the date of such determination;
(ii) Increased from such amount by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) (United States city average, all items, not seasonally adjusted), or its successor publication, as determined by the Bureau of Labor Statistics (BLS); and
(iii) Rounded to the nearest multiple of $0.05.
Section 2(b) of the Executive Order further provides that, in calculating the annual percentage increase in the CPI-W for purposes of determining the new minimum wage rate, the Secretary shall compare such CPI-W for the most recent month, quarter, or year available (as selected by the Secretary prior to the first year for which a minimum wage is in effect) with the CPI-W for the same month in the preceding year, the same quarter in the preceding year, or the preceding year, respectively.
Once a determination has been made with respect to the new minimum wage rate, the Executive Order and its implementing regulations require the Secretary to notify the public of the applicable minimum wage rate on an annual basis at least 90 days before any new minimum wage takes effect.
Section 3 of the Executive Order requires contractors to pay tipped employees covered by the Order performing on or in connection with covered contracts an hourly cash wage of at least $4.90, beginning on January 1, 2015, provided the employees receive sufficient tips to equal the Executive Order minimum wage rate under section 2 of the Order when combined with the cash wage.
The Executive Order minimum wage and the cash wage required for tipped employees are currently $10.35 and $7.25 per hour, respectively. The Department announced these rates on September 15, 2017, 82 FR 43408, and the rates took effect on January 1, 2018.
Using the methodology set forth in the Executive Order and summarized above, the Department must first determine the annual percentage increase in the CPI-W (United States city average, all items, not seasonally adjusted), as published by BLS, to determine the new Executive Order minimum wage rate. In calculating the annual percentage increase in the CPI-W, the Department must compare the CPI-W for the most recent year available with the CPI-W for the preceding year. The Department therefore compares the percentage change in the CPI-W between the most recent year (
In order to determine the Executive Order minimum wage rate beginning January 1, 2019, the Department therefore calculated the CPI-W for the most recent year by averaging the CPI-W for the four most recent quarters, which consist of the first two quarters of 2018 and the last two quarters of 2017 (
The new Executive Order minimum wage rate that must generally be paid to workers performing on or in connection with covered contracts beginning January 1, 2019 is therefore $10.60 per hour.
As noted above, section 3 of the Executive Order provides a methodology to determine the amount
Appendix A to this notice provides a comprehensive chart of the CPI-W data published by BLS that the Department used to calculate the new Executive Order minimum wage rate based on the methodology explained herein. Appendix B to this notice sets forth an updated version of the Executive Order poster that the Department published with its Final Rule, reflecting the updated wage rates that will be in effect beginning January 1, 2019.
Division of Federal Employees' Compensation, Office of Workers' Compensation Programs, Department of Labor.
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Workers' Compensation Programs is soliciting comments concerning its proposal to extend OMB approval of the information collection: Statement of Recovery (SOR) Forms (CA-1108 and CA-1122). A copy of the proposed information collection request can be obtained by contacting the office listed below in the
Written comments must be submitted to the office listed in the
You may submit comments by mail, delivery service or by hand to Ms. Yoon Ferguson, U.S. Department of Labor, 200 Constitution Ave. NW, Room S-3323, Washington, DC 20210; by fax (202) 354-9647; or by Email
When the employee receives a payment for his or her damages, whether from a final court judgment on or a settlement of the action, section 8132 of the FECA (5 U.S.C. 8132) provides that the employee “shall refund to the United States that amount of compensation paid by the United States. . . .” To enforce the United States' statutory right of reimbursement, the Office of Workers' Compensation Programs (OWCP) has promulgated regulations. The regulations require a FECA beneficiary to report these types of payments (20 CFR 10.710) and submit the detailed information necessary to calculate the amount of the refund and surplus, if any, according to the formula in the statute (20 CFR 10.707(e)).
The information collected by Form CA-1108 and Form CA-1122 from the FECA beneficiary includes this information and is necessary to calculate the amount of the refund and surplus owed to the United States from the FECA beneficiary's settlement or judgment, as required in the statute and the regulations. This information collection is currently approved for use through November 30, 2018.
* Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
* evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
* enhance the quality, utility and clarity of the information to be collected; and
* minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
Millennium Challenge Corporation.
Notice.
In accordance with the requirements of the Federal Advisory Committee Act, MCC intends to establish the MCC Economic Advisory Council (“The EAC”), and is hereby soliciting representative nominations. The EAC shall serve MCC in a solely advisory capacity and provide advice and guidance to Millennium Challenge Corporation (MCC) economists, evaluators, leadership of the Department of Policy and Evaluation (DPE), and senior MCC leadership regarding relevant trends in development economics, applied economic and evaluation methods, poverty analytics, as well as modeling, measuring, and evaluating development interventions, including without limitation social and gender inequities. In doing so, an overarching purpose of the EAC will be to sharpen MCC's analytical methods and capacity in support of continuing development effectiveness. It will also serve as a sounding board and reference group for assessing and advising on strategic policy innovations and methodological directions in MCC.
Nominations for EAC members must be received on or before 5 p.m. EDT on October 15, 2018. Further information about the nomination process is included below. MCC plans to host the first EAC meeting in late 2018. The EAC will meet at least one time per year in Washington, DC or via video/teleconferencing.
All nomination materials or requests for additional information should be emailed to MCC's Economic Advisory Council Designated Federal Officer, Brian Epley at
Brian Epley, 202.772.6515,
The EAC will focus on issues related to the analytical products and strategy used as inputs to compact and threshold program development and decision making, on learning from MCC experience about program effectiveness and impact, and to reflect on the broader global development trends and context of MCC's work. The EAC will provide advice, recommendations, and guidance from experts in academia and the international development community on the design and implementation of programs in a structured and integrated manner. The Vice President for MCC's Department of Policy and Evaluation affirms that the creation of the EAC is necessary and in the public interest. The EAC is seeking members from a range of academic organizations, independent think tanks, and international development agencies. Members will be chosen to represent a diversity of expertise, background, and geographic experience.
The EAC will provide advice to MCC on issues related to growth and development in low and middle income countries including:
1. New perspectives on economic development;
2. Innovative approaches to growth analytics;
3. Innovations in program and project evaluation;
4. Applied microeconomics and cost-benefit analytics;
5. Poverty and income dynamics;
6. Social development and the economics of gender; and
7. Other innovations in the field of development economics and evaluation.
Additional information about MCC and its portfolio can be found at
Qualified individuals may self-nominate or be nominated by any individual or organization. To be considered for the EAC, nominators should submit the following information:
• Name, title, organization and relevant contact information (including phone and email address) of the individual under consideration;
• A letter containing a brief biography for the nominee and description why the nominee should be considered for membership;
• CV including professional and academic credentials;
Please do not send company, or organization brochures or any other information. Materials submitted should total two pages or less, excluding CV. Should more information be needed, MCC staff will contact the nominee, obtain information from the nominee's past affiliations, or obtain information from publicly available sources.
All members of the EAC will be independent of the agency, representing the views and interests of their respective industry or area of expertise, and not as Special Government Employees. All members shall serve without compensation. The duties of the EAC are solely advisory and any determinations to be made or actions to be taken on the basis of EAC advice shall be made or taken by appropriate officers of MCC.
Nominees selected for appointment to the EAC will be notified by return email and receive a letter of appointment. A selection team will review the nomination packages. The selection team will make recommendations regarding membership to the Vice President for MCC's Department of Policy and Evaluation based on criteria including: (1) Professional experience, and knowledge; (2) academic field and expertise; (3) experience within regions in which MCC works; (4) contribution of diverse regional or technical professional perspectives, and (5) availability and willingness to serve.
In the selection of members for the EAC, MCC will seek to ensure a balanced representation and consider a cross-section of those directly affected, interested, and qualified, as appropriate to the nature and functions of the EAC.
Nominations are open to all individuals without regard to race, color, religion, sex, national origin, age, mental or physical disability, marital status, or sexual orientation.
National Aeronautics and Space Administration (NASA).
Notice of Centennial Challenges CO
This notice is issued in accordance with the NASA Prize Authority. Phase 1 of the CO
Challenge registration for Phase 1 opens August 30, 2018, and will remain open until 6:00 p.m. Eastern Time on January 24, 2019.
Other important dates:
Phase 1 of the CO
To register for or get additional information regarding the CO
For general information on the NASA Centennial Challenges Program please visit:
Future planetary habitats on Mars will require a high degree of self-sufficiency. This requires a concerted effort to both effectively recycle supplies brought from Earth and use local resources such as CO
Many of these required mission products such as food, nutrients, medicines, plastics, fuels, and adhesives are organic, and are comprised mostly of carbon, hydrogen, oxygen and nitrogen molecules. These molecules are readily available within the Martian atmosphere (CO
The type of organic substrate used strongly affects the efficiency of the microbial system. For example, while an organism may be able to use simple organic compounds such as formate (1- carbon) and acetate (2-carbon), these “low-energy” substrates will typically result in poor growth. In order to maximize the rate of growth and reduce system size and mass, organic substrates that are rich in energy and carbon, such as sugars, are needed. Sugars such as D-Glucose, a six-carbon sugar that is used by a wide variety of model heterotrophic microbes, is typically the preferred organic substrate for commercial terrestrial microbial production systems and experimentation. There are a wide range of other compounds, such as less complex sugars and glycerol that could also support relatively rapid rates of growth.
To effectively employ microbial bio-manufacturing platforms on planetary bodies such as Mars, it is vital that the carbon substrates be made on-site using local materials. However, generating complex compounds like glucose on Mars presents an array of challenges. While sugar-based substrates are inexpensively made in bulk on Earth from plant biomass, this approach is currently not feasible in space. Alternatively, current physicochemical processes such as photo/electrochemical and thermal catalytic systems are able to make smaller organic compounds such as methane, formate, acetate and some alcohols from CO
Phase 1 of the CO
NASA welcomes applications from individuals, teams, and organization or entities that have a recognized legal existence and structure under applicable law (State, Federal or Country) and that are in good standing in the jurisdiction under which they are organized with the following restrictions:
1. Individuals
2. Organizations
3. Teams
4. Teams
U.S. government employees may enter the competition, or be members of prize-eligible teams, so long as they are not acting within the scope of their Federal employment, and they rely on no facilities, access, personnel, knowledge or other resources that are available to them as a result of their employment except for those resources available to all other participants on an equal basis. U.S. government employees participating as individuals, or who submit applications on behalf of an otherwise eligible organization, will be responsible for ensuring that their participation in the Competition is permitted by the rules and regulations relevant to their position and that they have obtained any authorization that may be required by virtue of their government position. Failure to do so may result in the disqualification of them individually or of the entity which they represent or in which they are involved.
i. An employee of such entity,
ii. A full-time student of such entity, if the entity is a university or other accredited institution of higher learning,
iii. An owner of such entity, so long as foreign citizens own less than 50% of the interests in the entity, OR
iv. A contractor under written contract to such entity.
No Team Member shall be a citizen of a country on the NASA Export Control Program list of designated countries in Category II, Countries determined by the Department of State to support terrorism. The current list of designated countries can be found at
A team-designated team lead shall be responsible for the actions of and compliance with the rules, including prize eligibility rules, by all members of his or her team.
The eligibility requirements can also be found on the official challenge site:
Each application should reflect the anticipated ownership, use, and licensing of any intellectual property. The Team represents and warrants that the Entry is an original work created solely by the Team, that the Team own all Intellectual Property in and to the Entry, and that no other party has any right, title, claim or interest in the Entry, except as expressly identified by the Team to NASA in writing in the application. NASA claims no right, title, or interest to any such intellectual property solely as a consequence of the Team's participation in the competition, including the winning of a prize. NASA reserves the right to share any submissions received with its civil servants and contractors, and reserves the right to approach individual participants about any future opportunities at the conclusion of the competition.
The complete official rules for Phase 1 of the CO
National Archives and Records Administration (NARA).
Notice of availability of proposed records schedules; request for comments.
The National Archives and Records Administration (NARA) publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when agencies no longer need them for current Government business. The records schedules authorize agencies to preserve records of continuing value in the National Archives of the United States and to destroy, after a specified period, records lacking administrative, legal, research, or other value. NARA publishes notice in the
NARA must receive requests for copies in writing by October 4, 2018. Once NARA finishes appraising the records, we will send you a copy of the schedule you requested. We usually prepare appraisal memoranda that contain additional information concerning the records covered by a proposed schedule. You may also request these. If you do, we will also provide them once we have completed the appraisal. You have 30 days after we send to you these requested documents in which to submit comments.
You may request a copy of any records schedule identified in this notice by contacting Records Appraisal and Agency Assistance (ACRA) using one of the following means:
You must cite the control number, which appears in parentheses after the name of the agency that submitted the schedule, and a mailing address. If you would like an appraisal report, please include that in your request.
Margaret Hawkins, Director, by mail at Records Appraisal and Agency Assistance (ACRA), National Archives and Records Administration, 8601 Adelphi Road; College Park, MD 20740-6001, by phone at 301-837-1799, or by email at
NARA publishes notice in the
Each year, Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing records retention periods and submit these schedules for NARA's approval. These schedules provide for timely transfer into the National Archives of historically valuable records and authorize the agency to dispose of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent.
The schedules listed in this notice are media neutral unless otherwise specified. An item in a schedule is media neutral when an agency may apply the disposition instructions to records regardless of the medium in
Agencies may not destroy Federal records without Archivist of the United States' approval. The Archivist approves destruction only after thoroughly considering the records' administrative use by the agency of origin, the rights of the Government and of private people directly affected by the Government's activities, and whether or not the records have historical or other value.
In addition to identifying the Federal agencies and any subdivisions requesting disposition authority, this notice lists the organizational unit(s) accumulating the records (or notes that the schedule has agency-wide applicability when schedules cover records that may be accumulated throughout an agency); provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction); and includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it also includes information about the records. You may request additional information about the disposition process at the addresses above.
1. Department of Agriculture, Forest Service (DAA-0095-2018-0015, 1 item, 1 temporary item). General correspondence, policies, and project reports related to pesticide development, use, management, and safety.
2. Department of Agriculture, Forest Service (DAA-0095-2018-0022, 1 item, 1 temporary item). Administrative policies and procedures, correspondence, memoranda, and training records of the law enforcement program.
3. Department of Agriculture, Forest Service (DAA-0095-2018-0029, 1 item, 1 temporary item). General correspondence, coordination, and progress records related to energy program management.
4. Department of Agriculture, Forest Service (DAA-0095-2018-0030, 2 items, 2 temporary items). Correspondence, applications, and supporting documents related to the management and tracking of grazing permit applications.
5. Department of Agriculture, Forest Service (DAA-0095-2018-0031, 1 item, 1 temporary item). General correspondence and inquiries related to nonstructural range improvements.
6. Department of Agriculture, Forest Service (DAA-0095-2018-0033, 1 item, 1 temporary item). General correspondence, statistical data, plans, and agreements related to the management of wild free-roaming horses and burros.
7. Department of Agriculture, Forest Service (DAA-0095-2018-0038, 1 item, 1 temporary item). General correspondence, statistical data, and reports related to the management of recreation sites and programs.
8. Department of Agriculture, Forest Service (DAA-0095-2018-0040, 1 item, 1 temporary item). Correspondence, inventory and monitoring reports, and general inquiries related to trail management.
9. Department of Agriculture, Forest Service (DAA-0095-2018-0041, 1 item, 1 temporary item). Correspondence, progress reports, and purchasing lists related to management of recycling and waste prevention programs acquisition activities.
10. Department of Agriculture, Forest Service (DAA-0095-2018-0043, 2 items, 2 temporary items). Correspondence, market trend data, rate and cost tables, and studies related to timber value appraisals.
11. Department of Homeland Security, Immigration and Customs Enforcement (DAA-0567-2018-0001, 2 items, 2 temporary items). Records of participation in alternatives to detention programs.
12. Department of Homeland Security, Transportation Security Administration (DAA-0560-2017-0021, 14 items, 14 temporary items). Occupational safety, health, and environment records.
13. Department of Justice, Criminal Division (DAA-0060-2018-0001, 3 items, 1 temporary item). Records documenting the administration of the United States Victims of State Sponsored Terrorism Fund, including non-significant administrative and operations records. Proposed for permanent retention are background and policy files, including claims forms and supporting case files.
14. Federal Maritime Commission, Office of the Inspector General (DAA-0358-2017-0003, 12 items, 8 temporary items). Records relating to routine investigations, audits and evaluations, and peer reviews. Proposed for permanent retention are records relating to significant audits and investigations, final policy, and reports to Congress.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is making a finding of no significant impact (FONSI) for a proposed issuance of an exemption to FirstEnergy Nuclear Operating Company (FENOC, the licensee), for Davis-Besse Nuclear Power Station (DBNPS), Unit No. 1, located in Ottawa County, Ohio. The proposed action would grant the licensee a partial exemption from the “Physical barrier” requirements in the NRC's regulations, to allow FENOC to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on-site. The NRC is considering an Exemption to Renewed Facility Operating License No. NPF-3, issued on December 8, 2015, and held by FENOC; and First Energy Nuclear Generation, LLC; for the operation of DBNPS, Unit No. 1.
The environmental assessment referenced in this document is available on September 4, 2018.
Please refer to Docket ID NRC-2018-0192 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:
•
•
•
Bhalchandra K. Vaidya, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3308; email:
The NRC is considering issuance of a partial exemption, pursuant to section 73.5 of title 10 of the
In accordance with 10 CFR 51.21, the NRC has prepared an environmental assessment (EA) that analyzes the environmental effects of the proposed action. Based on the results of the EA, and in accordance with 10 CFR 51.31(a), the NRC has prepared a FONSI for the proposed exemption.
The proposed action would grant the licensee a partial exemption from the “physical barrier” requirements of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” as it applies to the angular specification for brackets used to support the required barbed wire (or similar material) topper. As stated in 10 CFR 73.2, fences must be constructed of No. 11 American wire gauge, or heavier wire fabric, topped by three strands or more of barbed wire or similar material on brackets angled inward or outward between 30 and 45 degrees from the vertical, with an overall height of not less than 8 feet, including the barbed topping. If approved, the partial exemption would allow the licensee to continue to use, without modification, the current configuration of vertical barbed wire fence toppings in limited protected area sections on-site, as specified on the maps submitted by the licensee in its letter dated March 16, 2018, to meet the regulatory requirements of 10 CFR part 73, “Physical protection of plants and materials.” Specifically, barbed wire on top of physical barrier fencing on gates, near gates, near interfaces with buildings, and on corners is oriented vertically.
The proposed action is in accordance with the licensee's application dated July 19, 2017, as supplemented by letters dated March 16, 2018; and May 2, 2018.
Physical protection consists of a variety of measures to protect nuclear facilities and material against sabotage, theft, diversion, and other malicious acts. The NRC and its licensees use a graded approach for physical protection, consistent with the significance of the facilities or material to be protected. In so doing, the NRC establishes the regulatory requirements and assesses compliance, and licensees are responsible for providing the protection.
The proposed action is needed to allow the licensee to continue to use, without modification, the current configuration of vertical barbed wire fence toppings in certain limited protected area sections on-site, as shown on the maps submitted by the licensee in its March 16, 2018, letter. Currently, some of the barbed wire bracketing on top of the protected area physical barrier fencing do not meet certain design criteria specified in 10 CFR 73.2. Specifically, barbed wire on top of physical barrier fencing on gates, near gates, near interfaces with buildings, and on corners is oriented vertically.
Separate from this EA, the NRC staff is evaluating the licensee's proposed action which will be documented in a safety evaluation report. The staff's review will determine whether there is reasonable assurance that the site maintains adequate protection from the current physical barriers in accordance with the requirements in 10 CFR part 73.
The NRC has completed its environmental evaluation of the proposed action. The proposed action would grant the licensee a partial exemption from the “physical barrier” requirements of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” as it applies to the angular specification for brackets used to support the required barbed wire (or similar material) topper. This will allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on site.
The proposed action would have no direct impacts on land use or water resources, including terrestrial and aquatic biota as the proposed action involves no new construction or modification of plant operational systems. There would be no changes to the quality or quantity of non-radiological effluents. No changes to the plant's National Pollutant Discharge Elimination System permit are needed. In addition, there would be no noticeable effect on air pollutant emissions, socio-economic conditions in the region, no environment justice impacts, and no impacts to historic and cultural resources. Therefore, there would be no significant non-radiological impacts associated with the proposed action.
The NRC has concluded that the proposed action would not significantly affect plant safety and would not have a significant adverse effect on the probability of an accident occurring. There would be no change to radioactive effluents that affect radiation exposures to plant workers and members of the public. No changes would be made to plant buildings or the site property. Therefore, implementing the proposed action would not result in a change to the radiation exposures to the public or radiation exposure to plant workers.
As an alternative to the proposed action, the NRC considered denial of the proposed action (
There are no unresolved conflicts concerning alternative uses of available resources under the proposed action.
The NRC staff did not enter into consultation with any other Federal agency or with the State of Ohio regarding the environmental impact of the proposed action.
The licensee has requested an exemption from the “physical barrier” requirements of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” to allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in limited protected area sections on site. The NRC is considering issuing the requested exemption. The proposed action would not significantly affect plant safety, would not have a significant adverse effect on the probability of an accident occurring, and would not have any significant radiological and non-radiological impacts. This FONSI incorporates by reference the EA in Section II of this notice. Therefore, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action.
The related environmental document is NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding the Davis-Besse Nuclear Power Station, Final Report,” Supplement 52, Volumes 1 and 2, which provides the latest environmental review of current operations and a description of environmental conditions at DBNPS.
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
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 two amendment requests. The amendment requests are for Waterford Steam Electric Station, Unit 3, and Calvert Cliffs Nuclear Power Plant, Units 1 and 2. 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 October 4, 2018. A request for a hearing must be filed by November 5, 2018. Any potential party as defined in section 2.4 of title 10 of the
You may submit comments by any of the following methods:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Janet C. Burkhardt, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1384, email:
Please refer to Docket ID NRC-2018-0169, 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:
•
•
•
Please include Docket ID NRC-2018-0169, 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 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.
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 notices of amendments containing SUNSI.
The Commission has made a proposed determination that the following amendment requests involve 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
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 significant hazards consideration, then any hearing held would take place before the issuance of the amendment unless the Commission finds an imminent danger to the health or safety of the public, in which case it will issue an appropriate order or rule under 10 CFR part 2.
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
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 from the use of manual calculations to the use of the computer code, TRANFLOW, to calculate steam generator (SG) secondary side internal loads during a postulated SLB [steam line break] has no effect on previously evaluated accident probabilities or consequences.
As stated in subsection 5.4.2 of the Waterford 3 [Updated Final Safety Analysis Report (UFSAR)], the SGs, including the tubes, are designed for the reactor coolant system transients listed in subsection 3.9.1.1 so that allowable stress limits are not exceeded for a specific number of cycles. In addition, the SG assemblies are designed to withstand the blowdown forces resulting from the severance of the steam nozzle. The SG component is not adversely affected by the use of TRANFLOW to calculate SLB internal pressure loads instead of manual calculations as the manual calculation method of evaluation is not described in the UFSAR. The proposed use of TRANFLOW does not adversely affect the ability to demonstrate that the design requirements of the reactor coolant pressure boundary are met during a postulated SLB event and all plant conditions. TRANFLOW uses a variety of well-known mathematical methods and empirical correlations in order to provide accurate solutions to thermal-hydraulic design problems using standard SG parameters and assumptions. TRANFLOW has been extensively validated and qualified by a variety of sources and methods. The use of the computer code, TRANFLOW, results in the calculation of internal loads during a postulated SLB event that are comparable to NRC approved codes, CEFLASH-4A, 4B and RELAP5. It has been shown that the results produced using TRANFLOW are acceptable when making engineering justifications for the design of the SG components.
Based on the above, the proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated?
The proposed use of TRANFLOW to calculate SG secondary side internal loads during a postulated SLB event does not introduce any new equipment, create new failure modes for existing equipment, or create any new limiting single failures. Operation of the SGs with secondary side components that have been analyzed for the effects of SLB internal loads using TRANFLOW have been shown to maintain SG primary or secondary side pressure boundary integrity during all plant conditions.
Therefore, based on the above, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated.
3. Does the proposed change involve a significant reduction in a margin of safety?
To demonstrate suitability for its intended purpose, TRANFLOW was developed and maintained under the Westinghouse Quality Assurance (QA) Program, which is in compliance with the design control measures, including verification, stated under 10 CFR part 50, Appendix B. Verification of TRANFLOW has included comparison to test data, field data, manual calculations, and independent computer code prediction. Westinghouse has performed a comparison of TRANFLOW results with those of the NRC approved codes CEFLASH-4A. CEFLASH-4B and RELAP5 for analyzing SG SLB internal loads which shows that the results are technically equivalent. The [Nuclear Energy Institute] NEI 97-06, Rev. 3 (Reference 6 [of the letter dated April 12, 2018]) Steam Generator Structural Integrity Performance Criteria have been shown to be met during a postulated SLB with the use of the computer code, TRANFLOW, in the design of the replacement SGs (Reference 1 [of the letter dated April 12, 2018]). Meeting the NEI 97-06, Rev. 3 Structural Integrity Performance Criteria ensures that the SG tubes are capable of performing their safety related functions. SG tubes are relied on to maintain primary system pressure and temperature during all plant conditions. Additional loading conditions associated with the design basis accidents have been evaluated and it has been determined that the use of TRANFLOW would not contribute to SG tube burst or collapse. ASME Code Section III analysis stress limits continue to be met for the secondary side subcomponents (
The NRC staff has reviewed the licensee's analysis and, based on this
1. Do the proposed changes involve a significant increase in the probability or consequences of any accident previously evaluated?
The proposed changes permit the extension of Completion Times provided the associated risk is assessed and managed in accordance with the NRC approved Risk-Informed Completion Time Program. The proposed changes do not involve a significant increase in the probability of an accident previously evaluated because the changes involve no change to the plant or its modes of operation. The proposed changes do not increase the consequences of an accident because the design-basis mitigation function of the affected systems is not changed and the consequences of an accident during the extended Completion Time are no different from those during the existing Completion Time.
Therefore, the proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Do the proposed changes create the possibility of a new or different kind of accident from any previously evaluated?
The proposed changes do not change the design, configuration, or method of operation of the plant. The proposed changes do not involve a physical alteration of the plant (no new or different kind of equipment will be installed).
Therefore, the proposed changes do not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Do the proposed changes involve a significant reduction in a margin of safety?
The proposed changes permit the extension of Completion Times provided that risk is assessed and managed in accordance with the NRC approved Risk-Informed Completion Time Program. The proposed changes implement a risk-informed configuration management program to assure that adequate margins of safety are maintained. Application of these new specifications and the configuration management program considers cumulative effects of multiple systems or components being out of service and does so more effectively than the current TS.
Therefore, the proposed changes do 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,
(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.
Nuclear Regulatory Commission.
Environmental impact statement; reopening of scoping comment period.
The U.S. Nuclear Regulatory Commission (NRC) is requesting public comments on the scope of the NRC's Environmental Impact Statement (EIS) for the Interim Storage Partners LLC (ISP) proposed consolidated interim storage facility for spent nuclear fuel, to be located on the Waste Control Specialists LLC (WCS) site in Andrews County, Texas. ISP requested on June 8, 2018, that the NRC resume its review, which had been suspended on April 18, 2017, and provided a revised license application. The NRC is reopening the public scoping comment period that had closed on April 28, 2017, to allow more time for members of the public to develop and submit their comments.
Submit comments by October 19, 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:
•
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
James Park, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-6954; email:
Please refer to Docket ID NRC-2016-0231 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:
•
•
•
•
Please include Docket ID NRC-2016-0231 in your comment submission. Comments received during this scoping period will be considered by the NRC, along with all comments received during the previous period, in determining the scope of the EIS. Scoping comments submitted during the previous period need not be resubmitted during this scoping period.
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.
On April 28, 2016, WCS submitted a license application to the NRC for a proposed consolidated interim storage facility for spent nuclear fuel (ADAMS Accession No. ML16132A533). The NRC accepted the WCS application for detailed review on January 26, 2017 (ADAMS Accession No. ML17018A168). On November 14, 2016, the NRC opened the public scoping period for its EIS on WCS' license application for a proposed consolidated interim storage facility for spent nuclear fuel (81 FR 79531). On April 18, 2017, WCS requested that the NRC temporarily suspend its review (ADAMS Accession No. ML17110A206). The EIS public scoping comment period closed on April 28, 2017 (82 FR 14039).
On June 8, 2018, ISP (a joint venture between WCS and Orano CIS LLC) requested that NRC resume its detailed review and submitted a revised license application (ADAMS Accession No. ML18166A003). On July 19, 2018, ISP provided an update to its application (ADAMS Accession No. ML18206A482). The NRC has decided to reopen the EIS public scoping comment period on this application until 45 days from October 19, 2018, to allow more time for members of the public to submit their comments.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is making a finding of no significant impact (FONSI) for a proposed issuance of an exemption to FirstEnergy Nuclear Operating Company (FENOC, the licensee), for Beaver Valley Power Station (BVPS), Units 1 and 2, located in Beaver County, Pennsylvania. The proposed action would grant the licensee a partial exemption from the “Physical barrier” requirements in the NRC's regulations, to allow FENOC to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on-site. The NRC is considering an Exemption to Renewed Facility Operating License No. DPR-66, and Renewed Facility Operating License No. NPF-73, issued on November 5, 2009, and held by FENOC; and FirstEnergy Nuclear Generation, LLC for the operation of BVPS, Units 1 and 2.
The environmental assessment referenced in this document is available on September 4, 2018.
Please refer to Docket ID NRC-2018-0193 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:
•
•
•
Bhalchandra K. Vaidya, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3308; email:
The NRC is considering issuance of a partial exemption, pursuant to section 73.5 of title 10 of the
In accordance with 10 CFR 51.21, the NRC has prepared an environmental assessment (EA) that analyzes the environmental effects of the proposed action. Based on the results of the EA, and in accordance with 10 CFR 51.31(a), the NRC has prepared a finding of no significant impact (FONSI) for the proposed exemption.
The proposed action would grant the licensee a partial exemption from the
The proposed action is in accordance with the licensee's application dated July 19, 2017, as supplemented by letters dated March 16, 2018; and May 2, 2018.
Physical protection consists of a variety of measures to protect nuclear facilities and material against sabotage, theft, diversion, and other malicious acts. The NRC and its licensees use a graded approach for physical protection, consistent with the significance of the facilities or material to be protected. In so doing, the NRC establishes the regulatory requirements and assesses compliance, and licensees are responsible for providing the protection.
The proposed action is needed to allow the licensee to continue to use, without modification, the current configuration of vertical barbed wire fence toppings in certain limited protected area sections on-site, as shown on the maps submitted by the licensee in its March 16, 2018, letter. Currently, some of the barbed wire bracketing on top of the protected area physical barrier fencing do not meet certain design criteria specified in 10 CFR 73.2. Specifically, barbed wire on top of physical barrier fencing on gates, near gates, near interfaces with buildings, and on corners is oriented vertically.
Separate from this EA, the NRC staff is evaluating the licensee's proposed action, which will be documented in a safety evaluation report. The staff's review will determine whether there is reasonable assurance that the site maintains adequate protection from the current physical barriers in accordance with the requirements in 10 CFR part 73.
The NRC has completed its environmental evaluation of the proposed action. The proposed action would grant the licensee a partial exemption from the “physical barrier” requirements of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” as it applies to the angular specification for brackets used to support the required barbed wire (or similar material) topper. This will allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on site.
The proposed action would have no direct impacts on land use or water resources, including terrestrial and aquatic biota as the proposed action involves no new construction or modification of plant operational systems. There would be no changes to the quality or quantity of non-radiological effluents. No changes to the plant's National Pollutant Discharge Elimination System permit are needed. In addition, there would be no noticeable effect on air pollutant emissions, socio-economic conditions in the region, no environment justice impacts, and no impacts to historic and cultural resources. Therefore, there would be no significant non-radiological impacts associated with the proposed action.
The NRC has concluded that the proposed action would not significantly affect plant safety and would not have a significant adverse effect on the probability of an accident occurring. There would be no change to radioactive effluents that affect radiation exposures to plant workers and members of the public. No changes would be made to plant buildings or the site property. Therefore, implementing the proposed action would not result in a change to the radiation exposures to the public or radiation exposure to plant workers.
As an alternative to the proposed action, the NRC considered denial of the proposed action (
There are no unresolved conflicts concerning alternative uses of available resources under the proposed action.
The NRC staff did not enter into consultation with any other Federal agency or with the State of Pennsylvania regarding the environmental impact of the proposed action.
The licensee has requested an exemption from the “physical barrier” requirements of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.21, “fences,” to allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in limited protected area sections on site. The NRC is considering issuing the requested exemption. The proposed action would not significantly affect plant safety, would not have a significant adverse effect on the probability of an accident occurring, and would not have any significant radiological and non-radiological impacts. This FONSI incorporates by reference the EA in Section II of this notice. Therefore, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action.
The related environmental document is NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding Beaver Valley Power Station, Units 1 and 2, Final Report,” which provides the latest environmental review of current operations and a description of environmental conditions at BVPS, Units 1 and 2.
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft protective order templates; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is seeking public comment on draft protective order templates to be used in hearings associated with closure of inspections, tests, analyses, and acceptance criteria (ITAAC). The templates have the purpose of facilitating quick development of case-specific protective orders to support the accelerated ITAAC hearing schedule. Participants in ITAAC hearings may, but are not required to, use the templates as the basis for proposed protective orders.
Submit comments by October 19, 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:
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Michael A. Spencer, Office of the General Counsel, U.S. Nuclear Regulatory Commission; telephone: 301-287-9115, email:
Please refer to Docket ID NRC-2018-0190 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:
•
•
•
Please include Docket ID NRC-2018-0190 in your comment submission. If you cannot submit your comments on the Federal Rulemaking website,
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.
On July 1, 2016 (81 FR 43266), the NRC published final procedures for hearings on conformance with the acceptance criteria in combined licenses (COLs) issued under part 52 of title 10 of the
Some NRC proceedings involve sensitive information. For ITAAC proceedings in particular, the NRC
The NRC received comments on the proposed ITAAC Hearing Procedures suggesting that model templates would facilitate quick development of protective orders. In response, the NRC stated that protective order templates would be developed in a separate process allowing for stakeholder input.
To fulfill this commitment, the NRC has developed and is seeking comment on two draft protective order templates, one for SUNSI (ADAMS Accession No. ML18239A329) and one for SGI (ADAMS Accession No. ML18239A322). The NRC staff will make a final determination regarding issuance of the templates after consideration of any public comments received in response to this request. The final templates will be referenced in a future
The NRC has developed two draft protective order templates for ITAAC hearings, one for SUNSI and one for SGI. Although the draft templates were developed for use in ITAAC hearings, the vast majority of the content is not specific to ITAAC proceedings. The draft SUNSI and SGI templates have the following ITAAC-specific provisions:
• The templates reflect the possibility that the presiding officer might be a single legal judge assisted as appropriate by technical advisors.
• Consistent with the accelerated ITAAC hearing schedule, petitioners are given less time to execute non-disclosure declarations, and licensees and the NRC staff are given less time to provide SUNSI or SGI to the petitioners, than is ordinarily the case.
The draft SGI template also has two additional ITAAC-specific provisions:
• Consistent with the ITAAC Hearing Procedures, the draft template provides that SGI must be filed by overnight mail. Filings with SGI will not be made on the E-Filing system because the E-Filing system does not comply with SGI security requirements. This provision does not appear in the SUNSI template because SUNSI filings will be made through the E-Filing system.
• The draft template quotes the ITAAC Hearing Procedures as stating that the NRC will not delay its actions in completing the hearing or making the 10 CFR 52.103(g) finding because of delays from background checks for persons seeking access to SGI.
Both templates are based on current requirements and policies, and would, if appropriate, be updated as those requirements and policies change. For example, NRC policies will change in response to the National Archives and Records Administration's final rule, “Controlled Unclassified Information,” (81 FR 63324; September 14, 2016) (CUI Rule). The CUI Rule establishes government-wide requirements for protecting sensitive unclassified information. The CUI Rule applies both to the Federal government and to non-Federal entities receiving CUI from the Federal government. The NRC has not yet implemented the CUI Rule and does not expect to achieve implementation before the ITAAC hearings for Vogtle Units 3 and 4. But any future updating of the templates for subsequent ITAAC proceedings would reflect consideration of the CUI Rule and associated guidance.
The NRC uses the term SUNSI to refer to a broad spectrum of sensitive information that is neither classified nor SGI. While there are many types of SUNSI, the draft SUNSI protective order template is directed at protection of proprietary and security-related information, as discussed in SECY-15-0010 (January 20, 2015) (ADAMS Accession No. ML14343A747). The NRC focused on these types of SUNSI because of the NRC's experience with hearings involving reactors and its knowledge of the matters subject to ITAAC. If an ITAAC hearing involves another type of SUNSI with different protection requirements, the template can be adjusted accordingly.
In developing the draft SUNSI template, the NRC considered protective orders for proprietary and security-related information issued after 2006. The NRC also considered guidance in NRC Regulatory Issue Summary (RIS) 2005-26, “Control of Sensitive Unclassified Non-Safeguards Information Related to Nuclear Power Reactors” (ADAMS Accession No. ML051430228), dated November 7, 2005. RIS 2005-26 is specifically directed at protection of security-related information for reactors and states that such information is protected in much the same way as commercial or financial information.
