| Page Range | 58175-58461 | |
| FR Document |
| Page and Subject | |
|---|---|
| 83 FR 58461 - Continuation of the National Emergency With Respect to Burundi | |
| 83 FR 58250 - Sunshine Act Meeting | |
| 83 FR 58300 - Sunshine Act Meeting | |
| 83 FR 58201 - Review of Controls for Certain Emerging Technologies | |
| 83 FR 58252 - Notice of Availability and Announcement of Public Meeting for the Draft Environmental Assessment for the Edward J. Schwartz Federal Building Structural Enhancements Project in San Diego, California | |
| 83 FR 58202 - User Fees Relating to Enrolled Agents and Enrolled Retirement Plan Agents | |
| 83 FR 58251 - Notice of Intent To Prepare a Supplemental Environmental Impact Statement for the Proposed U.S. Department of Homeland Security (DHS) Headquarters Consolidation at St. Elizabeths Master Plan Amendment #2 | |
| 83 FR 58261 - Notice of Interest Rate on Overdue Debts | |
| 83 FR 58274 - Intent To Request Extension From OMB of One Current Public Collection of Information: Air Cargo Security Requirements | |
| 83 FR 58261 - Activities Deemed Not To Be Research: Public Health Surveillance, 2018 Requirements | |
| 83 FR 58302 - Heliophysics Advisory Committee; Meeting | |
| 83 FR 58301 - National Space-Based Positioning, Navigation, and Timing Advisory Board; Meeting | |
| 83 FR 58318 - Projects Approved for Consumptive Uses of Water | |
| 83 FR 58304 - Proposal Review Panel for International Science and Engineering; Notice of Meeting | |
| 83 FR 58262 - Prospective Grant of an Exclusive Patent License: Development and Commercialization of Chimeric Antigen Receptor (CAR) Therapies for the Treatment of FMS-Like Tyrosine Kinase 3 (FLT3) Expressing Cancers | |
| 83 FR 58263 - Center for Scientific Review; Notice of Closed Meeting | |
| 83 FR 58264 - Center for Scientific Review; Notice of Closed Meeting | |
| 83 FR 58265 - Government-Owned Inventions; Availability for Licensing | |
| 83 FR 58264 - National Cancer Institute; Notice of Meeting | |
| 83 FR 58263 - National Heart, Lung, and Blood Institute; Notice of Meetings | |
| 83 FR 58262 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meetings | |
| 83 FR 58265 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meeting | |
| 83 FR 58266 - Government-Owned Inventions; Availability for Licensing | |
| 83 FR 58248 - Proposed Information Collection Request; Comment Request; Transportation Conformity Determinations for Federally Funded and Approved Transportation Plans, Programs and Projects, EPA ICR No. 2130.06, OMB Control No. 2060-0561 | |
| 83 FR 58257 - Determination That REGITINE (Phentolamine Mesylate) Injection, 5 Milligrams/Vial, and Other Drug Products Were Not Withdrawn From Sale for Reasons of Safety or Effectiveness | |
| 83 FR 58318 - Office of Commercial Space Transportation: Notice of Availability of the Final Environmental Assessment and Finding of No Significant Impact/Record of Decision for the Shuttle Landing Facility Launch Site Operator License | |
| 83 FR 58315 - ABR Dynamic Funds, LLC, et al. | |
| 83 FR 58281 - Agency Information Collection Activities; Secretarial Elections | |
| 83 FR 58245 - Verdant Power, LLC; Notice of Intent To File License Application, Filing of Pre-Application Document, and Approving Use of the Traditional Licensing Process | |
| 83 FR 58243 - Hydroelectric Licensing Regulations Under America's Water Infrastructure Act of 2018; Notice Establishing Schedule Pursuant to America's Water Infrastructure Act of 2018 | |
| 83 FR 58244 - North American Electric Reliability Corporation; Notice of Filing | |
| 83 FR 58242 - Marine Renewable Energy Collaborative of New England; Notice of Intent To File License Application, Filing of Draft Application, Request for Waivers of Integrated Licensing Process Regulations Necessary for Expedited Processing of a Hydrokinetic Pilot Project License Application, and Soliciting Comments | |
| 83 FR 58244 - Cube Yadkin Generation, LLC; Notice of Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Protests | |
| 83 FR 58278 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Student Transportation Form | |
| 83 FR 58279 - Agency Information Collection Activities; Reindeer in Alaska | |
| 83 FR 58298 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Report of Theft or Loss of Explosives-ATF F 5400.5 | |
| 83 FR 58285 - Call for Nominations for the Grand Staircase-Escalante National Monument Advisory Committee, Utah | |
| 83 FR 58237 - Notice of Orders Issued Under Section 3 of the Natural Gas Act During September 2018 | |
| 83 FR 58240 - Environmental Management Site-Specific Advisory Board, Portsmouth; Meeting | |
| 83 FR 58240 - Advanced Scientific Computing Advisory Committee; Meeting | |
| 83 FR 58239 - National Petroleum Council; Meeting | |
| 83 FR 58282 - Notice of Withdrawal Extension Application, United States Air Force, Public Land Order No. 7419, and Opportunity for Public Meeting; Nevada | |
| 83 FR 58272 - Soft Target Countermeasure Surveys | |
| 83 FR 58301 - NASA Advisory Council; Technology, Innovation and Engineering Committee; Meeting | |
| 83 FR 58300 - NASA Advisory Council; Human Exploration and Operations Committee; Meeting | |
| 83 FR 58236 - Market Risk Advisory Committee | |
| 83 FR 58321 - Quarterly Publication of Individuals, Who Have Chosen To Expatriate, as Required by Section 6039G | |
| 83 FR 58222 - Submission for OMB Review; Comment Request | |
| 83 FR 58185 - Drawbridge Operation Regulation; Sacramento River, Rio Vista, CA | |
| 83 FR 58269 - Information Collection Request to Office of Management and Budget; OMB Control Number: 1625-0099 | |
| 83 FR 58271 - Information Collection Request to Office of Management and Budget; OMB Control Number: 1625-0070 | |
| 83 FR 58270 - Information Collection Request to Office of Management and Budget; OMB Control Number: 1625-0047 | |
| 83 FR 58268 - Collection of Information Under Review by Office of Management and Budget; OMB Control Number: 1625-0018 | |
| 83 FR 58223 - Foreign-Trade Zone (FTZ) 176-Rockford, Illinois; Authorization of Production Activity Leading Americas Inc. (Wire Harnesses), Hampshire, Illinois | |
| 83 FR 58223 - Approval of Subzone Status; Digi-Key Corporation; Fargo, North Dakota | |
| 83 FR 58229 - Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Rescission, in Part, of Antidumping Duty Administrative Review; 2017-2018 | |
| 83 FR 58231 - Certain Steel Nails From the Sultanate of Oman: Final Results of Antidumping Duty Administrative Review; 2016-2017 | |
| 83 FR 58229 - Certain Activated Carbon From the People's Republic of China: Amended Final Results of Antidumping Duty Administrative Review; 2016-2017 | |
| 83 FR 58223 - Foreign-Trade Zone (FTZ) 64-Jacksonville, Florida, Authorization of Production Activity, Bacardi USA, Inc. (Kitting of Alcoholic Beverages), Jacksonville, Florida | |
| 83 FR 58267 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
| 83 FR 58303 - Agency Information Collection Activities: Proposed Collection; Comment Request; Loan Participation | |
| 83 FR 58302 - Submission for OMB Review; Comment Request | |
| 83 FR 58245 - Hydroelectric Licensing Regulations Under America's Water Infrastructure Act of 2018; Notice Inviting Federal and State Agencies and Indian Tribes To Request Participation in the Interagency Task Force Pursuant to America's Water Infrastructure Act of 2018 | |
| 83 FR 58246 - Records Governing Off-the-Record Communications; Public Notice | |
| 83 FR 58241 - Combined Notice of Filings | |
| 83 FR 58243 - Bridgewater Power Company, L.P.; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 58247 - Combined Notice of Filings #1 | |
| 83 FR 58252 - Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry (BSC, NCEH/ATSDR) | |
| 83 FR 58252 - Board of Scientific Counselors, National Center for Injury Prevention and Control (BSC NCIPC); Correction | |
| 83 FR 58319 - Limitation on Claims Against Proposed Public Transportation Projects | |
| 83 FR 58261 - National Biodefense Science Board Public Teleconference | |
| 83 FR 58283 - Notice of Availability of the Draft Oklahoma, Kansas, and Texas Joint Environmental Impact Statement/Bureau of Land Management Resource Management Plan and Bureau of Indian Affairs Integrated Resource Management Plan | |
| 83 FR 58186 - Safety Zone; Penn's Landing Fireworks, Delaware River, Philadelphia PA | |
| 83 FR 58259 - Report on the Performance of Drug and Biologics Firms in Conducting Postmarketing Requirements and Commitments; Availability | |
| 83 FR 58297 - Notice of Inventory Completion: U.S. Department of the Interior, Bureau of Land Management, Utah State Office, Salt Lake City, UT, and Southern Utah University, Cedar City, UT; Correction | |
| 83 FR 58294 - Notice of Inventory Completion: Marshall University, Huntington, WV | |
| 83 FR 58286 - Notice of Inventory Completion: U.S. Department of Defense, Department of the Navy, Washington, DC; Correction | |
| 83 FR 58277 - Foreign Endangered Species; Receipt of Permit Application | |
| 83 FR 58275 - Foreign Endangered Species; Marine Mammals; Receipt of Permit Applications | |
| 83 FR 58304 - Advisory Committee for Computer and Information Science and Engineering; Notice of Meeting | |
| 83 FR 58303 - Advisory Committee for Social, Behavioral and Economic Sciences; Notice of Meeting | |
| 83 FR 58267 - Notice of Meeting | |
| 83 FR 58175 - Federal Employees Dental and Vision Insurance Program: Extension of Eligibility to Certain TRICARE-Eligible Individuals; Effective Date of Enrollment | |
| 83 FR 58299 - Advisory Committee on Construction Safety and Health (ACCSH); Charter Renewal | |
| 83 FR 58319 - Hazardous Materials: Emergency Waiver No. 10 | |
| 83 FR 58320 - Hazardous Materials: Emergency Waiver No. 9 | |
| 83 FR 58299 - Notice of Lodging of Proposed Consent Decree Under the Comprehensive Environmental Response, Compensation and Liability Act | |
| 83 FR 58249 - Incentive Auction Task Force and Media Bureau Announce Settlement Opportunity for Mutually Exclusive Displacement Applications Filed During the Special Displacement Window | |
| 83 FR 58266 - National Human Genome Research Institute; Notice of Closed Meeting | |
| 83 FR 58264 - National Institute of Neurological Disorders and Stroke; Notice of Closed Meetings | |
| 83 FR 58260 - Meeting of the Advisory Committee on Infant Mortality | |
| 83 FR 58249 - Meeting of the Broadband Deployment Advisory Committee | |
| 83 FR 58280 - Agency Information Collection Activities; Class III Gaming Procedures, Tribal Revenue Allocation Plans, and Gaming on Trust Lands Acquired After October 17, 1988 | |
| 83 FR 58307 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Volume Incentive Program | |
| 83 FR 58274 - Agency Information Collection Activities; Extension, Without Change, of a Currently Approved Collection: Designation of Attorney in Fact/Revocation of Attorney in Fact | |
| 83 FR 58306 - Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rule 503 To Adopt Interpretations and Policies .02 and .03 | |
| 83 FR 58305 - New Postal Products | |
| 83 FR 58315 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change To Amend NYSE Arca Rule 5.2-E(j)(6) Relating to Equity Index-Linked Securities Listing Standards Set Forth in NYSE Arca Rule 5.2-E(j)(6)(B)(I) | |
| 83 FR 58309 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Amendment Nos. 1, 2, and 3 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, to List and Trade Corporate Non-Convertible Bonds on Nasdaq | |
| 83 FR 58271 - Agency Information Collection Activities: Screening Requirements for Carriers | |
| 83 FR 58298 - Certain Non-Volatile Memory Devices and Products Containing Same; Commission Determination To Rescind Remedial Orders Issued in This Investigation Based Upon License and Settlement | |
| 83 FR 58237 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Comprehensive Literacy Program Evaluation: Striving Readers Implementation Study | |
| 83 FR 58219 - Fisheries of the Northeastern United States; Mid-Atlantic Blueline Tilefish Fishery; 2019 and Projected 2020-2021 Specifications | |
| 83 FR 58304 - Final Environmental Impact Statement (FEIS) for the Sacramento Peak Observatory, Sunspot, New Mexico | |
| 83 FR 58260 - National Vaccine Injury Compensation Program: Revised Amount of the Average Cost of a Health Insurance Policy | |
| 83 FR 58250 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
| 83 FR 58206 - Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Attainment Plan for the Allegheny, Pennsylvania Nonattainment Area for the 2010 Sulfur Dioxide Primary National Ambient Air Quality Standard | |
| 83 FR 58317 - Privacy Act of 1974; Matching Program | |
| 83 FR 58253 - Medicare and Medicaid Programs: Application From the American Association for Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF) for Continued Approval of Its Ambulatory Surgical Center Accreditation Program | |
| 83 FR 58255 - Medicare, Medicaid, and Children's Health Insurance Programs; Provider Enrollment Application Fee Amount for Calendar Year 2019 | |
| 83 FR 58184 - Airworthiness Directives; Bombardier, Inc., Airplanes | |
| 83 FR 58196 - Airworthiness Directives; The Boeing Company Airplanes | |
| 83 FR 58191 - Airworthiness Directives; Airbus Helicopters Deutschland GmbH Helicopters | |
| 83 FR 58194 - Airworthiness Directives; Pratt & Whitney Division Turbofan Engines | |
| 83 FR 58223 - Polyester Textured Yarn From India and the People's Republic of China: Initiation of Less-Than-Fair-Value Investigations | |
| 83 FR 58232 - Polyester Textured Yarn From India and the People's Republic of China: Initiation of Countervailing Duty Investigations | |
| 83 FR 58199 - Airworthiness Directives; Pratt & Whitney Division (PW) Turbofan Engines | |
| 83 FR 58188 - Air Plan Approval; Connecticut; Volatile Organic Compound Emissions From Consumer Products and Architectural and Industrial Maintenance Coatings | |
| 83 FR 58432 - Reduced Reporting for Covered Depository Institutions | |
| 83 FR 58338 - Disclosure of Order Handling Information |
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
Transportation Security Administration
U.S. Customs and Border Protection
U.S. Immigration and Customs Enforcement
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
National Park Service
Alcohol, Tobacco, Firearms, and Explosives Bureau
Occupational Safety and Health Administration
Federal Aviation Administration
Federal Transit Administration
Pipeline and Hazardous Materials Safety 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.
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Office of Personnel Management.
Interim final rule; request for comments.
The Office of Personnel Management (OPM) is issuing an interim final rule to expand eligibility for enrollment in the Federal Employees Dental and Vision Insurance Program (FEDVIP) to additional groups. The National Defense Authorization Act for Fiscal Year 2017 (FY17 NDAA), expanded FEDVIP eligibility to certain TRICARE-eligible individuals (TEIs).
This rule is effective on November 14, 2018. OPM must receive comments on or before January 18, 2019.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
•
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
Julia Elam, Program Analyst, at
FEDVIP was created as a result of the passage of the Federal Employee Dental and Vision Benefits Enhancement Act of 2004, Public Law 108-496. This Act required OPM to make stand-alone dental and vision insurance available to Federal employees, retirees, and their dependents. FEDVIP has 3.4 million enrollees with approximately 7.1 covered individuals. FEDVIP is available to eligible Federal Civilian and U.S. Postal Service (USPS) employees, retirees (annuitants), survivor annuitants, compensationers, and their eligible family members (dependents) on an enrollee-pay-all basis; there is no government contribution towards premium.
The program is administered by OPM in accordance with 5 U.S.C. chapters 89A and 89B and implementing regulations (5 CFR part 894). Section 715 of Public Law 114-328, authorizes the Secretary of Defense to enter into an agreement with the OPM Director to allow certain TRICARE-eligible individuals to enroll, or to be covered under an enrollment in FEDVIP, and amends 5 U.S.C. 8951 and 8958(c) (dental benefits) and 5 U.S.C. 8981 and 8988(c) (vision benefits), to establish eligibility of certain TRICARE-eligible individuals to enroll so that they and their eligible family members may obtain dental and vision benefits under FEDVIP.
This rule will assist newly eligible individuals and their family members in enrolling in this program. Under 5 U.S.C. 8951, a TRICARE-eligible individual (TEI) who is eligible for FEDVIP dental benefits means an individual who is eligible for coverage pursuant to 10 U.S.C. 1076c(b) (the TRICARE Retiree Dental Program (TRDP)). Under this regulation, all individuals that are currently eligible for TRDP will be eligible for FEDVIP dental benefits beginning plan year 2019. Under 5 U.S.C. 8981, as amended, a TRICARE-eligible individual who is eligible for FEDVIP vision benefits means an individual who is covered pursuant to 10 U.S.C. 1076d (
Under subpart H, TRICARE-eligible individuals will need to actively enroll in FEDVIP in order to be covered for plan year 2019, even if those individuals are currently enrolled in TRDP. Generally, the uniformed services retiree will be the sponsor and enrollee in whose name the enrollment is carried for eligible dependent family members. Uniformed services members on active duty are not eligible for FEDVIP benefits, and a family member that is eligible for vision benefits will serve as the enrollee and will enroll eligible family members in one FEDVIP vision benefit plan.
There are technical corrections and clarifications such as the addition of definitions at 5 CFR 894.101, inclusion of terminology to include TRICARE-eligible individuals throughout subpart A, and a special provision for TRICARE-eligible individuals (TEIs) at 5 CFR 894.106. There is inclusion of language regarding coverage, types of enrollment, and cost of coverage for TRICARE-eligible individuals at 5 CFR 894.204, 5 CFR 894.401, 5 CFR 894.403, and 5 CFR 894.406. Technical corrections to include newly eligible TEIs are proposed in 5 CFR 894.305 through 894.307. The TEIs that can enroll and cover TEI family members are discussed at 5 CFR 894.309. Technical corrections for enrollment and termination or cancellation of coverage for TEIs have been included throughout subparts E and F.
The first enrollment opportunity for the newly eligible TRICARE-eligible individuals will occur during the 2018 Federal Benefits Open Season period, which will run from November 12 through December 10, 2018 with the
This rule is expected to be an E.O. 13771 deregulatory action because it offers more dental coverage options and new vision coverage in FEDVIP for TRICARE-eligible individuals. TRDP beneficiaries currently have one option for dental coverage or can seek coverage in the private dental insurance market. Vision coverage is a new government-offered benefit for this population. Eligibility to enroll in FEDVIP provides more coverage options for these individuals than are currently available to them.
OPM contracts with 10 dental carriers and 4 vision carriers to offer plans under FEDVIP. There are 15 dental plan options available across FEDVIP from these 10 dental carriers. Within the 4 vision carriers, there are 8 vision plan options that are nationwide and internationally available to all potential enrollees. While this rule expands the number of individuals who are potentially eligible for this FEDVIP, OPM does not believe this regulation will have a large impact on the broader dental or vision insurance markets as FEDVIP generally constitutes a smaller percentage of an overall carrier's book of business.
In plan year 2018, FEDVIP overall program enrollment includes 3.3 million individuals. The number enrolled has not changed significantly in recent years. For example, there were 3.2 million in plan year 2017 and 2.98 million in plan year 2016. Based on OPM data, between 2013 and 2017, an average of 87,849 people made plan changes during open season.
Based on the changes required by FY17 NDAA, OPM estimates there are approximately 7.82 million individuals who will be newly eligible for FEDVIP vision benefits and 5.93 million individuals who will be newly eligible for FEDVIP dental benefits. However, OPM does not expect every newly eligible individual to enroll in FEDVIP as they may choose not to enroll or may opt instead to enroll in private dental and/or vision insurance. Since OPM does not have extensive data on and cannot estimate the potential uptake of TRICARE-eligible individuals to determine the impact of this regulation, we are seeking comments on the following:
1. How will the changes made by this regulation impact the non-group dental or vision insurance market?
2. How will the changes made by this regulation impact the choices available to terminating FEDVIP enrollees?
3. How will the changes made by this regulation impact the enrollment of annuitants compared to employees?
4. How will the regulation impact changes to enrollment in FEDVIP?
OPM is issuing this rulemaking as an interim final rule and has determined that, under the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), it would be impracticable, unnecessary, and contrary to the public interest to delay a final regulation until a public notice and comment process has been completed.
The conclusion of a public notice and comment period before the rule is finalized would be impracticable because it would impede due and timely execution of OPM's functions: Uniformed services retirees and their family members and active duty family members would not have time to enroll or be enrolled in FEDVIP during the November 2018 open season. Since the enactment of Public Law 114-328, OPM and the Department of Defense (DoD) have worked in coordination on a number of actions necessary to implement the law. Before OPM could start any rulemaking implementation, a Memorandum of Agreement (MOA) was needed between the DoD's Defense Health Agency (DHA) and OPM to provide certain TRICARE-eligible individuals the opportunity to purchase FEDVIP dental and/or vision coverage beginning January 1, 2019. The MOA was signed on March 26, 2018, leaving OPM insufficient time to prepare and complete a full public notice and comment rulemaking proceeding and to timely incorporate a final rule into open season materials prior to the open season's commencement date.
To the extent that an NPRM would furnish general public information about enrollment opportunities, it is unnecessary in light of the extensive outreach already undertaken by OPM and DoD, which provided more specific and more detailed notice to affected beneficiaries than an NPRM would provide. Outreach included identifying the eligible population of uniformed services retirees and family members for both FEDVIP dental and vision coverage and active duty family members for vision coverage; joint efforts to communicate with potential enrollees about eligibility, enrollment, and key dates for enrolling in FEDVIP; and working with the FEDVIP Administrator to update enrollment systems to allow enrollment of newly eligible individuals. Furthermore, both OPM and DHA have worked in coordination to inform current TRICARE Retiree Dental Program (TRDP) enrollees about the end of dental benefit delivery under the TRDP by December 31, 2018 to ensure TRDP enrollees are aware of the transition of the program to FEDVIP.
In addition, it is unnecessary to the extent that OPM's rule simply extends the coverage of DoD regulations at 32 CFR 199.22 that were promulgated through notice and comment. The lost opportunity to enroll in the November 2018 open season would result in serious damage to important interests, since uniformed services retirees and their family members will no longer have access to the TRDP, the prior plan that FEDVIP is replacing, and the gap in coverage could have significant health and financial impact on them. This outcome would be contrary to the public interest.
For these reasons, OPM has determined that the public notice and participation that the APA ordinarily requires would, in this case, be impracticable, unnecessary, and contrary to the public interest and that good cause exists for waiving proposed rulemaking and delaying its solicitation of comments from the public until after it issues an interim final rule. OPM will consider those comments received upon its interim final rulemaking in a subsequent final rule.
OPM has examined the impact of this rule as required by Executive Order 12866 and Executive Order 13563, which directs 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). A regulatory impact analysis must be prepared for major rules with economically significant effects of $100 million or more in any one year. This rule has been designated as a “significant regulatory action,” under Executive Order 12866.
This rule is expected to be an E.O. 13771 deregulatory action. Details can be found in the “Expected Impact of the Proposed Changes” section of the rule.
I certify that this regulation will not have a significant economic impact on a substantial number of small entities.
We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or tribal governments.
This regulation meets the applicable standard set forth in Executive Order 12988.
This rule will not result in the expenditure by State, local or tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required.
This action pertains to agency management, personnel and organization and does not substantially affect the rights or obligations of nonagency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.
Notwithstanding any other provision of law, no person is required to respond to, nor shall any person 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
This rule involves a collection of information subject to the PRA for the Federal Employees Dental and Vision Insurance Program (FEDVIP) Enrollment System, known as BENEFEDS OPM is in the process of seeking OMB approval. The public reporting burden for this collection is estimated to average 8 minutes for a respondent to submit an enrollment including time for reviewing education and support but may not include time for reviewing a plan and specific benefits. The total burden hour estimate for this form is 44,307 hours. The systems of record notice for this collection is: Central-1 found on
The FEDVIP currently has a total of 15 dental plan options available across the program from 10 dental plan choices within 6 nationwide and 4 regional plans. Each potential enrollee has access to all nationwide options. Regional options are available in at least 29 states and Puerto Rico. There are 8 vision plan choices that are nationwide and international available to all potential enrollees. Historically, an average of 87,849 FEDVIP enrollees made plan changes during each open season between 2013-2017. This regulation is not anticipated to change the burden associated with this collection although the number of participants will increase due to the expansion of eligibility.
Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to
Administrative practice and procedure, Government employees, Health facilities, Health insurance, Health professions, Hostages, Iraq, Kuwait, Lebanon, Military personnel, Reporting and recordkeeping requirements, Retirement.
Accordingly, OPM amends 5 CFR part 894 as follows:
1. The authority citation for part 894 is revised to read as follows:
5 U.S.C. 8962; 5 U.S.C. 8992; Subpart C also issued under section 1 ofPub. L. 110-279, 122 Stat. 2604; Pub. L. 114-328.
The revisions and additions read as follows:
(1) Except as discussed in paragraph (4) of this definition, a child is one of the following:
(4) With respect to a
(1) Except as provided in paragraph (2) of this definition, the
(2) Your spouse's child born within or outside marriage or his or her adopted child. The child of your spouse shall continue to be considered your stepchild after your divorce from your spouse or the death of your spouse so long as the child continues to live with you in a regular parent-child relationship.
Generally, applicable provisions of this part are effective for
You may be enrolled or be covered in a FEDVIP dental plan and a separate FEDVIP vision plan at the same time. But no one may enroll or be covered as a
No. Former spouses receiving an apportionment of annuity are not eligible to enroll in FEDVIP. However, a
Generally, foster children are eligible for coverage as
(a) Except as provided at paragraph (b) of this section, a
(b) A
(a)
(2) A s
(3) A
(i) The
(ii) The
(iii) The
(A) Receives dental services from the Department of Veterans Affairs (VA);
(B) Has employer-sponsored dental coverage without a family coverage option; or
(C) Has a medical or dental condition that prevents him or her from obtaining dental benefits.
(b)
(2) A
(i) The
(ii) The
(3) A
(e) A
(1) A
(2) A
(i) Automatic bank withdrawal; or
(ii) Direct premium payments.
(b) * * *
(5) You are a
(a) You must contact the
(b) If you do not make the premium payments, your FEDVIP coverage will stop. You will not be able to reenroll until the next open season after:
(1) You are in pay status; or
(2) Your uniformed services pay or uniformed services retirement pay (retired, retainer, or equivalent) is sufficient to make the premium payment.
The additions read as follows:
(b) * * *
(4) A
(5) A
(6) A
(g) For a
The revisions and additions read as follows:
You may enroll or become covered outside of open season if you are otherwise eligible to enroll and:
(a) You or a
(f) You are a
(g) You are not a
(c) If you are a
(d) A
(e)(l) A belated open season enrollment or change is effective retroactive to the date it would have been effective if you had made a timely enrollment or request for a change.
(2) Any belated enrollment or change outside of open season that goes beyond the allowable 60
(3) You are responsible for any retroactive premiums due to a belated enrollment or request for a change.
(a) You may change from one dental plan to another, and/or from one vision plan to another, or you may change from one plan option to another option in that same plan:
(1) During the annual open season;
(2) When you get married (except for
(3) For
(b)(1) If you are enrolled in a dental or vision plan with a geographically restricted service area, and you or a covered eligible
(2) You may make this change at any time before or after the move, once you or a covered eligible
(3) The enrollment change is effective the first day of the pay period following the pay period in which you make the change.
(4) You may not change your
(a) Marriage; except for a
(b)
(c) Loss of other dental or vision coverage by an eligible
(c)(1) Except as provided in paragraph (c)(2) of this section, you may decrease your type of enrollment only during the period beginning 31 days before your QLE and ending 60 days after your QLE.
(2) You may make any of the following enrollment changes at any time beginning 31 days before a QLE listed in § 894.511(a):
(i) A decrease in your self plus one enrollment;
(ii) A decrease in your self and family enrollment to a self plus one enrollment, when you have only one remaining eligible
(iii) A decrease in your self and family enrollment to a self only enrollment, when you have no remaining eligible
(d)(1) Except as provided in paragraph (d)(2) of this section, your change in enrollment is effective the first day of the first pay period following the one in which you make the change.
(a) Loss of an eligible
(1) Divorce;
(2) Death; or
(3) Loss of eligibility of a previously enrolled
(b) You are an
No. If you do not change or cancel your enrollment, and if your enrollment does not terminate pursuant to this part, then your current enrollment will continue into the next year. Before open season, you should review the plan brochure for any changes in benefits and premiums for the next year.
(a) If you no longer meet the definition of an eligible
(b) If you go into a period of nonpay or insufficient pay (or insufficient uniformed services pay or uniformed services retirement pay) and you do not make direct premium payments, your FEDVIP coverage stops at the end of the pay period for which your agency, retirement system,
(c) If you are making direct premium payments or payments by automatic bank withdrawal, and you stop making the payments, your FEDVIP coverage stops at the end of the pay period for which you last made a payment.