Finally, the NRC considered the CUI Rule. Although the CUI Rule has not yet been implemented at the NRC, many CUI requirements are consistent with the existing protective provisions for SUNSI that provided the basis for the draft template. By aligning the provisions and terminology in the draft SUNSI template with the corresponding elements of the CUI Rule, the NRC hopes to facilitate any future update of the template to comply with the CUI Rule. The introductory discussion in the draft template identifies those CUI provisions that were excluded because they differ from, or go beyond, existing protective provisions for proprietary and security-related SUNSI for external stakeholders.
Safeguards Information is a special category of sensitive unclassified information defined in 10 CFR 73.2 and protected from unauthorized disclosure under AEA Section 147. Although SGI is unclassified information, it is handled and protected more like Classified National Security Information than like other sensitive unclassified information (
The SGI protective order template does not rely on prior SGI protective orders because they predate significant changes to the NRC's regulations on SGI and adjudicatory filings. Instead, the NRC combined general provisions from the draft SUNSI template with the SGI protection requirements in 10 CFR part 73 and the adjudicatory filing requirements in 10 CFR part 2. Also, while the NRC considered the CUI Rule when developing the draft SGI template, the draft template does not reflect any specific CUI provisions. The NRC has not yet implemented the CUI Rule, and in accordance with 32 CFR 2002.4(r), most CUI requirements do not apply to
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
The NRC may post materials related to this document, including public comments, on the Federal rulemaking website at
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is making a finding of no significant impact (FONSI) for a proposed issuance of an exemption to FirstEnergy Nuclear Operating Company (FENOC, the licensee), for Perry Nuclear Power Plant (PNPP), Unit No. 1, located in Lake County, Ohio. The proposed action would grant the licensee a partial exemption from the “Physical barrier” requirements in the NRC's regulations, to allow FENOC to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on-site. The NRC is considering an exemption to facility operating license no. NPF-58, issued on November 13, 1986, and held by FENOC, and FirstEnergy Nuclear Generation Company, LLC for the operation of PNPP, Unit No. 1.
The environmental assessment referenced in this document is available on September 4, 2018.
Please refer to Docket ID NRC-2018-0187 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:
•
•
•
Bhalchandra K. Vaidya, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3308; email:
The NRC is considering issuance of a partial exemption, pursuant to section 73.5 of title 10 of the
In accordance with 10 CFR 51.21, the NRC has prepared an environmental assessment (EA) that analyzes the environmental effects of the proposed action. Based on the results of the EA and in accordance with 10 CFR 51.31(a), the NRC has prepared a FONSI for the proposed exemption.
The proposed action would grant the licensee a partial exemption from the
The proposed action is in accordance with the licensee's application dated July 19, 2017, as supplemented by letters dated March 16, 2018; and May 2, 2018.
Physical protection consists of a variety of measures to protect nuclear facilities and material against sabotage, theft, diversion, and other malicious acts. The NRC and its licensees use a graded approach for physical protection, consistent with the significance of the facilities or material to be protected. In so doing, the NRC establishes the regulatory requirements and assesses compliance, and licensees are responsible for providing the protection.
The proposed action is needed to allow the licensee to continue to use, without modification, the current configuration of vertical barbed wire fence toppings in certain limited protected area sections on-site, as shown on the maps submitted by the licensee in its March 16, 2018, letter. Currently, some of the barbed wire bracketing on top of the protected area physical barrier fencing do not meet certain design criteria specified in 10 CFR 73.2. Specifically, barbed wire on top of physical barrier fencing on gates, near gates, near interfaces with buildings, and on corners is oriented vertically.
Separate from this EA, the NRC staff is evaluating the licensee's proposed action, which will be documented in a safety evaluation report. The staff's review will determine whether there is reasonable assurance that the site maintains adequate protection from the current physical barriers in accordance with the requirements in 10 CFR part 73.
The NRC has completed its environmental evaluation of the proposed action. The proposed action would grant the licensee a partial exemption from the “physical barrier” requirement of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” as it applies to the angular specification for brackets used to support the required barbed wire (or similar material) topper. This will allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in certain limited protected area sections on site.
The proposed action would have no direct impacts on land use or water resources, including terrestrial and aquatic biota as the proposed action involves no new construction or modification of plant operational systems. There would be no changes to the quality or quantity of non-radiological effluents. No changes to the plant's National Pollutant Discharge Elimination System permit are needed. In addition, there would be no noticeable effect on air pollutant emissions, socio-economic conditions in the region, no environment justice impacts, and no impacts to historic and cultural resources. Therefore, there would be no significant non-radiological impacts associated with the proposed action.
The NRC has concluded that the proposed action would not significantly affect plant safety and would not have a significant adverse effect on the probability of an accident occurring. There would be no change to radioactive effluents that affect radiation exposures to plant workers and members of the public. No changes would be made to plant buildings or the site property. Therefore, implementing the proposed action would not result in a change to the radiation exposures to the public or radiation exposure to plant workers.
As an alternative to the proposed action, the NRC considered denial of the proposed action (
There are no unresolved conflicts concerning alternative uses of available resources under the proposed action.
The NRC staff did not enter into consultation with any other Federal agency or with the State of Ohio regarding the environmental impact of the proposed action.
The licensee has requested an exemption from the “physical barrier” requirement of 10 CFR 73.2, specifically with respect to the design criteria specified in 10 CFR 73.2(1) “fences,” to allow the licensee to continue using vertical, rather than angled, barbed wire fence toppings in limited protected area sections on site. The NRC is considering issuing the requested exemption. The proposed action would not significantly affect plant safety, would not have a significant adverse effect on the probability of an accident occurring, and would not have any significant radiological and non-radiological impacts. This FONSI incorporates by reference the EA in Section II of this notice. Therefore, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined not to prepare an environmental impact statement for the proposed action.
The related environmental document is NUREG-0884, “Final Environmental Statement Related to the Operation of Perry Nuclear Power Plant, Units 1 and 2,” which provides the latest description of environmental conditions at Perry Nuclear Power Plant, Unit No. 1.
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
For the Nuclear Regulatory Commission.
On June 28, 2018, Miami International Securities Exchange, LLC (“MIAX Options” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.
Accordingly, pursuant to Section 19(b)(2) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 18, 2017, Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-FICC-2017-022 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Proposed Rule Change consists of proposed changes to FICC's Government Securities Division (“GSD”) Rulebook (“GSD Rules”) and Mortgage-Backed Securities Division (“MBSD” and, together with GSD, the “Divisions” and, each, a “Division”) Clearing Rules (“MBSD Rules,” and collectively with the GSD Rules, the “Rules”)
The GSD Rules and the MBSD Rules each currently provide for a loss allocation process through which both FICC (by applying up to 25 percent of its retained earnings in accordance with Section 7(b) of GSD Rule 4 and Section 7(c) of MBSD Rule 4) and its members
The current GSD and MBSD loss allocation rules provide that, in the event the Division ceases to act for a member, the amount on deposit to the Clearing Fund from the defaulting member, along with any other resources of, or attributable to, the defaulting member that FICC may access under the GSD Rules or the MBSD Rules (
Pursuant to current Rules, the applicable Division will first assess each Tier One Netting Member or Tier One Member, as applicable, an amount up to $50,000, in an equal basis per such member. If a loss remains, the Division will allocate the remaining loss ratably among Tier One Netting Members or Tier One Members, as applicable, in accordance with the amount of each Tier One Netting Member's or Tier One Member's respective average daily Required Fund Deposit over the prior 12 months. If a Tier One Netting Member or Tier One Member, as applicable, did not maintain a Required Fund Deposit for 12 months, its loss allocation amount will be based on its average daily Required Fund Deposit over the time period during which such member did maintain a Required Fund Deposit.
Pursuant to current Section 7(g) of GSD Rule 4 and MBSD Rule 4, if, as a result of the Division's application of the Required Fund Deposit of a member, a member's actual Clearing Fund deposit is less than its Required Fund Deposit, the member will be required to eliminate such deficiency in order to satisfy its Required Fund Deposit amount. In addition to losses that may result from the closeout of the defaulting member's guaranteed
The Rules of both Divisions currently provide that Tier Two Members are only subject to loss allocation to the extent they traded with the defaulting member and their trades resulted in a liquidation loss. FICC will assess Tier Two Members ratably based on their loss as a percentage of the entire remaining loss attributable to Tier Two Members.
FICC proposes to change the manner in which each of the aspects of the loss allocation process described above would be employed. GSD and MBSD would clarify or adjust certain elements and introduce certain new loss allocation concepts, as further discussed below. In addition, the proposal would address the loss allocation process as it relates to losses arising from or relating to multiple default or non-default events in a short period of time, also as described below.
FICC proposes six key changes to enhance each Division's loss allocation process. Specifically, FICC proposes to make changes to each Division regarding (1) the Corporate Contribution, (2) the Event Period, (3) the loss allocation round and notice, (4) the look-back period, (5) the loss allocation withdrawal notice and cap, and (6) the governance around non-default losses, each of which is discussed below.
As stated above, Section 7(b) of GSD Rule 4 and Section 7(c) of MBSD Rule 4 currently provide that FICC will contribute up to 25 percent of its retained earnings (or such higher amount as the Board of Directors shall determine) to a loss or liability that is not satisfied by the defaulting member's Clearing Fund deposit. Under the proposal, FICC would amend the calculation of its corporate contribution from a percentage of its retained earnings to a mandatory amount equal to 50 percent of the FICC General Business Risk Capital Requirement.
Currently, the Rules do not require FICC to contribute its retained earnings to losses and liabilities other than those from member defaults. Under the proposal, FICC would apply its Corporate Contribution to non-default losses as well. The proposed Corporate Contribution would apply to losses arising from Defaulting Member Events and Declared Non-Default Loss Events, and would be a mandatory contribution by FICC prior to any allocation of the loss among the applicable Division's members.
There would be one FICC Corporate Contribution, the amount of which would be available to both Divisions and would be applied against a loss or liability in either Division in the order in which such loss or liability occurs. In other words, FICC would not have two separate Corporate Contributions for each Division. In the event of a loss or liability relating to an Event Period, whether arising out of or relating to a Defaulting Member Event or a Declared Non-Default Loss Event, attributable to only one Division, the Corporate Contribution would be applied to that Division up to the amount then available. If a loss or liability relating to an Event Period, whether arising out of or relating to a Defaulting Member Event or a Declared Non-Default Loss Event, occurs simultaneously at both Divisions, the Corporate Contribution would be applied to the respective Divisions in the same proportion that the aggregate Average RFDs of all members in that Division bear to the aggregate Average RFDs of all members in both Divisions.
As compared to the current approach of applying “up to” a percentage of retained earnings to defaulting member losses, the proposed Corporate Contribution would be a fixed percentage of FICC's General Business Risk Capital Requirement, which would provide greater transparency and accessibility to members. The proposed Corporate Contribution would apply not only towards losses and liabilities arising out of or relating to Defaulting Member Events but also those arising out of or relating to Declared Non-Default Loss Events.
Under current Section 7(b) of GSD Rule 4 and Section 7(c) of MBSD Rule 4, FICC has the discretion to contribute amounts higher than the specified percentage of retained earnings, as determined by the Board of Directors, to any loss or liability incurred by FICC as
FICC states that in order to clearly define the obligations of each Division and its respective members regarding loss allocation and to balance the need to manage the risk of sequential loss events against members' need for certainty concerning their maximum loss allocation exposures, FICC proposes to introduce the concept of an Event Period to the GSD Rules and the MBSD Rules to address the losses and liabilities that may arise from or relate to multiple Defaulting Member Events and/or Declared Non-Default Loss Events that arise in quick succession in a Division. Specifically, the proposal would group Defaulting Member Events and Declared Non-Default Loss Events occurring within a period of 10 Business Days (“Event Period”) for purposes of allocating losses to members of the respective Divisions in one or more rounds, subject to the limitations of loss allocation as explained below.
In the case of a loss or liability arising from or relating to a Defaulting Member Event, an Event Period would begin on the day one or both Divisions notify their respective members that FICC has ceased to act for the GSD Defaulting Member and/or the MBSD Defaulting Member (or the next Business Day, if such day is not a Business Day). In the case of a loss or liability arising from or relating to a Declared Non-Default Loss Event, an Event Period would begin on the day that FICC notifies members of the respective Divisions of the Declared Non-Default Loss Event (or the next Business Day, if such day is not a Business Day). If a subsequent Defaulting Member Event or Declared Non-Default Loss Event occurs during an Event Period, any losses or liabilities arising out of or relating to any such subsequent event would be resolved as losses or liabilities that are part of the same Event Period, without extending the duration of such Event Period. An Event Period may include both Defaulting Member Events and Declared Non-Default Loss Events, and there would not be separate Event Periods for Defaulting Member Events or Declared Non-Default Loss Events occurring during overlapping 10 Business Day periods.
The amount of losses that may be allocated by each Division, subject to the required Corporate Contribution, and to which a Loss Allocation Cap would apply for any Member that elects to withdraw from membership in respect of a loss allocation round, would include any and all losses from any Defaulting Member Events and any Declared Non-Default Loss Events during the Event Period, regardless of the amount of time, during or after the Event Period, required for such losses to be crystallized and allocated.
Under the proposal, a loss allocation “round” would mean a series of loss allocations relating to an Event Period, the aggregate amount of which is limited by the sum of the Loss Allocation Caps of affected Tier One Netting Members or Tier One Members, as applicable (a “round cap”). When the aggregate amount of losses allocated in a round equals the round cap, any additional losses relating to the applicable Event Period would be allocated in one or more subsequent rounds, in each case subject to a round cap for that round. FICC may continue the loss allocation process in successive rounds until all losses from the Event Period are allocated among Tier One Netting Members or Tier One Members, as applicable, that have not submitted a Loss Allocation Withdrawal Notice in accordance with proposed Section 7b of GSD Rule 4 or MBSD Rule 4.
Each loss allocation would be communicated to each Tier One Netting Member or Tier One Member, as applicable, by the issuance of a notice that advises the Tier One Netting Member or Tier One Member, as applicable, of the amount being allocated to it (“Loss Allocation Notice”). Each Tier One Netting Member's or Tier One Member's, as applicable, pro rata share of losses and liabilities to be allocated in any round would be equal to (1) the average of its Required Fund Deposit for the 70 Business Days preceding the first day of the applicable Event Period or such shorter period of time that the Tier One Netting Member or Tier One Member, as applicable, has been a member (each member's “Average RFD”), divided by (2) the sum of Average RFD amounts of all Tier One Netting Members or Tier One Members, as applicable, subject to loss allocation in such round.
Each Loss Allocation Notice would specify the relevant Event Period and the round to which it relates. The first Loss Allocation Notice in any first, second, or subsequent round would expressly state that such Loss Allocation Notice reflects the beginning of the first, second, or subsequent round, as the case may be, and that each Tier One Netting Member or Tier One Member, as applicable, in that round has five Business Days from the issuance of such first Loss Allocation Notice for the round to notify FICC of its election to withdraw from membership with GSD or MBSD, as applicable, pursuant to proposed Section 7b of GSD Rule 4 or MBSD Rule 4, as applicable, and thereby benefit from its Loss Allocation Cap.
FICC states that it is appropriate to shorten such time period from 10 days to five Business Days because FICC needs timely notice of which Tier One Netting Members or Tier One Members, as applicable, would remain in its membership for purpose of calculating the loss allocation for any subsequent round. FICC states that five Business Days would provide Tier One Netting Members or Tier One Members, as applicable, with sufficient time to decide whether to cap their loss allocation obligations by withdrawing from their membership in GSD or MBSD, as applicable.
Currently, pursuant to Section 7(g) of GSD Rule 4 and MBSD Rule 4, if notification is provided to a member that an allocation has been made against the member pursuant to GSD Rule 4 or MBSD Rule 4, as applicable, and that application of the member's Required Fund Deposit is not sufficient to satisfy such obligation to make payment to FICC, the member is required to deliver to FICC by the Close of Business on the next Business Day, or by the Close of Business on the Business Day of issuance of the notification if so determined by FICC, that amount which is necessary to eliminate any such deficiency, unless the member elects to terminate its membership in FICC. Under the proposal, members would receive two Business Days' notice of a loss allocation, and be required to pay the requisite amount no later than the second Business Day following the issuance of such notice.
Currently, the GSD Rules and the MBSD Rules calculate a Tier One Netting Member's or a Tier One Member's pro rata share for purposes of loss allocation based on the member's average daily Required Fund Deposit over the prior 12 months or such shorter period as may be available in the case of a member which has not maintained a deposit over such time period.
GSD and MBSD propose to calculate each Tier One Netting Member's or Tier One Member's, as applicable, pro rata share of losses and liabilities to be allocated in any round to be equal to (1) the Tier One Netting Member's or Tier One Member's, as applicable, Average RFD divided by (2) the sum of Average RFD amounts for all Tier One Netting Members or a Tier One Members, as applicable, that are subject to loss allocation in such round. Additionally, if a Tier One Netting Member or Tier One Member, as applicable, withdraws from membership pursuant to proposed Section 7b of GSD Rule 4 or MBSD Rule 4, as applicable, GSD and MBSD are proposing that such member's Loss Allocation Cap be equal to the greater of (1) its Required Fund Deposit on the first day of the applicable Event Period or (2) its Average RFD.
FICC states that employing a revised look-back period of 70 Business Days instead of 12 months to calculate a Tier One Netting Member's or a Tier One Member's, as applicable, loss allocation pro rata share and Loss Allocation Cap is appropriate because FICC states that the current look-back period of 12 months is a very long period during which a member's business strategy and outlook could have shifted significantly, resulting in material changes to the size of its portfolios. FICC states that a look-back period of 70 Business Days would minimize that issue yet still would be long enough to enable FICC to capture a full calendar quarter of such members' activities and smooth out the impact from any abnormalities and/or arbitrariness that may have occurred.
Currently, pursuant to Section 7(g) of GSD Rule 4 and MBSD Rule 4, a member can withdraw from membership in order to avail itself of a member's cap on loss allocation if the member notifies FICC via a written notice, in accordance with Section 13 of GSD Rule 3 or MBSD Rule 3, as applicable, of its election to terminate its membership. Current Section 13 of GSD Rule 3 and MBSD Rule 3 require a member to provide FICC with 10 days written notice of the member's termination; however, FICC, in its discretion, may accept such termination within a shorter notice period. Such notice must be provided by the Close of Business on the Business Day on which the loss allocation payment is due to FICC and, if properly provided to FICC, would limit the member's liability for a loss allocation to its Required Fund Deposit for the Business Day on which the notification of allocation is provided to the member.
Under the proposal, a Tier One Netting Member or Tier One Member, as applicable, would be able to limit its loss allocation exposure to its Loss Allocation Cap by providing notice of its election to withdraw from membership within five Business Days from the issuance of the first Loss Allocation Notice in any round of an Event Period. Each round would allow a Tier One Netting Member or Tier One Member, as applicable, the opportunity to notify FICC of its election to withdraw from membership after satisfaction of the losses allocated in such round. Multiple Loss Allocation Notices may be issued with respect to each round to allocate losses up to the round cap. As proposed, if a member timely provides notice of its withdrawal from membership in respect of a loss allocation round, the maximum amount of losses it would be responsible for would be its Loss Allocation Cap,
As stated above, under the current Rules, the cap of a Tier One Netting Member or Tier One Member, as applicable, that provided a withdrawal notice would be its Required Fund Deposit for the Business Day on which the notification of allocation is provided to the member. Under the proposal, the Loss Allocation Cap of a Tier One Netting Member or Tier One Member, as applicable, would be equal to the greater of (1) its Required Fund Deposit on the first day of the applicable Event Period and (2) its Average RFD. Specifically, the first round and each subsequent round of loss allocation would allocate losses up to a round cap of the aggregate of all Loss Allocation Caps of those Tier One Netting Members or Tier One Members, as applicable, included in the round. If a Tier One Netting Member or Tier One Member, as applicable, provides notice of its election to withdraw from membership, it would be subject to loss allocation in that round, up to its Loss Allocation Cap. If the first round of loss allocation does not fully cover FICC's losses, a second round will be noticed to those members that did not elect to withdraw from membership in the previous round; however, the amount of any second or subsequent round cap may differ from the first or preceding round cap because there may be fewer Tier One Netting Members or Tier One Members, as applicable, in a second or subsequent round if Tier One Netting Members or Tier One Members, as applicable, elect to withdraw from membership with GSD or MBSD, as applicable, as provided in proposed Section 7b of GSD Rule 4 or MBSD Rule
As proposed, a Tier One Netting Member or a Tier One Member, as applicable, that withdraws in compliance with proposed Section 7b of GSD Rule 4 or MBSD Rule 4, as applicable, would remain obligated for its pro rata share of losses and liabilities with respect to any Event Period for which it is otherwise obligated under GSD Rule 4 or MBSD Rule 4, as applicable; however, its aggregate obligation would be limited to the amount of its Loss Allocation Cap as fixed in the round for which it withdrew.
FICC states that the proposed changes are designed to enable FICC to continue the loss allocation process in successive rounds until all of FICC's losses are allocated. To the extent that the Loss Allocation Cap of a Tier One Netting Member or Tier One Member, as applicable, exceeds such member's Required Fund Deposit on the first day of an Event Period, FICC may in its discretion retain any excess amounts on deposit from the member, up to the Loss Allocation Cap of a Tier One Netting Member or Tier One Member, as applicable.
Aside from losses that FICC might face as a result of a Defaulting Member Event, FICC could incur non-default losses incident to each Division's clearance and settlement business.
Section 5 of MBSD Rule 4 provides that “The use of the Clearing Fund deposits and assets and property on which the Corporation has a lien on shall be limited to satisfaction of losses or liabilities of the Corporation . . . otherwise incident to the clearance and settlement business of the Corporation with respect to losses and liabilities to meet unexpected or unusual requirements for funds that represent a small percentage of the Clearing Fund . . .”
For both the GSD Rules and the MBSD Rules, FICC proposes to enhance the governance around non-default losses that would trigger loss allocation to Tier One Netting Members or Tier One Members, as applicable, by specifying that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of FICC to provide clearance and settlement services in an orderly manner and would potentially generate losses to be mutualized among the Tier One Netting Members or Tier One Members, as applicable, in order to ensure that FICC may continue to offer clearance and settlement services in an orderly manner. The proposed change would provide that FICC would then be required to promptly notify members of this determination (a “Declared Non-Default Loss Event”). In addition, FICC proposes to specify that a mandatory Corporate Contribution would apply to a Declared Non-Default Loss Event prior to any allocation of the loss among members. Additionally, FICC proposes language to clarify members' obligations for Declared Non-Default Loss Events.
Under the proposal, FICC would clarify the Rules of both Divisions to make clear that Tier One Netting Members or Tier One Members, as applicable, are subject to loss allocation for non-default losses (
The proposed changes would align the loss allocation rules, to the extent practicable and appropriate, of the three DTCC Clearing Agencies so as to provide consistent treatment for firms that are participants of multiple DTCC Clearing Agencies. As proposed, the loss allocation process and certain related provisions would be consistent across the DTCC Clearing Agencies to the extent practicable and appropriate.
The proposed change would delete language currently in Section 5 of MBSD Rule 4 that limits certain uses by FICC of the MBSD Clearing Fund to “unexpected or unusual” requirements for funds that represent a “small percentage” of the MBSD Clearing Fund. FICC states that these limiting phrases (which appear in connection with FICC's use of MBSD Clearing Fund to cover losses and liabilities incident to its clearance and settlement business outside the context of an MBSD Defaulting Member Event as well as to cover certain liquidity needs) are vague, imprecise, and should be replaced in their entirety. Specifically, FICC proposes to delete the limiting language with respect to FICC's use of MBSD Clearing Fund to cover losses and liabilities incident to its clearance and settlement business outside the context of an MBSD Defaulting Member Event so as to not have such language be interpreted as impairing FICC's ability to access the MBSD Clearing Fund in order to manage non-default losses. FICC proposes to delete the limiting language with respect to FICC's use of MBSD Clearing Fund to cover certain liquidity needs because the effect of the limitation in this context is confusing and unclear.
FICC proposes to make various conforming and technical changes necessary to harmonize the remaining current Rules with the proposed changes. Such changes include, but are not limited to: (1) Amending Rule 1 (Definitions; Governing Law) to add cross-references to proposed terms that would be defined in Rule 4; (2) inserting, deleting, or changing various terms for clarity and consistency; (3) modifying the voluntary termination provisions to ensure that termination provisions in the GSD Rules and the MBSD Rules are consistent, whether voluntary or in response to a loss allocation, are consistent with one another to the extent appropriate; and
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to promote the prompt and accurate clearance and settlement of securities transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency, and to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions.
The Commission believes that the proposal to change the loss allocation process is designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency. As described above, FICC proposes to make the following changes to its loss allocation process. First, for both the GSD Rules and the MBSD Rules, the proposed changes would modify the calculation of FICC's Corporate Contribution so that FICC would apply a mandatory fixed percentage of its General Business Risk Capital Requirement as compared to the current Rules which provide for a “up to” percentage of retained earnings. The proposed changes also would clarify that the proposed Corporate Contribution would apply to Declared Non-Default Loss Events, as well as Defaulting Member Events, on a mandatory basis prior to any allocation of the loss among Tier One Netting Members or Tier One Members, as applicable. The proposal would specify how the Corporate Contribution would be applied between Divisions. Moreover, the proposal specifies that if the Corporate Contribution is applied to a loss or liability relating to an Event Period, then for any subsequent Event Periods that occur during the 250 business days thereafter, the Corporate Contribution would be reduced to the remaining, unused portion of the Corporate Contribution. The Commission believes that these changes set clear expectations about how and when FICC's Corporate Contribution would be applied to help address a loss, and allow FICC to better anticipate and prepare for potential risk exposures that may arise during an Event Period.
Second, as described above, FICC proposes to determine a member's loss allocation obligation based on the average of its Required Fund Deposit over a look-back period of 70 Business Days and to determine its Loss Allocation Cap based on the greater of its Required Fund Deposit or the average thereof over a look-back period of 70 Business Days. Currently, the GSD Rules and the MBSD Rules calculate a Tier One Netting Member's or a Tier One Member's pro rata share for purposes of loss allocation based on the member's average daily Required Fund Deposit over the prior 12 months or such shorter period as may be available in the case of a member which has not maintained a deposit over such time period. These proposed changes are designed to allow FICC to calculate a member's pro rata share of losses and liabilities based on the amount of risk that the member brings to FICC, and cover a sufficient amount of time to measure the risk. The look-back period of 70 Business Days is designed to be long enough to enable FICC to capture a full calendar quarter of members' activities and to smooth out the impact from any abnormalities that may have occurred, but not excessively long such that members' business strategy and outlook could have shifted significantly during the time period, resulting in material changes to the size of its portfolios. As a result of these changes, the Commission believes that FICC should be in a better position to manage its risk by using a look-back period that more accurately reflects the amount of risk that the member brings to FICC.
Third, as described above, FICC proposes to introduce the concept of an Event Period, which would group Defaulting Member Events and Declared Non-Default Loss Events occurring within a period of 10 Business Days for purposes of allocating losses to members in one or more rounds. Under the current Rules, every time each Division incurs a loss or liability, FICC will initiate its current loss allocation process by applying its retained earnings and allocating losses. However, the current Rules do not contemplate a situation where loss events occur in quick succession. Accordingly, even if multiple losses occur within a short period, the current Rules dictate that FICC start the loss allocation process separately for each loss event. Having multiple loss allocation calculations and notices from FICC and withdrawal notices from members after multiple sequential loss events could cause heighten operational complexity and, therefore, risk for FICC, since FICC would have to process and track multiple notices while performing its other critical operations during a time of significant stress.
Therefore, the Commission believes that the proposed change to introduce an Event Period would provide a more defined and transparent structure, compared to the current loss allocation process described immediately above, helping to reduce complexity in and the resources needed to effectuate the process, thus mitigating operational risk. Overall, such an improved structure should enable both FICC and each member to more effectively manage the risks and potential financial obligations presented by sequential Defaulting Member Events and/or Declared Non-Default Loss Events that are likely to arise in quick succession and could be closely linked to an initial event and/or market dislocation episode. In other words, the proposed Event Period structure should help clarify and define for both FICC and its members how FICC would initiate a single defined loss allocation process to cover all loss events within 10 Business Days. As a result, all loss allocation calculation and notices from FICC and potential withdrawal notices from members would be tied back to one Event Period instead of each individual loss event.
Fourth, as described above, the proposal would improve upon the current loss allocation approach laid out in FICC's Rules by providing for a loss allocation round, a Loss Allocation Notice process, a Loss Allocation Withdrawal Notice process, and a Loss Allocation Cap, for both the GSD Rules and the MBSD Rules. A loss allocation round would be a series of loss allocations relating to an Event Period, the aggregate amount of which would be
The Commission believes that the changes to (1) establish a specific Event Period, (2) continue the loss allocation process in successive rounds, (3) clearly communicate with its members regarding their loss allocation obligations, and (4) effectively identify continuing members for the purpose of calculating loss allocation obligations in successive rounds, are designed to make FICC's loss allocation process more certain. In addition, the changes are designed to provide members with a clear set of procedures that operate within the proposed loss allocation structure, and provide increased predictability and certainty regarding members' exposures and obligations. Furthermore, by grouping all loss events within 10 Business Days, the loss allocation process relating to multiple loss events can be streamlined. With enhanced certainty, predictability, and efficiency, FICC would then be able to better manage its risks from loss events occurring in quick succession, and members would be able to better manage their risks by deciding whether and when to withdraw from membership and limit their exposures to FICC. Furthermore, the proposed changes are designed to reduce liquidity risk to members by providing a two-day window to arrange funding to pay for loss allocation, while still allowing FICC to address losses in a timely manner.
Fifth, as described above, for both the GSD Rules and the MBSD Rules, FICC proposes to clarify the governance around Declared Non-Default Loss Events by providing that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of FICC to provide its services in an orderly manner. FICC also proposes to provide that FICC would then be required to promptly notify members of this determination. In addition, FICC proposes to apply a mandatory Corporate Contribution to a Declared Non-Default Loss Event prior to any allocation of the loss among members. The Commission believes that these changes should provide an orderly and transparent procedure to allocate a non-default loss by requiring the Board of Directors to make a definitive decision to announce an occurrence of a Declared Non-Default Loss Event, and requiring FICC to provide a notice to members of the decision. The Commission further believes that an orderly and transparent procedure should result in a risk management process at FICC that is more robust as a result of enhanced governance around FICC's response to non-default losses.
Collectively, the Commission believes that the proposed changes to FICC's loss allocation process would provide greater transparency, certainty, and efficiency to FICC regarding the amount of resources and the instances in which FICC would apply the resources to address risks arising from Defaulting Member Events and Declared Non-Default Loss Events, which could occur in quick succession. The Commission believes that the transparency, certainty, and efficiency would afford FICC better predictability regarding its risk exposure, and in turn, would allow a risk management process at FICC that is more effectively responsive to such events and would improve FICC's ability to continue to operate in a safe and sound manner during such events. Therefore, the Commission believes that these proposed changes would better equip FICC to assure the safeguarding of securities and funds which are in the custody or control of FICC.
The Commission believes that the proposed rule change to modify the use of MBSD Clearing Fund is designed to promote the prompt and accurate clearance and settlement of securities transactions. As described above, FICC proposes to delete the limiting language with respect to FICC's use of MBSD Clearing Fund to cover losses and liabilities incident to its clearance and settlement business outside the context of an MBSD Defaulting Member Event so as to not have such language be interpreted as impairing FICC's ability to access the MBSD Clearing Fund in order to manage non-default losses. Further, FICC proposes to delete the limiting language with respect to FICC's use of MBSD Clearing Fund to cover certain liquidity needs because the effect of the limitation in this context is confusing and unclear. The Commission believes that the proposed change to delete certain vague and imprecise limiting language that could impair FICC's ability to access the MBSD Clearing Fund to cover losses and liabilities incident to its clearance and settlement business outside the context of an MBSD Defaulting Member Event, as well as to cover certain liquidity needs, is designed to establish a clearer right of FICC to use MBSD Clearing Fund in such situations. By establishing a more explicit right of FICC to access the funds at such times, FICC should be better positioned to manage risks presented by non-default losses and, thus, continue offering its services. Accordingly, the Commission believes that the change is designed to promote the prompt and accurate clearance and settlement of securities transactions by enhancing FICC's ability to ensure that it can continue its operations and clearance and settlement services in an orderly manner in the event that it would be necessary or appropriate for FICC to access MBSD Clearing Fund deposits to manage its non-default losses.
Finally, the Commission believes that the proposed rule changes to align FICC's loss allocation rules with the loss allocation rules of the other DTCC Clearing Agencies, to the extent practicable and appropriate, are designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions. As described above, the alignment of FICC's loss allocation rules with the other DTCC Clearing Agencies is designed to help provide consistent treatment for firms that are participants of multiple DTCC Clearing Agencies. The Commission believes that providing consistent treatment through consistent procedures among the DTCC Clearing Agencies would help firms that participate in multiple DTCC Clearing Agencies from encountering unnecessary complexities and confusion stemming from differences in procedures regarding loss allocation processes, particularly at times of significant stress. Accordingly, by removing potential unnecessary complexities and confusion due to different loss allocation rules of the DTCC Clearing Agencies, the Commission believes that the proposal is designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions.
For the reasons above, the Commission believes that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(4)(viii) under the Act requires, in part, that a covered clearing agency
As described above, the proposal would revise the loss allocation process to address how FICC would manage loss events, including Defaulting Member Events. Under the proposal, if losses arise out of or relate to a Defaulting Member Event, FICC would first apply its Corporate Contribution. If those funds prove insufficient, the proposal provides for allocating the remaining losses to the remaining members through the proposed process. Accordingly, the Commission believes that the proposal is reasonably designed to manage FICC's credit exposures to its members, by addressing allocation of credit losses.
Therefore, the Commission believes that FICC's proposal is consistent with Rule 17Ad-22(e)(4)(viii) under the Act.
Rule 17Ad-22(e)(13) under the Act requires, in part, that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to ensure the covered clearing agency has the authority to take timely action to contain losses and liquidity demands and continue to meet its obligations.
As described above, the proposal would establish a more detailed and structured loss allocation process by (1) modifying the calculation and application of the Corporate Contribution; (2) introducing an Event Period; (3) introducing a loss allocation round and notice process; (4) implementing a look-back period to calculate a member's loss allocation obligation; (5) modifying the withdrawal process and the cap of withdrawing member's loss allocation exposure; and (6) providing the governance around a non-default loss. The Commission believes that each of these proposed changes helps establish a more transparent and clear loss allocation process and authority of FICC to take certain actions, such as announcing a Declared Non-Default Loss Event, within the loss allocation process. Further, having a more transparent and clear loss allocation process as proposed would provide clear authority to FICC to allocate losses from Defaulting Member Events and Declared Non-Default Loss Events and take timely actions to contain losses, and continue to meet its clearance and settlement obligations.
Therefore, the Commission believes that FICC's proposal is consistent with Rule 17Ad-22(e)(13) under the Act.
Rule 17Ad-22(e)(23)(i) under the Act requires that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to publicly disclose all relevant rules and material procedures, including key aspects of its default rules and procedures.
As described above, the proposal would publicly disclose how FICC's Corporate Contribution would be calculated and applied. In addition, the proposal would establish and publicly disclose a detailed procedure in the Rules for loss allocation. More specifically, the proposed changes would establish an Event Period, loss allocation rounds, a look-back period to calculate each member's loss allocation obligation, a withdrawal process followed by a loss allocation process, and a Loss Allocation Cap that would apply to members after withdrawal. Additionally, the proposal would align the loss allocation rules across the DTCC Clearing Agencies to help provide consistent treatment, and clarify that non-default losses would trigger loss allocation to members. The proposal would also provide for and make known to members the procedures to trigger a loss allocation procedure, contribute FICC's Corporate Contribution, allocate losses, and withdraw and limit member's loss exposure. Accordingly, the Commission believes that the proposal is reasonably designed to (1) publicly disclose all relevant rules and material procedures concerning key aspects of FICC's default rules and procedures, and (2) provide sufficient information to enable members to identify and evaluate the risks by participating in FICC.
Therefore, the Commission believes that FICC's proposal is consistent with Rules 17Ad-22(e)(23)(i) and (ii) under the Act.
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 6.49A to delete the provisions related to on-floor position transfers, amend the permissible reasons for and procedures related to off-floor position transfers, and make other nonsubstantive changes.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 6.49A to delete the provisions related to on-floor position transfers, amend the permissible reasons for and procedures related to off-floor position transfers, and make other nonsubstantive changes. Rule 6.49A specifies the circumstances under which Trading Permit Holders may effect transfers of positions, both on and off the trading floor, notwithstanding the prohibition in Rule 6.49(a).
Rule 6.49A(a)(2) permits certain position transfers to occur on the floor of the exchange or on another options exchange. The procedures for such on-floor position transfers are set forth in Rule 6.49A(b) and (c), as well as Interpretations and Policies .01 through .03. The Exchange no longer wants to make available on-floor transfers of positions, so the proposed rule change deletes paragraphs (a)(2), (b), and (c), and Interpretations and Policies .01 through .03
For example, the Exchange's on-floor transfer of positions rule was also intended to address the common situation in which a Designated Primary Market-Maker (“DPM”) sold its business or in which a Market-Maker, for reasons other than a forced liquidation, such as an extended vacation, wished to liquidate its entire, or nearly entire, position in a single set of transactions.
Current Rule 6.49A(a)(1) lists the circumstances in which Trading Permit Holders may transfer their positions off the floor. The circumstances currently listed include: (i) The dissolution of a joint account in which the remaining Trading Permit Holder assumes the positions of the joint account; (ii) the dissolution of a corporation or partnership in which a former nominee of the corporation or partnership assumes the positions; (iii) positions transferred as part of a Trading Permit Holder's capital contribution to a new joint account, partnership, or corporation; (iv) the donation of positions to a not-for-profit corporation; (v) the transfer of positions to a minor under the Uniform Gifts to Minor law; and (vi) a merger or acquisition where continuity of ownership or management results.
The Exchange proposes to add clarifying language to the first sentence of Rule 6.49A(a) to state that existing positions in options listed on the Exchange of a Trading Permit Holder or of a Non-Trading Permit Holder that are to be transferred on, from, or to the books of a Clearing Trading Permit Holder may be transferred off the Exchange (an “off-floor transfer”) if the off-floor transfer involves one of the events listed in the Rule.
The Exchange notes off-floor transfers of positions in Exchange-listed options may also be subject to applicable laws, rules, and regulations, including rules of other self-regulatory organizations.
The proposed rule change adds four events where an off-floor transfer would be permitted to occur.
• Proposed subparagraph (a)(1) permits an off-floor transfer to occur if it, pursuant to Rule 4.6 or 4.22, is an adjustment or transfer in connection with the correction of a bona fide error in the recording of a transaction or the transferring of a position to another account, provided that the original trade documentation confirms the error. This proposed rule change codifies previous, long-standing Exchange guidance regarding what off-floor transfers are permissible and will permit transactions to be properly recorded in the originally intended accounts.
• Proposed subparagraph (a)(2) permits an off-floor transfer if it is a transfer of positions from one account to another account where there is no change in ownership involved (
• Proposed subparagraph (a)(3) similarly permits an off-floor transfer if it is a consolidation of accounts
• Proposed subparagraph (a)(10) permits an off-floor transfer if it is a transfer of positions through operation of law from death, bankruptcy, or otherwise.
The Exchange believes these proposed events have similar purposes as those in the current rule, which is to permit market participants to move positions from one account to another and to permit transfers upon the occurrence of significant, non-recurring events.
The proposed rule change renumbers current subparagraphs (a)(1)(i) through (v) to be proposed subparagraphs (a)(5) through (9) and moves current subparagraph (a)(1)(vi) to proposed subparagraph (a)(4), with nonsubstantive changes. These permissible circumstances for off-floor transfers are consistent with the rules of other options exchanges.
Proposed paragraph (b) codifies Exchange guidance regarding certain restrictions on permissible off-floor transfers related to netting of open positions and to margin and haircut treatment. Proposed subparagraph (b)(1) states, unless otherwise permitted by Rule 6.49A, when effecting an off-floor transfer pursuant to paragraph (a), no position may net against another position (“netting”), and no position transfer may result in preferential margin or haircut treatment.
However, netting is permitted for off-floor transfers on behalf of a Market-Maker account for transactions in multiply listed options series on different options exchanges, but only if the Market-Maker nominees are trading
Proposed paragraph (c) states the transfer price, to the extent it is consistent with applicable laws, rules, and regulations, including rules of other self-regulatory organizations, and tax and accounting rules and regulations, at which an off-floor transfer is effected may be:
(1) The original trade prices of the positions that appear on the books of the trading Clearing Trading Permit Holder, in which case the records of the transfer must indicate the original trade dates for the positions;
(2) mark-to-market prices of the positions at the close of trading on the transfer date;
(3) mark-to-market prices of the positions at the close of trading on the trade date prior to the transfer date;
(4) the then-current market price of the positions at the time the off-floor transfer is effected.
This proposed rule change provides market participants that effect off-floor transactions with flexibility to select a transfer price based on the circumstances of the transfer and their business. However, for corrections of bona fide errors, because those transfers are necessary to correct processing errors that occurred at the time of transaction, those transfers would occur at the original transaction price, as the purpose of the transfer is to create the originally intended result of the transaction.
Proposed paragraph (d) requires a Trading Permit Holder and its Clearing Trading Permit Holder (to the extent that the Trading Permit Holder is not self-clearing) to submit to the Exchange, in a manner determined by the Exchange, written notice prior to effecting an off-floor transfer from or to the account of a Trading Permit Holder(s).
• The Exchange-listed options positions to be transferred;
• the nature of the transaction;
• the enumerated provision(s) under proposed paragraph (a) pursuant to which the positions are being transferred;
• the name of the counterparty(ies);
• the anticipated transfer date;
• the method for determined the transfer price; and
• any other information requested by the Exchange.
The proposed notice will ensure the Exchange is aware of all off-floor transfers so that it can monitor and review them (including the records that must be retained pursuant to proposed paragraph (e)) to determine whether they are effected in accordance with the Rules. Additionally, requiring notice from the Trading Permit Holder(s) and its Clearing Trading Permit Holder(s) will ensure both parties are in agreement with respect to the terms of the off-floor transfer. The proposed rule change is similar to rules of other options exchanges.
Similarly, proposed paragraph (e) requires each Trading Permit Holder and each Clearing Trading Permit Holder that is a party to an off-floor transfer must make and retain records of the information provided in the written notice to the Exchange pursuant to proposed subparagraph (d)(1), as well as information on the actual Exchange-listed options that are ultimately transferred, the actual transfer date, and the actual transfer price (and the original trade dates, if applicable), and any other information the Exchange may request the Trading Permit Holder or Clearing Trading Permit Holder provide. The proposed rule change is similar to rules of other options exchanges.
The proposed rule change moves current paragraph (d) regarding other exemptions to proposed paragraph (f). The exemptions permitted by this paragraph are those approved by the Exchange's president.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes that permitting the off-floor transfers in very limited circumstances such as where there is no change in beneficial ownership, to contribute to a non-profit corporation, to transfer to a minor or a transfer by operation of law is reasonable to allow a TPH to accomplish certain goals efficiently. The rule permits off-floor transfers in situations involving dissolutions of entities or accounts, for purposes of donations, mergers or by operation of law. For example, a TPH that is undergoing a structural change and a one-time movement of positions may require a transfer of positions or a TPH that is leaving a firm that will no longer be in business may require a transfer of positions to another firm. Also, a TPH may require a transfer of positions to make a capital contribution. The above-referenced circumstances are non-recurring situations where the transferor continues to maintain some ownership interest or manage the positions transferred. By contrast, repeated or routine off-floor transfers between entities or accounts—even if there is no change in beneficial ownership as a result of the transfer—is inconsistent with the purposes for which Rule 6.49A was adopted. Accordingly, the Exchange believes that such activity should not be permitted under the rules and thus, seeks to adopt language in proposed paragraph (e) to Rule 6.49A that the transfer of positions procedures set forth in Rule 6.49A are intended to facilitate non-recurring movements of positions.
The Exchange believes that the proposed rule change to eliminate the on-floor position transfer procedure promotes just and equitable principles of trade, helps remove impediments to and perfect the mechanism of a free and open market and a national market system, and promotes efficient administration of the Exchange, as it eliminates a complex procedure that is of limited use to Trading Permit Holders today but still imposes an administrative burden on the Exchange.
The Exchange believes the proposed rule change benefits investors, as it adds transparency to the Rules by codifying certain long-standing guidance regarding what types of off-floor transfers are permissible. The purpose of the additional circumstances in which market participants may conduct off-floor transfers is consistent with the purpose of the circumstances currently permitted in Rule 6.49A. Therefore, the proposed rule change will provide market participants that experience these limited, non-recurring events with an efficient and effective means to transfer positions in these situations. It also permits presidential exemptions when they are necessary or appropriate for the maintenance of a fair and orderly market and the protection of investors and are in the public interest. The Exchange believes the proposed rule change regarding permissible transfer prices provides market participants with flexibility to determine the price appropriate for their business, which maintain cost bases in accordance with normal accounting practices and removes impediments to a free and open market.
The proposed rule change requiring notice and maintenance of records will ensure the Exchange is able to review off-floor transfers for compliance with the Rules, which prevents fraudulent and manipulative acts and practices. The requirement to retain records is consistent with the requirements of Rule 17a-3 and 17a-4 under the Act.
As discussed above, the proposed rule change is similar to rules of other options exchanges, and thus further removes impediments to and perfects the mechanism of a free and open market.
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 Exchange does not believe the proposed rule change will impose any burden on intramarket competition, as the amended off-floor transfer procedure will apply to all Trading Permit Holders in the same manner. Use of the off-floor transfer procedure is voluntary, and all Trading Permit Holders may use the procedure to transfer position off the floor as long as the criteria in the proposed rule are satisfied. The current on-floor position transfer procedure is of limited use to Trading Permit Holders today but still imposes an administrative burden on the Exchange. The proposed elimination of the on-floor position transfer promotes efficient administration of the Exchange, as it eliminates this complex procedure that is limited in application. Market participants will still be able to effect transactions on the Exchange pursuant to the normal auction process if an off-floor transfer is not permissible.
The proposed rule change also provides market participants that experience the limited permissible, non-recurring events with an efficient and effective means to transfer positions in these situations. The Exchange believes the proposed rule change regarding permissible transfer prices provides market participants with flexibility to determine the price appropriate for their business, which determine prices in accordance with normal accounting practices and removes impediments to a free and open market. The Exchange does not believe the proposed notice and record requirements are unduly burdensome to market participants, as they are similar to requirements in the rules of other options exchanges, as discussed above. The Exchange believes these are reasonable requirements that will ensure the Exchange is aware of all off-floor transfers so that it can monitor and review them to determine whether they are effected in accordance with the Rules.
The Exchange does not believe the proposed rule change will impose any burden on intermarket competition. The proposed off-floor position transfer procedure is not intended to be a competitive trading tool. The Exchange does not believe the proposed changes to the off-floor position transfer procedure are material, as they codify certain longstanding guidance and clarify the procedure. This procedure is
The Exchange neither solicited nor received written comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
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.
On December 18, 2017, Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-FICC-2017-021 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
In the Proposed Rule Change, FICC proposes to (1) adopt an R&W Plan; (2) amend FICC's Government Securities Division (“GSD”) Rulebook (“GSD Rules”) to (a) adopt Rule 22D (Wind-down of the Corporation) and Rule 50 (Market Disruption and Force Majeure), and (b) make conforming changes to Rule 3A (Sponsoring Members and Sponsored Members), Rule 3B (Centrally Cleared Institutional Triparty Service) and Rule 13 (Funds-Only Settlement) related to the adoption of these proposed rules to the GSD Rules; (3) amend FICC's Mortgage-Backed Securities Division (“MBSD,” and, together with GSD, the “Divisions”) Clearing Rules (“MBSD Rules”) in order to (a) adopt Rule 17B (Wind-down of the Corporation) and Rule 40 (Market Disruption and Force Majeure); and (b) make conforming changes to Rule 3A (Cash Settlement Bank Members) related to the adoption of these proposed rules to the MBSD Rules; and (4) amend Rule 1 of the Electronic Pool Netting (“EPN”) Rules of MBSD (“EPN Rules”) to provide that EPN Users, as defined therein, are bound by proposed Rule 17B (Wind-down of the Corporation) and proposed Rule 40 (Market Disruption and Force Majeure) to be adopted to the MBSD Rules.
FICC states that the R&W Plan would be used by the Board of Directors of FICC (“Board”) and FICC's management in the event FICC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
FICC states that the Proposed Rules are designed to (1) facilitate the implementation of the R&W Plan when necessary and, in particular, allow FICC to effectuate its strategy for winding down and transferring its business; (2) provide Members and Limited Members with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations;
The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to FICC to either (i) recover, in the event it experiences losses that exceed its prefunded resources (such strategies and tools referred to herein as the “Recovery Plan”) or (ii) wind-down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful (such strategies and tools referred to herein as the “Wind-down Plan”). The R&W Plan would identify (i) the recovery tools available to FICC to address the risks of (a) uncovered losses or liquidity shortfalls resulting from the default of one or more Members, and (b) losses arising from non-default events, such as damage to its physical assets, a cyber-attack, or custody and investment losses, and (ii) the strategy for implementation of such tools. The R&W Plan would also establish the strategy and framework for the orderly wind-down of FICC and the transfer of its business in the remote event the implementation of the available recovery tools does not successfully return FICC to financial viability.
As discussed in greater detail below, the R&W Plan would provide, among other matters, (i) an overview of the business of FICC and its parent, The Depository Trust & Clearing Corporation (“DTCC”);
Certain recovery tools that would be identified in the R&W Plan are based in the Rules (including the Proposed Rules); therefore, descriptions of those tools in the R&W Plan would include descriptions of, and reference to, the applicable Rules and any related internal policies and procedures. Other recovery tools that would be identified in the R&W Plan are based in contractual arrangements to which FICC is a party, including, for example, existing committed or pre-arranged liquidity arrangements. Further, the R&W Plan would state that FICC may develop further supporting internal guidelines and materials that may provide operational support for matters described in the R&W Plan, and that
FICC states that many of the tools available to FICC that would be described in the R&W Plan are FICC's existing, business-as-usual risk management and Member default management tools, which would continue to be applied in scenarios of increasing stress. In addition to these existing, business-as-usual tools, the R&W Plan would describe FICC's other principal recovery tools, which include, for example, (i) identifying, monitoring and managing general business risk and holding sufficient liquid net assets funded by equity (“LNA”) to cover potential general business losses pursuant to the Clearing Agency Policy on Capital Requirements (“Capital Policy”),
The development of the R&W Plan is facilitated by the Office of Recovery & Resolution Planning (“R&R Team”) of DTCC.
As discussed in greater detail below, the Proposed Rules would define the procedures that may be employed in the event of FICC's wind-down and would provide for FICC's authority to take certain actions on the occurrence of a Market Disruption Event, as defined therein. FICC states that the Proposed Rules are designed to provide Members and Limited Members with transparency and certainty with respect to these matters. FICC also states that the Proposed Rules are designed to facilitate the implementation of the R&W Plan, particularly FICC's strategy for winding down and transferring its business, and are designed to provide FICC with the legal basis to implement those aspects of the R&W Plan.
The introduction to the R&W Plan would identify the document's purpose and its regulatory background, and would outline a summary of the R&W Plan. The stated purpose of the R&W Plan is that it is to be used by the Board and FICC management in the event FICC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
The R&W Plan would describe DTCC's business profile, provide a summary of the services of FICC as offered by each of the Divisions, and identify the intercompany arrangements and links between FICC and other entities, most notably a link between GSD and Chicago Mercantile Exchange Inc. (“CME”), which is also an FMI. FICC states that the overview section would provide a context for the R&W Plan by describing FICC's business, organizational structure and critical links to other entities. FICC also states that by providing this context, this section would facilitate the analysis of the potential impact of utilizing the recovery tools set forth in later sections of the Recovery Plan, and the analysis of the factors that would be addressed in implementing the Wind-down Plan.
The R&W Plan would provide a description of the critical contractual and operational arrangements between FICC and other legal entities, including the cross-margining agreement between GSD and CME, which is also an FMI.
The R&W Plan would define the criteria for classifying certain of FICC's services as “critical,” and would identify those critical services and the rationale for their classification. This section of the R&W Plan would provide an analysis of the potential systemic impact from a service disruption, which FICC states is important for evaluating how the recovery tools and the wind-down strategy would facilitate and provide for the continuation of FICC's critical services to the markets it serves. The criteria that would be used to identify an FICC service or function as critical would include (1) whether there is a lack of alternative providers or products; (2) whether failure of the service could impact FICC's ability to perform its central counterparty services through either Division; (3) whether failure of the service could impact FICC's ability to perform its multilateral netting services through either Division and, therefore, could impact the volume of transactions; (4) whether failure of the service could impact FICC's ability to perform its book-entry delivery and settlement services through either Division and, as such, could impact transaction costs; (5) whether failure of the service could impact FICC's ability to perform its cash payment processing services through either Division and, as such, could impact the flow of liquidity in the U.S. financial markets; and (6) whether the service is interconnected with other participants and processes within the U.S. financial system, for example, with other FMIs, settlement banks, and broker-dealers. The R&W Plan would then list each of those services, functions or activities that FICC has identified as “critical” based on the applicability of these six criteria. The R&W Plan would also include a non-exhaustive list of FICC services that are not deemed critical.
FICC states that the evaluation of which services provided by FICC are deemed critical is important for purposes of determining how the R&W Plan would facilitate the continuity of those services. While FICC's Wind-down Plan would provide for the transfer of all critical services to a transferee in the event FICC's wind-down is implemented, it would anticipate that any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership, would also be transferred.
The R&W Plan would describe the governance structure of both DTCC and
The R&W Plan would describe the governance of recovery efforts in response to both default losses and non-default losses under the Recovery Plan, identifying the groups responsible for those recovery efforts. Specifically, the R&W Plan would state that the Management Risk Committee provides oversight of actions relating to the default of a Member, which would be reported and escalated to it through the GCRO, and the Management Committee provides oversight of actions relating to non-default events that could result in a loss, which would be reported and escalated to it from the DTCC Chief Financial Officer (“CFO”) and the DTCC Treasury group that reports to the CFO, and from other relevant subject matter experts based on the nature and circumstances of the non-default event.
Finally, the R&W Plan would describe the role of the R&R Team in managing the overall recovery and wind-down program and plans for each of the Clearing Agencies.
FICC states that the Recovery Plan is intended to be a roadmap of those actions that FICC may employ across both Divisions to monitor and, as needed, stabilize its financial condition. FICC also states that as each event that could lead to a financial loss could be unique in its circumstances, FICC proposes that the Recovery Plan would not be prescriptive and would permit FICC to maintain flexibility in its use of identified tools and in the sequence in which such tools are used, subject to any conditions in the Rules or the contractual arrangement on which such tool is based. FICC's Recovery Plan would consist of (1) a description of the risk management surveillance, tools, and governance that FICC would employ across evolving stress scenarios that it may face as it transitions through a Crisis Continuum, described below; (2) a description of FICC's risk of losses that may result from non-default events, and the financial resources and recovery tools available to FICC to manage those risks and any resulting losses; and (3) an evaluation of the characteristics of the recovery tools that may be used in response to either default losses or non-default losses. In all cases, FICC states that it would act in accordance with the Rules, within the governance structure described in the R&W Plan, and in accordance with applicable regulatory oversight to address each situation to best protect FICC, the Members, and the markets in which it operates.
The Recovery Plan would describe the risk management surveillance, tools, and governance that FICC may employ across an increasing stress environment, which is referred to as the Crisis Continuum. This description would identify those tools that can be employed to mitigate losses, and mitigate or minimize liquidity needs, as the market environment becomes increasingly stressed. The phases of the Crisis Continuum would include (1) a stable market phase, (2) a stress market phase, (3) a phase commencing with FICC's decision to cease to act for a Member or Affiliated Family of Members
FICC states that the Recovery Plan would provide context to its roadmap through this Crisis Continuum by describing FICC's ongoing management of credit, market and liquidity risk across the Divisions, and its existing process for measuring and reporting its risks as they align with established thresholds for its tolerance of those risks. FICC also states that the Recovery Plan would discuss the management of
The Recovery Plan would outline the metrics and indicators that FICC has developed to evaluate a stress situation against established risk tolerance thresholds. Each risk mitigation tool identified in the Recovery Plan would include a description of the escalation thresholds that allow for effective and timely reporting to the appropriate internal management staff and committees, or to the Board. FICC states that the Recovery Plan is designed to make clear that these tools and escalation protocols would be calibrated across each phase of the Crisis Continuum. The Recovery Plan would also establish that FICC would retain the flexibility to deploy such tools either separately or in a coordinated approach, and to use other alternatives to these actions and tools as necessitated by the circumstances of a particular Member default in accordance with the applicable Rules. Therefore, FICC states that the Recovery Plan would both provide FICC with a roadmap to follow within each phase of the Crisis Continuum, and would permit it to adjust its risk management measures to address the unique circumstances of each event.
The Recovery Plan would describe the conditions that mark each phase of the Crisis Continuum, and would identify actions that FICC could take as it transitions through each phase in order to both prevent losses from materializing through active risk management, and to restore the financial health of FICC during a period of stress.
The stable market phase of the Crisis Continuum would describe active risk management activities in the normal course of business. These activities would include (1) routine monitoring of margin adequacy through daily review of back testing and stress testing results that review the adequacy of the margin calculations for each of GSD and MBSD, and escalation of those results to internal and Board committees;
The Recovery Plan would describe some of the indicators of the stress market phase of the Crisis Continuum, which would include, for example, volatility in market prices of certain assets where there is increased uncertainty among market participants about the fundamental value of those assets. This phase would involve general market stresses, when no Member default would be imminent. Within the description of this phase, the Recovery Plan would provide that FICC may take targeted, routine risk management measures as necessary and as permitted by the Rules.
Within the Member default phase of the Crisis Continuum, the Recovery Plan would provide a roadmap for the existing procedures that FICC would follow in the event of a Member default and any decision by FICC to cease to act for that Member.
The Recovery Plan would also identify financial resources available to FICC, pursuant to the Rules, to address losses arising out of a Member default. Specifically, GSD Rule 4 (Clearing Fund and Loss Allocation) and MBSD Rule 4 (Clearing Fund and Loss Allocation) provides that losses remaining after application of the Defaulting Member's resources be satisfied first by applying a Corporate Contribution, and then, if necessary, by allocating remaining losses among the membership in accordance with GSD Rule 4 (Clearing Fund and Loss Allocation) and MBSD Rule 4 (Clearing Fund and Loss Allocation), as applicable.
In order to provide for an effective and timely recovery, the Recovery Plan would describe the period of time that would occur near the end of the Member default phase, during which FICC may experience stress events or observe early warning indicators that
FICC states that it expects that significant deterioration of liquidity resources would cause it to enter the Recovery Corridor. Therefore, the R&W Plan would describe the actions FICC may take at this stage aimed at replenishing those resources. Throughout the Recovery Corridor, FICC would monitor the adequacy of the Divisions' respective resources and the expected timing of replenishment of those resources, and would do so through the monitoring of certain corridor indicator metrics.
FICC states that the majority of the corridor indicators, as identified in the Recovery Plan, relate directly to conditions that may require either Division to adjust its strategy for hedging and liquidating a Defaulting Member's portfolio, and any such changes would include an assessment of the status of the corridor indicators. For each corridor indicator, the Recovery Plan would identify (1) measures of the indicator, (2) evaluations of the status of the indicator, (3) metrics for determining the status of the deterioration or improvement of the indicator, and (4) “Corridor Actions,” which are steps that may be taken to improve the status of the indicator,
The Recovery Plan would also describe the reporting and escalation of the status of the corridor indicators throughout the Recovery Corridor. Significant deterioration of a corridor indicator, as measured by the metrics set out in the Recovery Plan, would be escalated to the Board. FICC management would review the corridor indicators and the related metrics at least annually, and would modify these metrics as necessary in light of observations from simulations of Member defaults and other analyses. Any proposed modifications would be reviewed by the Management Risk Committee and the Board Risk Committee. The Recovery Plan would estimate that FICC may remain in the Recovery Corridor between one day and two weeks. FICC states that this estimate is based on historical data observed in past Member defaults, the results of simulations of Member defaults, and periodic liquidity analyses conducted by FICC. FICC states that the actual length of a Recovery Corridor would vary based on actual market conditions observed at the time, and FICC would expect the Recovery Corridor to be shorter in market conditions of increased stress.
The Recovery Plan would outline steps by which FICC may allocate its losses, which would occur when and in the order provided in GSD Rule 4 (Clearing Fund and Loss Allocation) and MBSD Rule 4 (Clearing Fund and Loss Allocation), as applicable.
The Recovery Plan would state that FICC will have entered the recovery phase on the date that it issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period. The Recovery Plan would provide that, during the recovery phase, FICC would continue and, as needed, enhance, the monitoring and remedial actions already described in connection with previous phases of the Crisis Continuum, and would remain in the recovery phase until its financial resources are expected to be or are fully replenished, or until the Wind-down Plan is triggered.
The Recovery Plan would describe governance for the actions and tools that may be employed within each phase of the Crisis Continuum, which would be dictated by the facts and circumstances applicable to the situation being addressed. Such facts and circumstances would be measured by the various indicators and metrics applicable to that phase of the Crisis Continuum, and would follow the relevant escalation protocols that would be described in the Recovery Plan. The Recovery Plan would also describe the governance procedures around a decision to cease to act for a Member, pursuant to the applicable Division's Rules, and around the management and oversight of the subsequent liquidation of the Defaulting Member's portfolio. The Recovery Plan would state that, overall, FICC would retain flexibility in accordance with each Division's Rules, its governance structure, and its regulatory oversight, to address a particular situation in order to best protect FICC and the Members, and to meet the primary objectives, throughout the Crisis Continuum, of minimizing losses and, where consistent and practicable, minimizing disturbance to affected markets.
The Recovery Plan would outline how FICC may address losses that result from events other than a Member default. While these matters are addressed in greater detail in other documents, this section of the R&W Plan would provide a roadmap to those documents and an outline for FICC's approach to monitoring and managing losses that could result from a non-default event. The R&W Plan would first identify some of the risks FICC faces that could lead to these losses, which include, for example, (1) the business and profit/loss risks of unexpected declines in revenue or growth of expenses; (2) the operational risks of disruptions to systems or processes that could lead to large losses, including those resulting from, for example, a cyber-attack; and (3) custody or investment risks that could lead to financial losses. The Recovery Plan would describe FICC's overall strategy for the management of these risks, which includes a “three lines of defense” approach to risk management that allows for comprehensive management of risk across the organization.
The R&W Plan would identify the two categories of financial resources FICC maintains to cover losses and expenses arising from non-default risks or events as (1) LNA, maintained, monitored, and managed pursuant to the Capital Policy, which include (a) amounts held in satisfaction of the General Business Risk Capital Requirement,
The R&W Plan would address the process by which the CFO and the DTCC Treasury group would determine which available LNA resources are most appropriate to cover a loss that is caused by a non-default event. This determination involves an evaluation of a number of factors, including the current and expected size of the loss, the expected time horizon over when the loss or additional expenses would materialize, the current and projected available LNA, and the likelihood LNA could be successfully replenished pursuant to the Replenishment Plan, if triggered.
The R&W Plan would also describe proposed GSD Rule 50 (Market Disruption and Force Majeure) and proposed MBSD Rule 40 (Market Disruption and Force Majeure), which FICC is proposing to adopt in the GSD Rule and MBSD Rules, respectively. FICC states that this Proposed Rule is designed to provide transparency around how FICC would address extraordinary events that may occur outside its control. Specifically, the Proposed Rule would define a Market Disruption Event and the governance around a determination that such an event has occurred. The Proposed Rule would also describe FICC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of its services, if practicable.
The R&W Plan would describe the interaction between the Proposed Rule and FICC's existing processes and procedures addressing business continuity management and disaster recovery (generally, the “BCM/DR procedures”). FICC states that the intent is to make clear that the Proposed Rule is designed to support those BCM/DR procedures and to address circumstances that may be exogenous to FICC and not necessarily addressed by the BCM/DR procedures. Finally, the R&W Plan would describe that, because the operation of the Proposed Rule is specific to each applicable Market Disruption Event, the Proposed Rule does not define a time limit on its application. However, the R&W Plan would note that actions authorized by the Proposed Rule would be limited to the pendency of the applicable Market Disruption Event, as made clear in the Proposed Rule. FICC states that, overall, the Proposed Rule is designed to mitigate risks caused by Market Disruption Events and, thereby, minimize the risk of financial loss that may result from such events.
The Recovery Plan would describe FICC's evaluation of the tools identified within the Recovery Plan, and its rationale for concluding that such tools are comprehensive, effective, and transparent, and that such tools provide incentives to Members and minimize negative impact on Members and the financial system.
The Wind-down Plan would provide the framework and strategy for the orderly wind-down of FICC if the use of the recovery tools described in the Recovery Plan do not successfully return FICC to financial viability. FICC states that while such event is extremely unlikely, given the comprehensive nature of the recovery tools, FICC is proposing a wind-down strategy that provides for (1) the transfer of FICC's business, assets, and memberships of both Divisions to another legal entity, (2) such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code,
In describing the transfer approach to FICC's Wind-down Plan, the R&W Plan would identify the factors that FICC considered in developing this approach, including the fact that FICC does not own material assets that are unrelated to its clearance and settlement activities. Therefore, FICC states that a business reorganization or “bail-in” of debt approach would be unlikely to mitigate significant losses. Additionally, FICC states that the proposed approach was developed in consideration of its critical and unique position in the U.S. markets, which precludes any approach that would cause FICC's critical services to no longer be available.
First, the Wind-down Plan would describe the potential scenarios that could lead to the wind-down of FICC, and the likelihood of such scenarios. The Wind-down Plan would identify the time period leading up to a decision to wind-down FICC as the Runway Period. FICC states that this period would follow the implementation of any recovery tools, as it may take a period of time, depending on the severity of the market stress at that time, for these tools to be effective or for FICC to realize a loss sufficient to cause it to be unable to effectuate settlements and repay its obligations.
The trigger for implementing the Wind-down Plan would be a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning FICC to viability as a going concern. As described in the R&W Plan, FICC states that this is an appropriate trigger because it is both broad and flexible enough to cover a variety of scenarios, and would align incentives of FICC and the Members to avoid actions that might undermine FICC's recovery efforts. Additionally, FICC states that this approach takes into account the characteristics of FICC's recovery tools and enables the Board to consider (1) the presence of indicators of a successful or unsuccessful recovery, and (2) potential for knock-on effects of continued iterative application of FICC's recovery tools.
The Wind-down Plan would describe the general objectives of the transfer strategy, and would address assumptions regarding the transfer of FICC's critical services, business, assets, and membership, and the assignment of GSD's link with another FMI, to another legal entity that is legally, financially, and operationally able to provide FICC's critical services to entities that wish to continue their membership following the transfer (“Transferee”). The Wind-down Plan would provide that the Transferee would be either (1) a third party legal entity, which may be an existing or newly established legal entity or a bridge entity formed to operate the business on an interim basis to enable the business to be transferred subsequently (“Third Party Transferee”); or (2) an existing, debt-free failover legal entity established ex-ante by DTCC (“Failover Transferee”) to be used as an alternative Transferee in the event that no viable or preferable Third Party Transferee timely commits to acquire FICC's business. FICC would seek to identify the proposed Transferee, and negotiate and enter into transfer arrangements during the Runway Period and prior to making any filings under Chapter 11 of the U.S. Bankruptcy Code.
FICC states that in order to effect a timely transfer of its services and minimize the market and operational disruption of such transfer, FICC would expect to transfer all of its critical services and any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership. Following the transfer, the Wind-down Plan would anticipate that the Transferee and its continuing membership would determine whether to continue to provide any transferred non-critical service on an ongoing basis, or terminate the non-critical service following some transition period. FICC's Wind-down Plan would anticipate that the Transferee would enter into a transition services agreement with DTCC so that DTCC would continue to provide the shared services it currently provides to FICC, including staffing, infrastructure and operational support. The Wind-down Plan would also anticipate the assignment of FICC's link arrangements, including its arrangements with clearing banks and GSD's cross-margining arrangement with CME, described above, to the Transferee.
The Wind-down Plan would provide that, following the effectiveness of the transfer to the Transferee, the wind-down of FICC would involve addressing any residual claims against FICC through the bankruptcy process and liquidating the legal entity. The Wind-down Plan does not contemplate FICC continuing to provide services in any capacity following the transfer time, and any services not transferred would be terminated.
The Wind-down Plan would also identify the key dependencies for the effectiveness of the transfer, which include regulatory approvals that would permit the Transferee to be legally qualified to provide the transferred services from and after the transfer, and approval by the applicable bankruptcy court of, among other things, the proposed sale, assignments, and transfers to the Transferee.
The Wind-down Plan would address governance matters related to the
The Wind-down Plan would describe (1) actions FICC or DTCC may take to prepare for wind-down in the period before FICC experiences any financial distress, (2) actions FICC would take both during the recovery phase and the Runway Period to prepare for the execution of the Wind-down Plan, and (3) actions FICC would take upon commencement of bankruptcy proceedings to effectuate the Wind-down Plan.
Finally, the Wind-down Plan would include an analysis of the estimated time and costs to effectuate the R&W Plan, and would provide that this estimate be reviewed and approved by the Board annually. In order to estimate the length of time it might take to achieve a recovery or orderly wind-down of FICC's critical operations, as contemplated by the R&W Plan, the Wind-down Plan would include an analysis of the possible sequencing and length of time it might take to complete an orderly wind-down and transfer of critical operations, as described in earlier sections of the R&W Plan. The Wind-down Plan would also include in this analysis consideration of other factors, including the time it might take to complete any further attempts at recovery under the Recovery Plan. The Wind-down Plan would then multiply this estimated length of time by FICC's average monthly operating expenses, including adjustments to account for changes to FICC's profit and expense profile during these circumstances, over the previous twelve months to determine the amount of LNA that it should hold to achieve a recovery or orderly wind-down of FICC's critical operations. The estimated wind-down costs would constitute the Recovery/Wind-down Capital Requirement under the Capital Policy.
FICC states that the R&W Plan is designed as a roadmap, and the types of actions that may be taken both leading up to and in connection with implementation of the Wind-down Plan would be primarily addressed in other supporting documentation referred to therein.
The Wind-down Plan would address proposed GSD Rule 22D and MBSD Rule 17B (Wind-down of the Corporation), which would be adopted to facilitate the implementation of the Wind-down Plan, as discussed below.
In connection with the adoption of the R&W Plan, FICC proposes to adopt the Proposed Rules, each of which is described below. FICC states that the Proposed Rules are designed to facilitate the execution of the R&W Plan and are designed to provide Members and Limited Members with transparency as to critical aspects of the R&W Plan, particularly as they relate to the rights and responsibilities of both FICC and Members. FICC also states that the Proposed Rules are designed to provide a legal basis to these aspects of the R&W Plan.
FICC states that the proposed GSD Rule 22D and MBSD Rule 17B (collectively, “Wind-down Rule”) are designed to facilitate the execution of the Wind-down Plan. The Wind-down Rule would include a proposed set of defined terms that would be applicable only to the provisions of this Proposed Rule. FICC states that the Wind-down Rule is designed to make clear that a wind-down of FICC's business would occur (1) after a decision is made by the Board, and (2) in connection with the transfer of FICC's services to a Transferee, as described therein. Because GSD and MBSD are both divisions of FICC, the individual Wind-down Rules are designed to work together. A decision by the Board to initiate the Wind-down Plan would be pursuant to, and trigger the provisions of, the Wind-down Rule of each Division simultaneously. FICC states that, generally, the proposed Wind-down Rule is designed to create clear mechanisms for the transfer of Eligible Members, Eligible Limited Members, and Settling Banks (as these terms would be defined in the Wind-down Rule), and FICC's business in order to provide for continued access to critical services and to minimize disruption to the markets in the event the Wind-down Plan is initiated.
First, FICC states that the Proposed Rule is designed to make clear that the Board is responsible for initiating the Wind-down Plan, and would identify the criteria the Board would consider when making this determination. As provided for in the Wind-down Plan and in the proposed Wind-down Rule, the Board would initiate the Wind-down Plan if, in the exercise of its business judgment and subject to its fiduciary duties, it has determined that the execution of the Recovery Plan has not or is not likely to restore FICC to viability as a going concern, and the implementation of the Wind-down Plan, including the transfer of FICC's business, is in the best interests of FICC, Members and Limited Members of both Divisions, its shareholders and creditors, and the U.S. financial markets.
The Proposed Rule would provide that, upon making a determination to initiate the Wind-down Plan, the Board would identify the critical and non-critical services that would be transferred to the Transferee at the Transfer Time (as defined below and in the Proposed Rule), as well as any non-critical services that would not be transferred to the Transferee. The proposed Wind-down Rule would establish that any services transferred to the Transferee will only be provided by the Transferee as of the Transfer Time, and that any non-critical services that are not transferred to the Transferee would be terminated at the Transfer Time. The Proposed Rule would also provide that the Board would establish (1) an effective time for the transfer of FICC's business to a Transferee (“Transfer Time”), (2) the last day that transactions may be submitted to either Division for processing (“Last Transaction Acceptance Date”), and (3) the last day that transactions submitted to either Division will be settled (“Last Settlement Date”).
The Wind-down Rule would authorize the Board to provide for the settlement of pending transactions of either Division prior to the Transfer
FICC states that the Proposed Rule is designed to make clear, however, that neither Division would accept any transactions for processing after the Last Transaction Acceptance Date or which are designated to settle after the Last Settlement Date for such Division. Any transactions to be processed and/or settled after the Transfer Time would be required to be submitted to the Transferee, and would not be FICC's responsibility.