(g) If your status as a uniformed services retiree discontinues and you become a uniformed services member on active duty, your FEDVIP dental and/or vision plan enrollment terminates and your coverage stops at the end of the last pay period for which the premium payment was made from your uniformed services retirement pay. You will still be the
(h) If your status as a uniformed services member on active duty discontinues and you become a uniformed services retiree, the FEDVIP vision plan enrollment of your
No. There is no temporary extension of coverage, or Temporary Continuation of Coverage (TCC), or right to convert to an individual dental or vision policy when your FEDVIP coverage stops or when a
(a) Dental and vision plans under FEDVIP will include underserved areas in their service areas and provide benefits to enrollees in underserved areas.
(b) In any area where a FEDVIP dental or vision plan does not meet OPM access standards, including underserved areas, enrollees may receive services from non-network providers.
(c) Contracts under FEDVIP shall include access standards as defined by OPM and payment levels for services to non-network providers in areas that do not meet access standards.
(a) The U.S. Department of Defense (DOD) is responsible for regulating eligibility for obtaining medical and dental care under the TRICARE Program, pursuant to 10 U.S.C. chapter 55. The FEDVIP laws at 5 U.S.C. chapter 89A was amended by the National Defense Authorization Act for Fiscal Year 2017, Public Law 114-328, to allow individuals who were eligible for coverage under the TRICARE Retiree Dental Program (TRDP) in accordance with DOD rules to obtain dental coverage in a FEDVIP dental plan. Public Law 114-328 also added a provision allowing certain individuals who are concurrently enrolled for medical care in specified TRICARE health plans to obtain FEDVIP vision coverage.
(b) Categories of individuals who were eligible for TRDP and who are eligible to be covered under a FEDVIP dental plan are set forth in § 894.802. Categories of individuals who may be covered under specified TRICARE health plans and, if so covered, are eligible to be covered under a FEDVIP vision plan, are set forth in § 894.803. Individuals eligible for FEDVIP coverage are referred to as
(c)(1) FEDVIP rules provide an
(i) A dental and/or a vision plan; and
(ii)
(2) For
(i) If the
(ii) If a
(d) If a FEDVIP dental or vision plan has a specific geographic enrollment area,
A
(a) Except as provided in paragraphs (b) and (c) of this section, a
(1) 10 U.S.C. 1076d (TRICARE Reserve Select (TRS));
(2) 10 U.S.C. 1076e (TRICARE Retired Reserve (TRR));
(3) 10 U.S.C. 1079(a) (uniformed services active duty family members concurrently enrolled in TRICARE Select or TRICARE Prime);
(4) 10 U.S.C. 1086(c) (uniformed services retirees and retiree family members or former spouses concurrently enrolled in TRICARE Select or TRICARE Prime); or
(5) 10 U.S.C. 1086(d) (TRICARE for Life (TFL)), as set forth in 32 CFR 199.3. The provisions of TFL require Medicare eligible retirees and individual Medicare eligible retiree family members or former spouses to enroll in Medicare Part B (requires payment of applicable premiums), otherwise they are not a
(b) An individual covered under any of the following programs is
(1) TRICARE Young Adult provisions of 10 U.S.C. 1110b;
(2) Transitional Assistance Management Program (TAMP), 10 U.S.C. 1145(a);
(3) Continued Health Care Benefit Program (CHCBP), 10 U.S.C. 1078a; or
(4) Foreign Military (including NATO) sponsor/family coverage.
(c) An active duty member of the uniformed services under 10 U.S.C. 1074(a) is
(a) Generally, the
(b)
(1) Retiree. A member or former member of a uniformed service who is entitled to uniformed services retirement pay. To determine a
(2) Retired Reserve member under the age of 60 (“Gray Area Retiree”). To determine
(3) Medal of Honor recipient who is not otherwise entitled to dental benefits; or
(4) Deceased Member described in paragraph (b)(1) or (2) of this section who died after retiring from active duty and a deceased member who was a Medal of Honor recipient described in paragraph (b)(3) of this section.
(c)
(1) Retiree. A member or former member of a uniformed service who is entitled to uniformed services retirement pay.
(2) Retired Reserve member under the age of 60 (“Gray Area Retiree”);
(3) Medal of Honor recipient who is enrolled in TRICARE Select or TRICARE
Prime and who is not on active duty;
(4) Member of the uniformed services (active or Reserve Component) on active duty for more than 30 days. An active duty member of the uniformed services under 10 U.S.C. 1074(a) is not a
(5) Ready Reserve member;
(6) Deceased member described at paragraphs (c)(1) through (5) of this section; or
(7) Deceased Reserve Component member (deceased in the line of duty).
(a)
(2) However, a
(i) Receives VA dental services;
(ii) Has employer-sponsored dental coverage without a family coverage option; or
(iii) Has a medical or dental condition that prevents him or her from obtaining dental benefits.
(b)
(2) However, a
Generally, yes, since a retiree or Retired Reserve member who is a
(a) Receives VA dental services;
(b) Has employer-sponsored dental coverage without a family coverage option; or
(c) Has a medical or dental condition that prevents him or her from obtaining dental benefits.
No, a uniformed services member on active duty is not a
Generally, you are not eligible to enroll yourself as a
(a)
(b) The following order of precedence governs which
(1) An unremarried surviving spouse of a retiree or Medal of Honor recipient, if any, is the
(2) If there is no unremarried surviving spouse of a retiree or Medal of Honor recipient, the surviving
(3) The
(4) If there is no spouse, the
(c) In the event that the
(d) Accepting responsibility to self-certify as the
Generally, yes, as specified in § 894.202. However, if you are an
Generally, if your
(a) The retiree
(b) The retiree
(c) The retiree
No. A widow or widower who is a
(a) Enroll yourself and the
(b) Enroll all
Yes, you are eligible to enroll in a FEDVIP vision plan only. A
A foster child is excluded from coverage as they are not defined to be
Yes, as
(a)
(2) You are on active duty (not
(b)
(2) You are a retiree or a retired Reserve member and as a
(c)
(2) You are a retiree or Retired Reserve member (who is not on active duty), and you go on active duty. You lose
As a uniformed services member on active duty, you are the
If you and your
Federal Aviation Administration (FAA), DOT.
Final rule; correction.
The FAA is correcting an airworthiness directive (AD) that published in the
This correction is effective November 23, 2018.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 23, 2018 (83 FR 52754, October 18, 2018).
For service information identified in this final rule, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
You may examine the AD docket on the internet at
Darren Gassetto, Aerospace Engineer, Mechanical Systems and Admin Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email
Airworthiness Directive 2018-20-11, Amendment 39-19445 (83 FR 52754, October 18, 2018) (“AD 2018-20-11”), requires a detailed inspection of the ball bearings of an emergency exit, replacement of bearings if necessary, application of corrosion inhibiting compound (CIC), and revision of the maintenance or inspection program, as applicable. That AD applies to certain Bombardier, Inc., Model DHC-8-300 series airplanes.
As published, a service information citation is incorrect in the following preamble and regulatory text locations: Related Service Information Under 1 CFR part 51; paragraph (g) of AD 2018-20-11; and paragraph (l)(2)(iii) of AD 2018-20-11.
In those locations, AD 2018-20-11 refers to Temporary Revision (TR) 54-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM), but the document is actually Temporary Revision (TR) 52-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM).
Bombardier has issued the following service information:
• Service Bulletin 8-52-65, dated July 26, 2017, which describes procedures for a detailed inspection of the forward right-hand type I emergency exit door ball bearings for corrosion, seal damage, and loss of lubricant; applying CIC; and replacing emergency exit door ball bearings if necessary.
• de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017, which describes procedures for servicing the forward right-hand emergency exit door mechanisms.
• Temporary Revision (TR) 52-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM), which describes procedures for servicing the type I emergency exit door mechanisms.
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 document corrects an error and correctly adds the AD as an amendment to 14 CFR 39.13. Although no other part of the preamble or regulatory information has been corrected, we are publishing the entire rule in the
The effective date of this AD remains November 23, 2018.
Since this action only corrects a service information citation, it has no adverse economic impact and imposes no additional burden on any person. Therefore, we have determined that notice and public procedures are unnecessary.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 23, 2018.
None.
This AD applies to Bombardier, Inc., Model DHC-8-301, -311, and -315 airplanes, certificated in any category, serial numbers 100 through 672 inclusive.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by reports indicating that the forward right-hand type I emergency exit door could not be opened during maintenance. An investigation determined that the exit door handle was jammed due to corroded center and lower shaft ball bearings. We are issuing this AD to address corrosion of the emergency exit door ball bearings, which could result in the inability to open the emergency exit door during an emergency evacuation and consequently impede airplane egress.
Comply with this AD within the compliance times specified, unless already done.
Within 60 days after November 23, 2018 (the effective date of this AD): Revise the maintenance or inspection program, as applicable, to incorporate de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017; and Temporary Revision 52-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM). The initial compliance time for doing the task is at the time specified in de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017, or within 60 days after November 23, 2018, whichever occurs later.
Within 5,000 flight hours or 36 months, whichever occurs first, after November 23, 2018 (the effective date of this AD): Do a detailed inspection of all ball bearings of the forward right-hand type I emergency exit for corrosion, seal damage, and loss of lubricant; replace bearings as applicable; and apply corrosion inhibiting compound (CIC); in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 8-52-65, dated July 26, 2017. Do all applicable replacements before further flight.
After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2017-30, dated August 30, 2017, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Darren Gassetto, Aerospace Engineer, Mechanical Systems and Admin Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on November 23, 2018 (83 FR 52754, October 18, 2018).
(i) Bombardier Service Bulletin 8-52-65, dated July 26, 2017.
(ii) de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017.
(iii) Temporary Revision (TR) 52-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM).
(4) For service information identified in this AD, contact Bombardier, Inc. Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
(5) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(6) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Rio Vista Drawbridge across Sacramento River, mile 12.8 at Rio Vista, CA. The deviation is necessary to allow the bridge owner to conduct preventative maintenance on the bridge. This deviation allows the bridge to operate at various specified times during the deviation period.
This deviation is effective without actual notice from November 19, 2018 to 11:50 p.m. on February 15, 2019. For the purposes of enforcement, actual notice will be used from November 15, 2018 through November 19, 2018.
The docket for this deviation, USCG-2018-0980, is available at
If you have questions on this temporary
The California Department of Transportation has requested a temporary change to the operation of the Rio Vista Drawbridge, mile 12.8, over the Sacramento River, at Rio Vista, CA. The drawbridge navigation span provides a vertical clearance of 18 feet above Mean High Water in the closed-to-navigation position. In accordance with 33 CFR 117.5, the draw opens on signal. Navigation on the waterway is commercial and recreational.
From November 15, 2018 to February 15, 2019, the draw shall open for recreational vessels in accordance with the following schedule: Monday through Friday, 7 a.m. to 3:30 p.m., the draw need not open for the passage of recreational vessels except between 11 a.m. and noon when the draw shall open on signal when notice is given to the bridge tender. The draw shall open on signal, Monday through Friday, 3:30 p.m. to 7 a.m. the following morning, if at least a 4-hour notification is given to the bridge tender. The draw shall open on signal from 7 a.m. on Saturday though 11:59 p.m. on Sunday when notice is given to the bridge tender.
From November 15, 2018 to February 15, 2019, the draw shall open for commercial vessels in accordance with the following schedule: The draw shall open on signal from midnight on Monday through 7 a.m. on Saturday if at least a 4-hour notification is given to the bridge tender. The draw shall open on signal from 7 a.m. on Saturday through 11:59 p.m. on Sunday when notice is given to the bridge tender.
The temporary schedule change will allow the bridge owner to conduct needed maintenance and painting on the lift span portion of the bridge. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised.
Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies in accordance with 33 CFR 117.31(b). There is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Final rule.
The Coast Guard is amending the existing recurring fireworks safety zone on the Delaware River Adjacent to Penn's Landing in Philadelphia, Pennsylvania. This amendment allows the Coast Guard to enforce the safety zone at this location throughout the entire year. The Coast Guard will notify the public of upcoming enforcement of the zone through publication of a Notice of Enforcement in the
This rule is effective December 19, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Edmund Ofalt, U.S. Coast Guard, Sector Delaware Bay, Waterways Management Division; telephone 215-271-4814, email
The Coast Guard routinely receives requests for fireworks displays in the Delaware River Adjacent to Penn's Landing in Philadelphia, Pennsylvania. As a result, the Coast Guard previously issued a rule creating a recurring safety zone location for this location, listed as entry (a)16 in the table to 33 CFR 165.506. That regulation lists possible days of anticipated enforcement as July 2nd, 3rd, 4th, or 5th; Columbus Day; December 31st, and January 1st. In recent years, however, the number of firework events at this location have significantly increased. To date in the year 2018 there have been 13 requests for fireworks events at this location—many more than the anticipated number of approximately 3 events covered by the current regulation. The additional requests fall outside the enforcement dates listed in the CFR. As a result, the Coast Guard had to issue numerous temporary safety zones to cover the additional events that fall outside of the coverage of the current regulation. In accordance with good cause exceptions found in 5 U.S.C. 553, the rules creating these temporary safety zones are generally not preceded by notice of proposed rulemaking due to the short lead-time often provided to the Coast Guard.
In response, on September 21, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Safety Zone; Penn's Landing Fireworks, Delaware River, Philadelphia PA” (83 FR 47852). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action. During the comment period that ended October 22, 2018, we received one comment.
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with the fireworks to be used in this type of display will be a safety concern for anyone within a 500 yard radius of the fireworks barge. The purpose of this rule is to ensure safety of vessels and the navigable waters in the safety zone before, during and after the scheduled event.
As noted above, we received one comment on our NPRM published September 21, 2018. The comment was supportive of the proposed rulemaking. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.
This rule revises the recurring fireworks safety zone near Penn's Landing, listed as entry (a)16 in the table to 33 CFR 165.506. Although this safety zone will be January through December each year, enforcement of the safety zone will only be for short periods of time before, during and after fireworks shows at this location. In order to promote clarity, Penn's Landing has been added to the location column of the revised regulatory text. The column defining the boundaries of the regulated area has also been updated to improve clarity and more efficiently define the regulated area. The revised safety zone will cover all navigable waters of the Delaware River within 500 yards of a fireworks barge located at approximately 39°56′49″ N, longitude 075°08′11″ W, adjacent to Penn's Landing, Philadelphia, Pennsylvania.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on the size, location, duration and time of day of the safety zone. Only a small, designated area of the Delaware River will be impacted during enforcement. Consistent with the current regulatory text found in 33 CFR 165.506(d), the default time period this zone will be enforced during each activation is between 5:30 p.m. and 1 a.m. That regulation, however, allows for modifications in this timeframe. In practice, the zone is typically activated with only a two-hour enforcement time period. During the evening, when enforcement is occurring, commercial and recreational traffic is normally low. Notification of enforcement dates and times will be made, at a minimum, to the maritime community via Notice of Enforcement published in the
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 (Public Law 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 determined that this action is one of a
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.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving a State Implementation Plan (SIP) revision submitted by the State of Connecticut. The SIP revision amends requirements for controlling volatile organic compound (VOC) emissions from consumer products and architectural and industrial maintenance (AIM) coatings by revising Regulations of Connecticut State Agencies (RCSA) sections 22a-174-40, 22a-174-41, and adding section 22a-174-41a. The intended effect of this action is to approve these regulations into the Connecticut SIP. This action is being taken in accordance with the Clean Air Act (CAA).
Written comments must be received on or before December 19, 2018.
EPA has established a docket for this action under Docket Identification No. EPA-R01-OAR-2018-0099. All documents in the docket are listed on the
David L. Mackintosh, Air Quality Planning Unit, U.S. Environmental Protection Agency, EPA Region 1, 5 Post Office Square—Suite 100, (Mail code OEP05-2), Boston, MA 02109-3912, tel. 617-918-1584, email
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.
On June 4, 2018 (83 FR 25615), EPA issued a notice of proposed rulemaking (NPR) for the State of Connecticut. In the NPR, EPA proposed approval of SIP revisions submitted by the Connecticut Department of Energy and Environmental Protection (CT DEEP) on October 18, 2017. The SIP submittal included revised sections 22a-174-40 “Consumer Products” and 22a-174-41 “Architectural and Industrial Maintenance Products—Phase 1” and adds new section 22a-174-41a
The NPR provides the rationale for EPA's proposed approval, which will not be restated here.
EPA received three anonymous comments in response to the notice of proposed rulemaking. The comments address subjects outside the scope of the proposed action, do not explain (or provide a legal basis for) how the proposed action should differ in any way, and make no specific mention of the proposed action. Therefore, the comments are not germane and EPA provides no further response.
EPA is approving the October 18, 2017, CT DEEP SIP submittal consisting of revised section 22a-174-40 “Consumer Products” and 22a-174-41 “Architectural and Industrial Maintenance Products—Phase 1” and new section 22a-174-41a “Architectural and Industrial Maintenance Products—Phase 2,” all of which became effective in the State of Connecticut on October 5, 2017.
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Connecticut regulations described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available through
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations.
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 18, 2019. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(119) Revisions to the State Implementation Plan submitted by the Connecticut Department of Energy and Environmental Protection on October 18, 2017.
(i)
(B) Regulations of Connecticut State Agencies Section 22a-174-41, entitled “Architectural and Industrial Maintenance Products—Phase 1,” effective Oct 5, 2017.
(C) Regulations of Connecticut State Agencies Section 22a-174-41a, entitled “Architectural and Industrial Maintenance Products—Phase 2,” effective Oct 5, 2017.
The revisions and addition read as follows:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for Airbus Helicopters Deutschland GmbH (Airbus Helicopters) Model MBB-BK 117 C-2 helicopters. This proposed AD would require establishing or reducing the life limit of various parts. This proposed AD is prompted by recalculations. The actions of this proposed AD are intended to address an unsafe condition on these products.
We must receive comments on this proposed AD by January 18, 2019.
You may send comments by any of the following methods:
•
•
•
•
You may examine the AD docket on the internet at
For service information identified in this proposed rule, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
Matt Fuller, Senior Aviation Safety Engineer, Safety Management Section, Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email
We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.
We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2017-0174, dated September 12, 2017 (EASA AD 2017-0174), to correct an unsafe condition for Airbus Helicopters Model MBB-BK 117 C-2 helicopters. EASA advises that recalculation by Airbus Helicopters has resulted in new or reduced life limits for certain parts. EASA AD 2017-0174 states the life limits are mandatory for continued airworthiness and failing to replace life-limited parts as specified could result in an unsafe condition. To address this condition, EASA AD 2017-0174 requires replacing the affected parts before exceeding their new or reduced life limit.
These helicopters have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in its AD. We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition is likely to exist or develop on other products of the same type design.
We reviewed Airbus Helicopters Alert Service Bulletin ASB MBB-BK117 C-2-04A-008, Revision 0, dated April 27, 2017, for Model MBB-BK 117 C-2 and C-2e helicopters. This service information specifies entering into the helicopter records the reduced and new airworthiness life limits for certain part-numbered main rotor head, swash plate, rotor flight controls, cyclic controls, and upper controls parts.
This proposed AD would require establishing and reducing the life limit of the following parts: Main rotor head—nut, upper and lower quadruple nut, bolts, and inner sleeve; swash plate control ring assembly; rotor flight control collective bellcrank-K; cyclic
We estimate that this proposed AD would affect 128 helicopters of U.S. Registry. We estimate that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per work-hour.
Replacing a nut would take about 5 work-hours and parts would cost about $3,352 for an estimated replacement cost of $3,777.
Replacing a quadruple nut upper would take about 5 work-hours and parts would cost about $3,283 for an estimated replacement cost of $3,708.
Replacing a quadruple nut lower would take about 5 work-hours and parts would cost about $3,405 for an estimated replacement cost of $3,830.
Replacing a bolt would take about 2 work-hours and parts would cost about $370 for an estimated replacement cost of $540.
Replacing an inner sleeve would take about 2 work-hours and parts would cost about $20,073 for an estimated replacement cost of $20,243.
Replacing a control ring assembly would take about 5 work-hours and parts would cost about $11,141 for an estimated replacement cost of $11,566.
Replacing a bellcrank-K (collective) would take about 4 work-hours and parts would cost about $3,400 for an estimated replacement cost of $3,740.
Replacing a control rod tube would take about 4 work-hours and parts would cost about $1,084 for an estimated replacement cost of $1,424.
Replacing a forked lever would take about 3 work-hours and parts would cost about $6,049 for an estimated replacement cost of $6,304.
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.
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, 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 to the extent that it justifies making a regulatory distinction; 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.
We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.
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.
This AD applies to Airbus Helicopters Deutschland GmbH Model MBB-BK 117 C-2 helicopters with a part listed in Table 1 to paragraph (e) of this AD installed, certificated in any category.
Helicopters with an MBB-BK117 C-2e designation are Model MBB-BK117 C-2 helicopters.
This AD defines the unsafe condition as a part remaining in service beyond its fatigue life. This condition could result in failure of a part and loss of control of the helicopter.
We must receive comments by January 18, 2019.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Before further flight, remove from service any part that has reached or exceeded its new or reduced life limit as listed in Table 1 to paragraph (e) of this AD. Thereafter, remove from service each part on or before reaching its new or reduced life limit as listed in Table 1 to paragraph (e) of this AD. For purposes of this AD, a “landing” is counted any time the helicopter lifts off into the air and then lands again regardless of the duration of the landing and regardless of whether the engine is shut down.
(1) The Manager, Safety Management Section, Rotorcraft Standards Branch, FAA, may approve AMOCs for this AD. Send your proposal to: Matt Fuller, Senior Aviation Safety Engineer, Safety Management Section, Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
(1) Airbus Helicopters Alert Service Bulletin ASB MBB-BK117 C-2-04A-008, Revision 0, dated April 27, 2017, which is not incorporated by reference, contains additional information about the subject of this AD. For service information identified in this AD, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
(2) The subject of this AD is addressed in European Aviation Safety Agency (EASA) AD No. 2017-0174, dated September 12, 2017. You may view the EASA AD on the internet at
Joint Aircraft Service Component (JASC) Code: 6220, Main Rotor Head; 6230 Main Rotor Mast/Swashplate; and 6710, Main Rotor Control.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2016-22-05, which applies to certain Pratt & Whitney Division (PW) PW4164, PW4164-1D, PW4168, PW4168-1D, PW4168A, PW4168A-1D, and PW4170 turbofan engines. AD 2016-22-05 requires initial and repetitive inspections of the affected fuel nozzles and their replacement with parts eligible for installation. Since we issued AD 2016-22-05, PW introduced newly forged fuel nozzles, fuel manifold brackets, and clamps. This proposed AD would require initial and repetitive inspections of the affected fuel nozzles and fuel nozzle supply manifold assemblies, replacement of the affected fuel nozzles with parts eligible for installation, and the installation of new brackets and clamps on the fuel supply manifold assemblies with parts eligible for installation. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by January 3, 2019.
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 Pratt & Whitney Division, 400 Main St., East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503. You may view this service information at the FAA, Engine & Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759.
You may examine the AD docket on the internet at
Scott Hopper, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7154; fax: 781-238-7199; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We issued AD 2016-22-05, Amendment 39-18694 (81 FR 75686, November 1, 2016), (“AD 2016-22-05”), for certain PW PW4164, PW4164-1D, PW4168, PW4168-1D, PW4168A, PW4168A-1D, and PW4170 turbofan engines. AD 2016-22-05 requires initial and repetitive inspections of the affected fuel nozzles and their replacement with parts eligible for installation. AD 2016-22-05 resulted from several instances of fuel leaks on PW engines installed with the Talon IIB combustion chamber configuration. We issued AD 2016-22-05 to prevent failure of the fuel nozzles, which could lead to engine fire and damage to the airplane.
Since we issued AD 2016-22-05, multiple PW4000 turbofan engines experienced fuel leaks resulting in engine fires. A subsequent review of the potential causes identified cracks in the fuel manifold at the braze joint. As a result, PW published PW Alert Service Bulletin (ASB) PW4G-100-A73-47, dated March 10, 2017, and PW Service Bulletin (SB) PW4G-100-73-48, Revision No. 1, dated April 24, 2018, to introduce a forged fuel nozzle that removes the brazed inlet fitting and adds new brackets and clamps to the fuel supply manifolds to dampen combustion chamber vibrations.
We reviewed PW ASB PW4G-100-A73-45, dated February 16, 2016; PW ASB PW4G-100-A73-47, dated March 10, 2017; and PW SB PW4G-100-73-48, Revision No. 1, dated April 24, 2018. PW ASB PW4G-100-A73-45 describes procedures for inspecting and replacing the fuel nozzles. PW ASB PW4G-100-A73-47 describes procedures for replacing the fuel nozzle and support assembly. PW SB PW4G-100-73-48 describes procedures for replacing the fuel nozzle manifold assemblies and installing new brackets and clamps on the manifolds. 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
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 in other products of the same type design.
This proposed AD would retain all requirements of AD 2016-22-05. This proposed AD would require initial and repetitive inspections and replacement of the affected fuel nozzles. This proposed AD would also require replacement of the affected fuel nozzle supply manifold assemblies and the installation of new brackets and clamps on the fuel supply manifold assemblies with parts eligible for installation.
PW ASB PW4G-100-A73-47, dated March 10, 2017, requires the installation of the new fuel nozzles by April 1, 2019, which is approximately 24 months from the PW ASB issue date. This AD requires initial inspection and replacement of failed fuel nozzles before further flight and installation of new fuel nozzles within 24 months after the effective date of this AD.
We estimate that this proposed AD affects 72 engines installed on airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.
We have 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 that the 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,
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.
The FAA must receive comments on this AD action by January 3, 2019.
This AD replaces AD 2016-22-05, Amendment 39-18694 (81 FR 75686, November 1, 2016).
This AD applies to Pratt & Whitney Division (PW):
(1) PW4164, PW4168, and PW4168A model engines that have fuel nozzles, part number (P/N) 51J345, installed, and that have any of the following installed: Talon IIB combustion chamber per PW Service Bulletin (SB) PW4G-100-72-214, dated December 15, 2011; ring case configuration (RRC) high-pressure compressor (HPC) per PW SB PW4G-100-72-219, Revision No. 1, dated October 5, 2011, or original issue; or the outer combustion chamber assembly waspaloy nuts per PW SB PW4G-100-72-253, dated November 24, 2014;
(2) PW4168A model engines with Talon IIA outer combustion chamber assembly, P/N 51J100 or 51J382, and fuel nozzles, P/N 51J345, with serial numbers CGGUA19703 through CGGUA19718, inclusive, or CGGUA22996 and higher, installed;
(3) PW4168A-1D and PW4170 model engines with engine serial numbers P735001 through P735190, inclusive, and fuel nozzles, P/N 51J345, installed; and
(4) PW4164-1D, PW4168-1D, PW4168A-1D, and PW4170 model engines that have installed the RRC HPC per PW SB PW4G-100-72-220, Revision No. 4, dated September 30, 2011, or earlier revision, and have fuel nozzles, P/N 51J345, installed.
Joint Aircraft System Component (JASC) Code 7310, Engine Fuel Distribution.
This AD was prompted by several instances of fuel leaks on PW engines with the Talon IIB combustion chamber configuration installed. We are issuing this AD to prevent failure of the fuel nozzles. The unsafe condition, if not addressed, could result in engine fire and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) Within 800 flight hours (FHs) after December 6, 2016, the effective date of AD 2016-22-05, or before further flight, whichever occurs later, and after that within every 800 FHs accumulated on the fuel nozzles, perform the following:
(i) Inspect all fuel nozzles, P/N 51J345, in accordance with Part A, of PW Alert Service Bulletin (ASB) PW4G-100-A73-45, dated February 16, 2016.
(ii) For any fuel nozzle that fails the inspection, before further flight, remove and replace with a part that is eligible for installation.
(2) At next shop visit or within 24 months after the effective date of this AD, whichever occurs first, perform the following:
(i) Remove all fuel nozzles, P/N 51J345, in accordance with Part A, of PW ASB PW4G-100-A73-47, dated March 10, 2017, and replace with parts eligible for installation.
(ii) Replace the fuel nozzle manifold supply assemblies and install the new brackets and clamps on the fuel supply manifolds in accordance with Accomplishment Instructions, “For Engines Installed on Aircraft” or “For Engines Not Installed on Aircraft,” of PW SB PW4G-100-73-48, Revision No. 1, dated April 24, 2018.
(1) For the purpose of this AD, an “engine shop visit” is the induction of an engine into the shop for maintenance involving the separation of pairs of major mating engine case flanges, except for the following situations, which do not constitute an engine shop visit:
(i) Separation of engine flanges solely for the purposes of transportation of the engine without subsequent maintenance.
(ii) Separation of engine flanges solely for the purpose of replacing the fan or propulsor without subsequent engine maintenance.
(2) For the purpose of this AD, a part that is “eligible for installation” is a fuel nozzle with a P/N other than 51J345 that is FAA-approved for installation, and that meets the requirements of Part A, paragraph 5.B., or Part B, paragraph 2, of PW ASB PW4G-100-A73-47, dated March 10, 2017.
Installation of the eligible fuel nozzles, replacement of manifold supply assemblies, and installation of brackets and clamps in accordance with (g)(2) of this AD constitutes terminating action for the repetitive inspection requirements of paragraph (g)(1) of this AD.