The proposed Wind-down Rule would provide that, upon a decision to implement the Wind-down Plan, FICC would provide its Members and Limited Members and its regulators with a notice that includes material information relating to the Wind-down Plan and the anticipated transfer of the membership of both Divisions and business, including, for example, (1) a brief statement of the reasons for the decision to implement the Wind-down Plan; (2) identification of the Transferee and information regarding the transaction by which the transfer of FICC's business would be effected; (3) the Transfer Time, Last Transaction Acceptance Date, and Last Settlement Date; and (4) identification of Eligible Members and Eligible Limited Members, and the critical and non-critical services that would be transferred to the Transferee at the Transfer Time, as well as those Non-Eligible Members and Non-Eligible Limited Members (as defined in the Proposed Rule), and any non-critical services that would not be included in the transfer. FICC would also make available the rules and procedures and membership agreements of the Transferee.
The proposed Wind-down Rule would address the expected transfer of both Divisions' membership to the Transferee, which FICC would seek to effectuate by entering into an arrangement with a Failover Transferee, or by using commercially reasonable efforts to enter into such an arrangement with a Third Party Transferee. Therefore, the Wind-down Rule would provide Members, Limited Members and Settling Banks with notice that, in connection with the implementation of the Wind-down Plan and with no further action required by any party, (1) their membership with the applicable Division would transfer to the Transferee, (2) they would become party to a membership agreement with such Transferee, and (3) they would have all of the rights and be subject to all of the obligations applicable to their membership status under the rules of the Transferee. These provisions would not apply to any Member or Limited Member that is either in default of an obligation to FICC or has provided notice of its election to withdraw its membership from the applicable Division. Further, FICC states that the proposed Wind-down Rule is designed to make clear that it would not prohibit (1) Members and Limited Members that are not transferred by operation of the Wind-down Rule from applying for membership with the Transferee, or (2) Members, Limited Members, and Settling Banks that would be transferred to the Transferee from withdrawing from membership with the Transferee.
FICC states that the proposed automatic mechanism for the transfer of both Divisions' memberships is intended to provide the membership with continuous access to critical services in the event of FICC's wind-down, and to facilitate the continued prompt and accurate clearance and settlement of securities transactions. The proposed Wind-down Rule would provide that FICC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, with respect to the critical services and any non-critical services that are transferred from FICC to the Transferee, for at least a period of time to be agreed upon (“Comparability Period”), the business transferred from FICC to the Transferee would be operated in a manner that is comparable to the manner in which the business was previously operated by FICC. Specifically, the proposed Wind-down Rule would provide that: (1) The rules of the Transferee and terms of membership agreements would be comparable in substance and effect to the analogous Rules and membership agreements of FICC; (2) the rights and obligations of any Members, Limited Members and Settling Banks that are transferred to the Transferee would be comparable in substance and effect to their rights and obligations as to FICC; and (3) the Transferee would operate the transferred business and provide any services that are transferred in a comparable manner to which such services were provided by FICC. FICC states that the purpose of these provisions and the intended effect of the proposed Wind-down Rule is to facilitate a smooth transition of FICC's business to a Transferee and to provide that, for at least the Comparability Period, the Transferee (1) would operate the transferred business in a manner that is comparable in substance and effect to the manner in which the business was operated by FICC, and (2) would not require sudden and disruptive changes in the systems, operations and business practices of the new members of the Transferee.
The proposed Wind-down Rule would include a provision addressing the subordination of unsecured claims against FICC of its Members and Limited Members who fail to participate in FICC's recovery efforts (
The proposed Wind-down Rule would address other ex-ante matters, including provisions providing that its
FICC states that the purpose of the limitation of liability is to facilitate and protect FICC's ability to act expeditiously in response to extraordinary events. Such limitation of liability would be available only following triggering of the Wind-down Plan. In addition, and as a separate matter, FICC states that the limitation of liability provides Members with transparency for the unlikely situation when those extraordinary events could occur, as well as supporting the legal framework within which FICC would take such actions. FICC states that these provisions, collectively, are designed to enable FICC to take such acts as the Board determines necessary to effectuate an orderly transfer and wind-down of its business should recovery efforts prove unsuccessful.
The proposed GSD Rule 50 and MBSD Rule 40 (Market Disruption and Force Majeure) (collectively, “Force Majeure Rule”) would address FICC's authority to take certain actions upon the occurrence, and during the pendency, of a Market Disruption Event, as defined therein. FICC states that because GSD and MBSD are both divisions of FICC, the individual Force Majeure Rules are designed to work together. A decision by the Board or management of FICC that a Market Disruption Event has occurred in accordance with the Force Majeure Rule would trigger the provisions of the Force Majeure Rule of each Division simultaneously. The Proposed Rule is designed to clarify FICC's ability to take actions to address extraordinary events outside of the control of FICC and of the memberships of the Divisions, and to mitigate the effect of such events by facilitating the continuity of services (or, if deemed necessary, the temporary suspension of services). To that end, under the proposed Force Majeure Rule, FICC would be entitled, during the pendency of a Market Disruption Event, to (1) suspend the provision of any or all services, and (2) take, or refrain from taking, or require its Members and Limited Members to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of FICC's services as may be practicable.
The proposed Force Majeure Rule would identify the events or circumstances that would be considered a Market Disruption Event. The proposed Force Majeure Rule would define the governance procedures for how FICC would determine whether, and how, to implement the provisions of the rule. A determination that a Market Disruption Event has occurred would generally be made by the Board, but the Proposed Rule would provide for limited, interim delegation of authority to a specified officer or management committee if the Board would not be able to take timely action. In the event such delegated authority is exercised, the proposed Force Majeure Rule would require that the Board be convened as promptly as practicable, no later than five Business Days after such determination has been made, to ratify, modify, or rescind the action. The proposed Force Majeure Rule would also provide for prompt notification to the Commission, and advance consultation with Commission staff, when practicable, including notification when an event is no longer continuing and the relevant actions are terminated. The Proposed Rule would require Members and Limited Members to notify FICC immediately upon becoming aware of a Market Disruption Event, and, likewise, would require FICC to notify Members and Limited Members if it has triggered the Proposed Rule and of actions taken or intended to be taken thereunder.
Finally, the Proposed Rule would address other related matters, including a limitation of liability for any failure or delay in performance, in whole or in part, arising out of the Market Disruption Event. FICC states that the purpose of the limitation of liability would be similar to the purpose of the analogous provision in the proposed Wind-down Rule, which is to facilitate and protect FICC's ability to act expeditiously in response to extraordinary events.
In order to incorporate the Proposed Rules into the Rules and the EPN Rules, FICC proposes to amend (1) GSD Rule 3A (Sponsoring Members and Sponsored Members), GSD Rule 3B (Centrally Cleared Institutional Triparty Service), and GSD Rule 13 (Funds-Only Settlement); (2) MBSD Rule 3A (Cash Settlement Bank Members); and (3) EPN Rule 1 (Definitions). FICC states that these proposed changes are designed to clarify that certain types of Limited Members, as identified in those rules, would be subject to the Proposed Rules.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
First, the Commission believes that the R&W Plan, generally, is designed to help FICC promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible by providing FICC with a roadmap for actions it may employ to monitor and manage its risks, and, as needed, to stabilize its financial condition in the event those risks materialize. Specifically, as described above, the Recovery Plan would establish a number of triggers for the potential application of a number of recovery tools described in the Recovery Plan. The Commission believes that establishing such triggers alongside a
Similarly, the Force Majeure Rule is designed to provide a roadmap to address extraordinary events that may occur outside of FICC's control. Specifically, as described above, the Force Majeure Rule would define a Market Disruption Event and provide governance around determining when such an event has occurred. The Force Majeure Rule also would describe FICC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of FICC's services, if practicable. By defining a Market Disruption Event and providing such governance and authority, the Commission believes that the Force Majeure Rule would help FICC improve its ability to identify and manage a force majeure event, and, as needed, to stabilize its financial condition so that FICC can continue to operate.
The Commission believes that the Recovery Plan and the Force Majeure Rule would allow for a more considered and comprehensive evaluation by FICC of a stressed market situation and the ways in which FICC could apply available recovery tools in a manner intended to minimize the potential negative effects of the stress situation for FICC, its membership, and the broader financial system. Therefore, the Commission believes that the Recovery Plan and the Force Majeure Rule are designed to help FICC promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible by establishing a means for FICC to best determine the most appropriate way to address such stress situations in an effective manner.
Second, the Commission believes that the R&W Plan, generally, is designed to help FICC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible by providing a roadmap to wind-down that is designed to ensure the availability of FICC's critical services to the marketplace, while reducing disruption to the operations of membership and financial markets that might be caused by FICC's failure. Specifically, as described above, the Wind-down Plan, as facilitated by the Wind-down Rule, would provide for the wind-down of FICC's business and transfer of membership and critical services if the recovery tools do not successfully return FICC to financial viability. Accordingly, critical services, such as services that lack alternative providers or products; services that the failure of which could impact the volume of transactions, transaction costs, or the flow of liquidity in the U.S. financial markets; and services that are interconnected with other participants and processes within the U.S. financial system would be able to continue in an orderly manner while FICC is seeking to wind-down its services. By designing the Wind-down Plan and the Wind-down Rule to enable the continuity of FICC's critical services and membership in an orderly manner while FICC is seeking to wind-down its services, the Commission believes these proposed changes would help FICC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible in the event the Wind-down Plan is implemented.
As described above, to incorporate the Proposed Rules into the Rules and the EPN Rules, FICC proposes to amend (1) GSD Rule 3A (Sponsoring Members and Sponsored Members), GSD Rule 3B (Centrally Cleared Institutional Triparty Service), and GSD Rule 13 (Funds-Only Settlement); (2) MBSD Rule 3A (Cash Settlement Bank Members); and (3) EPN Rule 1 (Definitions). These proposed changes would clarify that certain types of Limited Members, as identified in those rules, would be subject to the Proposed Rules. These proposed changes would help these Limited Members readily understand their rights and obligations and would help enable Limited Members that are governed by the Proposed Rules to have a better understanding of the Proposed Rules. Enhanced access to and transparency of these rules would therefore assist such parties in understanding, planning for, and reacting in an orderly manner to, the implementation by FICC of the R&W Plan. Therefore, the Commission believes that these proposed changes to the Rules and the EPN Rules would help FICC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible.
By better enabling FICC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of FICC or for which it is responsible, as described above, the Commission finds that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(2)(i) under the Act requires a covered clearing agency
As described above, the R&W Plan is designed to identify clear lines of responsibility concerning the R&W Plan including (1) the ongoing development of the R&W Plan; (2) ongoing maintenance of the R&W Plan; (3) reviews and approval of the R&W Plan; and (4) the functioning and implementation of the R&W Plan. As described above, the R&R Team, which reports to the Management Committee, is responsible for maintaining the R&W Plan and for the development and ongoing maintenance of the overall recovery and wind-down planning process. Meanwhile, the Board, or such committees as may be delegated authority by the Board from time to time
In considering the above, the Commission believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent because it would specify lines of control. The Commission also believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that support the public interest requirements in Section 17A of the Act
Therefore, the Commission finds that the R&W Plan is consistent with Rules 17Ad-22(e)(2)(i), (iii), and (v) under the Act.
Rule 17Ad-22(e)(3)(ii) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
As described above, the R&W Plan's Recovery Plan provides a plan for FICC's recovery necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses by defining the risk management activities, stress conditions and indicators, and tools that FICC may use to address stress scenarios that could eventually prevent FICC from being able to provide its critical services as a going concern. More specifically, through the framework of the Crisis Continuum, which identifies tools that can be employed to mitigate losses and mitigate or minimize liquidity needs as the market environment becomes increasingly stressed, the Recovery Plan would identify measures that FICC may take to manage risks of credit losses and liquidity shortfalls, and other losses that could arise from a Member default. The Recovery Plan also would address FICC's management of general business risks and other non-default risks that could lead to losses by identifying potential non-default losses and the resources available to FICC to address such losses, including recovery triggers and tools to mitigate such losses. Therefore, the Commission believes that the R&W Plan's Recovery Plan helps FICC establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by FICC, which includes a recovery plan necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
As described above, the R&W Plan's Wind-down Plan provides a plan for orderly wind-down of FICC, which would be triggered by a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning FICC to viability as a going concern. Once triggered, the Wind-down Plan sets forth mechanisms for the transfer of the membership of both Divisions and FICC's business, and it is designed to maintain continued access to FICC's critical services and to minimize market impact of the transfer while FICC is seeking to ultimately wind-down its services. Specifically, the Wind-down Plan would provide for the transfer of FICC's business, assets, and membership to another legal entity with such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Although the Commission is not opining on the Wind-down Plan's consistency with the U.S. Bankruptcy Code, in reviewing the proposed changes, the Commission believes that FICC's intent to use bankruptcy proceedings to achieve an orderly liquidation of assets after any transfer of FICC's business appears reasonable, in light of the provisions of the Bankruptcy Code that address the liquidation and distribution of a debtor's property among creditors and interest holders.
Therefore, the Commission finds that the R&W Plan is consistent with Rule 17Ad-22(e)(3)(ii) under the Act.
Rule 17Ad-22(e)(15)(i) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that the covered clearing agency can continue operations and services as a going concern if those losses materialize, including by determining the amount of liquid net assets funded by equity based upon its general business risk profile and the length of time required to achieve a recovery or orderly wind-down, as appropriate, of its critical operations and services if such action is taken.
As discussed above, FICC's Capital Policy is designed to address how FICC holds LNA in compliance with these requirements,
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 18, 2017, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-DTC-2017-022, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Proposed Rule Change consists of proposed changes to DTC's Rules, By-Laws and Organization Certificate of DTC (“Rules”)
Under current Section 3 of Rule 4, if a Participant is obligated to DTC and fails to satisfy any obligation, DTC may, in such order and in such amounts as DTC shall determine in its sole discretion (1) apply some or all of the Actual Participants Fund Deposit of such Participant to such obligation; (2) pledge some or all of the shares of Preferred Stock of such Participant to its lenders as collateral security for a loan under the End-of-Day Credit Facility;
Current Rule 4 provides a single set of tools and a common process for the use of the Participants Fund for both (1) liquidity purposes to complete settlement among non-defaulting Participants, if one or more Participants fails to settle, and (2) the satisfaction of losses and liabilities due to Participant defaults
Under the current Rules, after the Participants Fund is applied pursuant to Section 4, DTC must promptly notify each Participant and the Commission of the amount applied and the reasons therefor. Current Rule 4 further requires Participants whose Actual Participants Fund Deposits have been ratably charged to restore their Required Participants Fund Deposits, if such charges create a deficiency. Such payments are due upon demand. Iterative pro rata charges relating to the same loss or liability are permitted in order to satisfy the loss or liability.
Rule 4 currently provides that a Participant may, within 10 Business Days after receipt of notice of any pro rata charge, notify DTC of its election to terminate its business with DTC, and the exposure of the terminating Participant for pro rata charges would be capped at the greater of (1) the amount of its Aggregate Required Deposit and Investment, as fixed immediately prior to the time of the first pro rata charge, plus 100 percent of the amount thereof, or (2) the amount of all prior pro rata charges attributable to the same loss or liability with respect to which the Participant has not timely exercised its right to terminate.
Proposed Section 3 of Rule 4 would provide that a Participant Default occurs
The proposed change would also amend and add provisions to separate use of the Participants Fund as a liquidity resource to complete settlement, reflected in proposed Section 4 of Rule 4, and for loss allocation, reflected in proposed Section 5 of Rule 4. DTC states that the proposed changes reinforce the distinction between the mechanisms to complete settlement on a Business Day, and to mutualize losses that may result from a failure to settle or other loss-generating events. DTC also states that the change would more closely align the loss allocation provisions of proposed Section 5 of Rule 4 to similar provisions of the NSCC and FICC rules, to the extent appropriate.
Proposed Section 4 would address the situation of a Defaulting Participant failure to settle if the application of the Actual Participants Fund Deposit of that Defaulting Participant, pursuant to proposed Section 3, is not sufficient to complete settlement among Participants other than the Defaulting Participant (each, a “non-defaulting Participant”).
Proposed Section 4 would expressly state that the Participants Fund shall constitute a liquidity resource which may be applied by DTC, in such amounts as it may determine, in its sole discretion, to fund settlement among non-defaulting Participants in the event of the failure of a Defaulting Participant to satisfy its settlement obligation on any Business Day. Such an application of the Participants Fund would be charged ratably to the Actual Participants Fund Deposits of the non-defaulting Participants on that Business Day. In connection with the use of the Participants Fund as a liquidity resource to complete settlement when a Participant fails to settle, the proposed rule would introduce the term “pro rata settlement charge,” in order to distinguish application of the Participants Fund to fund settlement from pro rata loss allocation charges that would be established in proposed Section 5 of Rule 4.
The pro rata settlement charge for each non-defaulting Participant would be based on the ratio of its Required Participants Fund Deposit to the sum of the Required Participants Fund Deposits of all such Participants on that Business Day (excluding any Additional Participants Fund Deposits in both the numerator and denominator of such ratio). The calculation of each non-defaulting Participant's pro rata settlement charge would be similar to the current Section 4 calculation of a pro rata charge except, as DTC states, that, for greater simplicity, it would not include the current distinction for common members of another clearing agency pursuant to a Clearing Agency Agreement.
The proposed change would provide each non-defaulting Participant an opportunity to elect to terminate its business with DTC and thereby cap its exposure to further pro rata settlement charges. As proposed, Participants would have five Business Days
DTC states that the pro rata application of the Actual Participants Fund Deposits of non-defaulting Participants to complete settlement when there is a Participant Default is
DTC's current loss allocation rules address the use of the Participants Fund for both liquidity purposes to complete settlement among non-defaulting Participants, and for the satisfaction of losses and liabilities due to Participant defaults or certain other losses or liabilities incident to the business of DTC, together. For both liquidity and loss scenarios, current Section 4 of Rule 4 provides that DTC may apply some or all of the Actual Participants Fund Deposits of all other Participants, and/or charge the existing retained earnings and undivided profits of DTC.
Currently, if DTC applies the Actual Participants Fund Deposits, any loss or liability will be apportioned among Participants ratably in accordance with their Required Participants Fund Deposits, less any additional amount that a Participant was required to Deposit to the Participants Fund pursuant to Section 2 of Rule 9(A). Current Section 4 of Rule 4 provides that if there is an unsatisfied loss or liability, DTC may, in its sole discretion, charge the existing retained earnings and undivided profits of DTC.
DTC proposes to change the manner in which each of the aspects of the loss allocation process described above would be employed. The proposal would clarify or adjust certain elements, and introduce certain new loss allocation concepts, as further discussed below. In addition, the proposal would address the loss allocation process as it relates to losses arising from or relating to multiple default or non-default events in a short period of time, also as described below.
DTC proposes five key changes to enhance DTC's loss allocation process. Specifically, DTC proposes to make changes regarding (1) the Corporate Contribution, (2) the Event Period, (3) the loss allocation round and notice, (4) the loss allocation termination notice and cap, and (5) the governance around non-default losses, each of which is discussed below.
Current Section 4 of Rule 4 provides that if there is an unsatisfied loss or liability, DTC may, in its sole discretion and in such amount as DTC would determine, charge the existing retained earnings and undivided profits of DTC. Under the proposed change, DTC would replace the discretionary application of an unspecified amount of retained earnings and undivided profits with a mandatory, defined Corporate Contribution. The proposed Corporate Contribution would apply to losses and liabilities that are incurred by DTC with respect to an Event Period, whether arising from a Default Loss Event or Declared Non-Default Loss Event, before the allocation of losses to Participants.
The proposed Corporate Contribution would be defined to be an amount equal to 50 percent of DTC's General Business Risk Capital Requirement.
DTC states that in order to clearly define the obligations of DTC and its Participants regarding loss allocation and to balance the need to manage the risk of sequential loss events against Participants' need for certainty concerning their maximum loss allocation exposures, DTC proposes to introduce the concept of an Event Period to the Rules to address the losses and liabilities that may arise from or relate to multiple Default Loss Events and/or Declared Non-Default Loss Events that arise in quick succession. Specifically, the proposal would group Default Loss Events and Declared Non-Default Loss Events occurring within a period of 10 Business Days (“Event Period”) for purposes of allocating losses to Participants in one or more rounds, subject to the limits of loss allocation as explained below.
In the case of a loss or liability arising from or relating to a Default Loss Event, an Event Period would begin on the day on which DTC notifies Participants that it has ceased to act for a Participant (or the next Business Day, if such day is not a Business Day). In the case of a Declared Non-Default Loss Event, an Event Period would begin on the day that DTC notifies Participants of the Declared Non-Default Loss Event (or the next Business Day, if such day is not a Business Day). If a subsequent Default Loss Event or Declared Non-Default
An Event Period may include both Default Loss Events and Declared Non-Default Loss Events, and there would not be separate Event Periods for Default Loss Events or Declared Non-Default Loss Events occurring during overlapping 10 Business Day periods. The amount of losses that may be allocated by DTC, subject to the required Corporate Contribution, and to which a Loss Allocation Cap would apply for any Participant that elects to terminate its business with DTC in respect of a loss allocation round, would include any and all losses from any Default Loss Events and any Declared Non-Default Loss Events during the Event Period, regardless of the amount of time, during or after the Event Period, required for such losses to be crystallized and allocated.
DTC states that in order to enhance clarity, the proposed change would define “Default Loss Event” as the determination by DTC to cease to act for a Participant (“CTA Participant”) pursuant to Rule 10, Rule 11, or Rule 12. The proposed change also would define “Declared Non-Default Loss Event” as the determination by the Board of Directors that a loss or liability incident to the clearance and settlement business of DTC may be a significant and substantial loss or liability that may materially impair the ability of DTC to provide clearance and settlement services in an orderly manner and will potentially generate losses to be mutualized among Participants in order to ensure that DTC may continue to offer its services in an orderly manner.
Under the proposal, a loss allocation “round” would mean a series of loss allocations relating to an Event Period, the aggregate amount of which is limited by the sum of the Loss Allocation Caps of affected Participants (a “round cap”). When the aggregate amount of losses allocated in a round equals the round cap, any additional losses relating to the applicable Event Period would be allocated in one or more subsequent rounds, in each case subject to a round cap for that round. DTC may continue the loss allocation process in successive rounds until all losses from the Event Period are allocated among Participants that have not submitted a Termination Notice in accordance with proposed Section 6(b) of Rule 4.
Each loss allocation would be communicated to Participants by the issuance of a notice that advises each Participant of the amount being allocated to it (“Loss Allocation Notice”). The calculation of each Participant's pro rata allocation charge would be similar to the current Section 4 calculation of a pro rata charge except that it would not include the current distinction for common members of another clearing agency pursuant to a Clearing Agency Agreement.
Each Loss Allocation Notice would specify the relevant Event Period and the round to which it relates. Multiple Loss Allocation Notices may be issued with respect to each round, up to the round cap. The first Loss Allocation Notice in any first, second, or subsequent round would expressly state that such Loss Allocation Notice reflects the beginning of the first, second, or subsequent round, as the case may be, and that each Participant in that round has five Business Days
DTC's current loss allocation provisions provide that if a charge is made against a Participant's Actual Participants Fund Deposits, and as result thereof the Participant's deposit is less than its Required Participants Fund Deposit, the Participant will, upon demand by DTC, be required to replenish its deposit to eliminate the deficiency within such time as DTC shall require. Under the proposal, Participants would receive two Business Days' notice of a loss allocation, and be required to pay the requisite amount no later than the second Business Day following the issuance of such notice.
DTC's current Rules provide that a Participant may terminate its business with DTC by notifying DTC. DTC proposes to enhance the termination procedure to clarify and align with the rules of NSCC and FICC, where appropriate. As proposed, Participants would have five Business Days from the issuance of the first Loss Allocation Notice in any round to decide whether to terminate its business with DTC, and thereby benefit from its Loss Allocation Cap. The start of each round
Under the current Rules, the exposure of the terminating Participant for pro rata charges would be capped at the greater of (1) the amount of its Aggregate Required Deposit and Investment, as fixed immediately prior to the time of the first pro rata charge, plus 100 percent of the amount thereof, or (2) the amount of all prior pro rata charges attributable to the same loss or liability with respect to which the Participant has not timely exercised its right to terminate. Under the proposal, if a Participant timely provides notice of its election to terminate its business with DTC as provided in proposed Section 8(b) of Rule 4, its maximum payment obligation with respect to any loss allocation round would be the amount of its Aggregate Required Deposit and Investment, as fixed on the first day of the Event Period, plus 100 percent of the amount thereof (“Loss Allocation Cap”).
Specifically, the first round and each subsequent round of loss allocation would allocate losses up to a round cap of the aggregate of all Loss Allocation Caps of those Participants included in the round. If a Participant provides notice of its election to terminate its business with DTC, it would be subject to loss allocation in that round, up to its Loss Allocation Cap. If the first round of loss allocation does not fully cover DTC's losses, a second round will be noticed to those Participants that did not elect to terminate in the previous round; however, the amount of any second or subsequent round cap may differ from the first or preceding round cap because there may be fewer Participants in a second or subsequent round if Participants elect to terminate their business with DTC as provided in proposed Section 8(b) of Rule 4 following the first Loss Allocation Notice in any round.
The Rules currently permit DTC to apply the Participants Fund to non-default losses,
Section 1 of Rule 2 provides that a Participant may terminate its business with DTC by notifying DTC in the appropriate manner.
Specifically, DTC is proposing that if a Participant elects to terminate its business with DTC pursuant to Section 1 of Rule 2 for reasons other than those specified in proposed Section 8 (a “Voluntary Retirement”), the Participant would be required to: (1) Provide a written notice of such termination to DTC (“Voluntary Retirement Notice”), as provided for in Section 1 of Rule 2; (2) specify in the Voluntary Retirement Notice a desired date for the termination of its business with DTC (“Voluntary Retirement Date”); (3) cease all activities and use of DTC services other than activities and services necessary to terminate the business of the Participant with DTC; and (4) ensure that all activities and use of DTC services by the Participant cease on or prior to the Voluntary Retirement Date.
Further, proposed Section 6(a) of Rule 4 would provide that if a Participant submits a Voluntary Retirement Notice and subsequently receives a Settlement Charge Notice or the first Loss Allocation Notice in a round on or prior to the Voluntary Retirement Date, such Participant must timely submit a Termination Notice in order to benefit from its Settlement Charge Cap or Loss Allocation Cap, as the case may be. In such a case, the Termination Notice would supersede and void the pending Voluntary Retirement Notice submitted by the Participant.
Current Rule 4 provides that after three months from when a Person has ceased to be a Participant, DTC shall return to such Person (or its successor in interest or legal representative) the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest to the date of such payment (including any amount added to the Actual Participants Fund Deposit of the former Participant through the sale of the Participant's Preferred Stock), provided that DTC receives such indemnities and guarantees as DTC deems satisfactory with respect to the matured and contingent obligations of the former Participant to DTC. Otherwise, within four years after a Person has ceased to be a Participant, DTC shall return to such Person (or its successor in interest or legal representative) the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest to the date of such payment, except that DTC may offset against such payment the amount of any known loss or liability to DTC arising out of or related to the obligations of the former Participant to DTC.
DTC proposes to reduce the time, after a Participant ceases to be a Participant, at which DTC would be required to return the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest, whether the Participant ceases to be such because it elected to terminate its business with DTC in response to a Settlement Charge Notice or Loss Allocation Notice or otherwise. Pursuant to the proposed change, the time period would be reduced from four years to two years. All other requirements relating to the return of the Actual Participants Fund Deposit would remain the same.
DTC states that the four year retention period was implemented at a time when there were more deposits and processing of physical certificates, as well as added risks related to manual processing, and related claims could surface many years after an alleged event. DTC states that the change to two years is appropriate because, currently, as DTC and the industry continue to move toward automation and dematerialization, claims typically surface more quickly. Therefore, DTC states that a shorter retention period of two years would be sufficient to maintain a reasonable level of coverage for possible claims arising in connection with the activities of a former Participant, while allowing DTC to provide some relief to former Participants by returning their Actual Participants Fund Deposits more quickly.
DTC proposes to make various conforming and technical changes necessary to harmonize the remaining current Rules with the proposed changes. Such changes include, but are not limited to, (1) inserting, deleting, or changing various terms, sentences, or headings for clarity and consistency; (2) consolidating certain sections of the Rules for clarity; and (3) amending Rule 1 (Definitions; Governing Law) to add cross-references to proposed terms that would be defined in Rule 4.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to promote the prompt and accurate clearance and settlement of securities transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions, and to protect investors and the public interest.
The Commission believes that the proposal to clarify the application of Participants Fund would promote the prompt and accurate clearance and settlement of securities transactions. As described above, the proposal would clarify that if a Participant fails to satisfy its obligations, the Participant's Actual Participants Fund Deposit would be used to eliminate any unpaid obligations of that Participant to DTC. Further, the proposal would modify the application of the Participants Fund, and clarify that the Participants Fund may be used (1) as a liquidity resource for DTC to fund settlement among non-defaulting Participants, and (2) to satisfy losses and liabilities of DTC in the loss allocation process. In addition, the proposal would add the term “Participant Default” to current Section 3 to clarify that proposed Section 3 would apply when there is a failure of a Participant to satisfy any obligation to DTC.
By establishing a more explicit right to use the Participants Fund as a liquidity resource under the above-described circumstances, DTC would have clearer authority to access such funds during stress events, enabling DTC to better manage its liquidity risks and, thus, payment obligations to Participants to help ensure settlement finality. As such, the Commission believes that the proposed change to clarify the application of Participants Fund would better enable DTC to continue to promptly and accurately clear and settle securities transactions during the stress events.
The Commission also believes that the proposal to change the loss allocation process is designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency. As described above, DTC proposes to make a number of changes to its loss allocation process. First, DTC would establish a mandatory Corporate Contribution to be applied to DTC's losses and liabilities. The proposed Corporate Contribution would be defined to be an amount equal to 50 percent of DTC's General Business Risk Capital Requirement. The proposed changes also would clarify that the proposed Corporate Contribution would apply to both Default Loss Events and Declared Non-Default Loss Events. Moreover, the proposal specifies that if the Corporate Contribution is applied to a loss or liability relating to an Event Period, then for any subsequent Event Periods that occur during the 250 business days thereafter, the Corporate Contribution would be reduced to the remaining, unused portion of the Corporate Contribution. The Commission believes that these changes set clear expectations about how and
Second, as described above, DTC proposes to introduce the concept of an Event Period, which would group Default Loss Events and Declared Non-Default Loss Events occurring within a period of 10 Business Days for purposes of allocating losses to Participants in one or more rounds. Under the current Rules, every time DTC incurs a loss or liability, DTC will initiate its current loss allocation process by applying its retained earnings and allocating losses. However, the current Rules do not contemplate a situation where loss events occur in quick succession. Accordingly, even if multiple losses occur within a short period, the current Rules dictate that DTC start the loss allocation process separately for each loss event. Having multiple loss allocation calculations and notices from DTC and Termination Notices from Participants after multiple sequential loss events could heighten operational complexity and, therefore, risk for DTC, since DTC would have to process and track multiple notices while performing its other critical operations during a time of significant stress.
Therefore, the Commission believes that the proposed change to introduce an Event Period would provide a more defined and transparent structure, compared to the current loss allocation process described immediately above, helping to reduce complexity in and the resources needed to effectuate the process, thus mitigating operational risk. Overall, such an improved structure should enable both DTC and each Participant to more effectively manage the risks and potential financial obligations presented by sequential Default Loss Events and/or Declared Non-Default Loss Events that are likely to arise in quick succession, and could be closely linked to an initial event and/or market dislocation episode. In other words, the proposed Event Period structure should help clarify and define for both DTC and Participants how DTC would initiate a single defined loss allocation process to cover all loss events within 10 Business Days. As a result, all loss allocation calculation and notices from DTC and potential Termination Notices from Participants would be tied back to one Event Period instead of each individual loss event.
Third, as described above, the proposal would improve upon the current loss allocation approach laid out in DTC's Rules by providing for a loss allocation round, a Loss Allocation Notice process, a Termination Notice process, and a Loss Allocation Cap. A loss allocation round would be a series of loss allocations relating to an Event Period, the aggregate amount of which would be limited by the round cap. When the losses allocated in a round equals the round cap, any additional losses relating to the Event Period would be allocated in subsequent rounds until all losses from the Event Period are allocated among Participants. Each loss allocation would be communicated to Participants by the issuance of a Loss Allocation Notice. Each Participant in a loss allocation round would have five Business Days from the issuance of such first Loss Allocation Notice for the round to notify DTC of its election to terminate its business with DTC, and thereby benefit from its Loss Allocation Cap. The Loss Allocation Cap of a Participant would be the amount of its Aggregate Required Deposit and Investment, as fixed on the first day of the Event Period, plus 100 percent of the amount thereof. Participants would have two Business Days after DTC issues a first round Loss Allocation Notice to pay the amount specified in the notice.
The Commission believes that the changes to (1) establish a specific Event Period, (2) continue the loss allocation process in successive rounds, (3) clearly communicate with its Participants regarding their loss allocation obligations, and (4) effectively identify continuing Participants for the purpose of calculating loss allocation obligations in successive rounds, are designed to make DTC's loss allocation process more certain. In addition, the changes are designed to provide Participants with a clear set of procedures that operate within the proposed loss allocation structure, and provide increased predictability and certainty regarding Participants' exposures and obligations. Furthermore, by grouping all loss events within 10 Business Days, the loss allocation process relating to multiple loss events can be streamlined. With enhanced certainty, predictability, and efficiency, DTC would then be able to better manage its risks from loss events occurring in quick succession, and Participants would be able to better manage their risks by deciding whether and when to withdraw from membership and limit their exposures to DTC. Furthermore, the proposed changes are designed to reduce liquidity risk to Participants by providing a two-day window to arrange funding to pay for loss allocation, while still allowing DTC to address losses in a timely manner.
Fourth, as described above, DTC proposes to clarify the governance around Declared Non-Default Loss Events by providing that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of DTC to provide its services in an orderly manner. DTC also proposes to provide that DTC would then be required to promptly notify Participants of this determination and start the loss allocation process concerning the loss stemming from a Declared Non-Default Loss Event. The Commission believes that these changes should provide an orderly and transparent procedure to allocate a non-default loss by requiring the Board of Directors to make a definitive decision to announce an occurrence of a Declared Non-Default Loss Event, and requiring DTC to provide a notice to Participants of the decision. The Commission further believes that an orderly and transparent procedure should result in a risk management process at DTC that is more robust as a result of enhanced governance around DTC's response to non-default losses.
Collectively, the Commission believes that the proposed changes to DTC's loss allocation process would provide greater transparency, certainty, and efficiency to DTC regarding the amount of resources and the instances in which DTC would apply the resources to address risks arising from Default Loss Events and Declared Non-Default Loss Events, which could occur in quick succession. The Commission believes that the transparency, certainty, and efficiency would afford DTC better predictability regarding its risk exposure, and in turn, would allow a risk management process at DTC that is more effectively responsive to such events and would improve DTC's ability to continue to operate in a safe and sound manner during such events. Therefore, the Commission believes that these proposed changes would better equip DTC to assure the safeguarding of securities and funds which are in the custody or control of DTC.
The Commission believes that the proposed rule changes to (1) provide additional transparency to Participants with respect to voluntary retirement, and (2) align DTC's loss allocation rules with the loss allocation rules of the other DTCC Clearing Agencies, to the extent practicable and appropriate, are designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions. As described above, the
The Commission believes that the proposed rule changes to (1) reduce the time within which DTC is required to return the Actual Participants Fund Deposit of a former Participant from four years to two years, and (2) make conforming and technical changes necessary to harmonize the current Rules with the proposed changes are designed to protect investors and the public interest. First, the Commission believes that the reduction in time to return the deposits would enable firms that have exited DTC to have access to their funds sooner than under the current Rules. While acknowledging that the reduction in time could lesson DTC's flexibility in liquidity management for the period between two years and four years, the Commission believes that DTC's procedures would continue to protect DTC and its clearance and settlement services because the rule would maintain the provisions that DTC (1) may offset the return of funds against the amount of any loss or liability of DTC arising out of or relating to the obligations of the former Participant, and (2) could retain the funds for up to two years. Therefore, DTC could maintain a necessary level of coverage for possible claims arising in connection with the DTC activities of a former Participant. Second, the conforming and technical changes are designed to provide clear and coherent Rules concerning loss allocation process to DTC and its Participants. The Commission believes that clear and coherent Rules should help enhance the ability of DTC and Participants to more effectively plan for, manage, and address the risks and financial obligations that loss events present to DTC and its Participants. Accordingly, the Commission believes that these two changes are designed to protect investors and public interest by (1) reducing financial risks for DTC's former Participants, and (2) providing clear and coherent Rules to DTC and Participants.
For the reasons above, the Commission believes that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(4)(viii) under the Act requires, in part, that a covered clearing agency
As described above, the proposal would revise the loss allocation process to address how DTC would manage loss events, including Defaulting Loss Events. Under the proposal, if losses arise out of or relate to a Defaulting Loss Event, DTC would first apply its Corporate Contribution. If those funds prove insufficient, the proposal provides for allocating the remaining losses to the remaining Participants through the proposed process. Accordingly, the Commission believes that the proposal is reasonably designed to manage DTC's credit exposures to its Participants, by addressing allocation of credit losses.
Therefore, the Commission believes that DTC's proposal is consistent with Rule 17Ad-22(e)(4)(viii) under the Act.
Rule 17Ad-22(e)(7)(i) under the Act requires, in part, that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to effectively measure, monitor, and manage the liquidity risk that arises in or is borne by the covered clearing agency, including measuring, monitoring, and managing its settlement and funding flows on an ongoing and timely basis, and its use of intraday liquidity, by maintaining sufficient liquid resources to effect same-day settlement of payment obligations with a high degree of confidence under a wide range of foreseeable stress scenarios.
As described above, the proposal would clarify that the Participants Fund may be used as a liquidity resource which may be applied by DTC to fund settlement among non-defaulting Participants. In addition, the proposal would provide a separate procedure to charge the Participants Fund to use it as a liquidity resource. The proposed change is designed to help DTC manage its settlement and funding flows on a more timely basis and better effect same day settlement of payment obligations in certain foreseeable stress scenarios.
Therefore, the Commission believes that the proposal is reasonably designed to help DTC effectively manage liquidity risk in a timely manner to complete settlement, and accordingly is consistent with Rule 17Ad-22(e)(7)(i).
Rule 17Ad-22(e)(13) under the Act requires, in part, that a covered clearing agency establish, implement, maintain and enforce written policies and
As described above, the proposal would establish a more detailed and structured loss allocation process by (1) applying a defined and mandatory Corporate Contribution to a loss; (2) introducing an Event Period; (3) introducing a loss allocation round and notice process; (4) modifying the termination process and the cap of terminating Participant's loss allocation exposure; and (5) providing the governance around a non-default loss. The Commission believes that each of these proposed changes helps establish a more transparent and clear loss allocation process and authority of DTC to take certain actions, such as announcing a Declared Non-Default Loss Event, within the loss allocation process. Further, having a more transparent and clear loss allocation process as proposed would provide clear authority to DTC to allocate losses from Default Loss Events and Declared Non-Default Loss Events and take timely actions to contain losses, and continue to meet its clearance and settlement obligations.
Therefore, the Commission believes that DTC's proposal is consistent with Rule 17Ad-22(e)(13) under the Act.
Rule 17Ad-22(e)(23)(i) under the Act requires that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to publicly disclose all relevant rules and material procedures, including key aspects of its default rules and procedures.
As described above, the proposal would publicly disclose how DTC's Corporate Contribution would be calculated and applied. In addition, the proposal would establish and publicly disclose a detailed procedure in the Rules for loss allocation. More specifically, the proposed changes would establish an Event Period, loss allocation rounds, a termination process followed by a settlement charge process or loss allocation process, and a Loss Allocation Cap that would apply to Participants after termination. Additionally, the proposal would align the loss allocation rules across the DTCC Clearing Agencies, to help provide consistent treatment, and clarify that non-default losses would trigger loss allocation to Participants. The proposal would also provide for and make known to members the procedures to trigger a loss allocation procedure, contribute DTC's Corporate Contribution, allocate losses, and withdraw and limit Participant's loss exposure. Accordingly, the Commission believes that the proposal is reasonably designed to (1) publicly disclose all relevant rules and material procedures concerning key aspects of DTC's default rules and procedures, and (2) provide sufficient information to enable Participants to identify and evaluate the risks by participating in DTC.
Therefore, the Commission believes that DTC's proposal is consistent with Rules 17Ad-22(e)(23)(i) and (ii) under the Act.
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 18, 2017, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-DTC-2017-021 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
In the Proposed Rule Change, DTC proposes to (1) adopt an R&W Plan; and (2) amend the Rules, By-Laws and Organization Certificate of DTC (“Rules”)
DTC states that the R&W Plan would be used by the Board of Directors of DTC (“Board”) and DTC's management in the event DTC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
DTC states that the Proposed Rules are designed to (1) facilitate the implementation of the R&W Plan when necessary and, in particular, allow DTC to effectuate its strategy for winding down and transferring its business; (2) provide Participants with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations; and (3) provide DTC with the legal basis to implement those provisions of the R&W Plan when necessary.
The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to DTC to either (i) recover, in the event it experiences losses that exceed its prefunded resources (such strategies and tools referred to herein as the “Recovery Plan”) or (ii) wind-down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful (such strategies and tools referred to herein as the “Wind-down Plan”).
The R&W Plan would identify (i) the recovery tools available to DTC to address the risks of (a) uncovered losses or liquidity shortfalls resulting from the default of one or more of its Participants, and (b) losses arising from non-default events, such as damage to its physical assets, a cyber-attack, or custody and investment losses, and (ii) the strategy for implementation of such tools. The R&W Plan would also establish the strategy and framework for the orderly wind-down of DTC and the transfer of its business in the remote event the implementation of the available recovery tools does not successfully return DTC to financial viability.
As discussed in greater detail below, the R&W Plan would provide, among other matters, (i) an overview of the business of DTC and its parent, The Depository Trust & Clearing Corporation (“DTCC”);
Certain recovery tools that would be identified in the R&W Plan are based in the Rules (including the Proposed Rules); therefore, descriptions of those tools in the R&W Plan would include descriptions of, and reference to, the applicable Rules and any related internal policies and procedures. Other recovery tools that would be identified in the R&W Plan are based in contractual arrangements to which DTC is a party, including, for example, existing committed or pre-arranged liquidity arrangements. Further, the R&W Plan would state that DTC may develop further supporting internal guidelines and materials that may provide operational support for matters described in the R&W Plan, and that such documents would be supplemental and subordinate to the R&W Plan.
DTC states that many of the tools available to DTC that would be described in the R&W Plan are DTC's existing, business-as-usual risk management and default management tools, which would continue to be applied in scenarios of increasing stress. In addition to these existing, business-as-usual tools, the R&W Plan would
The development of the R&W Plan is facilitated by the Office of Recovery & Resolution Planning (“R&R Team”) of DTCC.
As discussed in greater detail below, the Proposed Rules would define the procedures that may be employed in the event of a DTC wind-down, and would provide for DTC's authority to take certain actions on the occurrence of a Market Disruption Event, as defined therein. DTC states that the Proposed Rules are designed to provide Participants with transparency and certainty with respect to these matters. DTC also states that the Proposed Rules are designed to facilitate the implementation of the R&W Plan, particularly DTC's strategy for winding down and transferring its business, and are designed to provide DTC with the legal basis to implement those aspects of the R&W Plan.
The introduction to the R&W Plan would identify the document's purpose and its regulatory background, and would outline a summary of the R&W Plan. The stated purpose of the R&W Plan is that it is to be used by the Board and DTC management in the event DTC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
The R&W Plan would describe DTCC's business profile, provide a summary of DTC's services, and identify the intercompany arrangements and critical links between DTC and other FMIs. DTC states that the overview section would provide a context for the R&W Plan by describing DTC's business, organizational structure and critical links to other entities. DTC also states that by providing this context, this section would facilitate the analysis of the potential impact of utilizing the recovery tools set forth in later sections of the Recovery Plan, and the analysis of the factors that would be addressed in implementing the Wind-down Plan.
The R&W Plan would provide a description of established links between DTC and other FMIs, both domestic and foreign, including central securities depositories (“CSDs”) and central counterparties (“CCPs”), as well as the twelve U.S. Federal Reserve Banks. DTC states that this section of the R&W Plan, which identifies and briefly describes DTC's established links, is designed to provide a mapping of critical connections and dependencies that may need to be relied on or otherwise addressed in connection with the implementation of either the Recovery Plan or the Wind-down Plan.
The R&W Plan would define the criteria for classifying certain of DTC's services as “critical,” and would identify those critical services and the rationale for their classification. This section of the R&W Plan would provide an analysis of the potential systemic impact from a service disruption, which DTC states is important for evaluating how the recovery tools and the wind-down strategy would facilitate and provide for the continuation of DTC's critical services to the markets it serves. The criteria that would be used to identify a DTC service or function as critical would include (1) whether there is a lack of alternative providers or products; (2) whether failure of the service could impact DTC's ability to perform its book-entry and settlement services; (3) whether failure of the service could impact DTC's ability to perform its payment system functions; and (4) whether the service is interconnected with other participants and processes within the U.S. financial system, for example, with other FMIs, settlement banks and broker-dealers. The R&W Plan would then list each of those services, functions or activities that DTC has identified as “critical” based on the applicability of these four criteria. The R&W Plan would also include a non-exhaustive list of DTC services that are not deemed critical.
DTC states that the evaluation of which services provided by DTC are deemed critical is important for purposes of determining how the R&W Plan would facilitate the continuity of those services. While DTC's Wind-down Plan would provide for the transfer of all critical services to a transferee in the event DTC's wind-down is implemented, it would anticipate that any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership, would also be transferred.
The R&W Plan would describe the governance structure of both DTCC and DTC. This section of the R&W Plan would identify the ownership and governance model of these entities at both the Board and management levels. The R&W Plan would state that the stages of escalation required to manage recovery under the Recovery Plan or to invoke DTC's wind-down under the Wind-down Plan would range from relevant business line managers up to the Board through DTC's governance structure. The R&W Plan would then identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The R&W Plan would identify the Risk Committee of the Board (“Board Risk Committee”) as being responsible for oversight of risk management activities at DTC, which include focusing on both oversight of risk management systems and processes designed to identify and manage various risks faced by DTC as well as oversight of DTC's efforts to mitigate systemic risks that could impact those markets and the broader financial system.
The R&W Plan would describe the governance of recovery efforts in response to both default losses and non-default losses under the Recovery Plan, identifying the groups responsible for those recovery efforts. Specifically, the R&W Plan would state that the Management Risk Committee provides oversight of actions relating to the default of a Participant, which would be reported and escalated to it through the GCRO, and the Management Committee provides oversight of actions relating to non-default events that could result in a loss, which would be reported and escalated to it from the DTCC Chief Financial Officer (“CFO”) and the DTCC Treasury group that reports to the CFO, and from other relevant subject matter experts based on the nature and circumstances of the non-default event.
Finally, the R&W Plan would describe the role of the R&R Team in managing the overall recovery and wind-down program and plans for each of the Clearing Agencies.
DTC states that the Recovery Plan is intended to be a roadmap of those actions that DTC may employ to monitor and, as needed, stabilize its financial condition. DTC also states that as each event that could lead to a financial loss could be unique in its circumstances, DTC proposes that the Recovery Plan would not be prescriptive and would permit DTC to maintain flexibility in its use of identified tools and in the sequence in which such tools are used, subject to any conditions in the Rules or the contractual arrangement on which such tool is based. DTC's Recovery Plan would consist of (1) a description of the risk management surveillance, tools, and governance that DTC would employ across evolving stress scenarios that it may face as it transitions through a Crisis Continuum, described below; (2) a description of DTC's risk of losses that may result from non-default events, and the financial resources and recovery tools available to DTC to manage those risks and any resulting losses; and (3) an evaluation of the characteristics of the recovery tools that may be used in response to either losses arising out of a Participant Default (as defined below) or non-default losses. In all cases, DTC states that it would act in accordance with the Rules, within the governance structure described in the R&W Plan, and in accordance with applicable regulatory oversight to address each situation to best protect DTC, its Participants and the markets in which it operates.
The Recovery Plan would describe the risk management surveillance, tools, and governance that DTC may employ across an increasing stress environment, which is referred to as the Crisis Continuum. This description would identify those tools that can be employed to mitigate losses, and mitigate or minimize liquidity needs, as the market environment becomes increasingly stressed. The phases of the Crisis Continuum would include (1) a stable market phase, (2) a stress market phase, (3) a phase commencing with DTC's decision to cease to act for a Participant or Affiliated Family of Participants
DTC states that the Recovery Plan would provide context to its roadmap through this Crisis Continuum by describing DTC's ongoing management of credit, market, and liquidity risk, and its existing process for measuring and reporting its risks as they align with established thresholds for its tolerance of those risks. DTC also states that the Recovery Plan would discuss the management of credit/market risk and liquidity exposures together because the tools that address these risks can be deployed either separately or in a coordinated approach in order to address both exposures. DTC states that it manages these risk exposures collectively to limit their overall impact on DTC and its Participants. DTC states that it has built-in mechanisms to limit exposures and replenish financial resources used in a stress event, in order to continue to operate in a safe and sound manner. DTC states that it is a closed, collateralized system in which liquidity resources are matched against risk management controls, so, at any time, the potential net settlement obligation of the Participant or Affiliated Family of Participants with the largest net settlement obligation cannot exceed the amount of liquidity resources.
The Recovery Plan would outline the metrics and indicators that DTC has developed to evaluate a stress situation against established risk tolerance thresholds. Each risk mitigation tool identified in the Recovery Plan would include a description of the escalation thresholds that allow for effective and timely reporting to the appropriate internal management staff and committees, or to the Board. DTC states that the Recovery Plan is designed to make clear that these tools and escalation protocols would be calibrated across each phase of the Crisis Continuum. The Recovery Plan would also establish that DTC would retain the flexibility to deploy such tools either separately or in a coordinated approach, and to use other alternatives to these actions and tools as necessitated by the circumstances of a particular Participant Default event, in accordance with the Rules. Therefore, DTC states that the Recovery Plan would both provide DTC with a roadmap to follow within each phase of the Crisis Continuum, and would permit it to adjust its risk management measures to address the unique circumstances of each event.
The Recovery Plan would describe the conditions that mark each phase of the Crisis Continuum, and would identify actions that DTC could take as it transitions through each phase in order to both prevent losses from materializing through active risk management, and to restore the financial health of DTC during a period of stress.
The stable market phase of the Crisis Continuum would describe active risk management activities in the normal course of business. These activities would include performing (1) backtests to evaluate the adequacy of the collateral level and the haircut sufficiency for covering market price volatility and (2) stress testing to cover market price moves under real historical and hypothetical scenarios to assess the haircut adequacy under extreme but plausible market conditions. The backtesting and stress testing results are escalated, as necessary, to internal and Board committees.
The Recovery Plan would describe some of the indicators of the stress market phase of the Crisis Continuum, which would include, for example, volatility in market prices of certain assets where there is increased uncertainty among market participants about the fundamental value of those assets. This phase would involve general market stresses, when no Participant Default would be imminent. Within the description of this phase, the Recovery Plan would provide that DTC may take targeted, routine risk management measures as necessary and as permitted by the Rules.
Within the Participant Default phase of the Crisis Continuum, the Recovery Plan would provide a roadmap for the existing procedures that DTC would follow in the event of a Participant Default and any decision by DTC to cease to act for that Participant.
The Recovery Plan would also identify financial resources available to DTC, pursuant to the Rules, to address losses arising out of a Participant Default. Specifically, Rule 4 (Participants Fund and Participants Investment) provides that losses remaining after application of the Defaulting Participant's resources be satisfied first by applying a Corporate Contribution, and then, if necessary, by allocating remaining losses among the membership in accordance with Rule 4 (Participants Fund and Participants Investment).
In order to provide for an effective and timely recovery, the Recovery Plan would describe the period of time that would occur near the end of the Participant Default phase, during which DTC may experience stress events or observe early warning indicators that allow it to evaluate its options and prepare for the recovery phase (referred to in the R&W Plan as the Recovery Corridor). The Recovery Plan would then describe the recovery phase of the Crisis Continuum, which would begin on the date that DTC issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period.
DTC states that it expects that significant deterioration of liquidity resources would cause it to enter the Recovery Corridor. Therefore, the R&W Plan would describe the actions DTC may take aimed at replenishing those resources. Throughout the Recovery Corridor, DTC would monitor the adequacy of its resources and the expected timing of replenishment of those resources, and would do so through the monitoring of certain corridor indicator metrics.
DTC states that the majority of the corridor indicators, as identified in the Recovery Plan, relate directly to conditions that may require DTC to adjust its strategy for hedging and liquidating Collateral securities, and any such changes would include an assessment of the status of the corridor indicators. For each corridor indicator, the Recovery Plan would identify (1) measures of the indicator, (2) evaluations of the status of the indicator, (3) metrics for determining the status of the deterioration or improvement of the indicator, and (4) Corridor Actions, which are steps that may be taken to improve the status of the indicator,
The Recovery Plan would also describe the reporting and escalation of the status of the corridor indicators throughout the Recovery Corridor. Significant deterioration of a corridor indicator, as measured by the metrics set out in the Recovery Plan, would be escalated to the Board. DTC management would review the corridor indicators and the related metrics at least annually, and would modify these metrics as necessary in light of observations from simulations of Participant Defaults and other analyses. Any proposed modifications would be reviewed by the Management Risk Committee and the Board Risk Committee. The Recovery Plan would estimate that DTC may remain in the Recovery Corridor stage between one day and two weeks. DTC states that this estimate is based on historical data observed in past Participant Default events, the results of simulations of Participant Defaults, and periodic liquidity analyses conducted by DTC. DTC states that the actual length of a Recovery Corridor would vary based on actual market conditions observed at the time, and DTC would expect the Recovery Corridor to be shorter in market conditions of increased stress.
The Recovery Plan would outline steps by which DTC may allocate its losses, which would occur when and in the order provided in Rule 4 (Participants Fund and Participants Investment).
The Recovery Plan would state that DTC will have entered the recovery phase on the date that it issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period. The Recovery Plan would provide that, during the recovery phase, DTC would continue and, as needed, enhance, the monitoring and remedial actions already described in connection with previous phases of the Crisis Continuum, and would remain in the recovery phase until its financial resources are expected to be or are fully replenished, or until the Wind-down Plan is triggered.
The Recovery Plan would describe governance for the actions and tools that may be employed within each phase of the Crisis Continuum, which would be dictated by the facts and circumstances applicable to the situation being addressed. Such facts and circumstances would be measured by the various indicators and metrics applicable to that phase of the Crisis Continuum, and would follow relevant escalation protocol that would be described in the Recovery Plan. The Recovery Plan would also describe the governance procedures around a decision to cease to act for a Participant, pursuant to the Rules, and around the management and oversight of the subsequent liquidation of Collateral securities. The Recovery Plan would state that, overall, DTC would retain flexibility in accordance with the Rules, its governance structure, and its regulatory oversight, to address a particular situation in order to best protect DTC and its Participants, and to meet the primary objectives, throughout the Crisis Continuum, of minimizing losses and, where consistent and practicable, minimizing disturbance to affected markets.
The Recovery Plan would outline how DTC may address losses that result from events other than a Participant Default. While these matters are addressed in greater detail in other documents, this section of the R&W Plan would provide a roadmap to those documents and an outline for DTC's approach to monitoring and managing losses that could result from a non-default event. The R&W Plan would first identify some of the risks DTC faces that could lead to these losses, which include, for example, (1) the business and profit/loss risks of unexpected declines in revenue or growth of expenses; (2) the operational risks of disruptions to systems or processes that could lead to large losses, including those resulting from, for example, a cyber-attack; and (3) custody or investment risks that could lead to financial losses. The Recovery Plan would describe DTC's overall strategy for the management of these risks, which includes a “three lines of defense” approach to risk management that allows for comprehensive management of risk across the organization.
The R&W Plan would identify the two categories of financial resources DTC maintains to cover losses and expenses arising from non-default risks or events as (1) LNA, maintained, monitored, and managed pursuant to the Capital Policy, which include (a) amounts held in satisfaction of the General Business Risk Capital Requirement,
The R&W Plan would address the process by which the CFO and the DTCC Treasury group would determine which available LNA resources are most appropriate to cover a loss that is caused by a non-default event. This determination involves an evaluation of a number of factors, including the current and expected size of the loss, the expected time horizon over when the loss or additional expenses would materialize, the current and projected available LNA, and the likelihood LNA could be successfully replenished pursuant to the Replenishment Plan, if triggered.
The R&W Plan would also describe proposed Rule 38 (Market Disruption and Force Majeure), which DTC is proposing to adopt in the Rules. DTC states that this Proposed Rule is designed to provide transparency around how DTC would address extraordinary events that may occur outside its control. Specifically, the Proposed Rule would define a Market Disruption Event and the governance around a determination that such an event has occurred. The Proposed Rule would also describe DTC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of its services, if practicable.
The R&W Plan would describe the interaction between the Proposed Rule and DTC's existing processes and procedures addressing business continuity management and disaster recovery (generally, the “BCM/DR procedures”). DTC states that the intent is to make clear that the Proposed Rule is designed to support those BCM/DR procedures and to address circumstances that may be exogenous to DTC and not necessarily addressed by the BCM/DR procedures. Finally, the R&W Plan would describe that, because the operation of the Proposed Rule is specific to each applicable Market Disruption Event, the Proposed Rule does not define a time limit on its application. However, the R&W Plan would note that actions authorized by the Proposed Rule would be limited to the pendency of the applicable Market Disruption Event, as made clear in the Proposed Rule. DTC states that, overall, the Proposed Rule is designed to mitigate risks caused by Market Disruption Events and, thereby, minimize the risk of financial loss that may result from such events.
The Recovery Plan would describe DTC's evaluation of the tools identified within the Recovery Plan, and its rationale for concluding that such tools are comprehensive, effective, and transparent, and that such tools provide incentives to Participants and minimize negative impact on Participants and the financial system.
The Wind-down Plan would provide the framework and strategy for the orderly wind-down of DTC if the use of the recovery tools described in the Recovery Plan do not successfully return DTC to financial viability. DTC states that, while DTC believes that such event is extremely unlikely, given the comprehensive nature of the recovery tools, DTC is proposing a wind-down strategy that provides for (1) the transfer of DTC's business, assets, securities inventory, and membership to another legal entity, (2) such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code,
In describing the transfer approach to DTC's Wind-down Plan, the R&W Plan would identify the factors that DTC considered in developing this approach, including the fact that DTC does not own material assets that are unrelated to its clearance and settlement activities. Therefore, a business reorganization or “bail-in” of debt approach would be unlikely to mitigate significant losses. Additionally, DTC states that its approach was developed in consideration of its critical and unique position in the U.S. markets, which precludes any approach that would cause DTC's critical services to no longer be available.
First, the Wind-down Plan would describe the potential scenarios that could lead to the wind-down of DTC, and the likelihood of such scenarios. The Wind-down Plan would identify the time period leading up to a decision to wind-down DTC as the Runway Period. DTC states that this period would follow the implementation of any recovery tools, as it may take a period of time, depending on the severity of the market stress at that time, for these tools to be effective or for DTC to realize a loss sufficient to cause it to be unable to borrow to complete settlement and to repay such borrowings.
The trigger for implementing the Wind-down Plan would be a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning DTC to viability as a going concern. As described in the R&W Plan, DTC states that this is an appropriate trigger because it is both broad and flexible enough to cover a variety of scenarios, and would align incentives of DTC and Participants to avoid actions that might undermine DTC's recovery efforts.
The Wind-down Plan would describe the general objectives of the transfer strategy, and would address assumptions regarding the transfer of DTC's critical services, business, assets, securities inventory, and membership
DTC states that in order to effect a timely transfer of its services and minimize the market and operational disruption of such transfer, DTC would expect to transfer all of its critical services and any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership. Given the transfer of the securities inventory and the establishment on the books of the Transferee Participant and Pledgee securities accounts, DTC anticipates that, following the transfer, it would not itself continue to provide any services, critical or not. Following the transfer, the Wind-down Plan would anticipate that the Transferee and its continuing membership would determine whether to continue to provide any transferred non-critical service on an ongoing basis, or terminate the non-critical service following some transition period. DTC's Wind-down Plan would anticipate that the Transferee would enter into a transition services agreement with DTCC so that DTCC would continue to provide the shared services it currently provides to DTC, including staffing, infrastructure and operational support. The Wind-down Plan would also anticipate the assignment of DTC's “inbound” link arrangements to the Transferee. The Wind-down Plan would provide that in the case of “outbound” links, DTC would seek to have the linked FMIs agree, at a minimum, to accept the Transferee as a link party for a transition period.
The Wind-down Plan would provide that, following the effectiveness of the transfer to the Transferee, the wind-down of DTC would involve addressing any residual claims against DTC through the bankruptcy process and liquidating the legal entity. The Wind-down Plan does not contemplate DTC continuing to provide services in any capacity following the transfer time, and any services not transferred would be terminated.
The Wind-down Plan would also identify the key dependencies for the effectiveness of the transfer, which include regulatory approvals that would permit the Transferee to be legally qualified to provide the transferred services from and after the transfer, and approval by the applicable bankruptcy court of, among other things, the proposed sale, assignments, and transfers to the Transferee.
The Wind-down Plan would address governance matters related to the execution of the transfer of DTC's business and its wind-down. The Wind-down Plan would address the duties of the Board to execute the wind-down of DTC in conformity with (1) the Rules, (2) the Board's fiduciary duties, which mandate that it exercise reasonable business judgment in performing these duties, and (3) DTC's regulatory obligations under the Act as a registered clearing agency. The Wind-down Plan would also identify certain factors the Board may consider in making these decisions, which would include, for example, whether DTC could safely stabilize the business and protect its value without seeking bankruptcy protection, and DTC's ability to continue to meet its regulatory requirements.
The Wind-down Plan would describe (1) actions DTC or DTCC may take to prepare for wind-down in the period before DTC experiences any financial distress, (2) actions DTC would take both during the recovery phase and the Runway Period to prepare for the execution of the Wind-down Plan, and (3) actions DTC would take upon commencement of bankruptcy proceedings to effectuate the Wind-down Plan.
Finally, the Wind-down Plan would include an analysis of the estimated time and costs to effectuate the R&W Plan, and would provide that this estimate be reviewed and approved by the Board annually. In order to estimate the length of time it might take to achieve a recovery or orderly wind-down of DTC's critical operations, as contemplated by the R&W Plan, the Wind-down Plan would include an analysis of the possible sequencing and length of time it might take to complete an orderly wind-down and transfer of critical operations, as described in earlier sections of the R&W Plan. The Wind-down Plan would also include in this analysis consideration of other factors, including the time it might take to complete any further attempts at recovery under the Recovery Plan. The Wind-down Plan would then multiply this estimated length of time by DTC's average monthly operating expenses, including adjustments to account for changes to DTC's profit and expense profile during these circumstances, over the previous twelve months to determine the amount of LNA that it should hold to achieve a recovery or orderly wind-down of DTC's critical operations. The estimated wind-down costs would constitute the Recovery/
DTC states that the R&W Plan is designed as a roadmap, and the types of actions that may be taken both leading up to and in connection with implementation of the Wind-down Plan would be primarily addressed in other supporting documentation referred to therein.
The Wind-down Plan would address proposed Rule 32(A) (Wind-down of the Corporation), which would be adopted to facilitate the implementation of the Wind-down Plan, as discussed below.
In connection with the adoption of the R&W Plan, DTC proposes to adopt the Proposed Rules, each of which is described below. DTC states that the Proposed Rules are designed to facilitate the execution of the R&W Plan and are designed to provide Participants with transparency as to critical aspects of the R&W Plan, particularly as they relate to the rights and responsibilities of both DTC and its Participants. DTC also states that the Proposed Rules are designed to provide a legal basis to these aspects of the R&W Plan.
DTC states that the proposed Rule 32(A) (“Wind-down Rule”) is designed to facilitate the execution of the Wind-down Plan. The Wind-down Rule would include a proposed set of defined terms that would be applicable only to the provisions of this Proposed Rule. DTC states that the Wind-down Rule is designed to make clear that a wind-down of DTC's business would occur (1) after a decision is made by the Board, and (2) in connection with the transfer of DTC's services to a Transferee, as described therein. DTC states that, generally, the proposed Wind-down Rule is designed to create clear mechanisms for the transfer of Eligible Participants and Pledgees, Settling Banks, DRS Agents, and FAST Agents (as these terms would be defined in the Wind-down Rule), and DTC's inventory of financial assets in order to provide for continued access to critical services and to minimize disruption to the markets in the event the Wind-down Plan is initiated.
First, DTC states that the Proposed Rule is designed to make clear that the Board is responsible for initiating the Wind-down Plan, and would identify the criteria the Board would consider when making this determination. As provided for in the Wind-down Plan and in the proposed Wind-down Rule, the Board would initiate the Wind-down Plan if, in the exercise of its business judgment and subject to its fiduciary duties, it has determined that the execution of the Recovery Plan has not or is not likely to restore DTC to viability as a going concern, and the implementation of the Wind-down Plan, including the transfer of DTC's business, is in the best interests of DTC, its Participants and Pledgees, its shareholders and creditors, and the U.S. financial markets.
The Proposed Rule would provide that, upon making a determination to initiate the Wind-down Plan, the Board would identify the critical and non-critical services that would be transferred to the Transferee at the Transfer Time (as defined in the Proposed Rule), as well as any non-critical services that would not be transferred to the Transferee. The proposed Wind-down Rule would establish that any services transferred to the Transferee will only be provided by the Transferee as of the Transfer Time, and that any non-critical services that are not transferred to the Transferee would be terminated at the Transfer Time. The Proposed Rule would also provide that the Board would establish (1) an effective time for the transfer of DTC's business to a Transferee (“Transfer Time”), and (2) the last day that instructions in respect of securities and other financial products may be effectuated through the facilities of DTC (the “Last Activity Date”). DTC states that the Proposed Rule is designed to make clear that DTC would not accept any transactions for settlement after the Last Activity Date. Any transactions to be settled after the Transfer Time would be required to be submitted to the Transferee, and would not be DTC's responsibility.
The proposed Wind-down Rule would provide that, upon a decision to implement the Wind-down Plan, DTC would provide its Participants, Pledgees, DRS Agents, FAST Agents, Settling Banks and regulators with a notice that includes material information relating to the Wind-down Plan and the anticipated transfer of DTC's Participants and business, including, for example, (1) a brief statement of the reasons for the decision to implement the Wind-down Plan; (2) identification of the Transferee and information regarding the transaction by which the transfer of DTC's business would be effected; (3) the Transfer Time and Last Activity Date; and (4) identification of Participants and the critical and non-critical services that would be transferred to the Transferee at the Transfer Time, as well as those Non-Eligible Participants (as defined below and in the Proposed Rule) and any non-critical services that would not be included in the transfer. DTC would also make available the rules and procedures and membership agreements of the Transferee.
The proposed Wind-down Rule would address the expected transfer of DTC's membership to the Transferee, which DTC would seek to effectuate by entering into an arrangement with a Failover Transferee, or by using commercially reasonable efforts to enter into such an arrangement with a Third Party Transferee. Thus, under the proposal, in connection with the implementation of the Wind-down Plan and with no further action required by any party:
(1) Each Eligible Participant would become (i) a Participant of the Transferee and (ii) a party to a Participants agreement with the Transferee;
(2) each Participant that is delinquent in the performance of any obligation to DTC or that has provided notice of its election to withdraw as a Participant (a “Non-Eligible Participant”) as of the Transfer Time would become (i) the holder of a transition period securities account maintained by the Transferee on its books (“Transition Period Securities Account”) and (ii) a party to a Transition Period Securities Account agreement of the Transferee;
(3) each Pledgee would become (i) a Pledgee of the Transferee and (ii) a party to a Pledgee agreement with the Transferee;
(4) each DRS Agent would become (i) a DRS Agent of the Transferee and (ii) a party to a DRS Agent agreement with the Transferee;
(5) each FAST Agent would become (i) a FAST Agent of the Transferee and (ii) a party to a FAST Agent agreement with the Transferee; and
(6) each Settling Bank for Participants and Pledgees would become (i) a
Further, DTC states that the Proposed Rule is designed to make clear that it would not prohibit (1) Non-Eligible Participants from applying for membership with the Transferee, (2) Non-Eligible Participants that have become holders of Transition Period Securities Accounts (“Transition Period Securities Account Holders”) of the Transferee from withdrawing as a Transition Period Securities Account Holder from the Transferee, subject to the rules and procedures of the Transferee, and (3) Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks that would be transferred to the Transferee from withdrawing from membership with the Transferee, subject to the rules and procedures of the Transferee. Under the Proposed Rule, Non-Eligible Participants that have become Transition Period Securities Account Holders of the Transferee shall have the rights and be subject to the obligations of Transition Period Securities Account Holders set forth in special provisions of the rules and procedures of the Transferee applicable to such Transition Period Securities Account Holder. Specifically, Non-Eligible Participants that become Transition Period Securities Account Holders must, within the Transition Period (as defined in the Proposed Rule), instruct the Transferee to transfer the financial assets credited to its Transition Period Securities Account (i) to a Participant of the Transferee through the facilities of the Transferee or (ii) to a recipient outside the facilities of the Transferee, and no additional financial assets may be delivered versus payment to a Transition Period Securities Account during the Transition Period.
The proposed Wind-down Rule would provide that DTC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, at Transfer Time:
(1) DTC would transfer to the Transferee (i) its rights with respect to its nominee Cede & Co. (“Cede”) (and thereby its rights with respect to the financial assets owned of record by Cede), (ii) the financial assets held by it at the FRBNY, (iii) the financial assets held by it at other CSDs, (iv) the financial assets held in custody for it with FAST Agents, (v) the financial assets held in custody for it with other custodians and (vi) the financial assets it holds in physical custody.
(2) The Transferee would establish security entitlements on its books for Eligible Participants of DTC that become Participants of the Transferee that replicate the security entitlements that DTC maintained on its books immediately prior to the Transfer Time for such Eligible Participants, and DTC would simultaneously eliminate such security entitlements from its books.
(3) The Transferee would establish security entitlements on its books for Non-Eligible Participants of DTC that become Transition Period Securities Account Holders of the Transferee that replicate the security entitlements that DTC maintained on its books immediately prior to the Transfer Time for such Non-Eligible Participants, and DTC would simultaneously eliminate such security entitlements from its books.
(4) The Transferee would establish pledges on its books in favor of Pledgees that become Pledgees of the Transferee that replicate the pledges that DTC maintained on its books immediately prior to the Transfer Time in favor of such Pledgees, and DTC shall simultaneously eliminate such pledges from its books.
DTC states that the proposed automatic mechanism for the transfer of DTC's membership is intended to provide DTC's membership with continuous access to critical services in the event of DTC's wind-down, and to facilitate the continued prompt and accurate clearance and settlement of securities transactions. The proposed Wind-down Rule would provide that DTC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, with respect to the critical services and any non-critical services that are transferred from DTC to the Transferee, for at least a period of time to be agreed upon (“Comparability Period”), the business transferred from DTC to the Transferee would be operated in a manner that is comparable to the manner in which the business was previously operated by DTC. Specifically, the proposed Wind-down Rule would provide that: (1) The rules of the Transferee and terms of Participant, Pledgee, DRS Agent, FAST Agent and Settling Bank agreements would be comparable in substance and effect to the analogous Rules and agreements of DTC, (2) the rights and obligations of any Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks that are transferred to the Transferee would be comparable in substance and effect to their rights and obligations as to DTC, and (3) the Transferee would operate the transferred business and provide any services that are transferred in a comparable manner to which such services were provided by DTC.
DTC states that the purpose of these provisions and the intended effect of the proposed Wind-down Rule is to facilitate a smooth transition of DTC's business to a Transferee and to provide that, for at least the Comparability Period, the Transferee (1) would operate the transferred business in a manner that is comparable in substance and effect to the manner in which the business was operated by DTC, and (2) would not require sudden and disruptive changes in the systems, operations and business practices of the new Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks of the Transferee.
The proposed Wind-down Rule would include a provision addressing the subordination of unsecured claims against DTC of its Participants who fail to participate in DTC's recovery efforts (
The proposed Wind-down Rule would address other ex-ante matters, including provisions providing that its Participants, Pledgees, DRS Agents, FAST Agents and Settling Banks (1) will assist and cooperate with DTC to effectuate the transfer of DTC's business to a Transferee, (2) consent to the provisions of the rule, and (3) grant DTC power of attorney to execute and deliver on their behalf documents and instruments that may be requested by the Transferee. Finally, the Proposed Rule would include a limitation of liability for any actions taken or omitted
DTC states that the purpose of the limitation of liability is to facilitate and protect DTC's ability to act expeditiously in response to extraordinary events. Such limitation of liability would be available only following triggering of the Wind-down Plan. In addition, and as a separate matter, DTC states that the limitation of liability provides Participants with transparency for the unlikely situation when those extraordinary events could occur, as well as supporting the legal framework within which DTC would take such actions. DTC states that these provisions, collectively, are designed to enable DTC to take such acts as the Board determines necessary to effectuate an orderly transfer and wind-down of its business should recovery efforts prove unsuccessful.
The proposed Rule 38 (“Force Majeure Rule”) would address DTC's authority to take certain actions upon the occurrence, and during the pendency, of a Market Disruption Event, as defined therein. DTC states that the Proposed Rule is designed to clarify DTC's ability to take actions to address extraordinary events outside of the control of DTC and of its membership, and to mitigate the effect of such events by facilitating the continuity of services (or, if deemed necessary, the temporary suspension of services). To that end, under the proposed Force Majeure Rule, DTC would be entitled, during the pendency of a Market Disruption Event, to (1) suspend the provision of any or all services, and (2) take, or refrain from taking, or require its Participants and Pledgees to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of DTC's services as may be practicable.