(1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (k)(1) of this AD. You may email your request to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Scott Hopper, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7154; fax: 781-238-7199; email:
(2) For service information identified in this AD, contact Pratt & Whitney Division, 400 Main St., East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503. You may view this service information at the FAA, Engine & Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. This proposed AD was prompted by reports indicating that the pitot heat switch is not always set to ON, which could result in misleading air data. This proposed AD would require replacement of pitot anti-icing system components, installation of a junction box and wiring provisions, repetitive testing of the anti-icing system, and applicable on-condition actions. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by January 3, 2019.
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 Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet
You may examine the AD docket on the internet at
Frank Carreras, Aerospace Engineer, Systems and Equipment Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3539; email:
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
We have received reports indicating that the pitot heat switch is not always set to ON. The failure to activate the manually activated pitot anti-icing system likely resulted in misleading air data that contributed to an accident and three incidents involving Boeing Model 737 airplanes. This condition, if not addressed, could result in the air data sensors not being heated, which could allow ice to form on the sensors and cause erroneous air data. This erroneous air data can lead to loss of crew situational awareness and an inability to maintain continued safe flight and landing of the airplane.
We reviewed Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017. The service information describes procedures for replacement and repetitive testing of the P5-9 window and pitot heat module, changing the anti-icing system to automatically supply power to heat the air data sensors. If flight crews fail to activate it manually, the anti-icing system will come on automatically after engine start.
We also reviewed the following concurrent service information.
• Boeing Service Bulletin 737-30-1067, Revision 1, dated May 4, 2017. This service information describes procedures for installing a new J18 junction box to change the anti-icing system.
• Boeing Service Bulletin 737-30-1068, Revision 1, dated May 4, 2017. This service information describes procedures for installing wiring provisions to the anti-icing system.
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
Operators are required by 14 CFR part 91 to have an MEL to operate with inoperable equipment. Paragraph (l) of this proposed AD allows for the operation of the airplane even if the modified air data probe heat (ADPH) system is inoperable, so long as the operator's MEL has a provision to allow for this inoperability.
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 in other products of the same type design.
This proposed AD would require accomplishment of the actions identified as “RC” (required for compliance) in the Accomplishment Instructions of Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017, described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.
This proposed AD would also require accomplishing the actions specified in Boeing Service Bulletin 737-30-1067, Revision 1, dated May 4, 2017; and Boeing Service Bulletin 737-30-1068, Revision 1, dated May 4, 2017, described previously.
For information on the procedures and compliance times, see this service information at
We estimate that this proposed AD affects 296 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This 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
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 January 3, 2019.
None.
This AD applies to The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017.
Air Transport Association (ATA) of America Code 30, Ice and rain protection.
This AD was prompted by reports indicating that the pitot heat switch is not always set to ON, which could result in misleading air data. We are issuing this AD to address misleading air data, which can lead to loss of crew situational awareness and could ultimately result in the inability to maintain continued safe flight and landing.
Comply with this AD within the compliance times specified, unless already done.
For airplanes identified as Group 5 in Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017: Within 120 days after the effective date of this AD, inspect the airplane and do all applicable on-condition actions using a method approved in accordance with the procedures specified in paragraph (m) of this AD.
Except as specified by paragraph (j) of this AD, for airplanes identified as Groups 1 through 4 in Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017: At the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017, do all applicable actions identified as “RC” (required for compliance) in, and in accordance with, the Accomplishment Instructions of Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017.
For airplanes identified as Groups 1 through 4 in Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017: Prior to or concurrently with the action required by paragraph (h) of this AD, install a new J18 junction box to change the anti-icing system, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 737-30-1067, Revision 1, dated May 4, 2017, and install wiring provisions to the anti-icing system, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 737-30-1068, Revision 1, dated May 4, 2017.
For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017, uses the phrase “the original issue date of this service bulletin,” this AD requires using “the effective date of this AD.”
This paragraph provides credit for the actions specified in paragraph (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin 737-30A1064, dated May 4, 2017, provided that step 15 for Groups 1 through 4, as applicable, of the Accomplishment Instructions of Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017, is done at the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-30A1064, Revision 1, dated October 18, 2017, or within 180 days after the effective date of this AD, whichever occurs later.
In the event that the air data probe heat (ADPH) system as modified by this AD is inoperable, an airplane may be operated as specified in the operator's MEL, provided the MEL includes provisions that address the modified ADPH system.
(1) The Manager, Los Angeles ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (n)(2) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) For service information that contains steps that are labeled as RC, the provisions of paragraphs (m)(4)(i) and (m)(4)(ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC requirement is removed from that step or substep. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(1) For more information about this AD, contact Frank Carreras, Aerospace Engineer, Systems and Equipment Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3539; email:
(2) For information about AMOCs, contact Jeffrey W. Palmer, Aerospace Engineer, Systems and Equipment Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5851; fax: 562-627-5210; email:
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Pratt & Whitney Division (PW) PW4158 turbofan engines. This proposed AD was prompted by several reports of high cycle fatigue (HCF) cracks found in the fuel nozzle supply manifold. This proposed AD would require replacement of the affected fuel nozzles and fuel nozzle manifold supply assemblies with parts eligible for installation. This proposed AD would also require installation of new brackets and clamps on the fuel supply manifold assemblies. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by January 3, 2019.
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 Pratt & Whitney, 400 Main Street, East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503. You may view this service information at the FAA, Engine and Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759.
You may examine the AD docket on the internet at
Scott Hopper, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7154; fax: 781-238-7199; email:
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
We received several reports of HCF cracks found in the fuel nozzle supply manifold tube at the braze joint interface on PW PW4158 turbofan engines identified with suffix-3 on the Engine Data Plate, and equipped with the Talon IIB combustor chamber. The root cause of the cracks in the braze joint was attributed to thermal mechanical fatigue due to high thermal gradients on engines equipped with the Talon IIB combustor chamber. This condition, if not addressed, could result in engine fire, damage to the engine, and damage to the airplane.
We reviewed PW Service Bulletin (SB) PW4ENG 73-224, dated November 8, 2017. The SB describes procedures for replacing the fuel nozzle supply manifold assemblies with parts eligible for installation, and installing new brackets and clamps on the fuel nozzle supply manifolds. 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
We reviewed PW SB PW4ENG 73-223, dated February 5, 2018. This SB describes procedures for replacing the fuel nozzles and fuel nozzle support assemblies with parts eligible for installation.
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 in other products of the same type design.
This proposed AD would require replacing the affected fuel nozzles and fuel nozzle manifold supply assemblies with parts eligible for installation. This proposed AD would also require installation of new brackets and clamps on the fuel supply manifold assemblies.
We estimate that this proposed AD affects 114 engines installed on airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation 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 January 3, 2019.
None.
This AD applies to Pratt & Whitney Division (PW) PW4158 turbofan engines designated by a -3 on the Engine Data Plate and with Talon II outer combustion chamber assembly, part number (P/N) 51J228, installed.
Joint Aircraft System Component (JASC) Code 7310, Engine Fuel Distribution.
This AD was prompted by several reports of high cycle fatigue (HCF) cracks found in the fuel nozzle supply manifold tube at the braze joint interface. We are issuing this AD to prevent failure of the fuel nozzles. The unsafe condition, if not addressed, could result in engine fire, damage to the engine, and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
No later than, the next engine shop visit after the effective date of this AD, do the following:
(1) Remove the 24 fuel nozzles, part number (P/N) 51J344, and replace with P/N 51J397.
(2) Replace the fuel nozzle manifold supply assemblies and install new brackets and clamps on the fuel supply manifolds in accordance with the “For Engines Installed on Aircraft” or “For Engines Not Installed on Aircraft” sections, as applicable, of the Accomplishment Instructions in PW Service Bulletin (SB) PW4ENG 73-224, dated November 8, 2017.
For the purpose of this AD, an “engine shop visit” is the induction of an engine into the shop for maintenance involving the separation of pairs of major mating engine case flanges, except for the following situations, which do not constitute an engine shop visit:
(1) Separation of engine flanges solely for the purposes of transportation of the engine without subsequent maintenance.
(2) Separation of engine flanges solely for the purposes of replacing the fan or propulsor without subsequent maintenance.
(1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j)(1) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Scott Hopper, Aerospace Engineer, ECO Branch, FAA, Engine and Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7154; fax: 781-238-7199; email:
(2) For PW service information identified in this AD, contact Pratt & Whitney, 400 Main St., East Hartford, CT 06108; phone: 860-565-8770; fax: 860-565-4503. You may view this service information at the FAA, Engine and Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759.
Bureau of Industry and Security, Commerce.
Advance notice of proposed rulemaking (ANPRM).
The Bureau of Industry and Security (BIS) controls the export of dual-use and less sensitive military items through the Export Administration Regulations (EAR), including the Commerce Control List (CCL). As controls on exports of technology are a key component of the effort to protect sensitive U.S. technology, many sensitive technologies are listed on the CCL, often consistent with the lists maintained by the multilateral export control regimes of which the United States is a member. Certain technologies, however, may not yet be listed on the CCL or controlled multilaterally because they are emerging technologies. As such, they have not yet been evaluated for their national security impacts. This advance notice of proposed rulemaking (ANPRM) seeks public comment on criteria for identifying emerging technologies that are essential to U.S. national security, for example because they have potential conventional weapons, intelligence collection, weapons of mass destruction, or terrorist applications or could provide the United States with a qualitative military or intelligence advantage. Comment on this ANPRM will help inform the interagency process to identify and describe such emerging technologies. This interagency process is anticipated to result in proposed rules for new Export Control Classification Numbers (ECCNs) on the CCL.
Submit comments on or before December 19, 2018.
You may submit comments through either of the following:
•
•
Kirsten Mortimer, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, Department of Commerce. Phone: (202) 482-0092; Fax (202) 482-3355; Email:
As part of the National Defense Authorization Act (NDAA) for Fiscal Year 2019, Public Law No: 115-232, Congress enacted the Export Control Reform Act of 2018 (the Act or ECRA). Section 1758 of the Act authorizes Commerce to establish appropriate controls, including interim controls, on the export, reexport, or transfer (in country) of emerging and foundational technologies. Under the Act, emerging and foundational technologies are those essential to the national security of the United States and are not described in Section 721(a)(6)(A)(i)-(v) of the Defense Production Act of 1950, as amended. Emerging and foundational technologies, in keeping with ECRA, will be determined by an interagency process that will consider both public and classified information as well as information from the Emerging Technology Technical Advisory Committee and the Committee on Foreign Investment in the United States.
In identifying emerging and foundational technologies, the process must consider:
• The development of emerging and foundational technologies in foreign countries;
• The effect export controls may have on the development of such technologies in the United States; and
• The effectiveness of export controls on limiting the proliferation of emerging and foundational technologies in foreign countries.
To help inform this process, this advance notice of proposed rulemaking (ANPRM) proposes several general areas for public comment. Given the challenges involved in identifying emerging and foundational technologies, this ANPRM will help Commerce and other agencies propose specific emerging technologies for control.
Once an emerging or foundational technology has been identified, the Act authorizes Commerce to establish controls, including interim controls, on the export, reexport, or transfer (in-country) of that technology. In determining the appropriate level of export controls, the Department must consider the potential end-uses and end-users of the technology, and countries to which exports from the United States are restricted (
To assist BIS in identifying emerging technologies that are essential to the national security of the United States, this ANPRM seeks public comment on criteria for defining and identifying emerging technologies. This ANPRM describes certain categories of technology that are currently subject to the EAR but controlled only to embargoed countries, countries designated as supporters of international terrorism, and restricted end uses or end users. These categories are a representative list of the
Commerce does not seek to expand jurisdiction over technologies that are not currently subject to the EAR, such as “fundamental research” described in § 734.8 of the EAR. For purposes of this ANPRM, Commerce does not seek to alter existing controls on technology already specifically described in the CCL. Such controls would generally continue to be addressed through multilateral regimes or interagency reviews.
Commerce will issue a separate ANPRM regarding identification of foundational technologies that may be important to U.S. national security. Commerce seeks public comment, however, on treating emerging and foundational technologies as separate types of technology.
The representative general categories of technology for which Commerce currently seeks to determine whether there are specific emerging technologies that are essential to the national security of the United States include:
(1) Biotechnology, such as:
(i) Nanobiology;
(ii) Synthetic biology;
(iv) Genomic and genetic engineering; or
(v) Neurotech.
(2) Artificial intelligence (AI) and machine learning technology, such as:
(i) Neural networks and deep learning (
(ii) Evolution and genetic computation (
(iii) Reinforcement learning;
(iv) Computer vision (
(v) Expert systems (
(vi) Speech and audio processing (
(vii) Natural language processing (
(viii) Planning (
(ix) Audio and video manipulation technologies (
(x) AI cloud technologies; or
(xi) AI chipsets.
(3) Position, Navigation, and Timing (PNT) technology.
(4) Microprocessor technology, such as:
(i) Systems-on-Chip (SoC); or
(ii) Stacked Memory on Chip.
(5) Advanced computing technology, such as:
(i) Memory-centric logic.
(6) Data analytics technology, such as:
(i) Visualization;
(ii) Automated analysis algorithms; or
(iii) Context-aware computing.
(7) Quantum information and sensing technology, such as
(i) Quantum computing;
(ii) Quantum encryption; or
(iii) Quantum sensing.
(8) Logistics technology, such as:
(i) Mobile electric power;
(ii) Modeling and simulation;
(iii) Total asset visibility; or
(iv) Distribution-based Logistics Systems (DBLS).
(9) Additive manufacturing (
(10) Robotics such as:
(i) Micro-drone and micro-robotic systems;
(ii) Swarming technology;
(iii) Self-assembling robots;
(iv) Molecular robotics;
(v) Robot compliers; or
(vi) Smart Dust.
(11) Brain-computer interfaces, such as
(i) Neural-controlled interfaces;
(ii) Mind-machine interfaces;
(iii) Direct neural interfaces; or
(iv) Brain-machine interfaces.
(12) Hypersonics, such as:
(i) Flight control algorithms;
(ii) Propulsion technologies;
(iii) Thermal protection systems; or
(iv) Specialized materials (for structures, sensors, etc.).
(13) Advanced Materials, such as:
(i) Adaptive camouflage;
(ii) Functional textiles (
(iii) Biomaterials.
(14) Advanced surveillance technologies, such as:
Faceprint and voiceprint technologies.
BIS welcomes comments on: (1) How to define emerging technology to assist identification of such technology in the future; (2) criteria to apply to determine whether there are specific technologies within these general categories that are important to U.S. national security; (3) sources to identify such technologies; (4) other general technology categories that warrant review to identify emerging technology that are important to U.S. national security; (5) the status of development of these technologies in the United States and other countries; (6) the impact specific emerging technology controls would have on U.S. technological leadership; (7) any other approaches to the issue of identifying emerging technologies important to U.S. national security, including the stage of development or maturity level of an emerging technology that would warrant consideration for export control.
Comments should be submitted to BIS as described in the
This rule was determined to be significant by the Office of Management Budget under Executive Order 12866.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking and notice of public hearing.
This document contains proposed amendments to the regulations relating to imposing user fees for enrolled agents and enrolled retirement plan agents. The proposed regulations remove the initial enrollment user fee for enrolled retirement plan agents because the IRS no longer offers initial enrollment as an enrolled retirement plan agent. The proposed regulations also increase the amount of the renewal user fee for enrolled retirement plan agents from $30 to $67. In addition, the proposed regulations increase the amount of both the enrollment and renewal user fee for enrolled agents from $30 to $67. The proposed regulations affect individuals who are or apply to become enrolled agents and individuals who are enrolled retirement plan agents. The Independent Offices Appropriations Act of 1952 authorizes charging user fees.
Written or electronic comments must be received by January 18, 2019. Requests to speak and outlines of topics to be discussed at the public hearing
Send submissions to: CC:PA:LPD:PR (REG-122898-17), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-122898-17), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224 or sent electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, Mark Shurtliff at (202) 317-6845; concerning cost methodology, Michael A. Weber at (202) 803-9738; concerning submission of comments, the public hearing, or to be placed on the building access list to attend the public hearing, Regina Johnson at (202) 317-6901 (not toll-free numbers).
This document contains proposed amendments to 26 CFR part 300 regarding user fees.
Section 330(a)(1) of title 31 of the United States Code authorizes the Secretary of the Treasury to regulate the practice of representatives before the Treasury Department. Before admitting a representative to practice, the Secretary is authorized to “require that the representative demonstrate—(A) good character; (B) good reputation; (C) necessary qualifications to enable the representative to provide to persons valuable service; and (D) competency to advise and assist persons in presenting their cases.” 31 U.S.C. 330(a)(2). Pursuant to section 330 of title 31, the Secretary has published regulations governing practice before the IRS in 31 CFR part 10 and reprinted the regulations as Treasury Department Circular No. 230 (Circular 230).
Section 10.4(a) of Circular 230 authorizes the IRS to grant enrollment as enrolled agents to individuals who demonstrate special competence in tax matters by passing a written examination administered by, or under the oversight of, the IRS and who have not engaged in any conduct that would justify suspension or disbarment under Circular 230. Every year, the IRS develops and administers an Enrolled Agent Special Enrollment Examination (EA-SEE) that individuals must pass to become an enrolled agent.
Section 10.4(b) of Circular 230 currently authorizes the IRS to grant enrollment as enrolled retirement plan agents to individuals who demonstrate special competence in qualified retirement plan matters by passing a written examination administered by, or under the oversight of, the IRS and who have not engaged in any conduct that would justify suspension or disbarment under Circular 230. Until February 12, 2016, the IRS annually developed and administered an Enrolled Retirement Plan Agent Special Enrollment Examination (ERPA-SEE) that individuals were required to take and pass to become an enrolled retirement plan agent. After February 12, 2016, however, the IRS stopped offering the ERPA-SEE. Individuals who have already passed the ERPA-SEE may maintain their enrollment as enrolled retirement plan agents, but the IRS is not accepting applications to become new Enrolled Retirement Plan Agents. Accordingly, the proposed regulations propose to remove the user fee for the initial enrollment of an enrolled retirement plan agent currently in Treasury Regulation § 300.10.
Section 10.4(d) also authorizes the IRS to grant enrollment as an enrolled agent or an enrolled retirement plan agent to a qualifying former IRS employee by virtue of past IRS service and technical experience if the former employee has not engaged in any conduct that would justify suspension or disbarment under the provisions of Circular 230 and meets certain other requirements. Application for enrollment as an enrolled agent based on former employment with the IRS must be made within three years from the date of separation from that employment and does not require passing the EA-SEE. When the IRS discontinued offering the ERPA-SEE necessary for enrollment as an enrolled retirement plan agent for individuals without IRS work experience, effective February 12, 2016, the IRS stopped granting individuals enrollment as enrolled retirement plan agents by virtue of past service and technical experience in the IRS.
Once eligible for enrollment as an enrolled agent, whether by examination or former employment with the IRS, an individual must file an application for enrollment with the IRS and currently pay a $30 nonrefundable user fee. To maintain active enrollment and practice before the IRS, an individual who has been enrolled as an enrolled agent or enrolled retirement plan agent must file an application to renew enrollment every three years and currently pay a $30 nonrefundable user fee. 31 CFR 10.6(d).
The IRS Return Preparer Office (RPO) is responsible for certain matters related to authority to practice before the IRS, including acting on applications for enrollment and renewal of enrolled agents and for renewal of enrolled retirement plan agents. 31 CFR 10.1. As a condition for enrollment as an enrolled agent, the RPO may conduct a federal tax-compliance check to determine whether an applicant has filed all required tax returns and has no outstanding federal tax debts and a suitability check to determine whether an applicant has engaged in any conduct that would justify suspending or disbarring any practitioner under Circular 230. 31 CFR 10.5(d). As a condition for renewal, enrolled agents and enrolled retirement plan agents must certify completion of the continuing education requirements. 31 CFR 10.6(e).
As part of its responsibility for administering the enrollment program, RPO determines whether applicants have met the above requirements. 31 CFR 10.6(j)(1). An applicant who is denied enrollment as an enrolled agent for failure to pass a tax-compliance check may reapply if the applicant becomes current with respect to the applicant's tax liabilities. 31 CFR 10.5(d)(2). Applicants who fail to meet the continuing education and fee payment requirements receive from RPO a notice that states the basis for RPO's determination of noncompliance and provides an opportunity to cure the failure. 31 CFR 10.6(j)(1).
The Independent Offices Appropriations Act of 1952 (IOAA) (31 U.S.C. 9701) authorizes each agency to promulgate regulations establishing the charge for services the agency provides (user fees). Under the IOAA, these user-fee regulations are subject to policies prescribed by the President and shall be as uniform as practicable. Those policies are currently set forth in the Office of Management and Budget (OMB) Circular A-25 (OMB Circular), 58 FR 38142 (July 15, 1993).
The IOAA states that the services provided by an agency should be self-sustaining to the extent possible (31 U.S.C. 9701(a)). The OMB Circular states that agencies providing services
An agency should set the user fee at an amount that recovers the full cost of providing the service unless the agency requests, and the OMB grants, an exception to the full-cost requirement. The OMB may grant exceptions only where the cost of collecting the fees would represent an unduly large part of the fee for the activity, or where any other condition exists that, in the opinion of the agency head, justifies an exception. When the OMB grants an exception, the agency does not collect the full cost of providing the service that confers a special benefit on identifiable recipients rather than the public at large, and the agency therefore must fund the remaining cost of providing the service from other available funding sources. When the OMB grants an exception, the agency, and by extension all taxpayers, subsidize the cost of the service to the recipients who would otherwise be required to pay the full cost of providing the service, as the IOAA and the OMB Circular direct.
As discussed in section A of this preamble, an individual who has been granted enrollment as an enrolled agent or an enrolled retirement plan agent may practice before the IRS. The IRS confers benefits on individuals who are enrolled agents or enrolled retirement plan agents beyond those that accrue to the general public by allowing them to practice before the IRS. Because the ability to practice before the IRS is a special benefit, the IRS charges a user fee to recover the full cost associated with administering the program for enrollment and renewal of enrolled agents and renewal of enrolled retirement plan agents.
On September 30, 2010, the Treasury Department and the IRS published two final regulations in the
On April 19, 2011, the Treasury Department and the IRS published in the
As required by the IOAA and the OMB Circular, the RPO completed its 2017 biennial review of the enrollment and renewal user fees associated with enrolled agents and enrolled retirement plan agents. As discussed in section D of this preamble, during its review the RPO took into account the increase in labor, benefits, and overhead costs incurred in connection with providing services to individuals who enroll or renew enrollment as enrolled agents and enrolled retirement plan agents since the user fee was last changed in 2011. In addition, RPO determined that costs associated with federal tax-compliance checks and suitability checks on enrolled individuals should be recovered as part of the user fee for administering the enrollment and renewal programs. The 2017 biennial review also took into account new costs associated with administering the program for enrolled agents and enrolled retirement plan agents, including the costs of operating a dedicated toll-free helpline in the RPO for enrollment and renewal matters. The RPO determined that the full cost of administering the program for enrolled agents and enrolled retirement plan agents has increased from $30 to $67 per application for enrollment or renewal. The proposed fee complies with the directive in the OMB Circular to recover the full cost of providing a service that confers special benefits on identifiable recipients beyond those accruing to the general public.
The IRS follows generally accepted accounting principles (GAAP) in calculating the full cost of processing an application for enrollment or renewal. The Federal Accounting Standards Advisory Board (FASAB) is the body that establishes GAAP that apply for federal reporting entities, such as the IRS. FASAB publishes the FASAB Handbook of Accounting Standards and Other Pronouncements, as Amended (Current Handbook), which is available at
The IRS determines the cost of its services and the activities involved in producing them through a cost-accounting system that tracks costs to organizational units. The lowest organizational unit in the IRS's cost-accounting system is called a cost center. Cost centers are usually separate offices that are distinguished by subject-matter area of responsibility or geographic region. All costs of operating a cost center are recorded in the IRS's cost-accounting system and allocated to that cost center. The costs allocated to a cost center are the direct costs for the cost center's activities as well as all indirect costs, including overhead, associated with that cost center. Each cost is recorded in only one cost center.
To establish the per-unit cost, the total cost of providing the service is divided by the volume of services provided.
Not all cost centers are fully devoted to one service for which the IRS charges user fees. Some cost centers work on a number of different services across the IRS. In these cases, the IRS uses various cost-measurement techniques to estimate the cost incurred in those cost centers attributable to the program. These techniques include using various timekeeping systems to measure the time required to accomplish activities, or using information provided by subject-matter experts on the time devoted to a program. Once the IRS has estimated the average time required to accomplish an activity, it multiplies that time estimate by the relevant organizational unit's average labor and benefits cost per unit of time to determine the labor and benefits cost incurred to provide the service. To determine the full cost, IRS then adds overhead as discussed below.
Overhead is an indirect cost of operating an organization that cannot be immediately associated with an activity that the organization performs. Overhead includes costs of resources that are jointly or commonly consumed by one or more organizational unit's activities but are not specifically identifiable to a single activity.
These costs can include:
• General management and administrative services of sustaining and supporting organizations.
• Facilities management and ground maintenance services (security, rent, utilities, and building maintenance).
• Procurement and contracting services.
• Financial management and accounting services.
• Information technology services.
• Services to acquire and operate property, plants and equipment.
• Publication, reproduction, and graphics and video services.
• Research, analytical, and statistical services.
• Human resources/personnel services.
• Library and legal services.
To calculate the overhead allocable to a service, the IRS multiplies a Corporate Overhead rate by the labor and benefits costs determined as discussed previously. The IRS calculates the Corporate Overhead rate annually based on cost elements underlying the Statement of Net Cost included in the IRS Annual Financial Statements, which are audited by the Government Accountability Office. The Corporate Overhead rate is the ratio of the sum of the IRS's indirect labor and benefits costs from the supporting and sustaining organizational units—those that do not interact directly with taxpayers—and all non-labor costs to the IRS's labor and benefits costs of its organizational units that interact directly with taxpayers.
The Corporate Overhead rate of 68.00 percent for costs reviewed during FY 2017 was calculated based on FY 2016 costs (which are assumed to be fixed and reoccurring) as follows:
The IRS used projections for fiscal years 2018 through 2020 to determine the direct costs associated with enrolled agent enrollment and renewal and enrolled retirement plan agent renewal. Direct costs are incurred by the RPO and include labor costs for enrollment and renewal submission processing; tax compliance and background checks; continuing education and testing-related activities; and communications, which include the new toll-free helpline.
The labor and benefits for the work performed related to applications for enrolled agent enrollment and renewal and enrolled retirement plan agent renewal is projected to be $2,708,603 in total over fiscal years 2018 through 2020. The labor and benefits costs include the cost to perform background checks and tax compliance checks, which are services that were not included in the previous $30 user fee. The number of enrollment and renewal applications is based on the FY2016 numbers adjusted by the anticipated increase in enrollment. Adding Corporate Overhead expenses to the total labor and benefits results in total costs of $4,550,453 as shown below:
Dividing this total cost by the projected population of initial enrollment and renewal applications for fiscal years 2018 through 2020 results in a cost per application of $67 as shown below:
Taking into account the full amount of these costs, the user fee for enrolled agent enrollment or renewal and enrolled retirement plan agent renewal is proposed to be $67 per application. The IRS does not intend to seek an exception from OMB to the full cost requirement.
OIRA has determined that this regulation is significant and subject to review under section 6(b) of Executive Order 12866.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. The user fee primarily affects individuals who are enrolled agents, apply to become enrolled agents, or are enrolled retirement plan agents. Only individuals, not businesses, can be enrolled agents or enrolled retirement plan agents. Thus, any economic impact of the user fee on small entities generally will occur only when an enrolled agent or enrolled retirement plan agent owns a small business or when a small business employs enrolled agents or enrolled retirement plan agents and reimburses them for their renewal fees. The Treasury Department and IRS estimate that approximately 22,781 individuals will apply annually for enrollment as an enrolled agent, renewal as an enrolled agent, or renewal as an enrolled retirement plan agent. Due to the relatively small number of small businesses that employ enrolled agents or enrolled retirement plan agents, a substantial number of small entities are not likely to be affected. Further, the economic impact on any small entities affected would be limited to paying the $37 difference in cost between the $67 user fee and the previous $30 user fee (for each enrolled agent or enrolled retirement plan agent that a small entity employs and pays for), which is unlikely to present a significant economic impact. The total economic impact of this regulation is thus approximately $842,897 annually,
It is not anticipated that the increase in user fee that is paid every three years and averages to $12.33 per year will negatively affect enrollment, which has historically remained steady as user fee amounts have changed. Pursuant to section 7805(f), this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed amendments to the regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in the preamble under the
A public hearing has been scheduled for January 24, 2019, beginning at 10:00 a.m. in the Main Auditorium of the Internal Revenue Service Building, 1111 Constitution Avenue NW, Washington, DC 20224. Due to building-security procedures, visitors must enter at the Constitution Avenue entrance. All visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the
The rules of § 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic by
The principal author of these regulations is Mark Shurtliff, Office of the Associate Chief Counsel (Procedure and Administration). Other personnel from the Treasury Department and the IRS participated in their development.
Reporting and recordkeeping requirements, User fees.