The proposed Force Majeure Rule would identify the events or circumstances that would be considered a Market Disruption Event. The proposed Force Majeure Rule would define the governance procedures for how DTC would determine whether, and how, to implement the provisions of the rule. A determination that a Market Disruption Event has occurred would generally be made by the Board, but the Proposed Rule would provide for limited, interim delegation of authority to a specified officer or management committee if the Board would not be able to take timely action. In the event such delegated authority is exercised, the proposed Force Majeure Rule would require that the Board be convened as promptly as practicable, no later than five Business Days after such determination has been made, to ratify, modify, or rescind the action. The proposed Force Majeure Rule would also provide for prompt notification to the Commission, and advance consultation with Commission staff, when practicable, including notification when an event is no longer continuing and the relevant actions are terminated. The Proposed Rule would require Participants and Pledgees to notify DTC immediately upon becoming aware of a Market Disruption Event, and, likewise, would require DTC to notify its Participants and Pledgees if it has triggered the Proposed Rule and of actions taken or intended to be taken thereunder.
Finally, the Proposed Rule would address other related matters, including a limitation of liability for any failure or delay in performance, in whole or in part, arising out of the Market Disruption Event. DTC states that the purpose of the limitation of liability would be similar to the purpose of the analogous provision in the proposed Wind-down Rule, which is to facilitate and protect DTC's ability to act expeditiously in response to extraordinary events.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
First, the Commission believes that the R&W Plan, generally, is designed to help DTC promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible by providing DTC with a roadmap for actions it may employ to monitor and manage its risks, and, as needed, to stabilize its financial condition in the event those risks materialize. Specifically, as described above, the Recovery Plan would establish a number of triggers for the potential application of a number of recovery tools described in the Recovery Plan. The Commission believes that establishing such triggers alongside a list of available recovery tools would help DTC to more promptly determine when and how it may need to manage a significant stress event, and, as needed, stabilize its financial condition.
Similarly, the Force Majeure Rule is designed to provide a roadmap to address extraordinary events that may occur outside of DTC's control. Specifically, as described above, the Force Majeure Rule would define a Market Disruption Event and provide governance around determining when such an event has occurred. The Force Majeure Rule also would describe DTC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of DTC's services, if practicable. By defining a Market Disruption Event and providing such governance and authority, the Commission believes that the Force Majeure Rule would help DTC improve its ability to identify and manage a force majeure event, and, as needed, to stabilize its financial condition so that DTC can continue to operate.
The Commission believes that the Recovery Plan and the Force Majeure Rule would allow for a more considered and comprehensive evaluation by DTC of a stressed market situation and the ways in which DTC could apply available recovery tools in a manner intended to minimize the potential negative effects of the stress situation for DTC, its membership, and the broader financial system. Therefore, the
Second, the Commission believes that the R&W Plan, generally, is designed to help DTC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible by providing a roadmap to wind-down that is designed to ensure the availability of DTC's critical services to the marketplace, while reducing disruption to the operations of Participants and financial markets that might be caused by DTC's failure. Specifically, as described above, the Wind-down Plan, as facilitated by the Wind-down Rule, would provide for the wind-down of DTC's business and transfer of membership and critical services if the recovery tools do not successfully return DTC to financial viability. Accordingly, critical services, such as services that lack alternative providers or products as well as services that are interconnected with other participants and processes within the U.S. financial system would be able to continue in an orderly manner while DTC is seeking to wind-down its services. By designing the Wind-down Plan and the Wind-down Rule to enable the continuity of DTC's critical services and membership in an orderly manner while DTC is seeking to wind-down its services, the Commission believes these proposed changes would help DTC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible in the event the Wind-down Plan is implemented.
By better enabling DTC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible, as described above, the Commission finds that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(2)(i) under the Act requires a covered clearing agency
As described above, the R&W Plan is designed to identify clear lines of responsibility concerning the R&W Plan including (1) the ongoing development of the R&W Plan; (2) ongoing maintenance of the R&W Plan; (3) reviews and approval of the R&W Plan; and (4) the functioning and implementation of the R&W Plan. As described above, the R&R Team, which reports to the Management Committee, is responsible for maintaining the R&W Plan and for the development and ongoing maintenance of the overall recovery and wind-down planning process. Meanwhile, the Board, or such committees as may be delegated authority by the Board from time to time pursuant to its charter, would review and approve the R&W Plan biennially, and also would review and approve any changes that are proposed to the R&W Plan outside of the biennial review. Moreover, the R&W Plan would state the stages of escalation required to manage recovery under the Recovery Plan or to invoke DTC's wind-down under the Wind-down Plan, which would range from relevant business line managers up to the Board. The R&W Plan would identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The R&W Plan also would specify the process DTC would take to receive input from various parties at DTC, including management committees and the Board.
In considering the above, the Commission believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent because it would specify lines of control. The Commission also believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that support the public interest requirements in Section 17A of the Act
Therefore, the Commission finds that the R&W Plan is consistent with Rules 17Ad-22(e)(2)(i), (iii), and (v) under the Act.
Rule 17Ad-22(e)(3)(ii) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans
As described above, the R&W Plan's Recovery Plan provides a plan for DTC's recovery necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses by defining the risk management activities, stress conditions and indicators, and tools that DTC may use to address stress scenarios that could eventually prevent DTC from being able to provide its critical services as a going concern. More specifically, through the framework of the Crisis Continuum, which identifies tools that can be employed to mitigate losses and mitigate or minimize liquidity needs as the market environment becomes increasingly stressed, the Recovery Plan would identify measures that DTC may take to manage risks of credit losses and liquidity shortfalls, and other losses that could arise from a Participant Default. The Recovery Plan also would address DTC's management of general business risks and other non-default risks that could lead to losses by identifying potential non-default losses and the resources available to DTC to address such losses, including recovery triggers and tools to mitigate such losses. Therefore, the Commission believes that the R&W Plan's Recovery Plan helps DTC establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by DTC, which includes a recovery plan necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
As described above, the R&W Plan's Wind-down Plan provides a plan for orderly wind-down of DTC, which would be triggered by a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning DTC to viability as a going concern. Once triggered, the Wind-down Plan sets forth mechanisms for the transfer of DTC's membership and business, and it is designed to maintain continued access to DTC's critical services and to minimize market impact of the transfer while DTC is seeking to ultimately wind-down its services. Specifically, the Wind-down Plan would provide for the transfer of DTC's business, assets, securities inventory, and membership to another legal entity with such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Although the Commission is not opining on the Wind-down Plan's consistency with the U.S. Bankruptcy Code, in reviewing the proposed changes, the Commission believes that DTC's intent to use bankruptcy proceedings to achieve an orderly liquidation of assets after any transfer of DTC's business appears reasonable, in light of the provisions of the Bankruptcy Code that address the liquidation and distribution of a debtor's property among creditors and interest holders.
Therefore, the Commission finds that the R&W Plan is consistent with Rule 17Ad-22(e)(3)(ii) under the Act.
Rule 17Ad-22(e)(15)(i) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that the covered clearing agency can continue operations and services as a going concern if those losses materialize, including by determining the amount of liquid net assets funded by equity based upon its general business risk profile and the length of time required to achieve a recovery or orderly wind-down, as appropriate, of its critical operations and services if such action is taken.
As discussed above, DTC's Capital Policy is designed to address how DTC holds LNA in compliance with these requirements,
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 18, 2017, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-NSCC-2017-018 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Proposed Rule Change consists of proposed changes to NSCC's Rules and Procedures (“Rules”)
NSCC's loss allocation rules currently provide that in the event NSCC ceases to act
Pursuant to current Section 5 of Rule 4, if, as a result of applying the Clearing Fund deposit of a Member, the Member's actual Clearing Fund deposit is less than its Required Deposit, it will be required to eliminate such deficiency in order to satisfy its Required Deposit amount. Pursuant to current Section 4 of Rule 4, Members can also be assessed for non-default losses incident to the operation of the clearance and settlement business of NSCC. Pursuant to current Section 8 of Rule 4, Members may withdraw from membership within specified timeframes after a loss allocation charge to limit their obligation for future assessments.
NSCC proposes to change the manner in which each of the aspects of the loss allocation process described above would be employed. The proposal would clarify or adjust certain elements and introduce certain new loss allocation concepts, as further discussed below. In addition, the proposal would address the loss allocation process as it relates to losses arising from or relating to multiple default or non-default events in a short period of time, also as described below.
NSCC proposes six key changes to enhance NSCC's loss allocation process. Specifically, NSCC proposes to make changes regarding (1) the Corporate Contribution, (2) the Event Period, (3) the loss allocation round and notice, (4) the look-back period, (5) the loss allocation withdrawal notice and cap, and (6) the governance around non-default losses, each of which is discussed below.
Addendum E of the Rules currently provides that NSCC will contribute no less than 25 percent of its retained earnings (or such higher amount as the Board of Directors shall determine) to a loss or liability that is not satisfied by the impaired Member's Clearing Fund deposit. Under the proposal, NSCC would amend the calculation of its corporate contribution from a percentage of its retained earnings to a mandatory amount equal to 50 percent of the NSCC General Business Risk Capital Requirement.
NSCC's General Business Risk Capital Requirement, as defined in NSCC's Clearing Agency Policy on Capital Requirements,
Under the current Addendum E of the Rules, NSCC has the discretion to contribute amounts higher than the specified percentage of retained earnings, as determined by the Board of Directors, to any loss or liability incurred by NSCC as result of a Member's impairment. This option would be retained and expanded under the proposal so that NSCC can voluntarily apply amounts greater than the Corporate Contribution against any loss or liability (including non-default losses) of NSCC, if the Board of Directors, in its sole discretion, believes such to be appropriate under the factual situation existing at the time.
Currently, the Rules do not require NSCC to contribute its retained earnings to losses and liabilities other than those from Member impairments. Under the proposal, NSCC would apply its Corporate Contribution to non-default losses as well. The proposed Corporate Contribution would apply to losses arising from Defaulting Member Events and Declared Non-Default Loss Events, as defined in the proposed change, and would be a mandatory contribution by NSCC prior to any allocation of the loss among NSCC's Members.
As proposed, if the Corporate Contribution is fully or partially used against a loss or liability relating to an Event Period, the Corporate Contribution would be reduced to the remaining unused amount, if any, during the following 250 business days in order to permit NSCC to replenish the Corporate Contribution.
NSCC states that in order to clearly define the obligations of NSCC and its Members regarding loss allocation and to balance the need to manage the risk of sequential loss events against Members' need for certainty concerning their maximum loss allocation exposures, NSCC proposes to introduce the concept of an Event Period to the Rules to address the losses and liabilities that may arise from or relate to multiple Defaulting Member Events and/or Declared Non-Default Loss Events that arise in quick succession. Specifically, the proposal would group Defaulting Member Events and Declared Non-Default Loss Events occurring within a period of 10 business days (“Event Period”) for purposes of allocating losses to Members in one or
In the case of a loss or liability arising from or relating to a Defaulting Member Event, an Event Period would begin on the day NSCC notifies Members that it has ceased to act for the Defaulting Member (or the next business day, if such day is not a business day). In the case of a loss or liability arising from or relating to a Declared Non-Default Loss Event, an Event Period would begin on the day that NSCC notifies Members of the Declared Non-Default Loss Event (or the next business day, if such day is not a business day). If a subsequent Defaulting Member Event or Declared Non-Default Loss Event occurs during an Event Period, any losses or liabilities arising out of or relating to any such subsequent event would be resolved as losses or liabilities that are part of the same Event Period, without extending the duration of such Event Period. An Event Period may include both Defaulting Member Events and Declared Non-Default Loss Events, and there would not be separate Event Periods for Defaulting Member Events or Declared Non-Default Loss Events occurring during overlapping 10 business day periods.
The amount of losses that may be allocated by NSCC, subject to the required Corporate Contribution, and to which a Loss Allocation Cap would apply for any Member that elects to withdraw from membership in respect of a loss allocation round, would include any and all losses from any Defaulting Member Events and any Declared Non-Default Loss Events during the Event Period, regardless of the amount of time, during or after the Event Period, required for such losses to be crystallized and allocated.
Under the proposal, a loss allocation “round” would mean a series of loss allocations relating to an Event Period, the aggregate amount of which is limited by the sum of the Loss Allocation Caps of affected Members (a “round cap”). When the aggregate amount of losses allocated in a round equals the round cap, any additional losses relating to the applicable Event Period would be allocated in one or more subsequent rounds, in each case subject to a round cap for that round. NSCC may continue the loss allocation process in successive rounds until all losses from the Event Period are allocated among Members that have not submitted a Loss Allocation Withdrawal Notice in accordance with proposed Section 6 of Rule 4.
Each loss allocation would be communicated to Members by the issuance of a notice that advises each Member of the amount being allocated to it (“Loss Allocation Notice”). Each Member's pro rata share of losses and liabilities to be allocated in any round would be equal to (1) the average of its Required Fund Deposit for the 70 business days preceding the first day of the applicable Event Period or such shorter period of time that the Member has been a Member (each Member's “Average RFD”), divided by (2) the sum of Average RFD amounts of all Members subject to loss allocation in such round.
Each Loss Allocation Notice would specify the relevant Event Period and the round to which it relates. The first Loss Allocation Notice in any first, second, or subsequent round would expressly state that such Loss Allocation Notice reflects the beginning of the first, second, or subsequent round, as the case may be, and that each Member in that round has five business days from the issuance of such first Loss Allocation Notice for the round to notify NSCC of its election to withdraw from membership with NSCC pursuant to proposed Section 6 of Rule 4, and thereby benefit from its Loss Allocation Cap.
NSCC's current loss allocation provisions provide that if a charge is made against a Member's actual Clearing Fund deposit, and as result thereof the Member's deposit is less than its Required Deposit, the Member will, upon demand by NSCC, be required to replenish its deposit to eliminate the deficiency within such time as NSCC shall require. Under the proposal, Members would receive two business days' notice of a loss allocation, and be required to pay the requisite amount no later than the second business day following the issuance of such notice.
Currently, the Rules calculate a Member's pro rata share for purposes of loss allocation based on the Member's activity in each of the various services or Systems offered by NSCC.
NSCC states that employing a backward-looking average to calculate a Member's loss allocation pro rata share and Loss Allocation Cap would disincentivize Member behavior that could heighten volatility or reduce liquidity in markets in the midst of a financial crisis. Specifically, NSCC states that the proposed look-back period would discourage a Member from reducing its settlement activity during a time of stress primarily to limit its loss allocation pro rata share, which, as proposed, would now be based on the Member's average settlement activity over the look-back period rather than its settlement activity at a point in time that the Member may not be able to estimate. Similarly, NSCC states that taking a backward-looking average into consideration when determining a Member's Loss Allocation Cap would also deter a Member from reducing its settlement activity during a time of stress primarily to limit its Loss Allocation Cap.
NSCC's current loss allocation rules allow a Member to withdraw if the Member notifies NSCC, within 10 business days after receipt of notice of a pro rata charge, of its election to terminate its membership and thereby avail itself of a cap on loss allocation. The proposed change would shorten the withdrawal notification period from 10 business days to five business days, and would also change the beginning of such notification period from the receipt of the notice of a pro rata charge to the issuance of the notice.
Pursuant to the proposed change, in order to avail itself of its Loss Allocation Cap, a Member would be able to elect to withdraw from membership by following the requirements in proposed Section 6 of Rule 4: (1) Specify in its Loss Allocation Withdrawal Notice (as defined below) an effective date of withdrawal, which date shall be no later than 10 business days following the last day of the applicable Loss Allocation Withdrawal Notification Period (as defined below) (
Under the current Rules, a Member's cap on loss allocation is its Required Deposit as fixed immediately prior to the time of the pro rata charge. Under the proposal, the first round and each subsequent round of loss allocation would allocate losses up to a round cap of the aggregate of all Loss Allocation Caps of those Members included in the round. In addition, a Member that withdraws in compliance with proposed Section 6 of Rule 4 would remain obligated for its pro rata share of losses and liabilities with respect to any Event Period for which it is otherwise obligated under Rule 4;
Aside from losses that NSCC might face as a result of a Defaulting Member Event, NSCC could incur non-default losses incident to its clearance and settlement business.
NSCC proposes to enhance the governance around non-default losses that would trigger loss allocation to Members by specifying that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of NSCC to provide clearance and settlement services in an orderly manner and would potentially generate losses to be mutualized among the Members in order to ensure that NSCC may continue to offer clearance and settlement services in an orderly manner. The proposed change would provide that NSCC would then be required to promptly notify Members of this determination, which would be referred to as a Declared Non-Default Loss Event. In addition, NSCC proposes to specify that a mandatory Corporate Contribution would apply to a Declared Non-Default Loss Event prior to any allocation of the loss among Members, as described above. Additionally, NSCC proposes language to clarify Members' obligations for Declared Non-Default Loss Events.
The proposed changes would align the loss allocation rules, to the extent practicable and appropriate, of the three DTCC Clearing Agencies so as to provide consistent treatment for firms that are participants of multiple DTCC Clearing Agencies. As proposed, the loss allocation process and certain related provisions would be consistent across the DTCC Clearing Agencies to the extent practicable and appropriate.
NSCC proposes to reduce the time in which NSCC may retain a Member's Clearing Fund deposit. Specifically, NSCC proposes that if a Member gives notice to NSCC of its election to withdraw from membership, NSCC would return the Member's Actual Deposit in the form of (1) cash or securities within 30 calendar days and (2) Eligible Letters of Credit within 90 calendar days, after all of the Member's transactions have settled and all matured and contingent obligations to NSCC, for which the Member was responsible while a Member, have been satisfied, except that NSCC may retain for up to two years the Actual Deposits from Members who have Sponsored Accounts at DTC.
NSCC states that shortening the time for the return of a Member's Clearing Fund deposit would be helpful to firms that have exited NSCC, so that such firms could have use of the deposits sooner than under the current Rules. However, such return would only occur if all obligations of the terminating Member to NSCC have been satisfied, which would include both matured as well as contingent obligations.
NSCC proposes to make various conforming and technical changes necessary to harmonize the remaining current Rules with the proposed changes. The proposed defined terms in the loss allocation process would be included in Rule 1 (Definitions and Descriptions), and obsolete terms would be replaced with the proposed terms. In addition, the rule numbers appear in the remaining current Rules would be updated to reflect the changes made by the proposal. NSCC further proposes to modify its Voluntary Termination process to avoid any potential conflicts with the loss allocation process.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions, and to protect investors and the public interest.
The Commission believes that the proposal to change the loss allocation process is designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency. As described above, NSCC proposes to make a number of changes to its loss allocation process as described above. First, NSCC would modify the calculation of its Corporate Contribution to apply a mandatory fixed percentage of its General Business Risk Capital Requirement as compared to the current Rules that provide for a “no less than” percentage of retained earnings. The proposed changes also would clarify that the proposed Corporate Contribution would apply to Declared Non-Default Loss Events, as well as Defaulting Member Events, on a mandatory basis. Moreover, the proposal specifies that if the Corporate Contribution is applied to a loss or liability relating to an Event Period, then for any subsequent Event Periods that occur during the 250 business days thereafter, the Corporate Contribution would be reduced to the remaining, unused portion of the Corporate Contribution. The Commission believes that these changes set clear expectations about how and when NSCC's Corporate Contribution would be applied to help address a loss, and allow NSCC to better anticipate and prepare for potential risk exposures that may arise during an Event Period.
Second, as described above, NSCC proposes to determine a Member's loss allocation obligation based on the average of its Required Fund Deposit over a look-back period of 70 business days and to determine its Loss Allocation Cap based on the greater of its Required Fund Deposit or the average thereof over a look-back period of 70 business days. These proposed changes are designed to allow NSCC to calculate a Member's pro rata share of losses and liabilities based on the amount of risk that the Member brings to NSCC. Moreover, using a look-back period to determine a Member's loss allocation obligation is designed to deter Members from reducing their settlement activities during a time of stress primarily to limit their Loss Allocation Caps. As a result of these changes, the Commission believes that NSCC should be in a better position to manage its risk by curtailing the chance that reduced settlement activities contribute to higher volatility or lower liquidity during an already stressed period.
Third, as described above, NSCC proposes to introduce the concept of an Event Period, which would group Defaulting Member Events and Declared Non-Default Loss Events occurring within a period of 10 business days for purposes of allocating losses to Members in one or more rounds. Under the current Rules, every time NSCC incurs a loss or liability, NSCC will initiate its current loss allocation process by applying its retained earnings and allocating losses. However, the current Rules do not contemplate a situation where loss events occur in quick succession. Accordingly, even if multiple losses occur within a short period, the current Rules dictate that NSCC start the loss allocation process separately for each loss event. Having multiple loss allocation calculations and notices from NSCC and withdrawal notices from Members after multiple sequential loss events could cause heighten operational complexity and, therefore, risk for NSCC, since NSCC would have to process and track multiple notices while performing its other critical operations during a time of significant stress.
Therefore, the Commission believes that the proposed change to introduce an Event Period would provide a more defined and transparent structure, compared to the current loss allocation process described immediately above, helping to reduce complexity in and the resources needed to effectuate the process, thus mitigating operational risk. Overall, such an improved structure should enable both NSCC and each Member to more effectively manage the risks and potential financial obligations presented by sequential Defaulting Member Events or Declared Non-Default Loss Events that are likely to arise in quick succession, and could be closely linked to an initial event and/or market dislocation episode. In other words, the proposed Event Period structure should help clarify and define for both NSCC and Members how NSCC would initiate a single defined loss allocation process to cover all loss events within 10 business days. As a result, all loss allocation calculation and notices from NSCC and potential withdrawal notices from Members would be tied back to one Event Period instead of each individual loss event.
Fourth, as described above, the proposal would improve upon the current loss allocation approach laid out in NSCC's Rules by providing for a loss allocation round, a Loss Allocation Notice process, a Loss Allocation Withdrawal Notice process, and a Loss Allocation Cap. A loss allocation round would be a series of loss allocations relating to an Event Period, the aggregate amount of which would be limited by the round cap. When the losses allocated in a round equals the round cap, any additional losses relating to the Event Period would be allocated in subsequent rounds until all losses from the Event Period are allocated among Members. Each loss allocation would be communicated to Members by the issuance of a Loss Allocation Notice. Each Member in a loss allocation round would have five business days from the issuance of the first Loss Allocation Notice for the round to notify NSCC of its election to withdraw from membership with NSCC, and thereby benefit from its Loss Allocation Cap. The Loss Allocation Cap of a Member would be equal to the greater of its Required Fund Deposit on the first day of the applicable Event Period and its Average RFD. Members would have two business days after NSCC issues a first round Loss Allocation Notice to pay the amount specified in the notice.
The Commission believes that the changes to (1) establish a specific Event Period, (2) continue the loss allocation process in successive rounds, (3) clearly communicate with its Members regarding their loss allocation obligations, and (4) effectively identify continuing Members for the purpose of calculating loss allocation obligations in successive rounds, are designed to make NSCC's loss allocation process more certain. In addition, the changes are designed to provide Members with a clear set of procedures that operate within the proposed loss allocation structure, and provide increased predictability and certainty regarding Members' exposures and obligations. Furthermore, by grouping all loss events within 10 business days, the loss allocation process relating to multiple loss events can be streamlined. With enhanced certainty, predictability, and efficiency, NSCC would then be able to better manage its risks from loss events occurring in quick succession, and Members would be able to better manage their risks by deciding whether and when to withdraw from membership and limit their exposures to NSCC. Furthermore, the proposed changes are designed to reduce liquidity risk to Members by providing a two-day window to arrange funding to pay for loss allocation, while still allowing NSCC to address losses in a timely manner.
Fifth, as described above, NSCC proposes to clarify the governance around Declared Non-Default Loss Events by providing that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of NSCC to provide its services in an orderly manner. NSCC also proposes to provide that NSCC would then be required to promptly notify Members of this determination and start the loss allocation process concerning the loss stemming from a Declared Non-Default Loss Event. The Commission believes that these changes should provide an orderly and transparent procedure to allocate a non-default loss by requiring the Board of Directors to make a definitive decision to announce an occurrence of a Declared Non-Default Loss Event, and requiring NSCC to provide a notice to Members of the decision. The Commission further believes that an orderly and transparent procedure should result in a risk management process at NSCC that is more robust as a result of enhanced governance around NSCC's response to non-default losses.
Collectively, the Commission believes that the proposed changes to NSCC's loss allocation process would provide greater transparency, certainty, and efficiency to NSCC regarding the amount of resources and the instances in which NSCC would apply the resources to address risks arising from Defaulting Member Events and Declared Non-Default Loss Events, which could occur in quick succession. The Commission believes that the transparency, certainty, and efficiency would afford NSCC better predictability regarding its risk exposure, and in turn, would allow a risk management process at NSCC that is more effectively responsive to such events and would improve NSCC's ability to continue to operate in a safe and sound manner during such events. Therefore, the Commission believes that these proposed changes would better equip NSCC to assure the safeguarding of securities and funds which are in the custody or control of NSCC.
In addition, the Commission believes that the proposed rule changes to align NSCC's loss allocation rules with the loss allocation rules of the other DTCC Clearing Agencies, to the extent practicable and appropriate, are designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions. As described above, the alignment of NSCC's loss allocation rules with the other NSCC Clearing Agencies is designed to help provide consistent treatment for firms that are participants of multiple DTCC Clearing Agencies. The Commission believes that providing consistent treatment through consistent procedures among the DTCC Clearing Agencies would help firms that participate in multiple DTCC Clearing Agencies from encountering unnecessary complexities and confusion stemming from differences in procedures regarding loss allocation processes, particularly at times of significant stress. Accordingly, by removing potential unnecessary complexities and confusion due to different loss allocation rules of the DTCC Clearing Agencies, the Commission believes that the proposal is designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions.
Finally, the Commission believes that the proposed rule change to (1) reduce the time within which NSCC is required to return a former Member's Clearing Fund deposit that is cash or securities from 90 days to 30 calendar days, and (2) make conforming and technical changes necessary to harmonize the current Rules with the proposed changes are designed to protect investors and the public interest. First,
For the reasons above, the Commission believes that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(4)(viii) under the Act requires, in part, that a covered clearing agency
As described above, the proposal would revise the loss allocation process to address how NSCC would manage loss events, including Defaulting Member Events. Under the proposal, if losses arise out of or relate to a Defaulting Member Event, NSCC would first apply its Corporate Contribution. If those funds prove insufficient, the proposal provides for allocating the remaining losses to the remaining Members through the proposed process. Accordingly, the Commission believes that the proposal is reasonably designed to manage NSCC's credit exposures to its Members, by addressing allocation of credit losses.
Therefore, the Commission believes that NSCC's proposal is consistent with Rule 17Ad-22(e)(4)(viii) under the Act.
Rule 17Ad-22(e)(13) under the Act requires, in part, that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to ensure the covered clearing agency has the authority to take timely action to contain losses and liquidity demands and continue to meet its obligations.
As described above, the proposal would establish a more detailed and structured loss allocation process by (1) modifying the calculation and application of the Corporate Contribution; (2) introducing an Event Period; (3) introducing a loss allocation round and notice process; (4) implementing a look-back period to calculate a Member's loss allocation obligation; (5) modifying the withdrawal process and the cap of withdrawing Member's loss allocation exposure; and (6) providing the governance around a non-default loss. The Commission believes that each of these proposed changes helps establish a more transparent and clear loss allocation process and authority of NSCC to take certain actions, such as announcing a Declared Non-Default Loss Event, within the loss allocation process. Further, having a more transparent and clear loss allocation process as proposed would provide clear authority to NSCC to allocate losses from Defaulting Member Events and Declared Non-Default Loss Events and take timely actions to contain losses, and continue to meet its clearance and settlement obligations.
Therefore, the Commission believes that NSCC's proposal is consistent with Rule 17Ad-22(e)(13) under the Act.
Rule 17Ad-22(e)(23)(i) under the Act requires that a covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to publicly disclose all relevant rules and material procedures, including key aspects of its default rules and procedures.
As described above, the proposal would publicly disclose how NSCC's Corporate Contribution would be calculated and applied. In addition, the proposal would establish and publicly disclose a detailed procedure in the Rules for loss allocation. More specifically, the proposed changes would establish an Event Period, loss allocation rounds, a look-back period to calculate each Member's loss allocation obligation, a withdrawal process followed by a loss allocation process, and a Loss Allocation Cap that would apply to Members after withdrawal. Additionally, the proposal would align the loss allocation rules across the DTCC Clearing Agencies to help provide consistent treatment, and clarify that non-default losses would trigger loss allocation to Members. The proposal would also provide for and make known to members the procedures to trigger a loss allocation procedure, contribute NSCC's Corporate Contribution, allocate losses, and withdraw and limit Member's loss exposure. Accordingly, the Commission believes that the proposal is reasonably designed to (1) publicly disclose all relevant rules and material procedures concerning key aspects of NSCC's default rules and procedures, and (2) provide sufficient information to enable Members to identify and evaluate the risks by participating in NSCC.
Therefore, the Commission believes that NSCC's proposal is consistent with
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes amend Rule 7.31-E relating to Reserve Orders, to re-name two order types, and to delete inoperative rule text. The proposed rule 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.
The Exchange proposes to amend Rule 7.31-E relating to Reserve Orders, to re-name two order types, and to delete inoperative rule text.
Rule 7.31-E(d)(1) defines a Reserve Order as a Limit or Inside Limit Order with a quantity of the size displayed and with a reserve quantity of the size (“reserve interest”) that is not displayed. The displayed quantity of a Reserve Order is ranked Priority 2—Display Orders and the reserve interest is ranked Priority 3—Non-Display Orders.
Rule 7.31-E(d)(2) defines a “Limit Non-Displayed Order,” which is a Limit Order that is not displayed and does not route. Rule 7.31-E(e)(1) defines an “Arca Only Order,” which is a Limit Order that does not route.
The Exchange proposes non-substantive amendments to Rules 7.31-E and 7.46-E to re-name the “Arca Only Order” as the “Non-Routable Limit Order.” This proposed rule change is based on the term used by the Exchange's affiliate, NYSE American LLC (“NYSE American”) for the same order type.
The Exchange also proposes non-substantive amendments to Rules 7.31-E and 7.46-E to re-name the “Limit Non-Displayed Order” as the “Non-Displayed Limit Order.” The Exchange believes that this proposed rule change would conform the style of this order type with the name “Non-Routable Limit Order.” The Exchange therefore believes that this proposed rule change would promote clarity and consistency in its rules.
The Exchange proposes to amend Rule 7.31-E(d)(1) to change the manner by which the display portion of a Reserve Order would be replenished. As proposed, rather than replenishing the display quantity following any execution, the Exchange proposes to replenish the Reserve Order when the display quantity is decremented to below a round lot. The changes that the Exchange is proposing to Rule 7.31 relating to Reserve Orders (and Primary Pegged Orders) are identical to changes that were recently approved for the Exchange's affiliate, New York Stock Exchange LLC (“NYSE”).
As is currently the case, the replenish quantity would be the minimum display size of the order or the remaining quantity of reserve interest if it is less than the minimum display quantity. To reflect this functionality, the Exchange proposes that Rule 7.31-E(d)(1)(A) would be amended as follows (deleted text bracketed; new text italic):
(A) On entry, the display quantity of a Reserve Order must be entered in round lots. The displayed portion of a Reserve Order will be replenished
Under current functionality, because the replenished quantity is assigned a new working time, it is feasible for a single Reserve Order to have multiple replenished quantities with separate working times, each, a “child” order. The proposed change to limit when a Reserve Order would be replenished to when the display quantity is decremented to below a round lot only would reduce the number of child orders for a Reserve Order. The Exchange believes that minimizing the number of child orders for a Reserve Order would reduce the potential for market participants to detect that a child order displayed on the Exchange's proprietary market data feeds is associated with a Reserve Order.
In most cases, the maximum number of child orders for a Reserve Order would be two. For example, assume a Reserve Order to buy has a display quantity of 100 shares and an additional 200 shares of reserve interest. A sell order of 50 shares would trade with the display quantity of such Reserve Order, which would decrement the display quantity to 50 shares. As proposed, the Exchange would then replenish the Reserve Order with 100 shares from the reserve interest,
Generally, when there are two child orders, the older child order of less than a round lot will be executed before the second child order. However, there are limited circumstances when a Reserve Order could have two child orders that equal less than a round lot, which, as proposed, would trigger a replenishment. For such circumstance, the Exchange proposes that when a Reserve Order is replenished from reserve interest and already has two child orders that equal less than a round lot, the child order with the later working time would be reassigned the new working time assigned to the next replenished quantity.
For example, taking the same Reserve Order as above:
• If 100 shares of such order (“A”) are routed on arrival, it would have a display quantity of 100 shares (“B”) and 100 shares in reserve interest.
• While “A” is routed, a sell order of 50 shares would trade with “B,” decrementing “B” to 50 shares and the Reserve Order would be replenished from reserve interest, creating a second child order “C” of 100 shares.
• Next, the Exchange receives a request to reduce the size of the Reserve Order from 300 shares to 230 shares. Because “A” is still routed away and there is no reserve interest, and as described in more detail below, this 70 share reduction in size would be applied against the most recent child order of “C,” which would be reduced to 30 shares. Together with “B,” which would still be 50 shares, the two displayed child orders would equal less than a round lot, but with no quantity in reserve interest.
• Next, “A” is returned unexecuted, and as described below, becomes reserve interest and is evaluated for replenishment. Because the total display quantity (“B” + “C”) is less than a round lot, this Reserve Order would be replenished. But because the Reserve Order already has two child orders, the child order with the later working time, “C,” would be returned to the reserve interest, which would now have a quantity of 130 shares (“C” + “A”), and the Reserve Order would be replenished with 100 shares from the reserve interest with a new working time, which would be a new child order “D.”
• After this replenishment, this Reserve Order would have two child orders of “B” for 50 shares and “D” for 100 shares, and a reserve interest of 30 shares.
To effect these changes, the Exchange proposes to amend current Rule 7.31-E(d)(1)(B) to specify that each display quantity of a Reserve Order with a different working time would be referred to as a child order. The Exchange further proposes new Rule 7.31-E(d)(1)(B)(i) that would provide that when a Reserve Order is replenished from reserve interest and already has two child orders that equal less than a round lot, the child order with the later working time would rejoin the reserve interest and be assigned the new working time assigned to the next replenished quantity.
The Exchange also proposes new Rule 7.31-E(d)(1)(B)(ii) to provide that if a Reserve Order is not routable (
For a Primary Pegged Reserve Order, the Exchange proposes that the replenished quantity would follow Rule 7.31-E(h)(2)(B), which provides that a Primary Pegged Order would be rejected if the PBBO is locked or crossed. Because a Primary Pegged Reserve Order would have resting reserve interest, the Exchange proposes to amend Rule 7.31-E(h)(2)(B) to provide that if the PBBO is locked or crossed when the display quantity of a Primary Pegged Reserve Order is replenished, the entire order would be cancelled. The Exchange believes that cancelling the entire order is consistent with the current rule that provides that the entire order would be rejected on arrival if the display quantity would lock or cross the PBBO.
The Exchange further proposes to add new subsection (D) to Rule 7.31-E(d)(1) to describe when a Reserve Order would be routed. As proposed, a routable Reserve Order would be evaluated for routing both on arrival and each time the display quantity is replenished.
Proposed Rule 7.31-E(d)(1)(D)(i) would provide that if routing is required, the Exchange would route from reserve interest before publishing the display quantity. In addition, if after routing, there is less than a round lot available to display, the Exchange would wait until the routed quantity returns (executed or unexecuted) before publishing the display quantity. In the example described above, the Exchange would have published the display quantity before the routed quantity returned because the display quantity was at least a round lot. If, however, 250
The Exchange proposes this functionality to reduce the possibility for a Reserve Order to have more than one child order. If the Exchange did not wait, and instead displayed the 50 shares when the balance of the Reserve Order has routed, if the 250 shares returns unexecuted, such Reserve Order would be replenished and would have two child orders—one for the 50 shares that was displayed when the order was entered and a second for the 100 shares that replenished the Reserve Order from the quantity that returned unexecuted. By contrast, by waiting for a report on the routed quantity, if the routed quantity was not executed, the Exchange would display the minimum display quantity as a single child order. If the routed quantity was executed, the Exchange would display the 50 shares, but only because that would be the full remaining quantity of the Reserve Order.
Proposed Rule 7.31-E(d)(1)(D)(ii) would provide that any quantity of a Reserve Order that is returned unexecuted would join the working time of the reserve interest, which is current functionality. If there is no quantity of reserve interest to join, the returned quantity would be assigned a new working time as reserve interest. As further proposed, in either case, such reserve interest would replenish the display quantity as provided for in Rules 7.31(d)(1)(A) and (B). The Exchange believes that this proposed rule text would promote transparency and clarity in Exchange rules. The Exchange further believes it is appropriate for a returned quantity of a Reserve Order to join the reserve interest first because the order may not be eligible for a replenishment to the display quantity.
Proposed Rule 7.31-E(d)(1)(E) would provide that a request to reduce in size a Reserve Order would cancel the reserve interest before canceling the display quantity and if there is more than one child order, the child order with the later working time would be cancelled first. This represents current functionality and the example set forth above demonstrates how this would function. The Exchange believes that canceling reserve interest before a child order would promote the display of liquidity on an exchange. The Exchange further believes that canceling a later-timed child order would respect the time priority of the first child order, and any priority such child order may have for allocations.
The Exchange proposes additional non-substantive amendments to its rules to remove inoperative rule text.