Accordingly, 26 CFR part 300 is proposed to be amended as follows:
31 U.S.C. 9701.
(b)
(d)
(b)
(d)
(b)
(d)
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a state implementation plan (SIP) revision, submitted by the Pennsylvania Department of Environmental Protection (PADEP) on behalf of the Allegheny County Health Department (ACHD), to EPA on October 3, 2017, for the purpose of providing for attainment of the 2010 sulfur dioxide (SO
Written comments must be received on or before December 19, 2018.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2017-0730 at
Leslie Jones Doherty, (215) 814-3409, or by email at
On June 2, 2010, the EPA Administrator signed a final rule establishing a new SO
Effective on October 4, 2013, the Allegheny Area was designated as nonattainment for the 2010 SO
For a number of areas, including the Allegheny Area, EPA published a notice on March 18, 2016, that Pennsylvania and other pertinent states had failed to submit the required SO
Attainment plans must meet the applicable requirements of the CAA, and specifically CAA sections 172, 191, and 192. The required components of an attainment plan submittal are listed in section 172(c) of Title 1, part D of the CAA. The EPA's regulations governing nonattainment SIPs are set forth at 40 CFR part 51, with specific procedural requirements and control strategy requirements residing at subparts F and G, respectively. Soon after Congress enacted the 1990 Amendments to the CAA, EPA issued comprehensive guidance on SIPs, in a document entitled the “General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” published at 57 FR 13498 (April 16, 1992) (General Preamble). Among other things, the General Preamble addressed SO
In order for EPA to fully approve a SIP as meeting the requirements of CAA sections 110, 172 and 191-192 and EPA's regulations at 40 CFR part 51, the SIP for the affected area needs to demonstrate to EPA's satisfaction that each of the aforementioned requirements have been met. Under CAA sections 110(l) and 193, EPA may not approve a SIP that would interfere with any applicable requirement concerning NAAQS attainment and RFP, or any other applicable requirement, and no requirement in effect (or required to be adopted by an order, settlement, agreement, or plan in effect before November 15, 1990) in any area which is a nonattainment area for any air pollutant, may be modified in any manner unless it insures equivalent or greater emission reductions of such air pollutant.
CAA section 172(c)(1) directs states with areas designated as nonattainment to demonstrate that the submitted plan provides for attainment of the NAAQS. 40 CFR part 51, subpart G further delineates the control strategy requirements that SIPs must meet, and EPA has long required that all SIPs and control strategies reflect four fundamental principles of quantification, enforceability, replicability, and accountability. General Preamble, at 13567-68. SO
The 2014 SO
As specified in 40 CFR 50.17(b), the 1-hour primary SO
For SO
EPA recognizes that some sources have highly variable emissions, for example due to variations in fuel sulfur content and operating rate, that can make it extremely difficult, even with a well-designed control strategy, to ensure in practice that emissions for any given hour do not exceed the critical emission value. EPA also acknowledges the concern that longer term emission limits can allow short periods with emissions above the “critical emissions value,” which, if coincident with meteorological conditions conducive to high SO
Second, from a more theoretical perspective, EPA has compared the likely air quality with a source having maximum allowable emissions under an appropriately set longer term limit, as compared to the likely air quality with the source having maximum allowable emissions under the comparable 1-hour limit. In this comparison, in the 1-hour average limit scenario, the source is presumed at all times to emit at the critical emission level, and in the longer term average limit scenario, the source is presumed occasionally to emit more than the critical emission value but on average, and presumably at most times, to emit well below the critical emission value. In an “average year,” compliance with the 1-hour limit is expected to result in three exceedance days (
As a hypothetical example to illustrate these points, suppose a source that always emits 1000 pounds of SO
This simplified example illustrates the findings of a more complicated statistical analysis that EPA conducted using a range of scenarios using actual plant data. As described in Appendix B of EPA's 2014 SO
The question then becomes whether this approach, which is likely to produce a lower number of overall exceedances even though it may produce some unexpected exceedances above the critical emission value, meets the requirement in section 110(a)(1) and 172(c)(1) for SIPs to “provide for attainment” of the NAAQS. For SO
The 2014 SO
Preferred air quality models for use in regulatory applications are described in Appendix A of EPA's
As stated previously, attainment demonstrations for the 2010 1-hour primary SO
The meteorological data used in the analysis should generally be processed with the most recent version of AERMOD Meteorological Preprocessor (AERMET). Estimated concentrations should include ambient background concentrations, should follow the form of the standard, and should be calculated as described in section 2.6.1.2 of the August 23, 2010 clarification memo on “Applicability of Appendix W Modeling Guidance for the 1-hr SO
In accordance with section 172(c) of the CAA, the Pennsylvania attainment plan for the Allegheny County Area includes: (1) An emissions inventory for SO
Consistent with CAA requirements (
Pennsylvania's SO
States are required under section 172(c)(3) of the CAA to develop comprehensive, accurate and current emissions inventories of all sources of the relevant pollutant or pollutants in the nonattainment area. These inventories provide detailed accounting of all emissions and emissions sources by precursor or pollutant. In addition, inventories are used in air quality modeling to demonstrate that attainment of the NAAQS is as expeditious as practicable. The 2014 SO
For the base year inventory of actual emissions, a “comprehensive, accurate and current” inventory can be represented by a year that contributed to the three-year design value used for the original nonattainment designation. The 2014 SO
Table 1 shows the level of emissions, expressed in tpy, in the Allegheny Area for the 2011 base year by emissions source category.
EPA has evaluated Pennsylvania's 2011 base year emissions inventory for the Allegheny Area and has made the determination that this inventory was developed consistent with EPA's guidance. Therefore, pursuant to section 172(c)(3), EPA is proposing to approve Pennsylvania's 2011 base year emissions inventory for the Allegheny Area.
The attainment demonstration also provides for a projected attainment year inventory that includes estimated emissions for all emission sources of SO
The SO
ACHD provided an analysis which was developed in accordance with EPA's Modeling Guidance and the 2014 SO
ACHD characterized USS's Clairton Coke Works fugitive coke oven emissions using an alternative modeling technique, which shows significantly better model performance over the regulatory version of AERMOD. Given the high temperatures of these fugitive emissions, ACHD recognized that the plume rise and initial plume characteristics vary by hour reflecting hourly variations in meteorology in a manner that is not addressed in simple treatments of volume sources in AERMOD. Therefore, ACHD used an alternate method, using EPA's Buoyant Line and Point Source Model (BLP), to determine hourly values of these parameters. Since AERMOD does not provide for volume sources to have heat flux or otherwise to have plume rise, ACHD used hourly release heights reflecting the plume height for each hour's meteorology estimated by the BLP Plume Rise module. Similarly, ACHD used hourly values which characterize the initial width and height of the release based on hourly plume dimensions determined by BLP. Fugitive emissions were then included in AERMOD for each of the multiple volume sources used to represent the coke batteries in the Area by using volume sources with hourly release heights and initial dispersion coefficients determined in this manner, as contained in an hourly emission rate file. This alternative method is referred to as the BLP/AERMOD Hybrid approach.
As noted in ACHD's modeling protocol document (
A demonstration in support of the use of the BLP/AERMOD Hybrid approach for source characterization of the coke oven fugitive emissions for PM
EPA's review and approval of ACHD's analysis supporting the use of the BLP/AERMOD Hybrid approach followed the EPA Model Clearinghouse concurrence process as prescribed in section 3.2 of Appendix W. Following receipt of ACHD's analysis on July 27, 2018, EPA Region 3 recommended approval of this alternative modeling approach to the EPA Model Clearinghouse on August 7, 2018. The EPA Model Clearinghouse concurred with Region 3's recommended approval on August 10, 2018. EPA Region 3 then approved the use of this alternative model by letter from its Regional Administrator to ACHD dated August 16, 2018. EPA is providing notice in this rulemaking
The primary SO
CAA section 172(c)(1) requires that each attainment plan provide for the implementation of all reasonably available control measures (
Pennsylvania's October 3, 2017 submittal discusses facility-specific control measures, namely SO
Controls at the Clairton and Edgar Thomson plants represent the majority of SO
In its modeling analysis, ACHD determined critical emission values (CEV) with an hourly average for SO
The objective of ACHD's analysis of the variability of COG sulfur content is to determine the adjustment factor that can be multiplied times the modeled CEVs to compute longer term limits that will require a comparable degree of control as would be required by 1-hour limits at the CEVs. EPA's 2014 SO
In accordance with the methods EPA recommended in Appendix C to its 2014 SO
Table 3 shows the modeled CEV, the 30-day and 24-hour average adjustment factors and the resulting comparable 30-day and 24-hour average SO
EPA's guidance advises that, to help assure attainment near sources with longer term limits, states should assure that occasions with hourly emissions above the CEV are limited in frequency and magnitude. The supplemental limits that ACHD has adopted, providing 24-hour average limits to supplement the 30-day average limits, serve this purpose. To evaluate these limits, ACHD analyzed SO
For these sources with limits based on longer averaging periods, H
The USS Edgar Thomson plant is an iron and steel making facility which mainly produces steel slabs. At the USS Edgar Thomson facility, a new stack and a combined flue system is planned for Riley Boilers 1, 2 and 3. All boilers will exhaust to the new stack which is below good engineering practice (GEP) stack height. Specifically, the height of this stack, 85 meters, is lower than the formula GEP height based on the dimensions of nearby buildings, 97 meters.
Actual emissions will be reduced as a result of the boilers using the lower H
The USS Irvin plant is a secondary steel processing plant which receives steel slabs and performs one of several finishing processes on the steel slabs. Reductions in SO
In addition, Harsco Metals (also known as Braddock Recovery Inc) is located on the property of the USS Edgar Thomson plant. Harsco uses a rotary kiln fired with COG which is supplied by USS Clairton plant. As a result of the lower sulfur content in the USS-produced COG, Harsco has become subject to a lower SO
Emission limits at all four facilities (USS Clairton, Edgar Thomson and Irvin Plants and Harsco Metals) were established through enforceable installation permits (
EPA's guidance for longer term average limits is that plans based on such limits can be considered to provide for attainment where appropriate as long as the longer term limit is comparably stringent to the 1-hour limit that would otherwise be set and EPA can have reasonable confidence that occasions of emissions above the critical 1-hour emission rate will be limited in frequency and magnitude. ACHD has provided for comparable stringency by computing adjustment factors in accordance with the method that EPA recommended in Appendix C of its guidance and adopting longer term average limits (where applicable) that are adjusted accordingly. Also in accordance with EPA's recommendations, ACHD has established supplemental limits that will help assure that occasions of emissions above the critical 1-hour emission rate will be limited in frequency and magnitude. Therefore, EPA believes that ACHD has met EPA's recommended criteria for longer term average limits to be part of a plan that provides suitable assurances that the area will attain the standard.
ACHD also evaluated potential RACT at other sources in the Allegheny Area including Koppers Inc.—Clairton Plant, Clairton Slag—West Elizabeth Plant, Eastman Chemical Resins Inc.—Jefferson Plant and Kelly Run Sanitation—Forward Township. All sources have less than 5 tpy of allowable SO
EPA is proposing to approve ACHD's determination that the SO
Pennsylvania has requested that portions of the installation permits for the USS Mon Valley Works facilities—Clairton, Edgar Thomson and Irvin plants and Harsco Metals be approved into the Allegheny County portion of the Pennsylvania SIP. Upon approval, the emission limits listed in the installation permits and corresponding compliance parameters found in the installation permits for Clairton, Edgar Thomson, Irvin and Harsco Metals will become permanent and enforceable SIP measures to meet the requirements of the CAA. After considering ACHD's submitted information, EPA, therefore, concludes Pennsylvania's October 3, 2017, SIP submittal for the Area meets the RACM/RACT and emission limitation and other control measure requirements of section 172(c) of the CAA.
Section 172(c)(2) of the CAA requires an attainment plan to include a demonstration that shows reasonable further progress (
In accordance with section 172(c)(9) of the CAA, contingency measures are required as additional measures to be implemented in the event that an area fails to meet the RFP requirements or fails to attain the standard by its attainment date. These measures must be fully adopted rules or control measures that can be implemented quickly and without additional EPA or state action if the area fails to meet RFP requirements or fails to meet its attainment date, and should contain trigger mechanisms and an implementation schedule. However, SO
The contingency measures in Pennsylvania's October 3, 2017 submittal are designed to keep the Allegheny Area from triggering an exceedance or violation of the SO
EPA finds that ACHD has a comprehensive program included in the Pennsylvania SIP to identify sources of violations of the SO
Section 172(c)(5) of the CAA requires that an attainment plan require permits for the construction and operation of new or modified major stationary sources in a nonattainment area. In Allegheny County, NNSR procedures and conditions for which new major stationary sources or major modifications may obtain a preconstruction permit are stipulated in the ACHD Rules and Regulations, Article XXI, Air Pollution Control, § 2102.06, “Major Sources Locating in or Impacting a Nonattainment Area” which was previously approved into the Pennsylvania SIP, with the most recent revision effective March 30, 2015 (80 FR 16570). ACHD Rules and Regulations, Article XXI, Air Pollution Control, § 2102.06 also incorporates by reference applicable provisions of PADEP's NNSR regulations codified at 25 Pa. Code Chapter 127, Subchapter E. PADEP's NNSR regulations in 25 Pa. Code Chapter 127, Subchapter E were previously approved into the Pennsylvania SIP, with the most recent revision updating the regulations to meet EPA's 2002 NSR reform regulations effective on May 14, 2012 (77 FR 28261). A discussion of the specific PADEP provisions incorporated by reference into ACHD Article XXI can be found in Pennsylvania's October 3, 2017 submittal found under Docket ID No. EPA-R03-OAR-2017-0730. These rules provide for appropriate NNSR permitting as required by CAA sections 172(c)(5) and 173 and 40 CFR 51.165 for SO
EPA is proposing to approve Pennsylvania's attainment plan SIP revision for the Allegheny Area, as submitted through ACHD and PADEP to EPA on October 3, 2017, for the purpose of demonstrating attainment of the 2010 1-hour SO
EPA has determined that Pennsylvania's SO
In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference portions of the installation permits issued by ACHD with USS facilities at Clairton, Edgar Thomson and Irvin and with Harsco Metals. This includes emission limits and associated compliance parameters, recording-keeping and reporting. EPA has made, and will continue to make, these materials generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule, concerning the SO
Environmental protection, Air pollution control, Incorporation by reference, Reporting and recordkeeping requirements, Sulfur oxides.
42 U.S.C. 7401
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes specifications for the 2019 blueline tilefish fishery north of the North Carolina/Virginia border and projected specifications for 2020 and 2021. The proposed action is intended to establish allowable harvest levels and other management measures to prevent overfishing while allowing optimum yield, consistent with the Magnuson-Stevens Fishery Conservation and Management Act and the Tilefish Fishery Management Plan. It is also intended to inform the public of these proposed specifications for the 2019 fishing year and projected specifications for 2020-2021.
Comments must be received by 5 p.m. local time, on December 4, 2018.
You may submit comments on this document, identified by NOAA-NMFS-2018-0115, by either of the following methods:
1. Go to
2. Click the “Comment Now!” icon, complete the required fields.
3. Enter or attach your comments.
A draft environmental assessment (EA) has been prepared for this action that describes the proposed measures and other considered alternatives, as well as provides an analysis of the impacts of the proposed measures and alternatives. Copies of the specifications document, including the EA and the Initial Regulatory Flexibility Analysis (IRFA), are available on request from Dr. Christopher M. Moore, Executive Director, Mid-Atlantic Fishery Management Council, Suite 201, 800 North State Street, Dover, DE 19901. These documents are also accessible via the internet at
Douglas Potts, Fishery Policy Analyst, (978) 281-9341.
The blueline tilefish fishery north of the North Carolina/Virginia border is managed by the Mid-Atlantic Fishery Management Council under the Tilefish Fishery Management Plan (FMP), which outlines the Council's process for establishing annual specifications. Blueline tilefish south of the North Carolina/Virginia border are managed by the South Atlantic Fishery Management Council under the Snapper Grouper FMP.
The Tilefish FMP requires the Mid-Atlantic Council to recommend acceptable biological catch (ABC), annual catch limit (ACL), annual catch target (ACT), total allowable landings (TAL), and other management measures for the commercial and recreational sectors of the fishery, for up to three years at a time. The Council's Scientific and Statistical Committee (SSC) provides an ABC recommendation to the Council to derive these catch limits. The Council makes recommendations to NMFS that cannot exceed the recommendation of its SSC. The Council's recommendations must include supporting documentation concerning the environmental, economic, and social impacts of the recommendations. We are responsible for reviewing these recommendations to ensure that they achieve the FMP objectives and are consistent with all applicable laws. Following review, NMFS publishes the final specifications in the
A benchmark stock assessment was completed in late 2017 for the blueline tilefish population along the entire East Coast through the Southeast Data, Assessment, and Review process (SEDAR 50). Within the assessment, the coast-wide population was modeled separately north and south of Cape Hatteras, North Carolina, because of data limitations within the northern area. To assist in developing an ABC recommendation, the Mid- and South Atlantic Councils' SSCs, as well as staff from the NMFS Northeast and Southeast Fisheries Science Centers formed a joint subcommittee to examine available information for the region north of Cape
At its March 2018 meeting, the Mid-Atlantic SSC reviewed the results from the SEDAR 50 benchmark stock assessment as well as additional work using the Data-Limited Methods Toolkit and derived a recommendation for acceptable biological catch (ABC) using the Mid-Atlantic Council's risk policy. The resulting ABC was 179,500 lb (81.4 mt) annually for 2019-2021 for the region north of Cape Hatteras. The SSC then followed the recommendation of the Joint Mid- and South Atlantic Blueline Tilefish Subcommittee to assign 56 percent of that ABC to the Mid-Atlantic Council (north of the VA/NC border) and 44 percent to the South Atlantic Council. This percentage breakdown is based on the catch distribution from the 2017 Pilot Blueline Tilefish Longline Survey.
The Mid-Atlantic Council took final action on 2019-2021 quota specifications for the blueline tilefish fishery at its April 2018 meeting, and submitted its recommended specifications to us on August 17, 2018. A summary of the Council's recommended specifications is shown below in Table 1.
The Council's recommendations are consistent with the SSC's recommended ABC, and represent an approximate 15-percent increase in ABC from 2018.
The Mid-Atlantic Council recommended increasing the commercial possession limit from 300 (136 kg) to 500 lb (227 kg) to assist the commercial fishery in harvesting the full commercial TAL. The Council was concerned that if fishing effort increases substantially, the small commercial TAL could be landed quickly at the 500-lb (227-kg) limit. To mitigate that concern, the Council included an inseason trigger, authorizing the Regional Administrator to reduce the possession limit to 300 lb (136 kg) per trip when 70 percent of the TAL has been landed.
The Council proposed no change to the recreational fishery beyond the increase to the recreational TAL (Table 1). The recreational fishery is open from May 1 through October 31 of each year and closed from November 1 through April 30. The bag limit for blueline tilefish depends on the type of fishing vessel being used. On a private boat, each angler may keep up to three blueline tilefish. On an U.S. Coast Guard uninspected for-hire vessel (charter boat), each angler may keep up to five blueline tilefish. On an U.S. Coast Guard inspected for-hire vessel (party boat), each angler may keep up to seven blueline tilefish.
Pursuant to section 304(b)(1)(A) of the Magnuson Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Assistant Administrator has determined that this proposed rule is consistent with the Tilefish FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The Council prepared an analysis of the potential economic impacts of the action, which is included in the draft EA for this action and supplemented by information contained in the preamble of this proposed rule.
For Regulatory Flexibility Act purposes, NOAA's National Marine Fisheries Service has established a size standard for small businesses, including their affiliated operations, whose primary industry is commercial fishing (see 50 CFR 200.2). A business primarily engaged in commercial fishing (NAICS code 11411) is classified as small if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $11.0 million for all its affiliated operations worldwide. The Small Business Administration has established size standards for all other major industry sectors in the U.S., including defining for-hire fishing firms (NAICS code 487210) as small when their receipts are less than $7.5 million.
The measures proposed in this action apply to vessels that hold a Federal permit for blueline tilefish. Some entities own multiple vessels with tilefish permits. In 2017, 2,028 separate vessels held tilefish permits. Those vessels were owned by 1,519 entities. Using the size definitions above, 1,508 are small business entities, comprised of 886 small commercial fishing entities, 242 small for-hire entities, and 380 had no revenue in 2017 (but are considered small businesses). For those small businesses with revenues, their average total revenues were $0.55 million in 2017.
This action would increase the blueline tilefish commercial total allowable landings (TAL) from 23,263 lb (10.5 mt) to 26,869 lb (12.2 mt) (about 15 percent) and increase the commercial trip limit from 300 lb (136 kg) to 500 lb (227 kg) per trip. The trip limit would reduce to 300 lb (136 kg) when 70 percent of the commercial quota has been landed. The recreational TAL would increase from 62,262 lb (28.2 mt) to 71,912 lb (32.6 mt) (about 15 percent). Therefore, the potential impact of this action on small entities is positive, but limited by the relatively low TAL.
Given the small potential economic impact of the management measures proposed, this action will not have a significant economic impact on a substantial number of small entities.
Fisheries, Fishing, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, 50 CFR part 648 is proposed to be amended as follows:
16 U.S.C. 1801
(b) * * *
(1)
(2)
(i) When 70 percent of the blueline tilefish commercial TAL will be landed, the Regional Administrator will publish a notice in the
(ii) When 100 percent of the blueline tilefish commercial TAL will be landed, the Regional Administrator will publish a notice in the
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by December 19, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
On July 13, 2018, Bacardi USA, Inc., submitted a notification of proposed production activity to the FTZ Board for its facility within Subzone 64E, in Jacksonville, Florida.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
On July 16, 2018, Leading Americas Inc. submitted a notification of proposed production activity to the FTZ Board for its facility within FTZ 176—Site 17, in Hampshire, Illinois.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
On September 26, 2018, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the Municipal Airport Authority of the City of Fargo, grantee of FTZ 267, requesting subzone status subject to the existing activation limit of FTZ 267, on behalf of Digi-Key Corporation, in Fargo, North Dakota.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable November 7, 2018.
Kate Johnson at (202) 482-4929 (India), or Irene Gorelik at (202) 482-6905 (the People's Republic of China (China)), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On October 18, 2018, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) Petitions concerning imports of polyester textured yarn (yarn) from India and China, filed in proper form on behalf of Unifi Manufacturing, Inc. and Nan Ya Plastics Corporation, America (the petitioners), domestic producers of yarn.
During the period October 22 through November 1, 2018, we requested information from the petitioners pertaining to the scope of the investigations and certain allegations contained within the Petitions.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of yarn from India and China are being, or are likely to be, sold in the United States at less than fair value within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing yarn in the United States. Consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the AD investigations that the petitioners are requesting.
Because the Petitions were filed on October 18, 2018, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) for the India investigation is October 1, 2017, through September 30, 2018. Because China is a non-market economy (NME) country, pursuant to 19 CFR 351.204(b)(1), the POI is April 1, 2018, through September 30, 2018.
The product covered by these investigations is yarn from India and China. For a full description of the scope of these investigations,
During our review of the Petitions, we contacted the petitioners regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the product for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information parties consider relevant to the scope of the investigations be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact Commerce and request permission to submit the additional information. All such submissions must be filed on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of yarn to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors of production (FOPs) accurately, as well as to develop appropriate product-comparison criteria.
Interested parties may provide any factual information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics, and (2) product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe yarn, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on November 27, 2018, which is 20 calendar days from the signature date of this notice.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the Petitions.
In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the Appendix to this notice. To establish industry support, the petitioners provided their own production of the domestic like product in 2017, as well as the 2017 production of companies that support the Petitions.
Our review of the data provided in the Petitions, the General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petition.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the AD investigations that they are requesting that Commerce initiate.
The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; reduced market share; underselling and price depression and suppression; declines in the domestic industry's production, capacity utilization, and
The following is a description of the allegations of sales at less than fair value that are the basis for Commerce's decision to initiate AD investigations of imports of yarn from India and China. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the country-specific AD Initiation Checklists.
For both India and China, the petitioner based export price (EP) on price quotes for yarn produced in, and exported from, India and China and offered for sale in the United States.
For India, the petitioners based NV on home market prices obtained through market research for yarn produced in and sold, or offered for sale, in India within the proposed POI.
With respect to China, Commerce considers China to be an NME country.
The petitioners claim that Malaysia is an appropriate surrogate country for China because it is a market economy country that is at a level of economic development comparable to that of China, it is a significant producer of identical merchandise, and data for Malaysia for valuing FOPs are available and reliable.
Interested parties will have the opportunity to submit comments regarding surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determination.
Based on their assertion that information regarding the FOPs and volume of inputs consumed by Chinese producers/exporters of yarn was not reasonably available, the petitioners used their own consumption rates for yarn to estimate the Chinese manufacturers' FOPs.
As noted above, for India, the petitioners obtained home market prices but demonstrated that these prices were below the COP during the POI; therefore, the petitioners also based NV on CV pursuant to section 773(a)(4) of the Act. Pursuant to section 773(e) of the Act, CV consists of the cost of manufacturing (COM), SG&A expenses, financial expenses, profit, and packing expenses.
The petitioners calculated the COM based on two domestic producers' input FOPs and usage rates for raw materials, labor, energy, and packing.
Based on the data provided by the petitioners, there is reason to believe that imports of yarn from India and China are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for yarn are as follows: (1)
Based upon the examination of the Petitions, we find that the Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of yarn from India and China are being, or are likely to be, sold in the United States at less than fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.
The petitioners identified 34 producers/exporters as accounting for the majority of exports of yarn to the United States from India.
We also intend to release the CBP data under Administrative Protective Order (APO) to all parties with access to information protected by APO on the record within five business days of publication of this
Comments must be filed electronically using ACCESS. An electronically-filed document must be received successfully, in its entirety, by Commerce's electronic records system, ACCESS, no later than 5:00 p.m. ET on the dates noted above. We intend to finalize our decisions regarding respondent selection within 20 days of publication of this notice.
The petitioners identified 51 producers/exporters as accounting for the majority of exports of yarn to the United States from China.
Exporters and producers of yarn from China that do not receive Q&V questionnaires by mail may still submit a response to the Q&V questionnaire and can obtain a copy of the Q&V questionnaire from the Enforcement and Compliance website, at
In order to obtain separate-rate status in an NME investigation, exporters and producers must submit a separate-rate application.
Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
{w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME Investigation will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of “combination rates” because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the Governments of India and China
We will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of yarn from India and/or China are materially injuring or threatening
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). 19 CFR 351.301(b) requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Section 504 of the Trade Preferences Extension Act of 2015 amended the Act by adding the concept of particular market situation (PMS) for purposes of CV under section 773(e) of the Act.
Neither section 773(e) of the Act nor 19 CFR 351.301(c)(2)(v) set a deadline for the submission of PMS allegations and supporting factual information. However, in order to administer section 773(e) of the Act, Commerce must receive PMS allegations and supporting factual information with enough time to consider the submission. Thus, should an interested party wish to submit a PMS allegation and supporting new factual information pursuant to section 773(e) of the Act, it must do so no later than 20 days after submission of a respondent's initial Section D questionnaire response.
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in a letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). On January 22, 2008, Commerce published
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
The merchandise covered by these investigations, polyester textured yarn, is synthetic multifilament yarn that is manufactured from polyester (polyethylene terephthalate). Polyester textured yarn is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation, and the appearance of a natural fiber. This scope includes all forms of polyester textured yarn, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of plies, finish (luster), cross section, color, dye method, texturing method, or packing method (such as spindles, tubes, or beams).
The merchandise subject to these investigations is properly classified under subheadings 5402.33.3000 and 5402.33.6000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
Enforcement and Compliance, International Trade Administration, United States Department of Commerce.
On August 10, 2018, the Department of Commerce (Commerce) initiated an administrative review of the antidumping duty order on tapered roller bearings and parts thereof, finished and unfinished (TRBs) from the People's Republic of China (China) for 14 companies. Based on timely withdrawal of requests for review, we are now rescinding this administrative review with respect to 10 of these companies.
Applicable November 19, 2018.
Andrew Medley or Alex Wood, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4987 or (202) 482-1959, respectively.
In June 2018, Commerce received multiple timely requests to conduct an administrative review of the antidumping duty order on TRBs from China. Based upon these requests, on August 10, 2018, in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act), Commerce published a notice of initiation of an administrative review covering the period June 1, 2017, through May 31, 2018, with respect to 14 companies.
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if a party who requested the review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. CNH, CPZ/SKF, GGB, GSP, Hanji Auto, Hangzhou Radical, SGBC, Xinglun Bearings, Zhaofeng, and Zhejiang Machinery timely withdrew their requests for an administrative review of themselves. No other party requested a review of these 10 companies. Accordingly, we are rescinding this review, in part, with respect to these companies, pursuant to 19 CFR 351.213(d)(1).
The instant review will continue with respect to the following companies: Hangzhou Xiaoshan Dingli Machinery Co., Ltd.; Shandong Aokai Bearing Co., Ltd.; Taizhou Zson Bearing Technology Co., Ltd.; and Zhejiang Jingli Bearing Technology Co., Ltd.
Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries. For the companies for which this review is rescinded, antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after publication of this notice.
This notice serves as a reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This notice is issued and published in accordance with sections 751 and 777(i)(1) of the Act, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On October 22, 2018, the Department of Commerce (Commerce) published in the
Applicable November 19, 2018.
John Anwesen or Jinny Ahn, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0131 or (202) 482-0339, respectively.
On October 22, 2018, Commerce published in the
A ministerial error, as defined in section 751(h) of the Tariff Act of 1930, as amended (the Act), includes “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other type of unintentional error which the administering authority considers ministerial.”
The No Shipment Companies allege that, in Appendix II of the
In reviewing the ministerial error allegations in the
Furthermore, in the
In its timely filed ministerial allegation letter, Datong Juqiang alleges that, in the Datong Juqiang-specific draft liquidation instructions, Commerce identified one importer/customer by its short name, not its full legal name. In the final Datong Juqiang-specific liquidation instructions, Datong Juqiang requests that Commerce identify the importer/customer by both its full legal name and short name. Datong Juqiang also requests that Commerce revise the instruction to include an additional customer reported by Datong Juqiang in its responses, to avoid any confusion with United States Customs and Border Protection (CBP) when liquidating entries.
We find that Datong Juqiang's alleged errors do not constitute a ministerial error within the meaning of section 751(h) of the Act and 19 CFR 351.224(f) because they are comments on the draft liquidation instructions, rather than allegations of error in the final results of this administrative review. Nevertheless, we have considerd Datong Juqiang's comment on the draft liquidation instructions and have revised Datong Juqiang's liquidation instruction to include both the full legal name and short name of one importer/customer as identified by Datong Juqiang. However, consistent with our practice, we decline to include the name of the additional customer reported by Datong Juqiang in its responses because this customer was not reported as importer of record, which is the information upon which importer-specific assessment and liquidation instructions are based, unless the importer of record is unknown. In this case, this additional customer was not reported as an importer of record.
The amended weighted-average dumping margins are as follows:
These amended final results are published in accordance with sections 751(h) and 777(i)(1) of the Act and 19 CFR 351.224(e) and (g).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that, during the period of review (POR) July 1, 2016, through June 30, 2017, Oman Fasteners LLC (Oman Fasteners) is not selling nails at less than normal value but that the collapsed entity of Overseas International Steel Industry LLC (OISI) and Overseas Distribution Services Inc. (ODS) is.
Applicable November 19, 2018.
Thomas Martin, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3936, respectively.
On May 14, 2018, Commerce published the
The merchandise covered by this order is nails having a nominal shaft length not exceeding 12 inches.
All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the IDM. A list of the issues that parties raised and to which we responded is attached to this notice as an Appendix. The IDM is a public document and is on-file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on a review of the record and comments received from interested parties regarding our
As a result of this review, we determine that, for the period July 1, 2016, through June 30, 2017, the following dumping margins exist:
Commerce shall determine and Customs and Border Protection (CBP) shall assess antidumping duties on all appropriate entries.
In accordance with Commerce's “automatic assessment” practice, for entries of subject merchandise during the POR produced by each respondent for which it did not know that its merchandise was destined for the United States, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction. We intend to issue assessment instructions directly to CBP 15 days after publication of the final results of this review.
The following cash deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication of the final results of this administrative review, as provided by section 751(a)(2) of the Tariff Act of 1930, as amended (the Act): (1) The cash deposit rate for respondents noted above will be the rate established in the final results of this administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this administrative review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review, a prior review, or the original investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the manufacturer of the subject merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 9.10 percent, the all-others rate established in the antidumping investigation. These cash deposit requirements, when imposed, shall remain in effect until further notice.
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable November 7, 2018.
Janae Martin at (202) 482-0238 (India) and Robert Palmer at (202) 482-9068
On October 18, 2018, the U.S. Department of Commerce (Commerce) received countervailing duty (CVD) petitions concerning imports of polyester textured yarn (yarn) from India and China, filed in proper form on behalf of Unifi Manufacturing, Inc. and Nan Ya Plastics Corp., America (the petitioners), domestic producers of yarn.
During the period October 22 through November 1, 2018, we requested information from the petitioners pertaining to the scope of the investigations and certain allegations contained within the Petitions.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that the Governments of China and India (GOC, and GOI, respectively) are providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of yarn in China and India and that imports of such products are materially injuring, or threatening material injury to, the domestic yarn industry in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating CVD investigations, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support necessary for the initiation of the requested CVD investigations.
Because the Petitions were filed on October 18, 2018, the period of investigation is January 1, 2017, through December 31, 2017 for each investigation.
The product covered by these investigations is yarn from China and India. For a full description of the scope of these investigations,
During our review of the Petitions, we contacted the petitioners regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information parties consider relevant to the scope of the investigation be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request permission to submit the additional information. All such submissions must be filed on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified representatives of the GOC and GOI of the receipt of the Petitions and provided them the opportunity for consultations with respect to the China CVD Petition and India CVD Petition, respectively.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers, as a whole, of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.
In determining whether the petitioners have standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the Appendix to this notice. To establish industry support, the petitioners provided their own production of the domestic like product in 2017, as well as the 2017 production of companies that support the Petitions.
Our review of the data provided in the Petitions, the General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the CVD investigations that they are requesting that Commerce initiate.
Because China and India are “Subsidies Agreement Countries” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to these investigations. Accordingly, the ITC must determine whether imports of the subject merchandise from China and/or India materially injure, or threaten material injury to, a U.S. industry.
The petitioners allege that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; reduced market share; underselling and price depression or suppression; decline in the domestic industry's production, capacity utilization, and U.S. commercial shipments; decline in the domestic industry's financial performance; lost sales and revenues; and closures of U.S. production facilities.
Based on the examination of the Petitions, we find that the Petitions meet the requirements of section 702 of the Act. Therefore, we are initiating CVD investigations to determine whether imports of yarn from China and India benefit from countervailable subsidies conferred by the GOC and GOI, respectively. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the date of this initiation.
Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 19 of the 20 alleged programs, and to partially initiate on the remaining program. For a full discussion of the basis for our decision to initiate on each program,
Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 40 of the 43 alleged programs, and to partially initiate on one of the 43 programs. For a full discussion of the basis for our decision to initiate on each program,
In the Petitions, the petitioners named 51 companies in China
On November 6, 2018, Commerce released CBP data under Administrative Protective Order (APO) to all parties with access to information protected by APO and indicated that interested parties wishing to comment regarding the CBP data and respondent selection must do so within three business days of the publication date of the notice of initiation of these CVD investigations.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Commerce's website at
Comments must be filed electronically using ACCESS. An electronically filed document must be received successfully, in its entirety, by ACCESS no later than 5:00 p.m. ET on the date noted above. We intend to finalize our decisions regarding respondent selection within 20 days of publication of this notice.
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), copies of the public versions of the Petitions have been provided to the GOC and GOI
We will notify the ITC of our initiation, as required by section 702(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of yarn from China and India are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). 19 CFR 351.301(b) requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). On January 22, 2008, Commerce published
This notice is issued and published pursuant to sections 702 and 777(i) of the Act and 19 CFR 351.203(c).
The merchandise covered by these investigations, polyester textured yarn, is synthetic multifilament yarn that is manufactured from polyester (polyethylene terephthalate). Polyester textured yarn is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation, and the appearance of a natural fiber. This scope includes all forms of polyester textured yarn, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of plies, finish (luster), cross section, color, dye method, texturing method, or packing method (such as spindles, tubes, or beams).
The merchandise subject to these investigations is properly classified under subheadings 5402.33.3000 and 5402.33.6000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
Commodity Futures Trading Commission.
Notice of meeting.
The Commodity Futures Trading Commission (CFTC) announces that on December 4, 2018, from 9:30 a.m. to 4:00 p.m., the Market Risk Advisory Committee (MRAC) will hold a public meeting in the Conference Center at the CFTC's Washington, DC, headquarters. At this meeting, the MRAC will discuss: (1) The current state of clearinghouse risk management and governance and what lies ahead, (2) the management of non-default losses by clearinghouses in recovery and resolution, (3) recent reports and discussion papers on central clearing by global standard setting bodies, and (4) the oversight of third-party service providers/vendor risk management.
The meeting will be held on December 4, 2018, from 9:30 a.m. to 4:00 p.m. Members of the public who wish to submit written statements in connection with the meeting should submit them by December 11, 2018.
The meeting will take place in the Conference Center at the CFTC's headquarters, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581. You may submit public comments, identified by “Market Risk Advisory Committee,” by any of the following methods:
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Alicia L. Lewis, MRAC Designated Federal Officer, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581; (202) 418-5862.
The meeting will be open to the public with seating on a first-come, first-served basis. Members of the public may also listen to the meeting by telephone by calling a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed. Call-in participants should be prepared to provide their first name, last name, and affiliation.
The meeting agenda may change to accommodate other MRAC priorities. For agenda updates, please visit the MRAC committee site at:
After the meeting, a transcript of the meeting will be published through a link on the CFTC's website,
Institute of Education Sciences (IES), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing a new information collection.
Interested persons are invited to submit comments on or before December 19, 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 Tracy Rimdzius, 202-245-7283.
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.
Office of Fossil Energy, Department of Energy.
Notice of orders.
The Office of Fossil Energy (FE) of the Department of Energy gives notice that during September 2018, it issued orders granting authority to import and export natural gas, to import and export liquefied natural gas (LNG), to amend authority, and vacating prior authorization. These orders are summarized in the attached appendix and may be found on the FE website at
They are also available for inspection and copying in the U.S. Department of Energy (FE-34), Division of Natural Gas Regulation, Office of Regulation, Analysis, and Engagement, Office of Fossil Energy, Docket Room 3E-033, Forrestal Building, 1000 Independence Avenue SW, Washington, DC 20585, (202) 586-9478. The Docket Room is open between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays.
Office of Fossil Energy, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the National Petroleum Council. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Tuesday, December 4, 2018, 9:00 a.m. to 11:30 a.m.
The St. Regis Washington, DC, 923 Sixteenth Street NW, Washington, DC 20006, Room: Astor Ballroom.
Nancy Johnson, U.S. Department of Energy, Office of Oil and Natural Gas (FE-30), Washington, DC 20585; telephone (202) 586-5600 or facsimile (202) 586-6221.
Office of Environmental Management, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Portsmouth. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Thursday, December 6, 2018; 6:00 p.m.
Ohio State University, Endeavor Center, 1862 Shyville Road, Piketon, Ohio 45661.
Greg Simonton, Alternate Deputy Designated Federal Officer, Department of Energy Portsmouth/Paducah Project Office, Post Office Box 700, Piketon, Ohio 45661, (740) 897-3737,
Office of Science, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Advanced Scientific Computing Advisory Committee (ASCAC). The Federal Advisory Committee Act requires that public notice of these meetings be announced in the
Wednesday, December 12, 2018; 11:00 a.m.-3:00 p.m. Thursday, December 13, 2018; 11:00 a.m.-3:00 p.m.
Christine Chalk, Office of Advanced Scientific Computing Research; SC-21/Germantown Building; U.S. Department of Energy; 1000 Independence Avenue SW, Washington, DC 20585-1290; Telephone (301) 903-7486.
The meeting agenda includes an update on the budget, accomplishments and planned activities of the Advanced Scientific Computing Research program and the exascale computing project; an update on the Office of Science; technical presentations from funded researchers; and there will be an opportunity for comments from the public. The meeting will conclude at 3:00 p.m. on December 13, 2018. Agenda updates and presentations will be posted on the ASCAC website prior to the meeting:
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
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k. With this notice, we are soliciting comments on the pre-filing materials listed in paragraph j above, including the draft license application and monitoring plans. All comments should also be sent to the address above in paragraph h. In addition, all comments may be filed electronically via the internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's website
l. With this notice, we are approving MRECo's request to be designated as the non-federal representative for section 7 of the ESA and its request to initiate consultation under section 106 of the National Historic Preservation Act; and recommending that it begin informal consultation with: (a) The U.S. Fish and Wildlife Service and the National Marine Fisheries Service as required by section 7 of ESA; and (b) the Massachusetts State Historic Preservation Officer, as required by section 106, National Historical Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR 800.2.
m. With this notice, we are also asking federal, state, local, and tribal agencies with jurisdiction and/or expertise with respect to environmental issues to cooperate with us in the preparation of the environmental document. Agencies who would like to request cooperating status should follow the instructions for filing comments described in paragraph “k” above.
n. This notice does not constitute the Commission's approval of MRECo's request to use the Pilot Project Licensing Procedures. Upon its review of the project's overall characteristics relative to the pilot project criteria, the draft license application contents, and any comments filed, the Commission will determine whether there is adequate information to conclude the pre-filing process.
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p. A copy of the draft license application and all pre-filing materials are available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website (
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r. Register online at
This is a supplemental notice in the above-referenced proceeding of Bridgewater Power Company, L.P.'s application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is December 3, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
On October 23, 2018, the President signed America's Water Infrastructure Act of 2018 (Act) into law. In addition to amending part 1 of the Federal Power Act as it relates to certain aspects of preliminary permits, qualifying conduit hydropower facilities, and hydropower licenses, the Act directs the Federal Regulatory Commission (FERC or Commission) to:
(1) Issue a rule not later than 180 days after the date of enactment of the Act, establishing an expedited process for issuing and amending licenses for qualifying facilities at existing nonpowered dams that will seek to ensure a final decision by the Commission on an application for a license no later than two years after receipt of a completed application;
(2) With the Secretary of the Army, the Secretary of the Interior, and the Secretary of Agriculture, jointly develop a list of existing nonpowered Federal dams that the Commission and the Secretaries agree have the greatest potential for non-Federal hydropower development, and make the list available to the public and provide the list to certain Committees of the House of Representatives and the Senate not later than 12 months after the date of enactment of the Act;
(3) Issue a rule not later than 180 days after the date of enactment of the Act, establishing an expedited process for issuing and amending licenses for closed-loop pumped storage projects that will seek to ensure a final decision by the Commission on an application for a license by no later than two years after receipt of a completed application; and
(4) Hold a workshop not later than six months after the date of enactment of the Act to explore potential opportunities for development of closed-loop pumped storage projects at abandoned mine sites, and issue guidance no later than one year after the date of enactment of the Act to assist applicants for licenses or preliminary permits for closed-loop pumped storage projects at abandoned mine sites.
In establishing the expedited processes for issuing and amending licenses for qualifying facilities at existing nonpowered dams and closed-loop pumped storage projects, sections 3003 and 3004 of the Act require the Commission to convene an interagency task force (ITF), with appropriate federal and state agencies and Indian tribes represented, to coordinate the regulatory processes associated with the authorizations required to construct and operate these projects. By concurrent notice, the Commission has invited federal and state agencies and Indian tribes to request participation on the ITF by filing a statement of interest with the Commission by November 29, 2018.
The Commission has established three dockets in order to implement the requirements of the Act: RM19-6-000 (Licensing Regulations under America's Water Infrastructure Act of 2018); AD19-7-000 (Nonpowered Dams List); and AD19-8-000 (Closed-loop Pumped Storage Projects at Abandoned Mines Guidance).
Because the Act requires the Commission to issue a rule establishing the expedited licensing processes not later than 180 days after the date of enactment of the Act, the Commission has established a schedule with abbreviated deadlines. The schedule, which is subject to change, is included below.
For more information about this notice, please contact:
Take notice that on November 1, 2018, the North American Electric Reliability Corporation submitted an annual report on Find, Fix, Track and Report and Compliance Exception programs, in accordance with the Federal Energy Regulatory Commission's (Commission) Orders.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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j. Deadline for filing comments, motions to intervene, and protests: December 13, 2018.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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o.
On October 23, 2018, the President signed America's Water Infrastructure Act of 2018 (Act) into law. Sections 3003 and 3004 of the Act require the Federal Energy Regulatory Commission to issue rules establishing expedited processes for issuing and amending licenses for qualifying facilities at existing nonpowered dams and for closed-loop pumped storage projects. The processes must seek to ensure a final decision by the Commission on an application for a license by no later than two years after receipt of a completed application. These sections also require the Commission to convene an interagency task force (ITF) to coordinate the regulatory processes associated with the authorizations required in connection with the new processes. Because of the Congressionally-mandated deadline, participation in the ITF will be time sensitive.
The Commission invites federal and state agencies and Indian tribes to request participation on the ITF. Federal and state agencies and Indian tribes who wish to participate on the ITF must file a statement of interest with the Commission by November 29, 2018. The statement of interest should include the following information: The name of the agency or tribe; the name, title, phone number, and email address of the contact person; a brief explanation of the agency's or tribe's interest in joining the ITF; and a brief description of the agency's or tribe's experience with hydropower license proceedings.
In light of the Congressionally-mandated deadline and in the interest of facilitating an efficient and effective discussion, Commission staff will select a representative group of federal agencies, state agencies, and Indian tribes to participate on the ITF. The Commission will directly notify the agencies and tribes selected to participate on the ITF. Commission staff plans to hold a coordination session for ITF participants, which is scheduled for December 12, 2018. By concurrent notice, the Commission has established a schedule in order to implement the requirements of the Act.
The Commission strongly encourages electronic filing. Please file ITF-interest statements in Docket No. RM19-6-000 using the Commission's eFiling system at
For more information about this notice, please contact: Shana Wiseman, Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-8736,
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j. Verdant Power, LLC filed a request to use the Traditional Licensing Process on August 31, 2018 and provided public notice of its request on September 28, 2018. In a letter dated November 13, 2018, the Director of the Division of Hydropower Licensing approved Verdant Power, LLC's request to use the Traditional Licensing Process.
k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, Part 402; and NOAA Fisheries under section 305(b) of the Magnuson-Stevens Fishery Conservation and Management Act and implementing regulations at 50 CFR 600.920. We are also initiating consultation with the New York State Historic Preservation Office, as required by section 106, National Historic Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR 800.2.
l. With this notice, we are designating Verdant Power, LLC as the Commission's non-federal representative for carrying out informal consultation pursuant to section 7 of the Endangered Species Act and consultation pursuant to section 106 of the National Historic Preservation Act.
m. Verdant Power, LLC filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
n. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website (
o. The licensee states its unequivocal intent to submit an application for a subsequent license for Project No. 12611. Pursuant to 18 CFR 16.8, 16.9, and 16.10 each application for a subsequent license and any competing license applications must be filed with the Commission at least 24 months prior to the expiration of the existing license. All applications for license for this project must be filed by December 31, 2019.
p. Register online at
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication, and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as having made a prohibited off-the-record communication shall serve the document on all parties listed on the official service list for the applicable proceeding in accordance with Rule 2010, 18 CFR 385.2010.
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e)(1)(v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. The communications listed are grouped by docket numbers in ascending order. These filings are available for electronic review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency is planning to submit an information collection request (ICR), “Transportation Conformity Determinations for Federally Funded and Approved Transportation Plans, Programs, and Projects” (EPA ICR No. 2130.06, OMB Control No. 2060-0561), 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.
Comments must be submitted on or before January 18, 2019.
Submit your comments, referencing Docket ID No. EPA-HQ-OAR-2007-0269 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.
Astrid Terry, Office of Transportation and Air Quality, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734-214-4812; email address:
Supporting documents which explain in detail the information that 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,
Transportation conformity applies under EPA's conformity regulations at 40 CFR parts 51 and 93, subpart A, to areas that are designated nonattainment, and those redesignated to attainment after 1990 (“maintenance areas” with plans developed under Clean Air Act section 175A) for the following transportation-related criteria pollutants: Ozone, particulate matter (PM
Transportation conformity determinations are required before federal approval or funding is given to certain types of transportation planning documents as well as non-exempt highway and transit projects.
EPA considered the following in renewing the existing ICR:
• Burden estimates for transportation conformity determinations (including both regional and project-level) in current nonattainment and maintenance areas for the ozone, PM
• Federal burden associated with EPA's adequacy review process for submitted SIP motor vehicle emissions budgets that are to be used in conformity determinations;
• Efficiencies in areas making conformity determinations for multiple NAAQS;
• Differences in conformity resource needs in large and small metropolitan areas and isolated rural areas;
• Reduced burden from areas no longer determining conformity for the 1997 PM
• Reduced burden from areas completing 20 years of maintenance for PM
• Increased burden due to areas being designated as nonattainment for the 2015 ozone NAAQS.
This ICR does not include burden associated with the general development of transportation planning
Federal Communications Commission.
Notice. 17-83.
In this document, the FCC announces and provides an agenda for the next meeting of Broadband Deployment Advisory Committee (BDAC).
Thursday, December 6, 2018 and Friday, December 7, 2018. The meeting will come to order at 9:00 a.m. each day.
Federal Communications Commission, 445 12th Street SW, Room TW-C305, Washington, DC 20554.
Paul D'Ari, Designated Federal Authority (DFO) of the BDAC, at
This meeting is open to members of the general public. The FCC will accommodate as many participants as possible; however, admittance will be limited to seating availability. The FCC will also provide audio and/or video coverage of the meeting over the internet from the FCC's web page at
Open captioning will be provided for this event. Other reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via email to
Federal Communications Commission.
Notice.
In this document, the Federal Communications Commission's Incentive Auction Task Force and Media Bureau announce that certain displacement applications filed during the Special Displacement Window by low power television, TV translator, and analog-to-digital replacement translator stations that were displaced by the incentive auction and repacking process were deemed to be mutually exclusive. The document provides a list of mutually exclusive applications and announces a settlement period opening October 30, 2018 and closing January 10, 2019 at 11:59 p.m. ET.
The settlement period will open October 30, 2018 and close on January 10, 2019 at 11:59 p.m. ET.
Shaun Maher, Video Division, Media Bureau, Federal Communications Commission,
On February 9, 2018, the Incentive Auction Task Force and the Media Bureau announced a displacement application filing window for low power television (LPTV), TV translator, and analog-to-
Appendix A of document DA 18-1108 lists all displacement applications received in the Special Displacement Window that are mutually exclusive with other applications. Parties with applications in the mutually exclusive groups listed in Appendix A may resolve their mutual exclusivity by unilateral engineering amendment, legal settlement, or engineering settlement during a settlement period beginning today, October 30, 2018, and ending at 11:59 p.m. ET, January 10, 2019.
The applications listed in Appendix A are subject to the Commission's competitive bidding procedures unless their mutual exclusivity is resolved. The Media Bureau will withhold further action on the mutually exclusive proposals listed in Appendix A pending submission of settlement agreements or engineering amendments to resolve mutual exclusivity prior to the close of the settlement period. Thereafter, the Wireless Telecommunications and Media Bureaus will announce an auction date and propose auction procedures for the remaining mutually exclusive applications.
Requests for approval of settlement agreement and the above-outlined documents required by Section 73.3525 must be submitted in the form of an amendment to each party's pending application in LMS by 11:59 p.m. ET on January 10, 2019.
Requests for approval of engineering settlement agreements, accompanying documentation, and corresponding technical amendments must be submitted in the form of an amendment to each party's pending application in LMS by 11:59 p.m. ET on January 10, 2019. In the case of channel sharing settlements, the proposed sharee station shall file to modify its current license, specifying the technical parameters in the proposed host station's displacement application and request that its displacement application be dismissed upon grant of the channel sharing.
In the case of legal and engineering settlements, the parties should endeavor, wherever possible, to resolve their mutual exclusivity through minor engineering amendments, as defined by the applicable rules. However, applicants that are unable to resolve their mutual exclusivity through a minor engineering amendment may, as part of their legal or engineering settlement, amend their application(s) to propose a new available channel. The new channel proposal may not create a new mutual exclusivity or conflict with any other application previously-filed in the Special Displacement Window.
83 FR 56844.
Wednesday, November 14, 2018 at 10:00 a.m.
The meeting was continued on Thursday, November 15, 2018.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than December 14, 2018.
1.
National Capital Region, Public Buildings Service U.S. General Services Administration (GSA).
Notice of intent to prepare a Supplemental Environmental Impact Statement.
GSA plans to prepare a Supplemental Environmental Impact Statement (SEIS) for the proposed Master Plan Amendment to support the continued consolidation of the U.S. Department of Homeland Security (DHS) Headquarters at the St. Elizabeths West Campus, pursuant to the requirements of the National Environmental Policy Act (NEPA), Council on Environmental Quality regulations, and with Section 106 of the National Historic Preservation Act (NHPA) in accordance with 36 CFR part 800.8
R.I.S.E Demonstration Center, 1730 Martin Luther King Jr. Avenue SE, Washington, DC, 20032.
Paul Gyamfi, GSA, National Capital Region, Office of Planning and Design Quality, at 202-690-9252. Please contact Mr. Gyamfi if special assistance is needed to attend and participate in the scoping meeting.
GSA intends to prepare a SEIS to analyze the potential impacts resulting from the proposed Master Plan Amendment #2 to support the DHS Headquarters consolidation at the St. Elizabeths West Campus.
In 2008 and in 2012, GSA completed Environmental Impact Statements that analyzed the impacts from the development of 4.5 million square feet of secure office space, plus parking, in the District of Columbia to support the consolidated headquarters of the DHS on the St. Elizabeths East and West Campuses. GSA is preparing a SEIS to assess the impacts of development of the consolidated headquarters on the West Campus of St. Elizabeths. The proposed action is needed to improve efficiency, reflect the current condition of the historic buildings, reduce costs, and accelerate completion of the DHS consolidation. Previous St. Elizabeths Master Plans and Environmental Impact Statements are available for review at
GSA will analyze a range of alternatives (including the no action alternative) for the proposed Master Plan Amendment #2 of the DHS Headquarters at St. Elizabeths. This Master Plan Amendment will focus on development options to efficiently house DHS and its operating components on the St Elizabeths West Campus.
A scoping process will be conducted to aid in determining the alternatives to be considered and the scope of issues to be addressed, for identifying the significant issues related to the proposed Master Plan Amendment, in accordance with NEPA and NHPA.
A public scoping meeting will be held on Thursday, November 29, 2018, from 6:30 p.m. to 8:30 p.m., EDT at the R.I.S.E Demonstration Center, 1730 Martin Luther King Jr. Avenue SE, Washington, DC 20032. The meeting will be an informal open house where meeting participants may receive information, and give comments. GSA is publishing notices in the
Interested parties are encouraged to provide written comments on the SEIS and Section 106 processes. The scoping period begins on November 19, 2018 and ends on December 19, 2018. Comments received during the scoping period will be considered in the analyses to be conducted for the SEIS. Written comments regarding the SEIS must be postmarked no later than December 19, 2018, and sent to the following address: Mr. Paul Gyamfi, Office of Planning and Design Quality, Public Buildings Service, National Capital Region, U.S. General Services Administration, 301 7th Street SW, Suite 4004, Washington, DC, 20407; or by email:
Public Buildings Service (PBS), General Services Administration (GSA).
Notice of availability; announcement of public meeting.
This notice announces the availability, and opportunity for public review and comment, of a Draft Environmental Assessment (EA), which examines the potential impacts of a proposal by GSA to provide structural enhancement improvements to the existing Edward J. Schwartz Federal Building and United States Courthouse. The Draft EA describes the reason the project is being proposed; the alternatives being considered; the potential impacts of each of the alternatives on the existing environment; and the proposed avoidance, minimization, and/or mitigation measures related to those alternatives.
A public meeting for the Draft EA will be held on Wednesday, November 28, 2018, from 4:00 p.m. to 7:00 p.m., Pacific Standard Time. Interested parties are encouraged to attend and provide written comments on the Draft EA.
The comment period for the Draft EA ends on December 17, 2018.
The public meeting will be held at 704 J Street, San Diego, California, 92101. Further information, including an electronic copy of the Draft EA, may be found online on the following website:
Osmahn Kadri, Regional Environmental Quality Advisor/NEPA Project Manager, GSA, at 415-522-3617. Please also call this number if special assistance is needed to attend and participate in the public meeting.
The Project is proposed in order to improve structural safety for the public traveling underneath the building and for the tenants occupying the building above the Front Street underpass, located at 8800 Front Street in San Diego, California. The portion of Front Street that extends below the Schwartz FOB is referred to as the Front Street underpass. The existing building has five stories of federal office building space spanning above the roadway and two levels of parking structure beneath the roadway.
The EA will consider one Action Alternative and one No Action Alternative. The Action Alternative would consist of structural enhancement improvements to the portion of the existing Edward J. Schwartz Federal Building over Front Street between E and F streets. Existing columns and beams supporting the building at the Front Street underpass would be reinforced with new steel beams and column support structures and pre-cast concrete paneling. Construction would require full and partial closure of Front Street between Broadway and F Street. Street closure options during construction of the Action Alternative are being considered and a comprehensive Traffic Control Plan will be prepared to address the street closure.
The No Action Alternative assumes that structural enhancements to the existing building would not occur.
The public meeting will be conducted in open house format, where project information will be presented and distributed. Comments must be received by December 17, 2018, and emailed to
Notice is hereby given of a change in the meeting of the Board of Scientific Counselors, National Center for Injury Prevention and Control (BSC NCIPC; December 12, 2018, 9:00 a.m. to 4:30 p.m., EST, which was published in the
The registration information should read as follows: Due to the limited availability of phone line ports, we are encouraging the pubic to please register using the link provided:
Gwendolyn H. Cattledge, Ph.D., M.S.E.H., Deputy Associate Director for Science, NCIPC, CDC, 4770 Buford Highway NE, Mailstop F-63, Atlanta, GA 30341, Telephone (770) 488-1430. Email address:
The Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the CDC announces the following meeting for the Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances
The meeting will be held on December 12, 2018, 8:30 a.m. to 4:00 p.m., EST and December 13, 2018, 8:30 a.m. to 11:30 a.m., EST.