First, the Exchange proposes to amend Rule 7.35-E (Auctions) to remove Commentary .02, which sets forth rules that were operative no later than February 28, 2018. Because the amendments described in that Commentary .02 have been implemented, Commentary .02 is now moot and can be deleted.
Second, the Exchange proposes to amend Rule 7.39-E (Adjustment of Open Orders) to delete the title and text of the rule and designate the rule “Reserved.” Rule 7.39-E relates to the adjustment of open orders,
Because of the technology changes associated with the proposed rule changes relating to Reserve Orders, the Exchange will announce by Trader Update when these changes will be implemented, which the Exchange anticipates will be in the third quarter of 2018.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange believes that the proposed rule change to replenish a Reserve Order only if the display quantity is decremented to below a round lot would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would reduce the number of child orders associated with a single Reserve Order. By reducing the number of child orders, the Exchange believes it would reduce the potential for market participants to detect that a child order is associated with a Reserve Order. The proposed changes to Reserve Orders and Primary Pegged Orders are identical to recently approved changes to the rules of its affiliated exchange, NYSE, and how a Reserve Order would be replenished is also consistent with how Reserve Orders function on BZX and Nasdaq.
For similar reasons, the Exchange believes that if a Reserve Order has two child orders that equal less than a round lot, it would remove impediments to and perfect the mechanism of a free and open market and a national market system to assign a new working time to the later child order so that when such Reserve Order is replenished, it would have a maximum of only two child orders. The Exchange believes that this proposed change would streamline the operation of Reserve Orders and meet the objective to reduce the potential for market participants to be able to identify that a child order is associated with a Reserve Order.
The Exchange further believes that the proposed rule change to evaluate a Reserve Order for routing both on arrival and when replenishing would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would reduce the potential for the display quantity of a Reserve Order to lock or cross the PBBO of an away market. The Exchange further believes that routing from reserve interest would promote the display of liquidity on the Exchange, because if there is at least a round lot remaining of a Reserve Order that is not routed, the Exchange would display that quantity. The Exchange also believes that it would remove impediments to and perfect the mechanism of a free and open market and a national market system to wait to display a Reserve Order if there is less than a round lot remaining after routing
The Exchange believes that it would remove impediments to and perfect the mechanism of a free and open market and a national market system to apply a request to reduce in size a Reserve Order to the reserve interest first, and then next to the child order with the later working time, because such functionality would promote the display of liquidity on the Exchange and honor the priority of the first child order with the earlier working time. The Exchange believes that including this existing functionality in Rule 7.31-E would promote transparency and clarity in Exchange rules.
The Exchange believes that the proposed change to Primary Pegged Reserve Orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because similar to how a Primary Pegged Order would function on arrival, if the replenish quantity of a Primary Pegged Reserve Order would lock or cross the PBBO, the entire Reserve Order would be cancelled. The Exchange believes that by cancelling the entire order, the Exchange would reduce the potential for such order to be displayed at a price that would lock or cross the PBBO.
The Exchange believes that the proposed non-substantive amendments to rename the “Limit Non-Displayed Order” as the “Non-Displayed Limit Order” and to rename the “Arca Only Order” as the “Non-Routable Limit Order” would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed changes are designed to promote clarity and consistency in Exchange rules by moving the modifier describing the function of the order type before the term “Limit Order” and using order type names that are used on NYSE American.
Finally, the Exchange believes that removing inoperative rule text would remove impediments to and perfect the mechanism of a free and open market and a national market system because these proposed rule changes would promote clarity in Exchange rules.
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 is not designed to address any competitive issues. Rather, the proposed rule change to Reserve Orders is designed to reduce the potential for market participants to identify that a child order is related to a Reserve Order. The additional proposed rule changes are non-substantive and are designed to promote clarity and consistency in Exchange rules.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 18, 2017, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-NSCC-2017-017 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
In the Advance Notice, NSCC proposes to (1) adopt an R&W Plan; (2) amend NSCC's Rules & Procedures (“Rules”)
NSCC states that the R&W Plan would be used by the Board of Directors of NSCC (“Board”) and management of NSCC in the event NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
NSCC states that the Proposed Rules are designed to (1) facilitate the implementation of the R&W Plan when necessary and, in particular, allow NSCC to effectuate its strategy for winding down and transferring its business; (2) provide Members and Limited Members with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations; and (3) provide NSCC with the legal basis to implement those provisions of the R&W Plan when necessary.
The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to NSCC to either (i) recover, in the event it experiences losses that exceed its prefunded resources (such strategies and tools referred to herein as the “Recovery Plan”) or (ii) wind-down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful (such strategies and tools referred to herein as the “Wind-down Plan”).
The R&W Plan would identify (i) the recovery tools available to NSCC to address the risks of (a) uncovered losses or liquidity shortfalls resulting from the default of one or more Members, and (b) losses arising from non-default events, such as damage to its physical assets, a cyber-attack, or custody and investment losses, and (ii) the strategy for implementation of such tools. The R&W Plan would also establish the strategy and framework for the orderly wind-down of NSCC and the transfer of its business in the remote event the
As discussed in greater detail below, the R&W Plan would provide, among other matters, (i) an overview of the business of NSCC and its parent, The Depository Trust & Clearing Corporation (“DTCC”);
Certain recovery tools that would be identified in the R&W Plan are based in the Rules (including the Proposed Rules); therefore, descriptions of those tools in the R&W Plan would include descriptions of, and reference to, the applicable Rules and any related internal policies and procedures. Other recovery tools that would be identified in the R&W Plan are based in contractual arrangements to which NSCC is a party, including, for example, existing committed or pre-arranged liquidity arrangements. Further, the R&W Plan would state that NSCC may develop further supporting internal guidelines and materials that may provide operational support for matters described in the R&W Plan, and that such documents would be supplemental and subordinate to the R&W Plan.
NSCC states that many of the tools available to NSCC that would be described in the R&W Plan are NSCC's existing, business-as-usual risk management and Member default management tools, which would continue to be applied in scenarios of increasing stress. In addition to these existing, business-as-usual tools, the R&W Plan would describe NSCC's other principal recovery tools, which include, for example, (i) identifying, monitoring and managing general business risk and holding sufficient liquid net assets funded by equity (“LNA”) to cover potential general business losses pursuant to the Clearing Agency Policy on Capital Requirements (“Capital Policy”),
The development of the R&W Plan is facilitated by the Office of Recovery & Resolution Planning (“R&R Team”) of DTCC.
As discussed in greater detail below, the Proposed Rules would define the procedures that may be employed in the event of NSCC's default and its wind-down, and would provide for NSCC's authority to take certain actions on the occurrence of a Market Disruption Event, as defined therein. NSCC states that the Proposed Rules are designed to provide Members and Limited Members with transparency and certainty with respect to these matters. NSCC also states that the Proposed Rules are designed to facilitate the implementation of the R&W Plan, particularly NSCC's strategy for winding down and transferring its business, and are designed to provide NSCC with the legal basis to implement those aspects of the R&W Plan.
The introduction to the R&W Plan would identify the document's purpose and its regulatory background, and would outline a summary of the R&W Plan. The stated purpose of the R&W Plan is that it is to be used by the Board and NSCC management in the event NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.
The R&W Plan would describe DTCC's business profile, provide a summary of NSCC's services, and identify the intercompany arrangements and links between NSCC and other entities, including other FMIs. NSCC states that the overview section would provide a context for the R&W Plan by describing NSCC's business, organizational structure and critical links to other entities. NSCC also states that by providing this context, this section would facilitate the analysis of the potential impact of utilizing the recovery tools set forth in later sections of the Recovery Plan, and the analysis of the factors that would be addressed in implementing the Wind-down Plan.
The R&W Plan would provide a description of established links between NSCC and other FMIs, including The Options Clearing Corporation (“OCC”), CDS Clearing and Depository Services Inc. (“CDS”), and DTC. NSCC states that this section of the R&W Plan, which identifies and briefly describes NSCC's established links, is designed to provide a mapping of critical connections and dependencies that may need to be relied on or otherwise addressed in connection
The R&W Plan would define the criteria for classifying certain of NSCC's services as “critical,” and would identify those critical services and the rationale for their classification. This section of the R&W Plan would provide an analysis of the potential systemic impact from a service disruption, which NSCC states is important for evaluating how the recovery tools and the wind-down strategy would facilitate and provide for the continuation of NSCC's critical services to the markets it serves. The criteria that would be used to identify an NSCC service or function as critical would include (1) whether there is a lack of alternative providers or products; (2) whether failure of the service could impact NSCC's ability to perform its central counterparty services; (3) whether failure of the service could impact NSCC's ability to perform its netting services, and the availability of market liquidity; and (4) whether the service is interconnected with other participants and processes within the U.S. financial system, for example, with other FMIs, settlement banks, broker-dealers, and exchanges. The R&W Plan would then list each of those services, functions or activities that NSCC has identified as “critical” based on the applicability of these four criteria. The R&W Plan would also include a non-exhaustive list of NSCC services that are not deemed critical.
NSCC states that the evaluation of which services provided by NSCC are deemed critical is important for purposes of determining how the R&W Plan would facilitate the continuity of those services. While NSCC's Wind-down Plan would provide for the transfer of all critical services to a transferee in the event NSCC's wind-down is implemented, it would anticipate that any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership, would also be transferred.
The R&W Plan would describe the governance structure of both DTCC and NSCC. This section of the R&W Plan would identify the ownership and governance model of these entities at both the Board and management levels. The R&W Plan would state that the stages of escalation required to manage recovery under the Recovery Plan or to invoke NSCC's wind-down under the Wind-down Plan would range from relevant business line managers up to the Board through NSCC's governance structure. The R&W Plan would then identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The R&W Plan would identify the Risk Committee of the Board (“Board Risk Committee”) as being responsible for oversight of risk management activities at NSCC, which include focusing on both oversight of risk management systems and processes designed to identify and manage various risks faced by NSCC as well as oversight of NSCC's efforts to mitigate systemic risks that could impact those markets and the broader financial system.
The R&W Plan would describe the governance of recovery efforts in response to both default losses and non-default losses under the Recovery Plan, identifying the groups responsible for those recovery efforts. Specifically, the R&W Plan would state that the Management Risk Committee provides oversight of actions relating to the default of a Member, which would be reported and escalated to it through the GCRO, and the Management Committee provides oversight of actions relating to non-default events that could result in a loss, which would be reported and escalated to it from the DTCC Chief Financial Officer (“CFO”) and the DTCC Treasury group that reports to the CFO, and from other relevant subject matter experts based on the nature and circumstances of the non-default event.
Finally, the R&W Plan would describe the role of the R&R Team in managing the overall recovery and wind-down program and plans for each of the Clearing Agencies.
NSCC states that the Recovery Plan is intended to be a roadmap of those actions that NSCC may employ to monitor and, as needed, stabilize its financial condition. NSCC also states that as each event that could lead to a financial loss could be unique in its circumstances, NSCC proposes that the Recovery Plan would not be prescriptive and would permit NSCC to maintain flexibility in its use of identified tools and in the sequence in which such tools are used, subject to any conditions in the Rules or the contractual arrangement on which such tool is based. NSCC's Recovery Plan would consist of (1) a description of the risk management surveillance, tools, and governance that NSCC would employ across evolving stress scenarios that it may face as it transitions through a Crisis Continuum, described below; (2) a description of NSCC's risk of losses that may result from non-default events, and the financial resources and recovery tools available to NSCC to manage those risks and any resulting losses; and (3) an evaluation of the characteristics of the recovery tools that may be used in response to either default losses or non-default losses. In all cases, NSCC states that it would act in accordance with the Rules, within the governance structure described in the R&W Plan, and in accordance with applicable regulatory oversight to address each situation to best protect NSCC, Members, and the markets in which it operates.
The Recovery Plan would describe the risk management surveillance, tools, and governance that NSCC may employ across an increasing stress environment,
NSCC states that the Recovery Plan would provide context to its roadmap through this Crisis Continuum by describing NSCC's ongoing management of credit, market, and liquidity risk, and its existing process for measuring and reporting its risks as they align with established thresholds for its tolerance of those risks. NSCC also states that the Recovery Plan would discuss the management of credit/market risk and liquidity exposures together because the tools that address these risks can be deployed either separately or in a coordinated approach in order to address both exposures. NSCC states that it manages these risk exposures collectively to limit their overall impact on NSCC and its membership. NSCC states that as part of its market risk management strategy, NSCC manages its credit exposure to Members by determining the appropriate Required Deposits to the Clearing Fund and monitoring its sufficiency, as provided for in the Rules.
The Recovery Plan would outline the metrics and indicators that NSCC has developed to evaluate a stress situation against established risk tolerance thresholds. Each risk mitigation tool identified in the Recovery Plan would include a description of the escalation thresholds that allow for effective and timely reporting to the appropriate internal management staff and committees, or to the Board. NSCC states that the Recovery Plan is designed to make clear that these tools and escalation protocols would be calibrated across each phase of the Crisis Continuum. The Recovery Plan would also establish that NSCC would retain the flexibility to deploy such tools either separately or in a coordinated approach, and to use other alternatives to these actions and tools as necessitated by the circumstances of a particular Member default, in accordance with the Rules. Therefore, NSCC states that the Recovery Plan would both provide NSCC with a roadmap to follow within each phase of the Crisis Continuum, and would permit it to adjust its risk management measures to address the unique circumstances of each event.
The Recovery Plan would describe the conditions that mark each phase of the Crisis Continuum, and would identify actions that NSCC could take as it transitions through each phase in order to both prevent losses from materializing through active risk management, and to restore the financial health of NSCC during a period of stress.
The stable market phase of the Crisis Continuum would describe active risk management activities in the normal course of business. These activities would include (1) routine monitoring of margin adequacy through daily review of back testing and stress testing results that review the adequacy of NSCC's margin calculations, and escalation of those results to internal and Board committees;
The Recovery Plan would describe some of the indicators of the stress market phase of the Crisis Continuum, which would include, for example, volatility in market prices of certain assets where there is increased uncertainty among market participants about the fundamental value of those assets. This phase would involve general market stresses, when no Member default would be imminent. Within the description of this phase, the Recovery Plan would provide that NSCC may take targeted, routine risk management measures as necessary and as permitted by the Rules.
Within the Member default phase of the Crisis Continuum, the Recovery Plan would provide a roadmap for the existing procedures that NSCC would follow in the event of a Member default and any decision by NSCC to cease to act for that Member.
The Recovery Plan would also identify financial resources available to NSCC, pursuant to the Rules, to address losses arising out of a Member default. Specifically, Rule 4 (Clearing Fund) provides that losses remaining after application of the Defaulting Member's resources be satisfied first by applying a Corporate Contribution, and then, if necessary, by allocating remaining losses among the membership in accordance with Rule 4 (Clearing Fund).
In order to provide for an effective and timely recovery, the Recovery Plan would describe the period of time that would occur near the end of the Member default phase, during which NSCC may experience stress events or observe early warning indicators that allow it to evaluate its options and prepare for the recovery phase (referred to in the R&W Plan as the Recovery Corridor). The Recovery Plan would then describe the recovery phase of the Crisis Continuum, which would begin on the date that NSCC issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period.
NSCC states that it expects that significant deterioration of liquidity resources would cause it to enter the Recovery Corridor. Therefore, the R&W Plan would describe the actions NSCC may take aimed at replenishing those resources. Throughout the Recovery Corridor, NSCC would monitor the adequacy of its resources and the expected timing of replenishment of those resources, and would do so through the monitoring of certain corridor indicator metrics.
NSCC states that the majority of the corridor indicators, as identified in the Recovery Plan, relate directly to conditions that may require NSCC to adjust its strategy for hedging and liquidating a Defaulting Member's portfolio, and any such changes would include an assessment of the status of the corridor indicators. For each corridor indicator, the Recovery Plan would identify (1) measures of the indicator, (2) evaluations of the status of the indicator, (3) metrics for determining the status of the deterioration or improvement of the indicator, and (4) Corridor Actions, which are steps that may be taken to improve the status of the indicator,
The Recovery Plan would also describe the reporting and escalation of the status of the corridor indicators throughout the Recovery Corridor. Significant deterioration of a corridor indicator, as measured by the metrics set out in the Recovery Plan, would be escalated to the Board. NSCC management would review the corridor indicators and the related metrics at least annually, and would modify these metrics as necessary in light of observations from simulations of Member defaults and other analyses. Any proposed modifications would be reviewed by the Management Risk Committee and the Board Risk Committee. The Recovery Plan would estimate that NSCC may remain in the Recovery Corridor between one day and two weeks. NSCC states that this estimate is based on historical data observed in past Member defaults, the results of simulations of Member defaults, and periodic liquidity analyses conducted by NSCC. NSCC states that the actual length of a Recovery Corridor would vary based on actual market conditions observed at the time and NSCC would expect the Recovery Corridor to be shorter in market conditions of increased stress.
The Recovery Plan would outline steps by which NSCC may allocate its losses, which would occur when and in the order provided in Rule 4 (Clearing Fund).
The Recovery Plan would state that NSCC will have entered the recovery phase on the date that it issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period. The Recovery Plan would provide that, during the recovery phase, NSCC would continue and, as needed, enhance, the monitoring and remedial actions already described in connection with previous phases of the Crisis Continuum, and would remain in the recovery phase until its financial resources are expected to be or are fully replenished, or until the Wind-down Plan is triggered.
The Recovery Plan would describe governance for the actions and tools that
The Recovery Plan would outline how NSCC may address losses that result from events other than a Member default. While these matters are addressed in greater detail in other documents, this section of the R&W Plan would provide a roadmap to those documents and an outline for NSCC's approach to monitoring and managing losses that could result from a non-default event. The R&W Plan would first identify some of the risks NSCC faces that could lead to these losses, which include, for example, (1) the business and profit/loss risks of unexpected declines in revenue or growth of expenses; (2) the operational risks of disruptions to systems or processes that could lead to large losses, including those resulting from, for example, a cyber-attack; and (3) custody or investment risks that could lead to financial losses. The Recovery Plan would describe NSCC's overall strategy for the management of these risks, which includes a “three lines of defense” approach to risk management that allows for comprehensive management of risk across the organization.
The R&W Plan would identify the two categories of financial resources NSCC maintains to cover losses and expenses arising from non-default risks or events as (1) LNA, maintained, monitored, and managed pursuant to the Capital Policy, which include (a) amounts held in satisfaction of the General Business Risk Capital Requirement,
The R&W Plan would address the process by which the CFO and the DTCC Treasury group would determine which available LNA resources are most appropriate to cover a loss that is caused by a non-default event. This determination involves an evaluation of a number of factors, including the current and expected size of the loss, the expected time horizon over when the loss or additional expenses would materialize, the current and projected available LNA, and the likelihood LNA could be successfully replenished pursuant to the Replenishment Plan, if triggered.
The R&W Plan would also describe proposed Rule 60 (Market Disruption and Force Majeure), which NSCC is proposing to adopt in the Rules. NSCC states that this Proposed Rule is designed to provide transparency around how NSCC would address extraordinary events that may occur outside its control. Specifically, the Proposed Rule would define a Market Disruption Event and the governance around a determination that such an event has occurred. The Proposed Rule would also describe NSCC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of its services, if practicable.
The R&W Plan would describe the interaction between the Proposed Rule and NSCC's existing processes and procedures addressing business continuity management and disaster recovery (generally, the “BCM/DR procedures”). NSCC states that the intent is to make clear that the Proposed Rule is designed to support those BCM/DR procedures and to address circumstances that may be exogenous to NSCC and not necessarily addressed by the BCM/DR procedures. Finally, the R&W Plan would describe that, because the operation of the Proposed Rule is specific to each applicable Market Disruption Event, the Proposed Rule does not define a time limit on its application. However, the R&W Plan would note that actions authorized by the Proposed Rule would be limited to the pendency of the applicable Market Disruption Event, as made clear in the Proposed Rule. NSCC states that, overall, the Proposed Rule is designed to mitigate risks caused by Market Disruption Events and, thereby, minimize the risk of financial loss that may result from such events.
The Recovery Plan would describe NSCC's evaluation of the tools identified within the Recovery Plan, and its rationale for concluding that such tools are comprehensive, effective, and transparent, and that such tools provide incentives to Members and minimize negative impact on Members and the financial system.
The Wind-down Plan would provide the framework and strategy for the
In describing the transfer approach to NSCC's Wind-down Plan, the R&W Plan would identify the factors that NSCC considered in developing this approach, including the fact that NSCC does not own material assets that are unrelated to its clearance and settlement activities. Therefore, NSCC states that a business reorganization or “bail-in” of debt approach would be unlikely to mitigate significant losses. Additionally, NSCC states that the proposed approach was developed in consideration of its critical and unique position in the U.S. markets, which precludes any approach that would cause NSCC's critical services to no longer be available.
First, the Wind-down Plan would describe the potential scenarios that could lead to the wind-down of NSCC, and the likelihood of such scenarios. The Wind-down Plan would identify the time period leading up to a decision to wind-down NSCC as the Runway Period. NSCC states that this period would follow the implementation of any recovery tools, as it may take a period of time, depending on the severity of the market stress at that time, for these tools to be effective or for NSCC to realize a loss sufficient to cause it to be unable to effectuate settlements and repay its obligations.
The trigger for implementing the Wind-down Plan would be a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning NSCC to viability as a going concern. As described in the R&W Plan, NSCC states that this is an appropriate trigger because it is both broad and flexible enough to cover a variety of scenarios, and would align incentives of NSCC and the Members to avoid actions that might undermine NSCC's recovery efforts. Additionally, NSCC states that this approach takes into account the characteristics of NSCC's recovery tools and enables the Board to consider (1) the presence of indicators of a successful or unsuccessful recovery, and (2) potential for knock-on effects of continued iterative application of NSCC's recovery tools.
The Wind-down Plan would describe the general objectives of the transfer strategy, and would address assumptions regarding the transfer of NSCC's critical services, business, assets, and membership, and the assignment of NSCC's links with other FMIs, to another legal entity that is legally, financially, and operationally able to provide NSCC's critical services to entities that wish to continue their membership following the transfer (“Transferee”). The Wind-down Plan would provide that the Transferee would be either (1) a third party legal entity, which may be an existing or newly established legal entity or a bridge entity formed to operate the business on an interim basis to enable the business to be transferred subsequently (“Third Party Transferee”); or (2) an existing, debt-free failover legal entity established ex-ante by DTCC (“Failover Transferee”) to be used as an alternative Transferee in the event that no viable or preferable Third Party Transferee timely commits to acquire NSCC's business. NSCC would seek to identify the proposed Transferee, and negotiate and enter into transfer arrangements during the Runway Period and prior to making any filings under Chapter 11 of the U.S. Bankruptcy Code.
NSCC states that in order to effect a timely transfer of its services and minimize the market and operational disruption of such transfer, NSCC would expect to transfer all of its critical services and any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership. Following the transfer, the Wind-down Plan would anticipate that the Transferee and its continuing membership would determine whether to continue to provide any transferred non-critical service on an ongoing basis, or terminate the non-critical service following some transition period. NSCC's Wind-down Plan would anticipate that the Transferee would enter into a transition services agreement with DTCC so that DTCC would continue to provide the shared services it currently provides to NSCC, including staffing, infrastructure and operational support. The Wind-down Plan would also anticipate the assignment of NSCC's link arrangements, including those with DTC, CDS and OCC, described above, to the Transferee.
The Wind-down Plan would provide that, following the effectiveness of the transfer to the Transferee, the wind-down of NSCC would involve addressing any residual claims against NSCC through the bankruptcy process and liquidating the legal entity. The Wind-down Plan does not contemplate
The Wind-down Plan would also identify the key dependencies for the effectiveness of the transfer, which include regulatory approvals that would permit the Transferee to be legally qualified to provide the transferred services from and after the transfer, and approval by the applicable bankruptcy court of, among other things, the proposed sale, assignments, and transfers to the Transferee.
The Wind-down Plan would address governance matters related to the execution of the transfer of NSCC's business and its wind-down. The Wind-down Plan would address the duties of the Board to execute the wind-down of NSCC in conformity with (1) the Rules, (2) the Board's fiduciary duties, which mandate that it exercise reasonable business judgment in performing these duties, and (3) NSCC's regulatory obligations under the Act as a registered clearing agency. The Wind-down Plan would also identify certain factors the Board may consider in making these decisions, which would include, for example, whether NSCC could safely stabilize the business and protect its value without seeking bankruptcy protection, and NSCC's ability to continue to meet its regulatory requirements.
The Wind-down Plan would describe (1) actions NSCC or DTCC may take to prepare for wind-down in the period before NSCC experiences any financial distress, (2) actions NSCC would take both during the recovery phase and the Runway Period to prepare for the execution of the Wind-down Plan, and (3) actions NSCC would take upon commencement of bankruptcy proceedings to effectuate the Wind-down Plan.
Finally, the Wind-down Plan would include an analysis of the estimated time and costs to effectuate the R&W Plan, and would provide that this estimate be reviewed and approved by the Board annually. In order to estimate the length of time it might take to achieve a recovery or orderly wind-down of NSCC's critical operations, as contemplated by the R&W Plan, the Wind-down Plan would include an analysis of the possible sequencing and length of time it might take to complete an orderly wind-down and transfer of critical operations, as described in earlier sections of the R&W Plan. The Wind-down Plan would also include in this analysis consideration of other factors, including the time it might take to complete any further attempts at recovery under the Recovery Plan. The Wind-down Plan would then multiply this estimated length of time by NSCC's average monthly operating expenses, including adjustments to account for changes to NSCC's profit and expense profile during these circumstances, over the previous twelve months to determine the amount of LNA that it should hold to achieve a recovery or orderly wind-down of NSCC's critical operations. The estimated wind-down costs would constitute the Recovery/Wind-down Capital Requirement under the Capital Policy.
NSCC states that the R&W Plan is designed as a roadmap, and the types of actions that may be taken both leading up to and in connection with implementation of the Wind-down Plan would be primarily addressed in other supporting documentation referred to therein.
The Wind-down Plan would address proposed Rule 41 (Corporation Default) and proposed Rule 42 (Wind-down of the Corporation), which would be adopted to facilitate the implementation of the Wind-down Plan, as discussed below.
In connection with the adoption of the R&W Plan, NSCC proposes to adopt the Proposed Rules, each of which is described below. NSCC states that the Proposed Rules are designed to facilitate the execution of the R&W Plan and are designed to provide Members and Limited Members with transparency as to critical aspects of the R&W Plan, particularly as they relate to the rights and responsibilities of both NSCC and Members. NSCC also states that the Proposed Rules are designed to provide a legal basis to these aspects of the R&W Plan.
The proposed Rule 41 (“Corporation Default Rule”) would provide a mechanism for the termination, valuation and netting of unsettled, guaranteed Continuous Net Settlement (“CNS”) system
The proposed rule would define the events that would constitute a Corporation Default, which would generally include (1) the failure of NSCC to make any undisputed payment or delivery to a Member if such failure is not remedied within seven days after notice of such failure is given to NSCC; (2) NSCC is dissolved; (3) NSCC institutes a proceeding seeking a judgment of insolvency or bankruptcy, or a proceeding is instituted against it seeking a judgment of bankruptcy or insolvency and such judgment is entered; or (4) NSCC seeks or becomes subject to the appointment of a receiver, trustee or similar official pursuant to the federal securities laws or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
Upon a Corporation Default, the proposed Corporation Default Rule would provide that all unsettled, guaranteed CNS transactions would be terminated and, no later than 45 days from the date on which the event that constitutes a Corporation Default occurred (“Default Date”), the Board would determine a single net amount owed by or to each Member with respect to such transactions pursuant to the valuation procedures set forth in the Proposed Rule. NSCC states that essentially, for each affected position in a CNS Security, the CNS Market Value would be determined by using the Current Market Price for that security as determined in the CNS System as of the close of business on the next Business Day following the Default Date.
NSCC would determine a Net Contract Value for each Member's net unsettled long or short position in a CNS Security by netting the Member's (i) contract price for such net position that, as of the Default Date, has not yet passed the Settlement Date, and (ii) the Current Market Price in the CNS System on the Default Date for its fail positions. To determine each Member's CNS Close-out Value, (i) the Net Contract Value for each CUSIP would be subtracted from the CNS Market Value for such CUSIP, and (ii) the resulting difference for all CUSIPs in which the Member had a net long or short position would be summed, and would be netted and offset against any other amounts that may be due to or owing from the Member under the Rules. The proposed
NSCC states that this valuation approach, which is comparable to the approach adopted by other central counterparties, is appropriate for NSCC given the market in which NSCC operates and the volumes of transactions it processes in CNS because it would provide for a common, clear and transparent valuation methodology and price per CUSIP applicable to all affected Members.
NSCC states that the proposed Rule 42 (“Wind-down Rule”) is designed to facilitate the execution of the Wind-down Plan. The Wind-down Rule would include a proposed set of defined terms that would be applicable only to the provisions of this Proposed Rule. NSCC states that the Wind-down Rule is designed to make clear that a wind-down of NSCC's business would occur (1) after a decision is made by the Board, and (2) in connection with the transfer of NSCC's services to a Transferee, as described therein. NSCC states that, generally, the proposed Wind-down Rule is designed to create clear mechanisms for the transfer of Eligible Members, Eligible Limited Members, and Settling Banks (as these terms would be defined in the Wind-down Rule), and NSCC's business, in order to provide for continued access to critical services and to minimize disruption to the markets in the event the Wind-down Plan is initiated.
First, NSCC states that the Proposed Rule is designed to make clear that the Board is responsible for initiating the Wind-down Plan, and would identify the criteria the Board would consider when making this determination. As provided for in the Wind-down Plan and in the proposed Wind-down Rule, the Board would initiate the Wind-down Plan if, in the exercise of its business judgment and subject to its fiduciary duties, it has determined that the execution of the Recovery Plan has not or is not likely to restore NSCC to viability as a going concern, and the implementation of the Wind-down Plan, including the transfer of NSCC's business, is in the best interests of NSCC, Members and Limited Members, its shareholders and creditors, and the U.S. financial markets.
The Proposed Rule would provide that, upon making a determination to initiate the Wind-down Plan, the Board would identify the critical and non-critical services that would be transferred to the Transferee at the Transfer Time (as defined below and in the Proposed Rule), as well as any non-critical services that would not be transferred to the Transferee. The proposed Wind-down Rule would establish that any services transferred to the Transferee will only be provided by the Transferee as of the Transfer Time, and that any non-critical services that are not transferred to the Transferee would be terminated at the Transfer Time. The Proposed Rule would also provide that the Board would establish (1) an effective time for the transfer of NSCC's business to a Transferee (“Transfer Time”), (2) the last day that transactions may be submitted to NSCC for processing (“Last Transaction Acceptance Date”), and (3) the last day that transactions submitted to NSCC will be settled (“Last Settlement Date”).
The Wind-down Rule would authorize the Board to provide for the settlement of pending transactions prior to the Transfer Time, so long as the Corporation Default Rule has not been triggered. The Board would also have the ability to allow Members to only submit trades that would effectively offset pending positions or provide that transactions will be processed in accordance with special or exception processing procedures. NSCC states that the Proposed Rule is designed to enable these actions in order to facilitate settlement of pending transactions and reduce claims against NSCC that would have to be satisfied after the transfer has been effected. If none of these actions are deemed practicable (or if the Corporation Default Rule has been triggered), then the provisions of the proposed Corporation Default Rule would apply to the treatment of open, pending transactions.
NSCC states that the Proposed Rule is designed to make clear, however, that NSCC would not accept any transactions for processing after the Last Transaction Acceptance Date or which are designated to settle after the Last Settlement Date. Any transactions to be processed and/or settled after the Transfer Time would be required to be submitted to the Transferee, and would not be NSCC's responsibility.
The proposed Wind-down Rule would provide that, upon a decision to implement the Wind-down Plan, NSCC would provide Members and Limited Members and its regulators with a notice that includes material information relating to the Wind-down Plan and the anticipated transfer of NSCC's membership and business, including, for example, (1) a brief statement of the reasons for the decision to implement the Wind-down Plan; (2) identification of the Transferee and information regarding the transaction by which the transfer of NSCC's business would be effected; (3) the Transfer Time, Last Transaction Acceptance Date, and Last Settlement Date; and (4) identification of Eligible Members and Eligible Limited Members, and the critical and non-critical services that would be transferred to the Transferee at the Transfer Time, as well as those Non-Eligible Members and Non-Eligible Limited Members (as defined in the Proposed Rule), and any non-critical services that would not be included in the transfer. NSCC would also make available the rules and procedures and membership agreements of the Transferee.
The proposed Wind-down Rule would address the expected transfer of NSCC's membership to the Transferee, which NSCC would seek to effectuate by entering into an arrangement with a Failover Transferee, or by using commercially reasonable efforts to enter into such an arrangement with a Third Party Transferee. Therefore, the Wind-down Rule would provide Members, Limited Members and Settling Banks with notice that, in connection with the implementation of the Wind-down Plan and with no further action required by any party, (1) their membership with NSCC would transfer to the Transferee, (2) they would become party to a membership agreement with such Transferee, and (3) they would have all of the rights and be subject to all of the obligations applicable to their membership status under the rules of the Transferee. These provisions would not apply to any Member or Limited Member that is either in default of an obligation to NSCC or has provided notice of its election to withdraw from membership. Further, NSCC states that the proposed Wind-down Rule is designed to make clear that it would not prohibit (1) Members and Limited Members that are not transferred by
NSCC states that the proposed automatic mechanism for the transfer of NSCC's membership is intended to provide NSCC's membership with continuous access to critical services in the event of NSCC's wind-down, and to facilitate the continued prompt and accurate clearance and settlement of securities transactions. The proposed Wind-down Rule would provide that NSCC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, with respect to the critical services and any non-critical services that are transferred from NSCC to the Transferee, for at least a period of time to be agreed upon (“Comparability Period”), the business transferred from NSCC to the Transferee would be operated in a manner that is comparable to the manner in which the business was previously operated by NSCC. Specifically, the proposed Wind-down Rule would provide that (1) the rules of the Transferee and terms of membership agreements would be comparable in substance and effect to the analogous Rules and membership agreements of NSCC; (2) the rights and obligations of any Members, Limited Members and Settling Banks that are transferred to the Transferee would be comparable in substance and effect to their rights and obligations as to NSCC; and (3) the Transferee would operate the transferred business and provide any services that are transferred in a comparable manner to which such services were provided by NSCC. NSCC states that the purpose of these provisions and the intended effect of the proposed Wind-down Rule is to facilitate a smooth transition of NSCC's business to a Transferee and to provide that, for at least the Comparability Period, the Transferee (1) would operate the transferred business in a manner that is comparable in substance and effect to the manner in which the business was operated by NSCC, and (2) would not require sudden and disruptive changes in the systems, operations and business practices of the new members of the Transferee.
The proposed Wind-down Rule would include a provision addressing the subordination of unsecured claims against NSCC of Members and Limited Members who fail to participate in NSCC's recovery efforts (
The proposed Wind-down Rule would address other ex-ante matters including provisions providing that Members, Limited Members and Settling Banks (1) will assist and cooperate with NSCC to effectuate the transfer of NSCC's business to a Transferee, (2) consent to the provisions of the rule, and (3) grant NSCC power of attorney to execute and deliver on their behalf documents and instruments that may be requested by the Transferee. Finally, the Proposed Rule would include a limitation of liability for any actions taken or omitted to be taken by NSCC pursuant to the Proposed Rule.
NSCC states that the purpose of the limitation of liability is to facilitate and protect NSCC's ability to act expeditiously in response to extraordinary events. Such limitation of liability would be available only following triggering of the Wind-down Plan. In addition, and as a separate matter, NSCC states that the limitation of liability provides Members with transparency for the unlikely situation when those extraordinary events could occur, as well as supporting the legal framework within which NSCC would take such actions. NSCC states that these provisions, collectively, are designed to enable NSCC to take such acts as the Board determines necessary to effectuate an orderly transfer and wind-down of its business should recovery efforts prove unsuccessful.
The proposed Rule 60 (“Force Majeure Rule”) would address NSCC's authority to take certain actions upon the occurrence, and during the pendency, of a Market Disruption Event, as defined therein. NSCC states that the Proposed Rule is designed to clarify NSCC's ability to take actions to address extraordinary events outside of the control of NSCC and of its membership, and to mitigate the effect of such events by facilitating the continuity of services (or, if deemed necessary, the temporary suspension of services). To that end, under the proposed Force Majeure Rule, NSCC would be entitled, during the pendency of a Market Disruption Event, to (1) suspend the provision of any or all services, and (2) take, or refrain from taking, or require Members and Limited Members to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of NSCC's services as may be practicable.
The proposed Force Majeure Rule would identify the events or circumstances that would be considered a Market Disruption Event. The proposed Force Majeure Rule would define the governance procedures for how NSCC would determine whether, and how, to implement the provisions of the rule.
A determination that a Market Disruption Event has occurred would generally be made by the Board, but the Proposed Rule would provide for limited, interim delegation of authority to a specified officer or management committee if the Board would not be able to take timely action. In the event such delegated authority is exercised, the proposed Force Majeure Rule would require that the Board be convened as promptly as practicable, no later than five Business Days after such determination has been made, to ratify, modify, or rescind the action. The proposed Force Majeure Rule would also provide for prompt notification to the Commission, and advance consultation with Commission staff, when practicable, including notification when an event is no longer continuing and the relevant actions are terminated. The Proposed Rule would require Members and Limited Members to notify NSCC immediately upon becoming aware of a Market Disruption Event, and, likewise, would require NSCC to notify Members and Limited Members if it has triggered the Proposed Rule and of actions taken or intended to be taken thereunder.