Centers for Disease Control and Prevention, 4770 Buford Highway, Atlanta, Georgia 30341-3717 (Building 106, Conference Room 1B).
Shirley Little, Program Analyst, NCEH/ATSDR, CDC, 4770 Buford Highway, Mailstop F-45, Atlanta, Georgia 30341-3717, Telephone (770) 488-0577; Email
The Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Medicare & Medicaid Services, HHS.
Notice.
This final notice announces our decision to approve the American Association for Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF) for continued recognition as a national accrediting organization for ambulatory surgical centers (ASCs) that wish to participate in the Medicare or Medicaid programs.
This notice is applicable November 27, 2018 through November 27, 2024.
Erin McCoy, (410) 786-2337, Monda Shaver, (410) 786-3410, or Renee Henry, (410) 786-7828.
Under the Medicare program, eligible beneficiaries may receive covered services in an Ambulatory Surgical Center (ASC) provided certain requirements are met. Sections 1832(a)(2)(F)(i) of the Social Security Act (the Act) establishes distinct criteria for facilities seeking designation as an ASC. Regulations concerning provider agreements are at 42 CFR part 489 and those pertaining to activities relating to the survey and certification of facilities are at 42 CFR part 488. The regulations at 42 CFR part 416, specify the conditions that an ASC must meet in order to participate in the Medicare program, the scope of covered services and the conditions for Medicare payment for ASCs.
Generally, to enter into an agreement, an ASC must first be certified as complying with the conditions set forth in part 416 and recommended to the Centers for Medicare & Medicaid Services (CMS) for participation by a state survey agency. Thereafter, the ASC is subject to periodic surveys by a state survey agency to determine whether it continues to meet these conditions. However, there is an alternative to certification surveys by state agencies. Accreditation by a nationally recognized Medicare accreditation program approved by CMS may substitute for both initial and ongoing state review.
Section 1865(a)(1) of the Act provides that, if the Secretary of the Department of Health and Human Services finds that accreditation of a provider entity by an approved national accrediting organization meets or exceeds all applicable Medicare conditions, we may treat the provider entity as having met those conditions, that is, we may “deem” the provider entity to be in compliance. Accreditation by an accrediting organization is voluntary and is not required for Medicare participation.
Part 488, subpart A, implements the provisions of section 1865 of the Act and requires that a national accrediting organization applying for approval of its Medicare accreditation program must provide CMS with reasonable assurance that the accrediting organization requires its accredited provider entities to meet requirements that are at least as stringent as the Medicare conditions. Our regulations concerning the approval of accrediting organizations are set forth at § 488.5.
Section 1865(a)(3)(A) of the Act provides a statutory timetable to ensure that our review of applications for CMS-
On June 22, 2018, we published a proposed notice in the
• An onsite administrative review of AAAASF's: (1) Corporate policies; (2) financial and human resources available to accomplish the proposed surveys; (3) procedures for training, monitoring, and evaluation of its ASC surveyors; (4) ability to investigate and respond appropriately to complaints against accredited ASCs; and, (5) survey review and decision-making process for accreditation.
• The comparison of AAAASF's Medicare ASC accreditation program standards to our current Medicare ASC Conditions for Coverage (CfCs).
• A documentation review of AAAASF's survey process to:
++ Determine the composition of the survey team, surveyor qualifications, and AAAASF's ability to provide continuing surveyor training.
++ Compare AAAASF's processes to those CMS require of state survey agencies, including periodic resurvey and the ability to investigate and respond appropriately to complaints against accredited ASCs.
++ Evaluate AAAASF's procedures for monitoring ASCs it has found to be out of compliance with AAAASF's program requirements. (This pertains only to monitoring procedures when AAAASF identifies non-compliance. If noncompliance is identified by a state survey agency through a validation survey, the state survey agency monitors corrections as specified at § 488.9(c).)
++ Assess AAAASF's ability to report deficiencies to the surveyed ASC and respond to the ASCs plan of correction in a timely manner.
++ Establish AAAASF's ability to provide CMS with electronic data and reports necessary for effective validation and assessment of the organization's survey process.
++ Determine the adequacy of AAAASF's staff and other resources.
++ Confirm AAAASF's ability to provide adequate funding for performing required surveys.
++ Confirm AAAASF's policies with respect to surveys being unannounced.
++ Obtain AAAASF's agreement to provide CMS with a copy of the most current accreditation survey together with any other information related to the survey as we may require, including corrective action plans.
In accordance with section 1865(a)(3)(A) of the Act, the June 22, 2018 proposed notice also solicited public comments regarding whether AAAASF's requirements met or exceeded the Medicare CfCs for ASCs. We received no comments in response to our proposed notice.
We compared AAAASF's ASC accreditation program requirements and survey process with the Medicare CfCs at 42 CFR part 416, and the survey and certification process requirements of Parts 488 and 489. Our review and evaluation of AAAASF's ASC application, which were conducted as described in section III of this final notice, yielded the following areas where, as of the date of this notice, AAAASF has revised its standards and certification processes in order to meet the requirements at:
• § 416.2, to ensure its standards appropriately reference § 416.2 subparts B and C;
• § 416.44(b)(1) to ensure its standards appropriately reference Life Safety Code requirements;
• § 416.44(b)(2) to ensure its standards appropriately reference that only Life Safety Code deficiencies may request a time-limited waiver as part of the ASC's plan of correction;
• § 416.47(b)(4) to ensure its standards appropriately address each required element of § 416.47(b)(4);
• § 416.47(b)(5) to ensure its standards appropriately address § 416.47(b)(5);
• § 416.52(a)(1) through (3) to ensure its standards appropriately address the requirements for a comprehensive medical history and physical assessment;
• § 488.5(a)(4)(i) to ensure that its policies clearly support and convey the unannounced nature of Medicare deemed status surveys;
• § 488.5(a)(4)(ii) to ensure comparability of AAAASF's survey process and surveyor guidance to those required for state survey agencies conducting federal Medicare surveys for the same provider or supplier type;
• § 488.5(a)(4)(iii) to ensure that copies of AAAASF's guidelines and instructions to surveyors appropriately address Medicare requirements;
• § 488.5(a)(7) through (9) to ensure its surveyors are qualified and evaluated on performance;
• § 488.5(a)(11)(ii) to ensure accurate survey findings are reported to CMS;
• § 488.5(a)(12) to ensure complaints are triaged appropriately and surveyed within the required timeframes;
• § 488.26(b) and (c) to ensure deficiencies are cited at the appropriate level based on manner and degree of findings; and
• § 488.28(d) to ensure that its policies for correction of deficiencies in ASCs is comparable to CMS requirements, requiring that deficiencies normally must be corrected within 60 days.
Based on our review and observations described in section III of this final notice, we approve AAAASF as a national accreditation organization for ASCs that request participation in the Medicare program, effective November 27, 2018 through November 27, 2024.
This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 35).
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice.
This notice announces a $586.00 calendar year (CY) 2019 application fee for institutional providers that are initially enrolling in the Medicare or Medicaid program or the Children's Health Insurance Program (CHIP); revalidating their Medicare, Medicaid, or CHIP enrollment; or adding a new Medicare practice location. This fee is required with any enrollment application submitted on or after January 1, 2019 and on or before December 31, 2019.
This notice is applicable beginning on January 1, 2019.
Melissa Singer, (410) 786-0365.
In the February 2, 2011
As indicated in § 424.514 and § 455.460, the application fee is not required for either of the following:
• A Medicare physician or non-physician practitioner submitting a CMS-855I.
• A prospective or revalidating Medicaid or CHIP provider—
++ Who is an individual physician or non-physician practitioner; or
++ That is enrolled in Title XVIII of the Act or another state's Title XIX or XXI plan and has paid the application fee to a Medicare contractor or another state.
In the December 4, 2017
• Section 1866(j)(2)(C)(i)(I) of the Act established a $500 application fee for institutional providers in CY 2010.
• Consistent with section 1866(j)(2)(C)(i)(II) of the Act, § 424.514(d)(2) states that for CY 2011 and subsequent years, the preceding year's fee will be adjusted by the percentage change in the consumer price index (CPI) for all urban consumers (all items; United States city average, CPI-U) for the 12-month period ending on June 30 of the previous year.
• The CPI-U increase for CY 2011 was 1.0 percent, based on data obtained from the Bureau of Labor Statistics (BLS). This resulted in an application fee amount for CY 2011 of $505 (or $500 × 1.01).
• The CPI-U increase for the period of July 1, 2010 through June 30, 2011 was 3.54 percent, based on BLS data. This resulted in an application fee amount for CY 2012 of $522.87 (or $505 × 1.0354). In the February 2, 2011 final rule, we stated that if the adjustment sets the fee at an uneven dollar amount, we would round the fee to the nearest whole dollar amount. Accordingly, the application fee amount for CY 2012 was rounded to the nearest whole dollar amount, or $523.00.
• The CPI-U increase for the period of July 1, 2011 through June 30, 2012 was 1.664 percent, based on BLS data. This resulted in an application fee amount for CY 2013 of $531.70 ($523 × 1.01664). Rounding this figure to the nearest whole dollar amount resulted in a CY 2013 application fee amount of $532.00.
• The CPI-U increase for the period of July 1, 2012 through June 30, 2013 was 1.8 percent, based on BLS data. This resulted in an application fee amount for CY 2014 of $541.576 ($532 × 1.018). Rounding this figure to the nearest whole dollar amount resulted in a CY 2014 application fee amount of $542.00.
• The CPI-U increase for the period of July 1, 2013 through June 30, 2014 was 2.1 percent, based on BLS data. This resulted in an application fee amount for CY 2015 of $553.382 ($542 × 1.021). Rounding this figure to the nearest whole dollar amount resulted in a CY 2015 application fee amount of $553.00.
• The CPI-U increase for the period of July 1, 2014 through June 30, 2015 was 0.2 percent, based on BLS data. This resulted in an application fee amount for CY 2016 of $554.106 ($553 × 1.002). Rounding this figure to the nearest whole dollar amount resulted in a CY 2016 application fee amount of $554.00.
• The CPI-U increase for the period of July 1, 2015 through June 30, 2016 was
1.0 percent. This resulted in a CY 2017 application fee amount of $559.56 ($554 × 1.01). Rounding this figure to the nearest whole dollar amount resulted in a CY 2017 application fee amount of $560.00.
• The CPI-U increase for the period of July 1, 2016 through June 30, 2017 was 1.6 percent. This resulted in a CY 2018 application fee amount of $568.96 ($560 × 1.016). Rounding this figure to the nearest whole dollar amount resulted in a CY 2018 application fee amount of $569.00.
Using BLS data, the CPU-U increase for the period of July 1, 2017 through June 30, 2018 was 2.9%. This results in a CY 2019 application fee amount of $585.501 ($569 × 1.029). As we must round this to the nearest whole dollar amount, the resultant application fee for CY 2019 is $586.00.
This document does not impose information collection requirements, that is, reporting, recordkeeping, or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. However, it does reference previously approved information collections. The Forms CMS-855A, CMS-855B, and CMS-855I are approved under OMB control number 0938-0685; the Form CMS-855S is approved under OMB control number 0938-1056.
We have examined the impact of this notice as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017).
Executive Orders 12866 and 13563 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. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). As explained in this section of the notice, we estimate that the total cost of the increase in the application fee will not exceed $100 million. Therefore, this notice does not reach the $100 million economic threshold and is not considered a major notice.
The costs associated with this notice involve the increase in the application fee amount that certain providers and suppliers must pay in CY 2019.
In the December 4, 2017 application fee notice, we estimated that based on CMS statistics—
• 3,800 newly enrolling Medicare institutional providers would be subject to and pay an application fee in CY 2018. The estimate of 3,800 newly enrolling Medicare institutional providers was corrected to 10,700 newly enrolling Medicare institutional providers in the January 3, 2018 correction notice (83 FR 381).
• 7,500 revalidating Medicare institutional providers would be subject to and pay an application fee in CY 2018.
• 9,000 newly enrolling Medicaid and CHIP providers would be subject to and pay an application fee in CY 2018.
• 21,000 revalidating Medicaid and CHIP providers would be subject to and pay an application fee in CY 2018.
Based on CMS data, we estimate that in CY 2019 approximately—
• 12,870 newly enrolling institutional providers will be subject to and pay an application fee; and
• 41,580 revalidating institutional providers will be subject to and pay an application fee.
Using a figure of 54,450 (12,870 newly enrolling + 41,580 revalidating) institutional providers, we estimate an increase in the cost of the Medicare application fee requirement in CY 2019 of $925,650 (or 54,450 x $17 (or $586 minus $569)) from our CY 2018 projections and as previously described.
Based on CMS and state statistics, we estimate that approximately 30,000 (9,000 newly enrolling + 21,000 revalidating) Medicaid and CHIP institutional providers will be subject to an application fee in CY 2019. Using this figure, we project an increase in the cost of the Medicaid and CHIP application fee requirement in CY 2019 of $510,000 (or 30,000 x $17 (or $586 minus $569)) from our CY 2018 projections and as previously described.
Based on the foregoing, we estimate the total increase in the cost of the application fee requirement for Medicare, Medicaid, and CHIP providers and suppliers in CY 2019 to be $1,435,650 ($925,650 + $510,000) from our CY 2018 projections.
The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5 million in any 1 year. Individuals and states are not included in the definition of a small entity. As we stated in the RIA for the February 2, 2011 final rule with comment period (76 FR 5952), we do not believe that the application fee will have a significant impact on small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this notice would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2017, that threshold was approximately $148 million. The Agency has determined that there will be minimal impact from the costs of this notice, as the threshold is not met under the UMRA.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. Since this notice does not impose substantial direct costs on state or local governments, the requirements of Executive Order 13132 are not applicable.
Executive Order 13771, titled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017 (82 FR 9339, February 3, 2017). It has been determined that this notice is a transfer notice that does not impose more than de minimis costs
In accordance with the provisions of Executive Order 12866, this notice was reviewed by the Office of Management and Budget.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) has determined that the drug products listed in this document were not withdrawn from sale for reasons of safety or effectiveness. This determination means that FDA will not begin procedures to withdraw approval of abbreviated new drug applications (ANDAs) that refer to these drug products, and it will allow FDA to continue to approve ANDAs that refer to the products as long as they meet relevant legal and regulatory requirements.
Stacy Kane, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6236, Silver Spring, MD 20993-0002, 301-796-8363,
In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) (the 1984 amendments), which authorized the approval of duplicate versions of drug products approved under an ANDA procedure. ANDA applicants must, with certain exceptions, show that the drug for which they are seeking approval contains the same active ingredient in the same strength and dosage form as the “listed drug,” which is a version of the drug that was previously approved. ANDA applicants do not have to repeat the extensive clinical testing otherwise necessary to gain approval of a new drug application (NDA).
The 1984 amendments include what is now section 505(j)(7) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)), which requires FDA to publish a list of all approved drugs. FDA publishes this list as part of the “Approved Drug Products With Therapeutic Equivalence Evaluations,” which is generally known as the “Orange Book.” Under FDA regulations, a drug is removed from the list if the Agency withdraws or suspends approval of the drug's NDA or ANDA for reasons of safety or effectiveness, or if FDA determines that the listed drug was withdrawn from sale for reasons of safety or effectiveness (21 CFR 314.162).
Under § 314.161(a) (21 CFR 314.161(a)), the Agency must determine whether a listed drug was withdrawn from sale for reasons of safety or effectiveness: (1) Before an ANDA that refers to that listed drug may be approved, (2) whenever a listed drug is voluntarily withdrawn from sale and ANDAs that refer to the listed drug have been approved, and (3) when a person petitions for such a determination under 21 CFR 10.25(a) and 10.30. Section 314.161(d) provides that if FDA determines that a listed drug was withdrawn from sale for safety or effectiveness reasons, the Agency will initiate proceedings that could result in the withdrawal of approval of the ANDAs that refer to the listed drug.
FDA has become aware that the drug products listed in the table are no longer being marketed.
FDA has reviewed its records and, under § 314.161, has determined that the drug products listed were not withdrawn from sale for reasons of safety or effectiveness. Accordingly, the Agency will continue to list the drug products in the “Discontinued Drug Product List” section of the Orange Book. The “Discontinued Drug Product List” identifies, among other items, drug products that have been discontinued from marketing for reasons other than safety or effectiveness.
Approved ANDAs that refer to the NDAs and ANDAs listed are unaffected by the discontinued marketing of the products subject to those NDAs and ANDAs. Additional ANDAs that refer to these products may also be approved by the Agency if they comply with relevant legal and regulatory requirements. If FDA determines that labeling for these drug products should be revised to meet current standards, the Agency will advise ANDA applicants to submit such labeling.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the Agency's annual report entitled “Report on the Performance of Drug and Biologics Firms in Conducting Postmarketing Requirements and Commitments.” Under the Federal Food, Drug, and Cosmetic Act (FD&C Act), FDA is required to report annually on the status of postmarketing requirements (PMRs) and postmarketing commitments (PMCs) required of, or agreed upon by, application holders of approved drug and biological products. The report on the status of the studies and clinical trials that applicants have agreed to, or are required to, conduct is on the FDA's “Postmarketing Requirements and Commitments: Reports” web page (
Cathryn C. Lee, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 6484, Silver Spring, MD 20993-0002, 301-796-0700; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
Section 506B(c) of the FD&C Act (21 U.S.C. 356b(c)) requires FDA to publish an annual report on the status of postmarketing study commitments that applicants have committed to, or are required to conduct, and for which annual status reports have been submitted.
Under §§ 314.81(b)(2)(vii) and 601.70 (21 CFR 314.81(b)(2)(vii) and 601.70), applicants of approved drugs and licensed biologics are required to submit annually a report on the status of each clinical safety, clinical efficacy, clinical pharmacology, and nonclinical toxicology study or clinical trial either required by FDA (PMRs) or that they have committed to conduct (PMCs), either at the time of approval or after approval of their new drug application, abbreviated new drug application, or biologics license application. The status of PMCs concerning chemistry, manufacturing, and production controls and the status of other studies or clinical trials conducted on an applicant's own initiative are not required to be reported under §§ 314.81(b)(2)(vii) and 601.70 and are not addressed in this report. Furthermore, section 505(o)(3)(E) of the FD&C Act (21 U.S.C. 355(o)(3)(E)) requires that applicants report periodically on the status of each required study or clinical trial and each study or clinical trial “otherwise undertaken . . . to investigate a safety issue . . .”
An applicant must report on the progress of the PMR/PMC on the anniversary of the drug product's approval
With this notice, FDA is announcing the availability of the Agency's annual report entitled “Report on the Performance of Drug and Biologics Firms in Conducting Postmarketing Requirements and Commitments.” Information in this report covers any PMR/PMC that was established, in writing, at the time of approval or after approval of an application or a supplement to an application, and summarizes the status of PMRs/PMCs in fiscal year (FY) 2017 (
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
HRSA is publishing an updated monetary amount of the average cost of a health insurance policy as it relates to the National Vaccine Injury Compensation Program (VICP).
Section 100.2 of VICP's implementing regulation (42 CFR part 100) states that the revised amount of an average cost of a health insurance policy, as determined by the Secretary of HHS (the Secretary), is effective upon its delivery by the Secretary to the United States Court of Federal Claims (the Court), and will be published periodically in a notice in the
In 2018, MEPS-IC, available at
Therefore, the Secretary announces that the revised average cost of a health insurance policy under the VICP is $546.59 per month. In accordance with § 100.2, the revised amount was effective upon its delivery by the Secretary to the Court. Such notice was delivered to the Court on November 13, 2018.
Health Resources and Service Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
The Advisory Committee on Infant Mortality (ACIM) has scheduled a public meeting.
December 4, 2018, 9:00 a.m.-5:00 p.m. ET and December 5, 2018, 9:00 a.m.-3:30 p.m. ET.
This meeting will be held in-person and by webinar. The address for the meeting is 5600 Fishers Lane, Room 5W11, Rockville, Maryland 20857. Instructions on how to access the meeting via webcast will be provided upon registration.
Information about ACIM and the agenda for this meeting can be found on the ACIM website at
David S. de la Cruz, Ph.D., MPH, Designated Federal Official (DFO), at HRSA, Maternal and Child Health Bureau (MCHB), 5600 Fishers Lane, Rockville, Maryland 20857; 301-443-0543; or
ACIM provides advice and recommendations to the Secretary of HHS (Secretary) on HHS programs and activities that focus on reducing infant mortality and improving the health status of infants and pregnant women and factors affecting the continuum of care with respect to maternal and child health care. ACIM focuses on outcomes before, during, and following pregnancy and childbirth, strategies to coordinate a myriad of federal, state, local, and private programs, efforts that are designed to deal with the health and social problems impacting infant mortality, and the implementation of the federal Healthy Start Program.
The meeting agenda is being finalized and tentatively includes updates on HRSA, MCHB, and the Healthy Start Program, an introduction of members, a briefing on infant mortality and health disparity data in the U.S., and future topic areas for ACIM to discuss. Agenda items are subject to changes as priorities dictate. The final meeting agenda will be available 2 days prior to the meeting on the ACIM website:
Members of the public will have the opportunity to provide comments on the afternoon of December 5, 2018. Written comments must be submitted via email to the DFO, David S. de la Cruz, by 12:00 p.m. ET on Tuesday, November 20, 2018, at
Individuals who plan to attend and need special assistance or another reasonable accommodation should notify David S. de la Cruz at the address and phone number listed above at least 10 days prior to the meeting. Since this meeting occurs in a federal government building, attendees must go through a security check to enter the building. Non-U.S. Citizen attendees must notify HRSA of their planned attendance at least 10 business days prior to the meeting in order to facilitate their entry into the building. All attendees are required to present government-issued identification prior to entry.
Section 30.18 of the Department of Health and Human Services' claims collection regulations (45 CFR part 30) provides that the Secretary shall charge an annual rate of interest, which is determined and fixed by the Secretary of the Treasury after considering private consumer rates of interest on the date that the Department of Health and Human Services becomes entitled to recovery. The rate cannot be lower than the Department of Treasury's current value of funds rate or the applicable rate determined from the “Schedule of Certified Interest Rates with Range of Maturities” unless the Secretary waives interest in whole or part, or a different rate is prescribed by statute, contract, or repayment agreement. The Secretary of the Treasury may revise this rate quarterly. The Department of Health and Human Services publishes this rate in the
The current rate of 10
The Office for Human Research Protections, Office of the Assistant Secretary for Health, Office of the Secretary, HHS.
Notice of availability.
The Office for Human Research Protections (OHRP), Office of the Assistant Secretary for Health, is announcing the availability of a draft guidance document entitled, “Activities Deemed Not to Be Research: Public Health Surveillance, 2018 Requirements.”
Submit written comments by December 19, 2018.
Submit written requests for a single copy of the draft guidance document entitled “Activities Deemed Not to Be Research: Public Health Surveillance, 2018 Requirements,” to the Division of Policy and Assurances, Office for Human Research Protections, 1101 Wootton Parkway, Suite 200, Rockville, MD 20852. Send one self-addressed adhesive label to assist that office in processing your request, or fax your request to 240-453-6909. See the
You may submit comments identified by docket ID number HHS-OS-OPHS-2018-0015 (Activities Deemed Not to Be Research: Public Health Surveillance, 2018 Requirements), by one of the following methods:
•
•
Comments received, including any personal information, will be posted without change to
Irene Stith-Coleman, Ph.D., Office for Human Research Protections, 1101 Wootton Parkway, Suite 200, Rockville, MD 20852, 240-453-6900; email
OHRP, Office of the Assistant Secretary for Health, is announcing the availability of a draft guidance document entitled “Activities Deemed Not to Be Research: Public Health Surveillance, 2018 Requirements.” This guidance document applies to activities that are conducted or supported by HHS. It is intended to help entities determine whether a planned activity constitutes a public health surveillance activity deemed not to be research under the 2018 Requirements (the revised subpart A of 45 CFR part 46, effective July 19, 2018). The draft guidance document, when finalized, will represent OHRP's current thinking on this topic. OHRP obtained input from HHS agencies and the Common Rule departments and agencies in developing the draft guidance document.
Persons with access may obtain the draft guidance documents on OHRP's website at
Office of the Assistant Secretary for Preparedness and Response (ASPR), Department of Health and Human Services (HHS).
Notice.
As stipulated by the Federal Advisory Committee Act, the Department of Health and Human
The NBSB Public Teleconference is December 13, 2018, from 2:00 p.m. to 4:00 p.m. Eastern Standard Time (EST).
We encourage members of the public to attend the public meetings. To register, send an email to
The NBSB is authorized under Section 319M of the Public PHS Act (42 U.S.C. 247d-7f), as added by Section 402 of the Pandemic and All-Hazards Preparedness Act of 2006 and amended by Section 404 of the Pandemic and All-Hazards Preparedness Reauthorization Act. The Board is governed by the Federal Advisory Committee Act (5 U.S.C. App.), which sets forth standards for the formation and use of advisory committees. The NBSB provides expert advice and guidance on scientific, technical, and other matters of special interest to the Department regarding current and future chemical, biological, nuclear, and radiological agents, whether naturally occurring, accidental, or deliberate.
We encourage members of the public to provide written comments that are relevant to the NBSB public teleconference prior to December 13, 2018. Send written comments by email to
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
The National Cancer Institute, an institute of the National Institutes of Health, Department of Health and Human Services, is contemplating the grant of an Exclusive Patent License to practice the inventions embodied in the Patents and Patent Applications listed in the Supplementary Information section of this Notice to ElevateBio. (“Elevate”), located in Cambridge, MA.
Only written comments and/or applications for a license which are received by the National Cancer Institute's Technology Transfer Center on or before December 4, 2018 will be considered.
Requests for copies of the patent applications, inquiries, and comments relating to the contemplated Exclusive Patent License should be directed to: Jim Knabb, Senior Technology Transfer Manager, NCI Technology Transfer Center, 9609 Medical Center Drive, RM 1E530, MSC 9702, Bethesda, MD 20892-9702 (for business mail), Rockville, MD 20850-9702; Telephone: (240)-276-7856; Facsimile: (240)-276-5504; Email:
1. US Provisional Patent Application 62/342,394, filed May 27, 2016 (E-133-2016-0-US-01);
2. International Patent Application PCT/US2017/034,691, filed May 26, 2017 (E-133-2016-0-PCT-02)
The patent rights in these inventions have been assigned and/or exclusively licensed to the government of the United States of America.
The prospective exclusive license territory may be worldwide, and the fields of use may be limited to the following:
“The development of a mono- or multi-specific FMS-like tyrosine kinase 3 (FLT3; also known as CD135) chimeric antigen receptor (CAR)-based immunotherapy using autologous or allogenic human lymphocytes (T cells or NK cells) transduced with lentiviral vectors, wherein the viral transduction leads to the expression of a CAR that targets FLT3 (comprised of the FLT3-binding domain referenced as NC7 in the invention as well as an intracellular signaling domain), for the prophylaxis or treatment of FLT3-expressing cancers.”
This technology discloses a CAR vector that targets FLT3 comprised of an anti-FLT3 antibody known as NC7, and an intracellular signaling domain. FLT3 (CD135) is a cytokine receptor expressed on hematopoietic progenitor cells, and is one of the most frequently mutated genes in acute myeloid leukemia (AML) and infant acute lymphoblastic leukemia (ALL). FLT3 mutation leads to increased cell surface expression and therefore on leukemic cells, which makes it an attractive candidate for cellular therapies such as CAR-T.
This Notice is made in accordance with 35 U.S.C. 209 and 37 CFR part 404. The prospective exclusive license will be royalty bearing, and the prospective exclusive license may be granted unless within fifteen (15) days from the date of this published Notice, the National Cancer Institute receives written evidence and argument that establishes that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR part 404.
In response to this Notice, the public may file comments or objections. Comments and objections, other than those in the form of a license application, will not be treated confidentially, and may be made publicly available.
License applications submitted in response to this Notice will be presumed to contain business confidential information and any release of information from these license applications will be made only as required and upon a request under the Freedom of Information Act, 5 U.S.C. 552.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the joint meeting of the NCI Board of Scientific Advisors (BSA) and National Cancer Advisory Board (NCAB).
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will be videocast and can be accessed from the NIH Videocasting and
A portion of the National Cancer Advisory Board meeting will be closed to the public in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended, for the review, discussion, and evaluation of individual intramural programs and projects conducted by the National Cancer Institute, including consideration of personnel qualifications and performance, and the competence of individual investigators, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NCI-Shady Grove campus. All visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Institute's/Center's home page: NCAB:
National Institutes of Health, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. to achieve expeditious commercialization of results of federally-funded research and development.
Licensing information may be obtained by emailing the indicated licensing contact at the National Heart, Lung, and Blood, Office of Technology Transfer and Development Office of Technology Transfer, 31 Center Drive, Room 4A29, MSC2479, Bethesda, MD 20892-2479; telephone: 301-402-5579. A signed Confidential Disclosure Agreement may be required to receive any unpublished information.
Technology description follows.
Available for licensing and commercial development are methods for the treatment of beta-globinapathies such as sickle cell disease and beta-thalassemia by inhibiting the expression and/or activity of RIOK3 in erythroid cells such as primary erythroid progenitor cell or a CD34+ erythroid cells. RIOK3 inhibitors contemplated within the scope of the invention can be antibodies, siRNAs, microRNAs, antisense oligonucleotides or small molecules like Midostaurin, Axitinib, Bosutinib, or Ruxolitinib.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Division of Intramural Research Board of Scientific Counselors.
The meeting will be closed to the public in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for the review, discussion, and evaluation of individual intramural programs and projects conducted by the NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, including consideration of personnel
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
National Institutes of Health, HHS.
Notice.
The invention listed below is owned by an agency of the U.S. Government and is available for licensing.
Dr. Vince Contreras, 240-669-2823;
Technology description follows.
Scientists at the National Institute of Allergy and Infectious Diseases (NIAID) recently discovered a human neutralizing antibody, 10E8, that binds to the GP41 protein of HIV-1 and prevents infection by HIV-1. 10E8 potently neutralizes up to 98% of genetically diverse HIV-1 strains.
By engineering the 10E8 antibody, NIAID scientists have improved the properties of 10E8 that affect manufacturability, such as solubility, while preserving its neutralizing breadth and potency.
10E8 variants are useful for passive protection from infection, as therapeutics, and as a tool for vaccine development.
This technology is available for licensing for commercial development in accordance with 35 U.S.C. 209 and 37 CFR part 404.
• Passive protection to prevent HIV infection
• Passive protection to prevent mother-to-infant HIV transmission
• Gene-based vectors for anti-gp41 antibody expression
• Therapeutics for elimination of HIV infected cells that are actively producing virus
• Among the most potent and broadly neutralizing human antibodies isolated to date
• Broad reactivity and high affinity to most HIV-1 strains
• Improved manufacturability relative to the natural 10E8 antibody
• In vivo data available (animal)
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of National Advisory Council for Human Genome Research.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
Comments are invited on: (a) Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (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.
The National Survey on Drug Use and Health (NSDUH) is a survey of the U.S. civilian, non-institutionalized population aged 12 years old or older. The data are used to determine the prevalence of use of tobacco products, alcohol, illicit substances, and illicit use of prescription drugs. The results are used by SAMHSA, the Office of National Drug Control Policy (ONDCP), federal government agencies, and other organizations and researchers to establish policy, to direct program activities, and to better allocate resources.
As with all NSDUH surveys conducted since 1999, including those prior to 2002 when the NSDUH was referred to as the National Household Survey on Drug Abuse, the sample size of the survey for 2019 will be sufficient to permit prevalence estimates for each of the 50 states and the District of Columbia. The total annual burden estimate is shown below in Table 1.
Send comments to Summer King, SAMHSA Reports Clearance Officer, Room 15E57B, 5600 Fishers Lane, Rockville, MD 20857
Written comments should be received by January 18, 2019.
Pursuant to Public Law 92-463, notice is hereby given that the Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Substance Abuse Prevention's (CSAP) Drug Testing Advisory Board (DTAB) will convene via in person and web conference on December 4, 2018, from 9:00 a.m. EST to 3:30 p.m. EST and December 5, 2018, from 9:00 a.m. EST to 4:00 p.m.
The Board will meet in open-session in-person on December 4, 2018, from 9:00 a.m. EST to 3:30 p.m. EST to discuss the proposed Mandatory Guidelines for Federal Workplace Drug Testing Programs (urine specimens) with updates from the Department of Transportation, Nuclear Regulatory Commission, and the Department of Defense. There will be additional presentations from the Division of Workplace Programs' staff on urine, oral fluid, hair Mandatory Guidelines and future direction, updates on electronic chain of custody and standard variables, and emerging issues surrounding marijuana legalization. The board will meet in closed-session in-person on
Meeting registration information can be completed at
Coast Guard, DHS.
Thirty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995 the U.S. Coast Guard is forwarding an Information Collection Request (ICR), abstracted below, to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting approval for reinstatement, without change, of the following collection of information: 1625-0018, Official Logbook. Our ICR describe the information we seek to collect from the public. Review and comments by OIRA ensure we only impose paperwork burdens commensurate with our performance of duties.
Comments must reach the Coast Guard and OIRA on or before December 19, 2018.
You may submit comments identified by Coast Guard docket number [USCG-2018-0791] to the Coast Guard using the Federal eRulemaking Portal at
(1)
(2)
A copy of the ICR is available through the docket on the internet at
Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. These comments will help OIRA determine whether to approve the ICR referred to in this Notice.
We encourage you to respond to this request by submitting comments and related materials. Comments to Coast Guard or OIRA must contain the OMB Control Number of the ICR. They must also contain the docket number of this request, [USCG-2018-0791], and must be received by December 19, 2018.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
OIRA posts its decisions on ICRs online at
This request provides a 30-day comment period required by OIRA. The Coast Guard published the 60-day notice (83 FR 45457, September 7, 2018) required by 44 U.S.C. 3506(c)(2). That notice elicited no comments. Accordingly, no changes have been made to the Collections.
Coast Guard, DHS.
Sixty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995, the U.S. Coast Guard intends to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625-0099, Requirements for the Use of Liquefied Petroleum Gas and Compressed Natural Gas as Cooking Fuel on Passenger Vessels; without change. Our ICR describes the information we seek to collect from the public. Before submitting this ICR to OIRA, the Coast Guard is inviting comments as described below.
Comments must reach the Coast Guard on or before January 18, 2019.
You may submit comments identified by Coast Guard docket number [USCG-2018-1043] to the Coast Guard using the Federal eRulemaking Portal at
A copy of the ICR is available through the docket on the internet at
Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. In response to your comments, we may revise this ICR or decide not to seek an extension of approval for the Collection. We will consider all comments and material received during the comment period.
We encourage you to respond to this request by submitting comments and related materials. Comments must contain the OMB Control Number of the ICR and the docket number of this request, [USCG-2018-1043], and must be received by January 18, 2019.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Coast Guard, DHS.
Sixty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995, the U.S. Coast Guard intends to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625-0047, Plan Approval and Records for Vital System Automation; without change. Our ICR describe the information we seek to collect from the public. Before submitting this ICR to OIRA, the Coast Guard is inviting comments as described below.
Comments must reach the Coast Guard on or before January 18, 2019.
You may submit comments identified by Coast Guard docket number [USCG-2018-0882] to the Coast Guard using the Federal eRulemaking Portal at
A copy of the ICR is available through the docket on the internet at
Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. In response to your comments, we may revise this ICR or decide not to seek an extension of approval for the Collection. We will consider all comments and material received during the comment period.
We encourage you to respond to this request by submitting comments and related materials. Comments must contain the OMB Control Number of the ICR and the docket number of this request, [USCG-2018-0882], and must be received by January 18, 2019.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Coast Guard, DHS.
Sixty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995, the U.S. Coast Guard intends to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625-0070, Vessel Identification System; without change. Our ICR describes the information we seek to collect from the public. Before submitting this ICR to OIRA, the Coast Guard is inviting comments as described below.
Comments must reach the Coast Guard on or before January 18, 2019.
You may submit comments identified by Coast Guard docket number [USCG-2018-1042] to the Coast Guard using the Federal eRulemaking Portal at
A copy of the ICR is available through the docket on the internet at
Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. In response to your comments, we may revise this ICR or decide not to seek an extension of approval for the Collection. We will consider all comments and material received during the comment period.
We encourage you to respond to this request by submitting comments and related materials. Comments must contain the OMB Control Number of the ICR and the docket number of this request, [USCG-2018-1042], and must be received by January 18, 2019.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
U.S. Customs and Border Protection (CBP), Department of Homeland Security.
30-Day notice and request for comments; extension of an existing collection of information.
The Department of Homeland Security, U.S. Customs and Border
Comments are encouraged and will be accepted (no later than December 19, 2018) to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional PRA information should be directed to Seth Renkema, Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection, Office of Trade, Regulations and Rulings, 90 K Street NE, 10th Floor, Washington, DC 20229-1177, Telephone number (202) 325-0056 or via email
CBP invites the general public and other Federal agencies to comment on the proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Some examples of the evidence the carrier may provide to CBP include: A description of the carrier's document screening training program; the number of employees trained; information regarding the date and number of improperly documented aliens intercepted by the carrier at the port(s) of embarkation; and any other evidence to demonstrate the carrier's efforts to properly screen passengers destined for the United States.
Office of Infrastructure Protection (IP), National Protection and Programs Directorate (NPPD), Department of Homeland Security (DHS).
30-Day notice and request for comments; new collection, 1670-NEW.
DHS NPPD IP will submit the following Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995. NPPD IP has contracted a study to analyze a broad set of business security measures in terms of their costs and spillover effects, with an emphasis on identifying security measures that had a positive effect. To do so, the study team will survey the businesses' customers to evaluate the public's perceptions of the security measures, and evaluate the enhanced security measures on business operations and customer responses. DHS previously published this ICR in the
Comments are encouraged and will be accepted until December 19, 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 OMB Desk Officer, Department of Homeland Security and sent via electronic mail to
Comments submitted in response to this notice may be made available to the public through relevant websites. For this reason, please do not include in your comments information of a confidential nature, such as sensitive personal information or proprietary information. If you send an email comment, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the internet. Please note that responses to this public comment request containing any routine notice about the confidentiality of the communication will be treated as public comments that may be made available to the public notwithstanding the inclusion of the routine notice.
For specific questions related to collection activities, please contact Bill Schweigart at 703-603-5148 or at
Title II of the Homeland Security Act of 2002 (Pub. L. 107-296), as amended (2006), directs the DHS to coordinate all Federal homeland security activities, including infrastructure protection. On behalf of DHS, NPPD IP manages the Department's program to protect and enhance the resilience of the Nation's physical and cyber infrastructure within the 16 critical infrastructure sectors designated by Presidential Policy Directive 21 Critical Infrastructure Security and Resilience (PPD-21) (February 2013) by implementing the National Infrastructure Protection Plan (NIPP) 2013: Partnering for Critical Infrastructure Security and Resilience. NPPD IP accomplishes their mission by building sustainable partnerships with its public and private sector stakeholders to enable more effective sector coordination, information sharing, and program development and implementation.
The Homeland Security Act of 2002, as amended (2006), also grants DHS the authority to create university-based Centers of Excellence (COEs) using grants, cooperative agreements and contracts. The COEs are authorized by Congress and selected by DHS Science and Technology Directorate (S&T) through a competitive selection process. Among the COEs is The National Center for Risk & Economic Analysis of Terrorism Events (CREATE) at The University of Southern California. The Strategic Sourcing Program Office for DHS has approved the Basic Ordering Agreements (BOAs) for DHS-wide use. Any and all DHS Components requiring the research, analysis, and/or services of the COEs described in the COE BOAs may issue Task Orders under the BOAs through their assigned warranted Contracting Officers.
NPPD IP has contracted a study through the approved BOA with CREATE to analyze a broad set of security measures used in the Commercial Facilities critical infrastructure sector in terms of their costs and spillover effects, with an emphasis on identifying security measures that had a positive effect. This includes examining a broad range of measures including increased police/security guard presence and other non- or less-invasive options. The study team will work with business leaders to identify locations that have implemented various security measures already, and develop and administer surveys for statistical analysis and modeling. Additionally, the study team will survey the businesses' customers to evaluate the public's perceptions of the security measures, and evaluate the enhanced security measures on business operations and customers' responses.
CREATE will work with NPPD personnel to identify locations that have implemented various security measures already, and develop and administer surveys for statistical analysis and modeling. Management professionals (Chief Operating Officers, Head of Marketing, and Head of Security) from five selected businesses will be asked questions tailored to the five specific businesses regarding current and planned safety measures, management understanding of customer perceptions of security measures, management beliefs about the impacts of security measures, management beliefs about how security measures change customer behaviors and business volume, and some select demographic information. This will be conducted as a structured interview, herein referred to as “Business Structured Interview”, and is needed to obtain necessary and relevant data for subsequent economic analyses. The purpose of these analyses is to evaluate whether specific counterterrorism efforts have a negative or positive impact on the company in question.
CREATE will administer a customer survey, herein referred to as “Customer Survey”, regarding awareness of countermeasures in the Commercial Facilities sector, attitudes and perceptions toward safety, impacts (physical, psychological, and monetary) countermeasures have on customers, and select demographic and individual difference questions. There will be five variations of this survey targeted to each of the five specific businesses with slight variations in the language as a result, however the same information is being sought from the groups. These surveys are intended to create an understanding of the impacts of security countermeasures on customers/visitors' perceptions and behaviors at each of the specific target businesses selected.
Information will be analyzed to determine whether the spillover effects are positive and negative and to what extent. Statistical analysis of the results will identify the direct impacts. These will be fed into an economy-wide modeling approach known as computable general equilibrium (CGE) analysis to determine the “ripple” effects on the entire local economy. The analysis will be performed with an eye toward uncertainty analysis, as well in terms of the framing of survey questions and, rigorously specifying the confidence intervals for the statistical results.
The DHS and CREATE research team will use the information being collected in order to inform the study described above.
The Business Structured Interview will be conducted as interviews, either in-person or via video conferencing that will have a list of questions to help structure and guide discussions. The Customer Survey will be created and sent utilizing a professional-grade software, “Research Core,” by Qualtrics. The software allows the researchers to send customized email invitations to respondents, track their progress, and prevent fraud and abuse of the survey.
This is a new information collection.
OMB is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
U.S. Immigration and Customs Enforcement, Department of Homeland Security.
30-Day notice.
The Department of Homeland Security, U.S. Immigration and Customs Enforcement (USICE) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995. This proposed information collection was previously published in the
Comments are encouraged and will be accepted until December 19, 2018.
Interested persons are invited to submit written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time, to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Immigration and Customs Enforcement, Department of Homeland Security, and sent via electronic mail to
Written comments and suggestions from the public and affected agencies should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Transportation Security Administration, DHS.
60-Day notice.
The Transportation Security Administration (TSA) invites public comment on one currently approved Information Collection Request (ICR), Office of Management and Budget (OMB) control number 1652-0040, abstracted below that we will submit to OMB for an extension in compliance with the Paperwork Reduction Act (PRA). The ICR describes the nature of the information collection and its expected burden. This ICR involves three broad categories of affected populations operating under a security program: Aircraft operators, foreign air carriers, and indirect air carriers. The collections of information that make up this ICR include security programs, security threat assessments (STA) on certain individuals, known shipper data via the Known Shipper Management System (KSMS), Indirect Air Carrier Management System (IACMS), and evidence of compliance recordkeeping.
Send your comments by January 18, 2019.
Comments may be emailed to
Christina A. Walsh at the above address, or by telephone (571) 227-2062.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Consistent with the requirements of Executive Order (E.O.) 13771, Reducing Regulation and Controlling Regulatory Costs, and E.O. 13777, Enforcing the Regulatory Reform Agenda, TSA is also requesting comments on the extent to which this request for information could be modified to reduce the burden on respondents.
The extension of this ICR is necessary to ensure compliance with TSA's regulations covering the acceptance, handling, and screening of cargo transported by air. The uninterrupted collection of this information will allow TSA to continue to ensure implementation of these vital security measures for the protection of the traveling public.
This information collection requires entities regulated by TSA, which includes aircraft operators, foreign air carriers, and indirect air carriers (IACs), to collect certain information as part of the implementation of a standard security program, to submit modifications to the standard security program to TSA for approval, and update such programs as necessary. As part of these security programs, the regulated entities must also collect personal information and submit such information to TSA so that TSA may conduct STAs on individuals with unescorted access to cargo. This includes each individual who is a general partner, officer, or director of an IAC or an applicant to be an IAC, and certain owners of an IAC or an applicant to be an IAC; and any individual who has responsibility for screening cargo under 49 CFR parts 1544, 1546, or 1548.
Further, both companies and individuals whom aircraft operators, foreign air carriers, and IACs have qualified to ship cargo on passenger aircraft, also referred to as “known shippers,” must submit information to TSA. This information is collected electronically through the KSMS. In accordance with TSA security program requirements, regulated entities may use an alternate manual submission method to identify known shippers.
Regulated entities must also enter into IACMS the information required from applicants requesting to be approved as IACs in accordance with 49 CFR 1548.7 and the information required for their IAC annual renewal. Regulated entities must also maintain records, including records pertaining to security programs, training, and compliance to demonstrate adherence with the regulatory requirements. These records must be made available to TSA upon request. The forms used in this collection of information include the Aviation Security Known Shipper Verification Form and the Security Threat Assessment Application.
This ICR covers multiple activities. TSA estimates that there will be—
(1) 4,050 annual respondents regarding Security Programs, for an annual hour burden of 16,403;
(2) 98,500 respondents applying for an STA, for an annual hour burden of 24,625;
(3) 26,700 respondents accessing the KSMS, for an annual hour burden of 23,872; and
(4) 4,050 annual respondents (these respondents are the same respondents identified in (1) above)) to the recordkeeping requirement, for an annual hour burden of 8,208 hours.
Comprehensively, TSA estimates a total annual hour burden of 73,108 hours for this collection.
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications.
We, the U.S. Fish and Wildlife Service (Service), invite the public to comment on applications to conduct certain activities with foreign species that are listed as endangered under the Endangered Species Act (ESA) and foreign or native species for which the Service has jurisdiction under the Marine Mammal Protection Act (MMPA). With some exceptions, the ESA and the MMPA prohibit activities with listed species unless Federal authorization is issued that allows such activities. The ESA and MMPA also require that we invite public comment before issuing permits for endangered species or marine mammals.
We must receive comments by December 19, 2018.
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For more information, see Public Comment Procedures under
Brenda Tapia, by phone at 703-358-2104, via email at
You may submit your comments and materials by one of the methods in
When submitting comments, please specify the name of the applicant and the permit number at the beginning of your comment. Provide sufficient information to allow us to authenticate any scientific or commercial data you include. The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) those that include citations to, and analyses of, the applicable laws and regulations.
You may view and comment on others' public comments on
If you submit a comment at
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
We invite comments on the following applications.
The applicant requests a permit to import one live captive-bred male Siberian tiger (
The applicant requests authorization to import skin and mouth swabs from wild Sonora tiger salamanders (
The applicant requests authorization to export and reimport nonliving museum specimens of endangered and threatened species previously accessioned into the applicant's collection for scientific research. This notification covers activities to be conducted by the applicant over a 5-year period.
The applicant requests authorization to export and reimport nonliving museum specimens of endangered and threatened species previously accessioned into the applicant's collection for scientific research. This notification covers activities to be conducted by the applicant over a 5-year period.
The applicant requests a captive-bred wildlife registration under 50 CFR 17.21(g) for slender-horned gazelle (
The applicant requests a permit to import 189 skin and shell samples derived from the hawksbill sea turtles (
The applicant requests authorization to export biological samples from captive bred Louisiana pearlshell mussels (
The applicant requests a captive-bred wildlife registration under 50 CFR 17.21(g) for the following species: Komodo monitor (
The applicant requests a captive-bred wildlife registration under 50 CFR 17.21(g) for the following species: Ring-tailed lemur (Lemur catta), Siamang gibbon (
The applicant requests a captive-bred wildlife registration under 50 CFR 17.21(g) for the following species: radiated tortoise (
The applicant requests renewal of a captive-bred wildlife registration under 50 CFR 17.21(g) for radiated tortoise (
The applicant requests a captive-bred wildlife registration under 50 CFR 17.21(g) for radiated tortoise (
The applicant requests a permit authorizing the culling of excess red lechwe (
The following applicants request permits to import sport-hunted trophies of male bontebok (
The applicant requests authorization to renew and amend their permit to conduct research activities on polar bears (
If we issue permits to any of the applicants listed in this notice, we will publish a notice in the
We issue this notice under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of receipt of permit application.
We, the U.S. Fish and Wildlife Service, invite the public to comment on an application to conduct certain activities with a foreign species that is listed as endangered under the Endangered Species Act (ESA). With some exceptions, the ESA prohibits activities with listed species unless Federal authorization is issued that allows such activities. The ESA also requires that we invite public comment before issuing permits for endangered species.
We must receive comments by December 19, 2018.
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For more information, see Public Comment Procedures under
Brenda Tapia, by phone at 703-358-2104, via email at
You may submit your comments and materials by one of the methods in
When submitting comments, please specify the name of the applicant and the permit number at the beginning of your comment. Provide sufficient information to allow us to authenticate any scientific or commercial data you include. The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) those that include citations to, and analyses of, the applicable laws and regulations.
You may view and comment on others' public comments on
If you submit a comment at
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
We invite comments on the following application.
The applicant requests a permit to export up to six captive-born Sonora pronghorn (
If we issue a permit to the applicant listed in this notice, we will publish a notice in the
We issue this notice under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Bureau of Indian Affairs, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Indian Education (BIE) are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 19, 2018.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Dr. Joe Herrin, phone: (202) 208-7658. You may also view the ICR at
In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the
A
We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BIE; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BIE enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BIE minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Indian Affairs, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Indian Affairs (BIA) are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 19, 2018.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact: Mr. Keith Kahklen, phone: (907) 586-7618. You may also view the ICR at
In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
We are again soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BIA; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BIA enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BIA minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Indian Affairs, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Assistant Secretary—Indian Affairs (AS-IA) proposing to renew three information collections.
Interested persons are invited to submit comments on or before January 18, 2019.
Send your comments on this information collection request (ICR) by mail to Ms. Paula Hart, U.S. Department of the Interior, Office of Indian Gaming, 1849 C Street NW, Mail Stop 3657, Washington, DC 20240; email:
To request additional information about this ICR, contact Ms. Paula Hart, U.S. Department of the Interior, Office of Indian Gaming, telephone: 202-219-4066.
In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the AS-IA; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the AS-IA enhance the quality, utility, and clarity of the information to be collected; and (5) how might the AS-IA minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Indian Affairs, Interior.
Notice of Information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Indian Affairs (BIA) are proposing to renew an information collection.
Interested persons are invited to submit comments on or before December 19, 2018.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Laurel Iron Cloud by email at
In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
We are again soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BIA; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BIA enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BIA minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
BIA requires the tribe to submit a formal request for Secretarial election, including: A tribal resolution; the document or language to be voted on in the election; a list of all tribal members who are age 18 or older in the next 120 days (when the election will occur), including their last known addresses,
While much of the information the tribe prepares for a Secretarial election (
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Land Management, Interior.
Notice.
The Department of the Air Force (DAF), Nellis Air Force Base (AFB) has filed an application with the Department of the Interior to extend the duration of Public Land Order (PLO) No. 7419 for an additional 20-year term for the same military purpose and location. PLO No. 7419 withdrew 2,252 acres of public land from settlement, sale, location, or entry under the general land laws, including the United States mining laws, but not the mineral leasing laws. PLO No. 7419 was issued for the United States Air Force to provide safety buffers from potentially hazardous areas, to protect populated areas, and to comply with ammunition and explosives safety standards. This Notice gives the public an opportunity to comment on the withdrawal extension application and to request a public meeting. This Notice also amends PLO No. 7419's legal land description to reflect an amended land survey plat completed in 2016.
All persons who wish to submit comments, suggestions, objections, or request a public meeting in connection with the withdrawal extension application may do so in writing until February 19, 2019.
Comments on this withdrawal extension application and public meeting opportunity should be sent to the District Manager, Bureau of Land Management (BLM), Southern Nevada District Office, 4701 North Torrey Pines Drive, Las Vegas, NV 89130-2301.
Tom Seley, Project Manager, BLM Southern Nevada District Office, at email
The DAF, Nellis AFB, has filed an application with the Department of the Interior to extend the duration of PLO No. 7419 for an additional 20-year term. The PLO withdrew approximately 2,252 acres of public lands from settlement, sale, location or entry under the general land laws, including the United States mining laws, but not from leasing under the mineral leasing laws, subject to valid existing rights. The purpose of the withdrawal is for military use at Nellis AFB to provide safety buffers from potentially hazardous areas, to protect populated areas, and to facilitate DAF compliance with the Department of Defense (DOD) Directive No. 6055.09E regarding ammunition and explosives safety standards. The safety buffer zone includes security patrol roads and a security checkpoint. PLO No. 7419 will expire on December 8, 2019, unless it is extended.
As required by Section 204(b)(1) of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. 1714(b)(1), and BLM regulations at 43 CFR part 2300, the BLM is publishing Notice of the DAF, Nellis AFB Application.
This Notice amends the legal land description and acreage in PLO No. 7419, as noted on an amended plat accepted by the Nevada BLM Chief, Cadastral Survey on October 17, 2016. The lands withdrawn by PLO No. 7419 are described as follows:
The areas described contain approximately 2,125.90 acres in Clark County.
The use of a right-of-way, interagency agreement, or cooperative agreement would not apply or provide adequate protection for safety buffers from potentially hazardous areas, protect populated areas, or comply with DOD Directive No. 6055.09E regarding ammunition and explosive safety standards.
No water rights would be required to fulfill the purpose of the requested withdrawal extension.
There are no suitable alternative sites since the lands described are contained within Nellis AFB.
For a period until February 19, 2019, all persons who wish to submit comments, suggestions, or objections in connection with the withdrawal extension application may present their views in writing to the BLM District Manager at the address in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Notice is hereby given that an opportunity for a public meeting may be afforded in connection with the proposed withdrawal extension. All interested persons who desire a public meeting for the purpose of being heard on the withdrawal extension application must submit a written request to the BLM District Manager, Southern Nevada District Office at the address in the
The withdrawal extension application will be processed in accordance with the regulations set forth in 43 CFR 2310.4.
Bureau of Land Management, Interior; and Bureau of Indian Affairs, Interior.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969 (NEPA), as amended, and the Federal Land Policy and Management Act of 1976, as amended, the Bureau of Land Management (BLM) and Bureau of Indian Affairs (BIA) have prepared a Draft Joint Environmental Impact Statement (EIS)/BLM Draft Resource Management Plan (RMP) and BIA Integrated Resource Management Plan (IRMP) for the BLM Oklahoma Field Office, BIA Southern Plains Region, and BIA Eastern Oklahoma Region, and by this Notice is announcing the opening of the public comment period.
To ensure that comments will be considered, the BLM and BIA must receive written comments on the Draft Joint EIS/BLM RMP and BIA IRMP within 90-days of the date the Environmental Protection Agency publishes its Notice of Availability for the Draft Joint EIS/BLM RMP and BIA IRMP in the
You may submit comments related to the Draft Joint EIS/BLM RMP and BIA IRMP through either of the following methods:
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Copies of the Draft Joint EIS/BLM RMP and BIA IRMP are available from the BLM and the BIA at the following locations:
The Draft Joint EIS/BLM RMP and BIA IRMP background documents are available on the ePlanning website at:
Patrick Rich, RMP Team Lead; telephone: 405-579-7154; address: 201 Stephenson Parkway, Suite 1200, Norman, Oklahoma 73072; or email:
In the Draft Joint EIS/BLM RMP and BIA IRMP, the BLM and BIA analyze the environmental consequences of four alternatives under consideration for managing Federal lands and minerals within the Oklahoma-Kansas-Texas planning area. The BLM Oklahoma Field Office administers approximately 15,100 acres of public lands, including approximately 11,800 acres at the Cross Bar Management Area near Amarillo, Texas; about 3,300 acres of small tracts scattered across the planning area; and Federal lands along the 116-mile stretch of the Red River between the North Fork of the Red River and the 98th Meridian (Red River area). No exact acreages of Federal lands along the Red River are available at this time, because the full 116-mile stretch of land has not been surveyed. The Oklahoma Field Office also administers approximately 4,810,900 acres of subsurface Federal mineral estate across the planning area, including approximately 3,991,100 acres underlying surface estate managed by other Federal agencies, such as U.S. Fish and Wildlife Service, U.S. Forest Service, and National Park Service, and approximately 408,000 acres of split-estate, where Federal minerals underlie private surface estate. The RMP only pertains to Federal lands and has no effect on the boundary of the Federal lands.
The BIA decision area includes approximately 394,200 surface acres and 2,033,500 mineral estate acres for the BIA Eastern Oklahoma Regional Office. Approximately 1,474,500 acres of the BIA Eastern Oklahoma Regional Office jurisdictional area is limited to
The BLM is the lead agency in developing the land use plan, while the BIA is a co-lead partner in this joint, integrated planning effort. The Draft Joint EIS/BLM RMP and BIA IRMP provides a land use plan that will replace the BLM's current 1994 Oklahoma RMP, the 1991 Kansas RMP, and the 1996 Texas RMP, as amended. RMP revision and consolidation is necessary due to the numerous changes, including renewable energy, recreation, special status species, visual resources, and wildlife habitat that have occurred across the BLM Oklahoma Field Office planning area since publication. New resource data are available for consideration, and new policies, guidelines, and laws have been established.
Land use planning and NEPA regulations require the BLM and BIA to formulate a reasonable range of alternatives to consider different management scenarios and different means of addressing resource or resource-use conflicts. Established planning criteria, as outlined in 43 CFR part 1610, guide the alternatives-development process. This pursuit provides the BLM, BIA, and the public with an understanding of the various ways in which challenges associated with resources and resource uses might be resolved. This draft land use plan offers the BLM State Director for New Mexico, Oklahoma, Kansas, and Texas; the BIA Eastern Oklahoma Regional Director; and the BIA Southern Plains Regional Director a reasonable range of alternatives from which to make informed decisions. The four alternatives analyzed in the Draft Joint EIS/BLM RMP and BIA IRMP are generally described as follows:
• Alternative A (No Action) is a continuation of existing land use management actions under the current Kansas, Oklahoma, and Texas RMPs and associated amendments;
• Alternative B (Agency Preferred) represents a balanced mix of land use management actions intended to address current and future land use management issues, including provisions for energy development, recreational opportunities, and conservation of natural resources;
• Alternative C represents land use management strategies intended primarily to preserve and protect ecosystem health and resource values across the planning area; and
• Alternative D represents land use management strategies intended primarily to develop resources and promote economic development across the decision area, such as livestock grazing, energy and mineral development, and recreation.