Finally, the Proposed Rule would address other related matters, including a limitation of liability for any failure or delay in performance, in whole or in part, arising out of the Market Disruption Event. NSCC states that the purpose of the limitation of liability would be similar to the purpose of the analogous provision in the proposed Wind-down Rule, which is to facilitate and protect NSCC's ability to act expeditiously in response to extraordinary events.
In order to align the order of the Proposed Rules with the order of comparable rules in the rulebooks of the other Clearing Agencies, NSCC proposes to re-number the current Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40, which is currently reserved for future use.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that a registered clearing agency have rules designed to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
First, the Commission believes that the R&W Plan, generally, is designed to help NSCC promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible by providing NSCC with a roadmap for actions it may employ to monitor and manage its risks, and, as needed, to stabilize its financial condition in the event those risks materialize. Specifically, as described above, the Recovery Plan would establish a number of triggers for the potential application of a number of recovery tools described in the Recovery Plan. The Commission believes that establishing such triggers alongside a list of available recovery tools would help NSCC to more promptly determine when and how it may need to manage a significant stress event, and, as needed, stabilize its financial condition.
Similarly, the Force Majeure Rule is designed to provide a roadmap to address extraordinary events that may occur outside of NSCC's control. Specifically, as described above, the Force Majeure Rule would define a Market Disruption Event and provide governance around determining when such an event has occurred. The Force Majeure Rule also would describe NSCC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of NSCC's services, if practicable. By defining a Market Disruption Event and providing such governance and authority, the Commission believes that the Force Majeure Rule would help NSCC improve its ability to identify and manage a force majeure event, and, as needed, to stabilize its financial condition so that NSCC can continue to operate.
The Commission believes that the Recovery Plan and the Force Majeure Rule would allow for a more considered and comprehensive evaluation by NSCC of a stressed market situation and the ways in which NSCC could apply available recovery tools in a manner intended to minimize the potential negative effects of the stress situation for NSCC, its Members, and the broader financial system. Therefore, the Commission believes that the Recovery Plan and the Force Majeure Rule are designed to help NSCC promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible by establishing a means for NSCC to best determine the most appropriate way to address such stress situations in an effective manner.
Second, the Commission believes that the R&W Plan, generally, is designed to help NSCC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible by providing a roadmap to wind-down that is designed to ensure the availability of NSCC's critical services to the marketplace, while reducing disruption to the operations of Members and financial markets that might be caused by NSCC's failure. Specifically, as described above, the Wind-down Plan, as facilitated by the Wind-down Rule and the Corporation Default Rule, would provide for the wind-down of NSCC's business and transfer of membership and critical services if the recovery tools do not successfully return NSCC to financial viability. Accordingly, critical services, such as services that lack alternative providers or products, services that the failure of which could impact the availability of market liquidity, and services that are interconnected with other participants and processes within the U.S. financial system would be able to continue in an orderly manner while NSCC is seeking to wind-down its services. By designing the Wind-down Plan and these Proposed Rules to enable the continuity of NSCC's critical services and membership in an orderly manner while NSCC is seeking to wind-down its services, the Commission believes these proposed changes would help NSCC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible in the event the Wind-down Plan is implemented.
As described above, NSCC proposes to re-number current Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40, which is currently reserved for future use, to align the order of the Proposed Rules with the order of comparable rules in the rulebooks of the other Clearing Agencies. This proposed change would help create ease of reference to and heightened transparency of such rules, particularly for Members and for other clearing agencies and other market infrastructure that have links to, or reliance upon, the critical services offered by NSCC. Enhanced access to and transparency of these rules would therefore assist such parties in
By better enabling NSCC to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible, as described above, the Commission finds that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.
Rule 17Ad-22(e)(2)(i) under the Act requires a covered clearing agency
As described above, the R&W Plan is designed to identify clear lines of responsibility concerning the R&W Plan including (1) the ongoing development of the R&W Plan; (2) ongoing maintenance of the R&W Plan; (3) reviews and approval of the R&W Plan; and (4) the functioning and implementation of the R&W Plan. As described above, the R&R Team, which reports to the Management Committee, is responsible for maintaining the R&W Plan and for the development and ongoing maintenance of the overall recovery and wind-down planning process. Meanwhile, the Board, or such committees as may be delegated authority by the Board from time to time pursuant to its charter, would review and approve the R&W Plan biennially, and also would review and approve any changes that are proposed to the R&W Plan outside of the biennial review. Moreover, the R&W Plan would state the stages of escalation required to manage recovery under the Recovery Plan or to invoke NSCC's wind-down under the Wind-down Plan, which would range from relevant business line managers up to the Board. The R&W Plan would identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The R&W Plan also would specify the process NSCC would take to receive input from various parties at NSCC, including management committees and the Board.
In considering the above, the Commission believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent because it would specify lines of control. The Commission also believes that the R&W Plan would help contribute to establishing, implementing, maintaining, and enforcing written policies and procedures reasonably designed to provide for governance arrangements that support the public interest requirements in Section 17A of the Act
Therefore, the Commission finds that the R&W Plan is consistent with Rules 17Ad-22(e)(2)(i), (iii), and (v) under the Act.
Rule 17Ad-22(e)(3)(ii) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.
As described above, the R&W Plan's Recovery Plan provides a plan for NSCC's recovery necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses by defining the risk management activities, stress conditions and indicators, and tools that NSCC may use to address stress scenarios that could eventually prevent NSCC from being able to provide its critical services as a going concern. More specifically, through the framework of the Crisis Continuum, which identifies tools that can be employed to mitigate losses and mitigate or minimize liquidity needs as the market environment becomes increasingly stressed, the Recovery Plan would identify measures that NSCC may take to manage risks of credit losses and liquidity shortfalls, and other losses that could arise from a Member default. The Recovery Plan also would address NSCC's management of general business risks and other non-default risks that could lead to losses by identifying potential non-default losses and the resources available to NSCC to address such losses, including recovery triggers and tools to mitigate such losses. Therefore, the Commission believes that the R&W Plan's Recovery Plan helps NSCC establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity,
As described above, the R&W Plan's Wind-down Plan provides a plan for orderly wind-down of NSCC, which would be triggered by a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning NSCC to viability as a going concern. Once triggered, the Wind-down Plan sets forth mechanisms for the transfer of NSCC's membership and business, and it is designed to maintain continued access to NSCC's critical services and to minimize market impact of the transfer while NSCC is seeking to ultimately wind-down its services. Specifically, the Wind-down Plan would provide for the transfer of NSCC's business, assets, and membership to another legal entity with such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Although the Commission is not opining on the Wind-down Plan's consistency with the U.S. Bankruptcy Code, in reviewing the proposed changes, the Commission believes that NSCC's intent to use bankruptcy proceedings to achieve an orderly liquidation of assets after any transfer of NSCC's business appears reasonable, in light of the provisions of the Bankruptcy Code that address the liquidation and distribution of a debtor's property among creditors and interest holders.
Therefore, the Commission finds that the R&W Plan is consistent with Rule 17Ad-22(e)(3)(ii) under the Act.
Rule 17Ad-22(e)(15)(i) under the Act requires a covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that the covered clearing agency can continue operations and services as a going concern if those losses materialize, including by determining the amount of liquid net assets funded by equity based upon its general business risk profile and the length of time required to achieve a recovery or orderly wind-down, as appropriate, of its critical operations and services if such action is taken.
As discussed above, NSCC's Capital Policy is designed to address how NSCC holds LNA in compliance with these requirements,
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a notice of an Economic Injury Disaster Loan (EIDL) declaration for the State of California, dated 08/24/2018.
Issued on 08/24/2018.
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 Administrator's EIDL declaration, applications for economic injury disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for economic injury is 156630.
The States which received an EIDL Declaration # are California, Arizona.
Pursuant to the authority granted to the United States Small Business Administration under the Small Business Investment Act of 1958, as amended, under Section 309 of the Act and Section 107.1900 of the Small Business Administration Rules and Regulations (13 CFR 107.1900) to function as a small business investment company under the Small Business Investment Company License No. 09/09-0460 issued to Hercules Technology II, L.P. said license is hereby declared null and void.
U.S. Small Business Administration.
Notice.
This is a notice of an Economic Injury Disaster Loan (EIDL) declaration for the State of Colorado, dated 08/24/2018.
Issued on 08/24/2018.
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 Administrator's EIDL declaration, applications for economic injury disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for economic injury is 156560.
The States which received an EIDL Declaration # are Colorado, New Mexico.
U.S. Small Business Administration
Notice of open Federal Advisory Committee Meeting.
The U.S. Small Business Administration (SBA) is issuing this notice to announce the location, date, time, and agenda for the next meeting of the Advisory Committee on Veterans Business Affairs. The meeting is open to the public.
Thursday, September 6, 2018, from 9:00 a.m. to 4:00 p.m.
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C., Appendix 2), SBA announces the meeting of the Advisory Committee on Veterans Business Affairs (ACVBA). The ACVBA is established pursuant to 15 U.S.C. 657(b) note, and serves as an independent source of advice and policy. The purpose of this meeting is to focus on strategic planning, updates on past and current events, and the ACVBA's objectives for 2018.
For more information on veteran owned small business programs, please visit
U.S. Small Business Administration.
Notice of open Federal Interagency Task Force Meeting.
The U.S. Small Business Administration (SBA) is issuing this notice to announce the location, date, time and agenda for the next meeting of the Interagency Task Force on Veterans Small Business Development. The meeting is open to the public.
Wednesday, September 5, 2018, from 1:00 p.m. to 4:00 p.m.
U.S. Small Business Administration, 409 3rd Street SW, Washington, DC 20416.
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C., Appendix 2), SBA announces the meeting of the Interagency Task Force on Veterans Small Business Development (Task Force). The Task Force is established pursuant to Executive Order 13540 to coordinate the efforts of Federal agencies to improve capital, business development opportunities, and pre-established federal contracting goals for small business concerns owned and controlled by veterans and service-disabled veterans.
Moreover, the Task Force shall coordinate administrative and regulatory activities and develop proposals relating to “six focus areas”: (1) Improving capital access and capacity of small business concerns owned and controlled by veterans and service-disabled veterans through loans, surety bonding, and franchising; (2) ensuring achievement of the pre-established Federal contracting goals for small business concerns owned and controlled by veterans and service disabled veterans through expanded mentor-protégé assistance and matching such small business concerns with contracting opportunities; (3) increasing the integrity of certifications of status as a small business concern owned and controlled by a veteran or service-disabled veteran; (4) reducing paperwork and administrative burdens on veterans in accessing business development and entrepreneurship opportunities; (5) increasing and improving training and counseling services provided to small business concerns owned and controlled by veterans; and (6) making other improvements relating to the support for veterans business development by the Federal Government.
Pursuant to the authority granted to the United States Small Business Administration by the Windup Order of the United States District Court for the District of Massachusetts, entered August 25, 2016, the United States Small Business Administration hereby revokes the license of New England Partners Capital, L.P., a Delaware Limited Partnership, to function as a small business investment company under the Small Business Investment Company License No. 01710368 issued to New England Partners Capital, L.P., on February 26, 1998 and said license is hereby declared null and void as of August 25, 2016.
Social Security Administration.
Notice of updated schedule of standardized administrative fees.
On August 22, 2012,
The updated standard fee schedule is part of our continuing effort to standardize fees for non-program information requests. Standard fees provide consistency and ensure we recover the full cost of supplying information when we receive a request for a purpose not directly related to the administration of a program under the Social Security Act (Act).
The changes described above are applicable for requests we receive on or after October 1, 2018.
Kristina Poist, Social Security Administration, Office of Finance, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 597-1977. For information on eligibility or filing for benefits, visit our website,
Section 1106 of the Act and the Privacy Act
We charge $91 for each Form SSA-7050 for detailed yearly Social Security Earnings information. We will certify the detailed earnings information for an additional $34. Note: Certification is usually not necessary. A requester can obtain certified and non-certified detailed yearly Social Security earnings in formation by completing Form SSA-7050,
We will continue to evaluate all standard fees at least every two years to ensure we capture the full costs associated with providing information for non-program-related purposes. We require nonrefundable advance payment of the standard fee by check, money order, or credit card. We do not accept cash. Only one form of payment is acceptable in the full amount of the standard fee. If we revise any of the standard fees, we will publish another notice in the
Additional information is available on our Business Services website or by written request to: Social Security Administration, Office of Public Inquiries, Windsor Park Building, 6401 Security Boulevard, Baltimore, MD 21235.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
Written comments should be submitted by October 4, 2018.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Barbara Hall at (940) 594-5913, or by email at:
We estimate that of the 31 new applications for pilot school certificates, 25% will have special curricula courses that will need to be accounted for in the passage rate required for issuance of a certificate in § 141.5(d). Of the 291 applications for renewal of pilot school certificates, approximately 25% would include special curricula courses that must now be accounted for in the passage rate for renewal of a certificate under § 141.5(d). We estimate that it would take .1 hours to add this special curricula course information to both initial and renewal applications.
The FAA is also making a burden adjustment to the number of pilot schools, increasing the population from 546 pilot schools to 581 pilot schools.
Under part 211 of Title 49 Code of Federal Regulations (CFR), this provides the public notice that by letter dated August 14, 2018, CSX Transportation, Inc. (CSXT) petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 234. FRA assigned the petition Docket Number FRA-2018-0069.
CSXT seeks a waiver of compliance from 49 CFR 234.247,
CSXT states that no revenue traffic has moved on the discontinued portion of the Illinois Subdivision since June of 2016. Because CSXT has no current intention of resuming revenue service on this Subdivision, CSXT seeks this relief to remove the cars and rail-bound equipment from its tracks as expeditiously as possible. Specifically, CSXT seeks relief to operate over non-functioning highway-rail grade crossings without making inspections and tests required in §§ 234.249 through 234.271. To ameliorate any safety concerns, CSXT will make all train moves at 10 miles per hour or less and during daylight hours, work with local authorities to obtain permission to close the roadway at impacted crossings, and will station an employee at each impacted crossing to provide waring to approaching highway traffic and communicate with motorists as needed.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
•
•
•
•
Communications received by October 19, 2018 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the
Under part 211 of Title 49 Code of Federal Regulations (CFR), this document provides the public notice that on August 6, 2018, the Federal Railroad Administration (FRA) received a petition from the San Mateo County Transit District, on behalf of Caltrain, for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR parts 229, 231, and 238. Specifically, Caltrain seeks a waiver of compliance for their new Stadler-built KISS Electric Multiple Unit (EMU) railcars specific to the passenger area emergency brake valve, the clearance above top of rail, and the safety appliances. FRA assigned the petition Docket Number FRA-2018-0067.
First, Caltrain seeks a waiver of compliance from the emergency brake valve requirements of 49 CFR 229.47(b) and 238.305(c)(5), which require certain equipment to be equipped with an emergency brake valve accessible to another crew member in the passenger compartment and have the words “Emergency Brake Valve” legibly stenciled or marked near each valve, or be shown on an adjacent badge plate. The Caltrain EMU utilizes pull handles to provide a means for crew members and passengers to initiate an emergency brake condition. The vehicle is equipped with a modern electro-pneumatic brake system that does not rely on a conventional train-lined brake pipe to initiate an emergency brake command to the train. Instead, emergency brake commands are transmitted using electronic signals using fail-safe design principles. When a pull handle is activated (or “pulled”), propulsion is cut and irretrievable emergency brake is initiated. The handle can only be reset using a crew key. There is one emergency brake pull handle per doorway area, four total per car, and each is appropriately stenciled with the nomenclature “Emergency Brake.” Although the Caltrain EMU emergency brake pull handles are not technically “valves” as specified in the regulatory language, Caltrain contends they perform the same function as the required Emergency Brake Valve and satisfy the requirements of 49 CFR 229.47(b) and 238.305(c)(5).
Second, Caltrain seeks a waiver of compliance from the clearance above-top-of-rail (ATOR) requirements of 49 CFR 229.71. The Caltrain EMU will utilize Magnetic Track Brakes that are mounted on each non-powered (
Third, Caltrain seeks a waiver of compliance from the safety appliance requirements of 49 CFR 229.71(b),
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
•
•
•
•
Communications received by October 19, 2018 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications
Under part 211 of Title 49 Code of Federal Regulations (CFR), this document provides the public notice that on August 3, 2018, the Regional Transportation District (RTD) and the City of Denver, Colorado, petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 222. FRA assigned the petition Docket Number FRA-2016-0028.
Specifically, petitioners seek a waiver from the provisions of 49 CFR 222.35(b)(1) to establish a new quiet zone consisting of twelve public highway-rail grade crossings with active grade crossing warning devices comprising both flashing lights and gates that are not equipped with constant warning time devices. The crossing warning devices on the proposed “Denver East Corridor Quiet Zone” on the RTD A-Line are primarily activated by a wireless crossing activation system (WCAS) using “GPS-determined train speed and location to predict how many seconds a train is from the crossing.” Petitioners assert that this information is communicated wirelessly to the crossing warning devices and seeks to provide constant warning times. Additionally, this system is supplemented by a conventional track warning system in case the WCAS is unavailable.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
•
•
•
•
Communications received by October 19, 2018 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0138 by any one of the following methods:
•
•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel SERENITY is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0138 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0136 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453,
As described by the applicant the intended service of the vessel MIDNIGHT SUN is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0136 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0137 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel TO-MAR-O is:
The complete application is available for review identified in the DOT docket as MARAD-2018-137 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0142 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel SAILFISH is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0142 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. § 55103, 46 U.S.C. § 12121.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995, this notice announces that the Information Collection Request (ICR) abstracted below is being forwarded to the Office of Management and Budget (OMB) for review and comments. The information to be collected will be used to apply for admission to the U.S. Merchant Marine Academy. Collection of information is completed digitally through an online candidate portal. Part I of the Candidate Application is used to establish initial eligibility. The Academic Information Request, Candidate Activities Record, School Official Evaluations and Biographical Essay are used by the USMMA admissions staff and its Candidate Evaluation Board to select the best qualified candidates for the Academy. Result from the administration of the Candidate Fitness Assessment are used to determine physical qualification. Candidates may also submit an optional resume and additional recommendation letters with their application. A
Comments must be submitted on or before October 4, 2018.
Send comments regarding the burden estimate, including suggestions for reducing the burden, to the Office of Management and Budget, Attention: Desk Officer for the Office of the Secretary of Transportation, 725 17th Street NW, Washington, DC 20503. Comments are invited on: (a) Whether the proposed collection of information is necessary for the Department's performance; (b) the accuracy of the estimated burden; (c) ways for the Department to enhance the quality, utility and clarity of the information collection; and (d) ways that the burden could be minimized without reducing the quality of the collected information. The agency will summarize and/or include your comments in the request for OMB's clearance of this information collection.
Mike Bedryk, CDR USMS, Director of Admissions, 516.726.5641, U.S. Merchant Marine Academy, 300 Steamboat Road, New York, NY 11024,
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.93.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-20187-0141 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel MAKARA is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0141 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0140 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel COOL RUNNINGS is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0140 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
The Secretary of Transportation may, on petition of the licensee, amend a deepwater port license issued under the of the Deepwater Port Act of 1974, as amended. For purposes of this notice, the Maritime Administration (MARAD) provides public notice of its decision to approve the request of Neptune LNG LLC (Neptune) for continuation of the suspension of port operations at the Neptune Deepwater Port (Neptune Port) by amending the Neptune Deepwater Port License (License).
The Docket Management Facility maintains the public docket for this project. The docket may be viewed electronically at
If you have questions about the Neptune Deepwater Port License Amendment and suspension of port operations, please contact Ms. Yvette M. Fields, Director, Office of Deepwater Ports and Offshore Activities at (202) 366-0926 or
On December 22, 2017, MARAD received a written request from Neptune for authorization to temporarily suspend operations at the Neptune Port, located approximately 22 miles northeast of Boston, Massachusetts. In the request, Neptune indicated that conditions within the Northeast region's natural gas market continue to impact the Neptune Port's ability to import liquefied natural gas (LNG). As a result, the Neptune Port has remained inactive over the past several years and will likely remain inactive for the foreseeable future. For these reasons, Neptune requested MARAD's authorization to formally suspend port operations for a period of four years.
After conducting a thorough evaluation and consultation with various Federal agencies, MARAD has determined that the amendment of the license is consistent with the requirements of 33 U.S.C. chapter 29 and has accepted Neptune's request and authorized amendment of the License to provide an additional four-year suspension of port operations. The amendment is applicable only to Articles 2, 6, and 19 of the License. All other terms, conditions, and obligations of the License will remain in effect during and after the suspension period. The suspension period became effective June 26, 2018, and will extend for a period of four years, to be measured in calendar days.
In order to resume operations prior to expiration of the four-year suspension period, Neptune must petition MARAD for approval to resume port operations. The petition must be submitted at least six months prior to the proposed re-start date, and certify that Neptune is in receipt of all applicable Federal and State permits, approvals, and authorizations. Should Neptune request an extension of the suspension period, such request must be submitted to MARAD no less than one hundred eighty (180) calendar days prior to the expiration date of the suspension period. Thereafter, MARAD will evaluate, in consultation with the relevant Federal agencies, the appropriateness of such an extension. The final determination on any extension will be rendered by the Maritime Administrator or a designee acting on behalf of the Maritime Administrator.
Additional information pertaining to this public notice may be found in the public docket regarding the Neptune Deepwater Port License online at
49 CFR 1.93.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before October 4, 2018.
You may submit comments identified by DOT Docket Number MARAD-2018-0139 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel PIPER is:
The complete application is available for review identified in the DOT docket as MARAD-2018-0139 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Office of the Comptroller of the Currency (OCC), Department of the Treasury.
Notice of Federal Advisory Committee meeting.
The OCC announces a meeting of the Mutual Savings Association Advisory Committee (MSAAC).
A public meeting of the MSAAC will be held on Tuesday, September 25, 2018, beginning at 8:30 a.m. Eastern Daylight Time (EDT).
The OCC will hold the September 25, 2018 meeting of the MSAAC at the OCC's offices at 400 7th Street SW, Washington, DC 20219.
Michael R. Brickman, Deputy Comptroller for Thrift Supervision, (202) 649-5420, Office of the Comptroller of the Currency, Washington, DC 20219.
By this notice, the OCC is announcing that the MSAAC will convene a meeting on Tuesday, September 25, 2018, at the OCC's offices at 400 7th Street SW, Washington, DC 20219. The meeting is open to the public and will begin at 8:30 a.m. EDT. The purpose of the meeting is for the MSAAC to advise the OCC on regulatory or other changes the OCC may make to ensure the health and viability of mutual savings associations. The agenda includes a discussion of current topics of interest to the industry.
Members of the public may submit written statements to the MSAAC. The OCC must receive written statements no later than 5:00 p.m. EDT on Tuesday, September 18, 2018. Members of the public may submit written statements to
Members of the public who plan to attend the meeting should contact the OCC by 5:00 p.m. EDT on Tuesday, September 18, 2018, to inform the OCC of their desire to attend the meeting and to provide information that will be required to facilitate entry into the meeting. Members of the public may contact the OCC via email at
Attendees should provide their full name, email address, and organization, if any. For security reasons, attendees will be subject to security screening procedures and must present a valid government-issued identification to enter the building.
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 public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently, the IRS is soliciting comments concerning transitional guidance under sections 162(f) and 6050X with respect to certain fines, penalties, and other amounts.
Written comments should be received on or before November 5, 2018 to be assured of consideration.
Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW, Washington, DC 20224. Requests for additional information or copies of the regulations should be directed to R. Joseph Durbala, at Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet, at
Section 13306 of “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” Public Law 115-97 (the “Act”), which was signed into law on December 22, 2017, amended section 162(f) of the Internal Revenue Code (“Code”) and added new section 6050X to the Code. The Department of the Treasury (“Treasury Department”) and the Internal Revenue Service (“IRS”) intend to publish proposed regulations under sections 162(f) and 6050X.
This submission is being made to seek new approval as required in the Paperwork Reduction Act.
The following paragraph applies to all 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 if 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.
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the ICR for OMB approval of the extension of the information collection; they will also become a matter of public record.
Departmental Offices, Treasury Department.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork burdens, invites the general public and other Federal agencies to comment on an information collection that is due for renewed approval by the Office of Management and Budget. The Office of International Affairs within the Department of the Treasury is soliciting comments concerning recordkeeping requirements associated with Reporting of International Capital and Foreign Currency Transactions and Positions—31 CFR part 128.
Written comments should be received on or before November 5, 2018 to be assured of consideration.
Direct all written comments on international capital transactions and positions to: Dwight Wolkow, International Portfolio Investment Data Systems, Department of the Treasury, Room 5422, 1500 Pennsylvania Avenue NW, Washington, DC 20220. In view of possible delays in mail delivery, please also notify Mr. Wolkow by email (
Requests for additional information on international capital transactions and positions should be directed to Mr.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before October 4, 2018.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Office of Quality, Privacy and Risk, Department of Veterans Affairs, 811 Vermont Avenue, Floor 5, Area 368, Washington, DC 20420, (202) 461-5870 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
(1) The Secretary, in consultation with the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the United States Trade Representative (USTR), the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and such other senior Executive Branch officials as the Secretary deems appropriate, is hereby authorized to provide relief from the quantitative limitations applicable to aluminum articles described in subheadings 9903.85.05 and 9903.85.06 of subchapter III of chapter 99 of the HTSUS for any aluminum article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, and is also authorized to provide such relief based upon specific national security considerations. Such relief shall be provided for an aluminum article only after a request for relief is made by a directly affected party located in the United States. Such relief may be provided to directly affected parties on a party-by-party basis taking into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate. If the Secretary determines that relief should be granted to a requesting party for the importation of a particular aluminum article, the Secretary shall publicly post such determination and notify U.S. Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the applicable quantitative limitation. Relief granted under this clause shall apply only to an article entered for consumption, or withdrawn from warehouse for consumption, on or after the date on which the request for relief is granted by the Secretary. Until such time as any applicable quantitative limitation for a particular article has been reached, CBP shall count any aluminum article for which relief is granted under this clause toward such quantitative limitation at the time when such aluminum article is entered for consumption or withdrawn from warehouse for consumption. Any aluminum article for which relief is granted under this clause shall not be subject to the additional rate of duty set forth in Proclamation 9704, as amended. Aluminum articles for which relief is granted under this clause shall be subject to the duty treatment provided in subheading 9903.85.11 of subchapter III of chapter 99 of the HTSUS, as established by the Annex to this proclamation.
(2) As soon as practicable, the Secretary shall issue procedures for the requests for exclusion described in clause 1 of this proclamation. The issuance of such procedures is exempt from Executive Order 13771 of January
(3) Clause 3 of Proclamation 9704, as amended by Proclamation 9710, is further amended by striking the fourth and fifth sentences and inserting in lieu thereof the following two sentences: “If the Secretary determines that a particular aluminum article should be excluded, the Secretary shall publicly post such determination and notify U.S. Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the duties described in clause 2 of this proclamation. For merchandise entered for consumption, or withdrawn from warehouse for consumption, on or after the date the duty established under this proclamation is effective and with respect to which liquidation is not final, such relief shall be retroactive to the date the request for relief was accepted by the Department of Commerce.”.
(4) Where the government of a country identified in the superior text to subheadings 9903.85.05 and 9903.85.06 of subchapter III of chapter 99 of the HTSUS notifies the United States that it has established a mechanism for the certification of exports to the United States of products covered by the quantitative limitations applicable to these subheadings, and where such mechanism meets the operational requirements for participation in an export certification system administered by the United States, CBP, in consultation with the Secretary, USTR, and other relevant executive departments and agencies, may require that importers of these products furnish relevant export certification information in order to qualify for the treatment set forth in subheadings 9903.85.05 and 9903.85.06. Where CBP adopts such a requirement, it shall publish in the
(5) Subdivision (c) of U.S. note 19 to subchapter III of chapter 99 of the HTSUS is amended by inserting at the end the following new sentence: “Pursuant to subheading 9903.85.11 and superior text thereto, the Secretary may provide that any excluded product shall be granted entry into the customs territory of the United States when the applicable quantitative limitation has filled for the specified period for such good.”.
(6) Subdivision (d) of U.S. note 19 to subchapter III of chapter 99 of the HTSUS is amended by inserting after “9903.85.06” the phrase “and 9903.85.11”.
(7) The superior text for subheadings 9903.85.05 and 9903.85.06 of the HTSUS is amended by deleting “Aluminum” and inserting in lieu thereof: “Except as provided in subheading 9903.85.11, aluminum”.
(8) To implement clause 1 of this proclamation, subchapter III of chapter 99 of the HTSUS is modified as provided in the Annex to this proclamation.
(9) The modifications to the HTSUS made by clauses 5 through 8 of this proclamation and the Annex to this proclamation shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 30, 2018, and shall continue in effect, unless such actions are expressly reduced, modified, or terminated.
(10) Clause 5 of Proclamation 9704 is amended by inserting “for consumption” after “goods entered” in the first sentence. Clause 5 of Proclamation 9710, as amended, is amended by striking “by this proclamation” from the end of the second sentence. Clause 5 of Proclamation 9739 is amended by striking “by clause 1 of this proclamation”.
(11) The Secretary, in consultation with CBP and other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments directed by this proclamation. The Secretary shall publish any such modification to the HTSUS in the
(12) Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.
(1) The Secretary, in consultation with the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the United States Trade Representative (USTR), the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and such other senior Executive Branch officials as the Secretary deems appropriate, is hereby authorized to provide relief from the quantitative limitations applicable to steel articles described in subheadings 9903.80.05 through 9903.80.58 of subchapter III of chapter 99 of the HTSUS for any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, and is also authorized to provide such relief based upon specific national security considerations. Such relief shall be provided for a steel article only after a request for relief is made by a directly affected party located in the United States. Such relief may be provided to directly affected parties on a party-by-party basis taking into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate. If the Secretary determines that relief should be granted to a requesting party for the importation of a particular steel article, the Secretary shall publicly post such determination and notify U.S. Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the applicable quantitative limitation. Relief granted under this clause shall apply only to an article entered for consumption, or withdrawn from warehouse for consumption, on or after the date on which the request for relief is granted by the Secretary. Until such time as any applicable
(2) The Secretary shall, on an expedited basis, grant relief from the quantitative limitations set forth in Proclamation 9740 and Proclamation 9759 and their accompanying annexes for any steel article where (i) the party requesting relief entered into a written contract for production and shipment of such steel article before March 8, 2018; (ii) such contract specifies the quantity of such steel article that is to be produced and shipped to the United States consistent with a schedule contained in such contract; (iii) such steel article is to be used to construct a facility in the United States and such steel article cannot be procured from a supplier in the United States to meet the delivery schedule and specifications contained in such contract; (iv) the payments made pursuant to such contract constitute 10 percent or less of the cost of the facility under construction; and (v) lack of relief from the quantitative limitations on such steel article would significantly disrupt or delay completion of the facility being constructed in the United States with the steel article specified in such contract. Until such time as any applicable quantitative limitation for a particular article has been reached, CBP shall count any steel article for which relief is granted under this clause toward such quantitative limitation at the time when such steel article is entered for consumption or withdrawn from warehouse for consumption. Any steel article for which relief is granted under this clause shall be subject to the additional rate of duty set forth in clause 2 of Proclamation 9705, as amended by this proclamation, when such steel article is entered for consumption or withdrawn from warehouse for consumption. This rate of duty is in addition to any other duties, fees, exactions, and charges applicable to such steel article. Any steel article provided relief under this clause must be entered for consumption, or withdrawn from warehouse for consumption, on or before March 31, 2019, and may not be granted further relief by the Secretary under clause 3 of Proclamation 9705, as amended. Steel articles for which relief is granted under this clause shall be subject to the duty treatment provided in subheading 9903.80.61 of subchapter III of chapter 99 of the HTSUS, as established by the Annex to this proclamation.
(3) The Secretary shall grant relief under clause 2 of this proclamation only upon receipt of a sworn statement signed by the chief executive officer and the chief legal officer of the party requesting relief. Such statement shall attest that (i) the steel article for which relief is sought and the associated contract meet all of the criteria for relief set forth in clause 2 of this proclamation; (ii) the party requesting relief will accurately report to CBP, in the manner that CBP prescribes, the quantity of steel articles entered for consumption, or withdrawn from warehouse for consumption, pursuant to any grant of relief; and (iii) the quantity of steel articles entered pursuant to a grant of relief will not exceed the quantity specified in such contract for delivery on or before March 31, 2019. Upon granting relief under clause 2 of this proclamation, the Secretary shall notify CBP and publish a notice of relief for the quantity of steel articles specified in such contract that are scheduled for delivery on or before March 31, 2019. The Secretary shall revoke any grant of relief under clause 2 of this proclamation if the Secretary determines at any time after such grant that the criteria for relief have not been met and may, if the Secretary deems it appropriate, notify the Attorney General of the facts that led to such revocation.
(4) As soon as practicable, the Secretary shall issue procedures for the requests for exclusion described in clause 1 of this proclamation. The issuance of such procedures is exempt from Executive Order 13771 of January 30, 2017 (Reducing Regulation and Controlling Regulatory Costs). CBP shall implement exclusions granted pursuant to clause 1 or relief provided under clause 2 of this proclamation as soon as practicable.
(5) Clause 3 of Proclamation 9705, as amended by Proclamation 9711, is further amended by striking the fourth and fifth sentences and inserting in lieu thereof the following two sentences: “If the Secretary determines that a particular steel article should be excluded, the Secretary shall publicly post such determination and notify U.S. Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the duties described in clause 2 of this proclamation. For merchandise entered for consumption, or withdrawn from warehouse for consumption, on or after the date the duty established under this proclamation is effective and with respect to which liquidation is not final, such relief shall be retroactive to the date the request for relief was accepted by the Department of Commerce.”.
(6) In order to establish the duty rate on imports of steel articles for which relief is granted under clause 2 of this proclamation, clause 2 of Proclamation 9705, as amended, is further amended by striking the last sentence and inserting in lieu thereof the following two sentences: “All steel articles imports covered by subheading 9903.80.61, in subchapter III of chapter 99 of the HTSUS, shall be subject to the additional 25 percent ad valorem rate of duty established herein with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on the date specified in a determination by the Secretary granting relief. These rates of duty, which are in addition to any other duties, fees, exactions, and charges applicable to such imported steel articles, shall apply to imports of steel articles from each country as specified in the preceding three sentences.”.
(7) Where the government of a country identified in the superior text to subheadings 9903.80.05 through 9903.80.58 of subchapter III of chapter 99 of the HTSUS notifies the United States that it has established a mechanism for the certification of exports to the United States of products covered by the quantitative limitations applicable to these subheadings, and where such mechanism meets the operational requirements for participation in an export certification system administered by the United States, CBP, in consultation with the Secretary, USTR, and other relevant executive departments and agencies, may require that importers of these products furnish relevant export certification information in order to qualify for the treatment set forth in subheadings 9903.80.05 through 9903.80.58. Where CBP adopts such a requirement, it shall publish in the
(8) Subdivision (c) of U.S. note 16 to subchapter III of chapter 99 of the HTSUS is amended by inserting at the end the following new sentence: “Pursuant to subheadings 9903.80.60 and 9903.80.61 and superior text thereto, the Secretary may provide that any excluded product shall be granted entry into the customs territory of the United States when the applicable quantitative limitation has filled for the specified period for such good.”.
(9) Subdivision (d) of U.S. note 16 to subchapter III of chapter 99 of the HTSUS is amended by inserting after “9903.80.58” the phrase “and 9903.80.60 and 9903.80.61”.
(10) The rate of duty specified in the HTSUS in the general column for heading 9903.80.01 is amended by striking “25%” and inserting in lieu thereof: “The duty provided in the applicable subheading + 25%”.
(11) The rate of duty specified in the HTSUS in the general column for heading 9903.80.02 is amended by striking “50%” and inserting in lieu thereof: “The duty provided in the applicable subheading + 50%”.
(12) The superior text for subheadings 9903.80.05 through 9903.80.58 of the HTSUS is amended by deleting “Iron” and inserting in lieu thereof: “Except as provided in subheadings 9903.80.60 and 9903.80.61, iron”.
(13) To implement clauses 1 and 2 of this proclamation, subchapter III of chapter 99 of the HTSUS is modified as provided in the Annex to this proclamation.
(14) The modifications to the HTSUS made by clauses 8 through 13 of this proclamation and the Annex to this proclamation shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 30, 2018, and shall continue in effect, unless such actions are expressly reduced, modified, or terminated.
(15) Clause 5 of Proclamation 9705 is amended by inserting “for consumption” after “goods entered” in the first sentence. Clause 5 of Proclamation 9711, as amended, is amended by striking “by this proclamation” from the end of the second sentence. Clause 6 of Proclamation 9740 is amended by striking “by clause 1 of this proclamation”.
(16) The Secretary, in consultation with CBP and other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments directed by this proclamation. The Secretary shall publish any such modification to the HTSUS in the
(17) Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.
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 |