The BLM is considering areas of critical environmental concern (ACEC) during this planning process, and has proposed one ACEC in the Draft RMP to protect certain resource values. Pertinent information regarding this ACEC, including proposed designation acreage, resource-use limitations, if designated, and the alternatives affected are summarized below.
• Closed to off-highway vehicle use and mechanized travel, except for the main access road and administrative use;
• Non-mechanized trail use limited to designated trails;
• No surface occupancy stipulation for fluid minerals development;
• Closed to mineral material disposal and non-energy leasable mineral development;
• Managed as a right-of-way exclusion zone;
• Visual resources would be managed as visual resource management class II and III (camping areas);
• Vegetation management would emphasize high-priority habitats identified in state wildlife action plans;
• Maintain cover for wildlife and migratory birds;
• Reduce impacts on paleontological resources from ground disturbance and access; and
• Available for livestock grazing.
The land use planning process was initiated on July 26, 2013, through a Notice of Intent published in the
Seventy-two cooperating agencies expressed interest in collaborating with the BLM and BIA during the NEPA process, and the following agencies signed a formal cooperating agency agreement:
The BLM and BIA held 17 scoping meetings between November 2013 and January 2014, throughout Kansas, Oklahoma, and Texas, with stakeholders, interest groups, and the public.
During the scoping period, the public provided the BLM Oklahoma Field Office with input on relevant issues to consider in the planning process. Additional information was collected during three additional workshops, one each in Kansas, Oklahoma, and Texas with the public and cooperating agencies. Based on these issues, conflicts, information, and the BLM and BIA goals and objectives for this planning effort, the BLM-BIA Interdisciplinary Team formulated action alternatives for consideration and analysis in the Draft Joint EIS/BLM RMP and BIA IRMP. Following the close of the public comment period, the BLM and BIA will use any substantive public comments to revise the Draft Joint EIS/BLM RMP and BIA IRMP in preparation for its release to the public as the Proposed Resource Management Plan and Final Environmental Impact Statement (Proposed RMP/Final EIS). The BLM and BIA will respond to each substantive comment received during the public review and comment period by making appropriate revisions to the document, or by explaining why the comment did not warrant a change. Notice of the Availability of the Proposed RMP/Final EIS will be published in the
Please note that public comments and other submitted information, including names, street addresses, and email addresses of persons submitting comments will be available for public review and disclosure by using one of the methods listed in the
Before including your address, phone number, email address, and/or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
40 CFR 1506.6, 40 CFR 1506.10, 43 CFR 1610.2.
Bureau of Land Management, Interior.
Notice.
The purpose of this Notice is to request public nominations for 15 members to the Grand Staircase-Escalante National Monument Advisory Committee (GSENM MAC). The GSENM MAC provides information and advice regarding the development and implementation of management plans for the Grand Staircase, Kaiparowits, and Escalante Canyons Units and, as appropriate, management of the Monument. The Grand Staircase-Escalante National Monument (GSENM) will accept public nominations for 30 days from the date this Notice is posted.
A completed application and accompanying nomination/recommendation letters must be received at the address listed below no later than December 19, 2018.
Grand Staircase-Escalante National Monument Headquarters Office, 669 South Highway 89A, Kanab, Utah 84741, Attention: MAC Nominations.
Larry Crutchfield, Public Affairs Officer, GSENM Headquarters Office, 669 South Highway 89A, Kanab, Utah 84741; phone (435) 644-1209, or email:
The Secretary of the Interior established the GSENM MAC pursuant to section 309 of the Federal Land Policy and Management Act (FLPMA) of 1976 (43 U.S.C. 1739) and Presidential Proclamation 9682 in conformity with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C. Appendix 2). The 15 appointed members of the GSENM MAC perform several primary tasks: (1) Provide information and advice on the development of management plans for the Grand Staircase, Kaiparowits, and Escalante Canyons Units and, as appropriate, management of the Monument; (2) Assist BLM in developing recommendations for implementation of ecosystem approaches to management by advising BLM in establishing goals and objectives within the Monument; (3) Advise BLM regarding ongoing local efforts to develop and achieve collaborative approaches to management of the Monument; (4) Consult and make recommendations on issues such as protocols for specific projects;
The MAC shall include 15 members to be appointed by the Secretary as follows:
(1)An elected official from Garfield County representing the County;
(2) an elected official from Kane County representing the County;
(3) a representative of State government;
(4) a representative of Tribal government with ancestral interest in the Monument;
(5) a representative of the educational community;
(6) a representative of the conservation community;
(7) a representative of developed outdoor recreation, off-highway vehicle users, or commercial recreation activities, including, for example, commercial or recreation fishing;
(8) a representative of dispersed recreation;
(9) a livestock grazing permittee operating within the Monument to represent grazing permittees;
(10) a representative of private landowners;
(11) a representative of local business owners; and,
(12) a representative of the public-at-large, including, for example, sportsmen and sportswomen communities.
Three members will be appointed as special Government employees, one for each of the following areas of expertise:
(1) A member with expertise in systems ecology;
(2) A member with expertise in paleontology; and
(3) A member with expertise in archaeology or history.
The Secretary appoints persons to the GSENM MAC who are representatives of the various major citizen interests pertaining to land use planning and management of the lands under BLM management in GSENM.
Each GSENM MAC member will be a person who, as a result of training and experience, has knowledge or special expertise which qualifies him or her to provide advice from among the categories of interest listed above. As appropriate, certain MAC members may be appointed as Special Government Employees. Special Government Employees serve on the MAC without compensation, and are subject to financial disclosure requirements in the Ethics in Government Act and 5 CFR 2634.
This Notice, published pursuant to 43 CFR 1784.4-1 and in accordance with Presidential Proclamation 9682, requests the public to submit applications to fill 15 positions on the MAC. Any individual or organization may nominate one or more persons to serve on the GSENM MAC. Individuals may nominate themselves for GSENM MAC membership. Nomination forms may be obtained from the GSENM Headquarters Office, listed above in the
Members will serve staggered terms without monetary compensation, but will be reimbursed for travel and per diem expenses at current rates for Government employees. The MAC will meet approximately two to four times annually, and at such other times as designated by the BLM Designated Federal Officer.
43 CFR 1784.4-1.
National Park Service, Interior.
Notice; correction.
The Department of the Navy has corrected an inventory of human remains and associated funerary objects, published in a Notice of Inventory Completion in the
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the Department of the Navy at the address in this notice by December 19, 2018.
Mr. Joseph Montoya, Environmental Planning and Conservation Branch Manager, Naval Base Ventura County, 311 Main Road, Building 1, Code N45V, Point Mugu, CA 93042, telephone (805) 989-3804, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the correction of an inventory of human remains and associated funerary objects under the control of the Department of the Navy, and in the physical custody of eight repositories which include the Fowler Museum at UCLA, Natural History Museum of Los Angeles County, San Diego Museum of Man, Santa Barbara Museum of Natural History, Southwest Museum of the Autry National Center of the American West, U.C. Berkeley Phoebe A. Hearst Museum of Anthropology, Naval Air Weapons Station China Lake Curation Facility, and Naval Base Ventura County San Nicolas Island Curation Facility. The human remains and associated funerary objects were removed from San Nicolas Island, Naval Base Ventura County, Ventura County, CA.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of
This notice corrects the minimum number of human remains, the number of associated funerary objects, and cultural affiliation published in a Notice of Inventory Completion in the
In the
The human remains representing, at minimum, 547 individuals and the 1,017 associated funerary objects listed in this notice are in eight different locations in California.
In the
These are the Fowler Museum at UCLA, the Natural History Museum of Los Angeles County, the Naval Base Ventura County (NBVC) San Nicolas Island Curation Facility, the San Diego Museum of Man, the Santa Barbara Museum of Natural History, the Southwest Museum of the American Indian at the Autry Museum of the American West, the U.C. Berkeley Phoebe A. Hearst Museum of Anthropology and the Naval Air Weapons Station (NAWS) China Lake Curation Facility.
In the
Primary documentation for these human remains is limited.
In the
One sub-adult and one adult male individual were collected from site CA-SNI-19 (the Indian Dwelling Site at Corral Harbor). For the remaining two individuals, no specific provenience information is available beyond their SNI origin.
In the
In 1951, human remains representing, at minimum, 16 individuals (15 adult (five identified as female, four as male and six undetermined), and one sub-adult) were collected by Stewart L. Peck from site CA-SNI-18 and donated to UCLA. No known individuals were identified. The four associated funerary objects are animal bones, comingled with the human remains of catalog number 136a.
In the
In 1951, human remains representing at minimum, 2 individuals were collected by Stewart L. Peck and donated to UCLA. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In the
Sometime prior to 1952, human remains representing, at minimum, two individuals (both adult, one further identified as male) were collected by an unknown party and donated to UCLA.
In the
The 17 associated funerary objects, listed as individual or grouped catalogued items, are one abalone fish hook, one biface fragment, five unmodified shells, one crab claw fragment, two unmodified animal bone fragments, one obsidian point, one perforated disk or abalone shell fish hook blank, one steatite bowl fragment, one lot tarring pebbles, one worked disk or abalone shell fish hook blank, two worked shells. One shell fish hook fragment is listed in the catalog records, but is missing from the museum collections.
In the
Prior to 1958, human remains representing, at minimum four individuals (three adults (one female, two male), and one sub-adult), were removed from site CA-SNI-15 (NI-15) by H.B. Allen and donated to UCLA.
In the
In 1959, human remains representing, at minimum, 61 individuals were collected during excavations conducted by Sam-Joe Townsend, Fred Reinman, Marshall McKusick, Clement Meighan and others from the UCLA Archaeological Survey. These human remains were collected from six SNI sites—CA-SNI-14, CA-SNI-15, CA-SNI-16, CA-SNI-18, CA-SNI-40, and CA-SNI-56. In August 1959, excavations at SNI-14 removed an infant individual. Excavations at SNI-15 removed a burial with two adult females interred. Excavations at SNI-16 removed 21 individuals (16 adults, of which three are male and six are female, four sub-adults, and an individual represented by a scapula fragment). Excavations at SNI-18 removed seven individuals (seven adults, four identified as male and one female). Excavations at SNI-40 removed 20 burials that included a minimum of 26 individuals (17 adults, of which nine were identified as male and five as female, three infants, five juveniles, and one sub-adult). In September 1959, a survey of SNI-40 removed an adult individual represented by 16 teeth from a looted grave. Excavations from SNI-56 removed two burials representing three adult individuals (identified further as one male, one female and one undetermined). No known individuals were identified. The 269 associated funerary objects, listed as individual or grouped catalogued items, are divided among the different site numbers. The two associated funerary objects from SNI-14 are one bone spatulate, and one lot of Olivella shell beads. The three associated funerary objects from SNI-15 are one bird bone needle, one lot of bone beads, and one steatite bead fragment. The 100 associated funerary objects from SNI-16 are four lots of asphaltum fragments with basketry impressions, six unmodified animal bone fragments, one bird humerus awl, one animal bone with asphaltum, one bone fishhook, one sea lion tooth pendant, four chalcedony pendants, one unmodified jasper fragment, one yellow ochre fragment, one flaked shale object, one shell bead, one shell implement, four abalone shell containers (holes sealed with asphaltum), two unmodified shell fragments, one lot Olivella shell beads, one modified abalone shell fragment, 69 abalone shell pendants. Three shell pendants and five abalone shell containers are missing from the collection. The 73 associated funerary objects from SNI-18 are one bone harpoon dart, three shell ornaments, one possible pelican stone effigy, one stone ornament with a hole drilled in the center, two stone bifaces, one
In the
Navy-controlled NAGPRA items at the Fowler Museum also include human remains representing, at minimum, an additional three individuals (two adults identified as a male and female, and an infant) that lack specific information on the date of collection, or the site provenience beyond their SNI origin. The collection is labeled as Burial 1 and was donated to the UCLA Dickey Biology Collections prior to 1990. It was transferred to the Fowler Museum at UCLA for NAGPRA inventory purposes. No known individual was identified. No associated funerary objects are present.
In the
One additional group of human remains representing, at minimum, 9 individuals, that also lack specific information on the date of collection/donation or a collector, does have accompanying documentation indicating it was collected from site CA-SNI-18. No known individuals were identified. No associated funerary objects are present.
In the
In the
In August 1933, human remains representing, at minimum, one individual were collected by an individual named Rose and donated to the Antelope Valley Museum. The human remains were transferred to the Natural History Museum of Los Angeles County by Grace Oliver of the Antelope Valley Museum in 1979. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In the
The nine associated funerary objects are one composite bone fishhook barb, one sea lion rib bone flaker, one whale bone implement, one bone tube bead, one conical sandstone pipe, one biface fragment, one projectile point in two-pieces, one biface tip, and one large sandstone pipe.
In the
In 1959, human remains representing, at minimum, 2 individuals were collected by Ed Mitchell and Sam-Joe Townsend and donated to the Natural History Museum of Los Angeles County. No specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In the
In 1959, human remains representing, at minimum, seven individuals were collected by Ed Mitchell and Sam-Joe Townsend from sites CA-SNI-18 and other unnumbered SNI sites, and donated to the Natural History Museum of Los Angeles County.
In the
No specific provenience information beyond their SNI origin exists for these human remains.
In the
In 1966, human remains representing, at minimum, one individual were collected by S. Ray Harmon and donated to the Natural History Museum of Los Angeles County in 1979.
In the
The four associated funerary objects, listed as individual or grouped catalogued items, are one unmodified large black abalone shell, one lot of asphaltum fragments, one abalone shell pendant, and one lot of bird bones.
In the
In the
The three associated funerary objects, listed as individual or grouped catalogued
In the
In the early 1900s, human remains representing, at minimum, eight individuals were collected by Arthur Sanger.
In the
The two associated funerary objects are projectile points, embedded within the ilium and cranium of associated human remains.
In the
In 1938, human remains representing, at minimum, four individuals were collected from SNI sites by UCLA. These human remains were later donated to Loyola Marymount University in 1962, which returned them to SNI holdings in 2006. The human remains were collected from six SNI sites—SN-1, SN-9, SN-12, SN-17, SN-18, and SN-171—and some unnumbered locations. No known individuals were identified. The 29 associated funerary objects, listed as individual or grouped catalogued items, are divided among the different sites. The 12 associated funerary objects from SN-1 are seven shell fish hook fragments, one Norrisia norrisi fish hook fragment, one worked Haliotis rufescens fragment, one pendant, one sandstone hammer stone, and one broken soapstone pipe. The one associated funerary object from SN-17 is a fish hook fragment. The 13 associated funerary objects from SN-18 are one lot of lithics, one lot of unworked sandstone, one lot of oxidized metal, one lot of unworked mussel shell, one quartzite flake, one chert projectile point base, four fish hook fragments, one unmodified shell, one unmodified mammal bone, and one lot of unmodified fish bone. The three associated funerary objects from unknown locations are one shell fish hook fragment, one broken awl, and one lot of faunal remains.
In the
In 1959, human remains representing, at minimum, 2 individuals were collected during excavations conducted by Sam-Joe Townsend and Fred Reinman from the UCLA Archaeological Survey. These human remains were collected from 2 SNI Sites—CA-SNI-14 and CA-SNI-15. These two individuals belong to the same collection from the 1959 excavations located in the Fowler Museum at UCLA and reported under subparagraph (i) of this notice. No known individuals were identified. No associated funerary objects are present.
In the
The 33 associated funerary objects, listed as individual or grouped catalogued items, are one aves beak, one bag of Haliotis, broken, one cut/worked bird bone, one cut and worked shell, one lot of cut, worked, abraded, punched, and broken abalone shell, one cut/worked/abraded red abalone shell, one cut faunal bone, two Olivella shell side walls, one ornament fragment, three projectile points, two fragments of red ochre pigment, one sandstone burial marker, one sandstone nodule with red ochre stain, one sea grass, twined, with detritus, one shell columella, eight whole and broken shell fishhooks, three shell fishhook blanks, one frontal marine mammal tooth, one whale bone wedge, and one whole abalone shell.
In the
In 1977, human remains representing, at minimum, eight individuals were collected during excavations conducted by George Kritzman and others. These human remains were collected from 5 SNI sites—CA-SNI-5, CA-SNI-11, CA-SNI-47, CA-SNI-55 and CA-SNI-146. No known individuals were identified. The 14 associated funerary objects, listed as individual or grouped catalogued items, are divided among the different sites. The nine associated funerary objects from SNI-47 are two projectile points, four shell fish hook blanks, one rim tool, one lot asphaltum with possible basketry impressions, and one drill. The five associated funerary objects from SNI-55 are one rim tool, one gorge, one bead blank, one lot of asphaltum water bottle impressions, and one lot of asphaltum basketry impressions.
In the
In the
The one associated funerary object, listed as grouped catalogued items, is one lot of miscellaneous faunal remains (shell, fishbone, etc.).
In the
The eight associated funerary objects, listed as individual or grouped catalogued items, are two shell fishhook blanks, one lot of skirt weights, four bags of unsorted mixed shell and lithics, and one spire ground shell bead.
In the
In the
The 37 associated funerary objects, listed as individual or grouped catalogued items, are one marine mammal tooth, one cut marine mammal mandible w/asphaltum, one awl, six bags of flaked stone, one bag of mixed flaked stone, sandstone and bone, three bags of mixed lithics and shell, one bag of mixed shell, flaked stone & bone, three bags of mixed shell, one bag of mixed shell and bone, one lot of basketry impressions, one shell bead, one shell bead blank, one Mytilus californianus disk bead, one biface fragment, one crab claw and asphaltum, one
In the
In 1989, human remains representing, at minimum, eight individuals were collected during excavations conducted by Steven Schwartz, George Kritzman, Audrey Schwartz, and others from the Department of the Navy's Cultural Resources management program. These human remains were collected from four SNI sites—CA-SNI-168, CA-SNI-171, CA-SNI-214, and CA-SNI-221. No known individuals were identified. The 116 associated funerary objects, listed as individual or grouped catalogued items, are divided among the different sites. The two associated funerary objects from SNI-168 are one broken red abalone and one lot asphaltum fragments. The 114 associated funerary objects from SNI-214 are two lots asphaltum impressions, one lot asphaltum basketry impressions, one asphaltum water bottle with stopper and Haliotis fragments, one biface fragment, one biface knife, two bifaces with asphaltum on base, one disc bead, one bird bone, two lots bird bone fragments, one bone tool, three bowl fragments, two lots carbonized wood, one composite spear with asphaltum, one Delphinidae jaw, one complete dog skeleton, one bag of fish bone, two fish hooks, five fish hook blanks, two incised soapstone, one bag of lithics, one lot of flaked stone, one lot of manuports, two Marine mammal bone awl or punch, one cut Marine mammal bone fragment, one marine mammal scapula, one mortar, one lot Mytilus californianus shell, two pestles, three pestle bases, two pestle fragments, one pestle mid-section, one lot red ochre, one possible sandstone saw, one pressure flaker, nine projectile points, one projectile point base, one projectile point fragment, two projectile point midsections, one projectile point tip, two projectile point with asphaltum on base, one projectile point spear head, one punch or awl, three marine mammal ribs with asphaltum, two lots sandstone dish fragments, one sandstone slab, one sandstone tool, one possible sandstone weight, one scraper, one shell bottle stop, one soapstone healing stone, two soapstone pendants, one lot of variously abraded, drilled or raw soapstone, one bag of soil from inside mortar, one lot tarring pebbles, one Tachycardium shell, one bag unworked bone fragments, one unworked mammal rib, one piece unworked sandstone, one lot unworked shell, one unworked stone with asphaltum, two unworked whale bones, one whale bone chisel, five whale bone pry, three whale bone wand, one whale bone wand tip, one whale bone epiphyseal plate, five whole and fragmentary whale scapulae, one piece of wood, one piece of wood with asphaltum and charcoal, one piece pecked sandstone, and two pieces abraded soapstone.
In the
The human remains are noted as missing since 2016.
In the
In 2000, human remains representing, at minimum, one individual were collected by Steve Schwartz and Lisa Thomas because of their progressive exposure by erosion.
In the
In the
The six associated funerary objects, listed as individual or grouped catalogued items, are one lot of shell beads, one shell bead, one lot of fragmentary marine shell, one lot of stone fragments, one lot of fragmentary mixed fish, human and mammal bone, and one lot of fragmentary bone, charcoal and asphaltum.
In the
An additional set of human remains representing, at minimum, 1 individual that also lacks specific information on the date of collection/donation or a collector, does have accompanying documentation indicating it was collected from site CA-SNI-171. No known individual was identified. No associated funerary objects are present.
In the
NAGPRA items in collections at the SNI Curation Facility include one funerary object associated with human remains located at the Southwest Museum/Autry Museum and reported under subparagraph (vi) of this notice. This associated funerary object is a unmodified abalone shell that was collected by Rozaire in 1960 at site CA-SNI-41 and donated to the Southwest Museum.
NAGPRA items in collections at the SNI Curation Facility also include one funerary object associated with human remains located at the Southwest Museum/Autry Museum and reported under subparagraph (vi) of this notice. This associated funerary object is a fragment of sea grass matting that was collected by an unknown party in 1984 at site CA-SNI-325 and donated to the Southwest Museum.
In the
In 1899, human remains representing, at minimum, one individual were collected by Mrs. L. H. Sherman and donated to the San Diego Museum of Man. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In the
In 1930, human remains representing, at minimum, 140 individuals, including some cremated remains, were collected by Malcolm J. Rogers during an expedition for the San Diego Museum of Man. These human remains were excavated or collected on the surface from 31 SNI sites with Rogers' field numbers (with equivalent Smithsonian trinomial, when known) SN-01 (CA-SNI-7), SN-01A (CA-SNI-5), SN-03 (CA-SNI-4), SN-04 (CA-SNI-3), SN-05 (CA-SNI-137), SN-06, SN-07 (CA-SNI-54), SN-07A (CA-SNI-318), SN-12 (CA-SNI-11), SN-13 (CA-SNI-12), SN-14 (CA-SNI-25), SN-15 (CA-SNI-21), SN-16, SN-17 (CA-SNI-141), SN-18 (CA-SNI-15/16), SN-19 (CA-SNI-158),
In the
In 1937 and 1939, human remains representing, at minimum, 26 individuals, including four cremations, were transferred to the San Diego Museum of Man from the San Diego Museum of Natural History.
In the
The five associated funerary objects, listed as individual or grouped catalogued items, include two lots of shell beads, one abalone fishhook, and two steatite effigies.
In the
The four associated funerary objects, listed as individual or grouped catalogued items, are one abalone shell with asphaltum, one piece of charcoal, one animal bone tool, and one lot of unmodified shells.
In the
On an unknown date, human remains representing, at minimum, four individuals were surface collected from SNI and donated to the San Diego Museum of Man. No specific provenience information beyond their SNI origin exists for these human remains; they were most likely collected by Malcom J. Rogers during an expedition for the San Diego Museum of Man in 1930, or part of the 1936 San Diego Natural History Museum transfer. No known individuals were identified. No associated funerary objects are present.
In the
Between 1945 and 1948, human remains representing, at minimum, 19 individuals were collected by Phil Orr during excavations on SNI for the Santa Barbara Museum of Natural History. These human remains were excavated or surface collected from 7 SNI sites—CA-SNI-5 (Orr's 133.5), CA-SNI-7 (Orr's 133.7), CA-SNI-10 (Orr's 133.10), CA-SNI-17 (Orr's 133.15), CA-SNI-21 (Orr's 133.21), Orr's 133.17 and Orr's 133.18. No known individuals were identified. The 17 associated funerary objects, listed as individual or grouped catalogued items, are one abalone shell dish, one large bird radius/ulna, two misc. shells, one lot of Olivella shell beads, one lot of mixed Olivella shell beads and bone points, one string of Olivella shell beads, one lot of shell beads, two spire topped Olivella shell beads, two steatite donut stones, one steatite pendant, and four stone beads.
In the
In 1948, human remains representing, at minimum, two individuals were collected by Phil Orr during excavations at Orr's site number 133.18 (associated state trinomial site number unknown) for the Santa Barbara Museum of Natural History. No known individuals were identified. The one associated funerary object is a lot of shell beads.
In the
In 1959, human remains representing, at minimum, one individual were collected by Thomas Bird and donated to the Santa Barbara Museum of Natural History in 1990.
In the
In 1960, human remains representing, at minimum, two individuals were collected by David Roy Wiser on a construction site near the Department of the Navy's island airstrip and donated to the Santa Barbara Museum of Natural History.
In the
In 1966, human remains representing, at minimum, one individual were collected by U.S. Navy personnel from a site with the Santa Barbara Museum of Natural History Site Number 133.54 (the equivalent Smithsonian trinomial is unknown) and donated to the Santa Barbara Museum of Natural History.
In the
In 1970, human remains representing, at minimum, one individual were donated by Art McHarg to the Santa Barbara Museum of Natural History.
In the
Circa 1900, human remains representing, at minimum, one individual were collected by Margaret Nix and donated to the Southwest Museum. No specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In the
Circa 1926, human remains representing, at minimum, two individuals, were collected by Norman Murdoch and donated to the Southwest Museum in 1976.
In the
Between 1958 and 1960, human remains representing, at minimum, 48 individuals were collected by Bruce Bryan, Charles Rozaire, George Kritzman, and others during Southwest Museum expeditions to SNI. These human remains were excavated or surface collected from nine SNI sites—CA-SNI-11, CA-SNI-12, CA-SNI-16, CA-SNI-38, CA-SNI-41, CA-SNI-47, CA-SNI-51, CA-SNI-55, CA-SNI-97. No known individuals were identified. The 129 associated funerary objects, listed as individual or grouped catalogued items, are divided among the different sites. The four associated funerary objects from SNI-11 are one lot bird bone, one complete small mortar, one lot red ceramic pieces, and one lot tarring pebbles with asphaltum. The 17 associated funerary objects from SNI-12 are one lot Abalone shell beads, one Abalone shell fragment, three Abalone shell pendants, one lot Abalone square shell beads, one lot coral fragments, one limpet shell, one lot miscellaneous shell fragments, three lots Olivella shell beads, two lots sea urchin fragments, one lot snail shells, and two lots Tegula shell fragments. The 25 associated funerary objects from SNI-16 are four lots Abalone shell fragments, one bag misc. shell and faunal, one bag of burnt pebbles, shell fragments and animal bone, one lot Basketry impression soil, two lots Asphaltum fragments, one lot clam or oyster shell fragments, one lot coral fragments, two lots fish bone, two lots Limpet shells, one Oyster shell pendant, one lot rodent bones, two lots sea urchin fragments, one lot shell beads, one lot shell fragments, two lots snail shell fragments, one lot Tegula shell fragments, and one lot whole Olivella beads. The three associated funerary objects from SNI-38 are one lot Abalone shell fragments, one lot unmodified animal bone, and one steatite effigy. The seven associated funerary objects from SNI-41 are one lot Tegula shells, two lots Abalone shell, one lot unmodified animal bones, one lot Chiton shells, one Olivella shell disc bead, and one sandstone object. The 14 associated funerary objects from SNI-47 are one lot barnacle shell, one lot Abalone shells, one lot mussel shells, one Tegula shell, two granite bowl fragments, one Limpet shell, two polished soapstone effigy fragments, one lot red Abalone shells, one sandstone mano, one lot sea urchin fragments, one shell fragment, and one woven sea grass fiber. The 33 associated funerary objects from SNI-51 are one lot of misc. worked and unworked shell, four lots of mixed stone, shell and bone tools, beads, and lithics, with misc. fragments of animal bone and shell, one lot of tarred pebbles with one flake, one clump of soil with sea grass, two lots animal bone, three unmodified animal bones, two lots charcoal, one modified animal bone, two lots burned bone beads with circular incised groove, one lot burned bone tube beads, one lot tube beads, two lots disc-shaped beads, one lot disc-shaped shell beads, one Conus californicus spire-lopped shell bead, one lot disc-shaped stone beads, two lots Mytilus disc-shaped shell beads with centrally-drilled hole, one lot Olivella shell bead blank, one lot Olivella shell beads, one lot red ochre pigment fragments, three lots spire-lopped shell beads, and one lot woven seagrass pieces. The two associated funerary objects from SNI-55, listed as individual or grouped catalogued items, are one lot Abalone shell beads and one lot Olivella shell beads. The 24 associated funerary objects from SNI-97 are two asphaltum fragments, one bag of seagrass cordage and matting with one bone fragment, two bundles of fibers and soil, one lot sea grass cordage, one lot Black Abalone shells, one burned and ground animal bone fragments, one lot of ground animal bone fragment, one lot burned wood fragments, one core hammerstone, one Cowrie shell fragment, one Mussel shell fragment, one lot fish and animal bone, one ground stone fragment, two stone scrapers, two Quartzite flake or pestle fragments, one lot shell beads, one lot shell fragments, one stone hoe or chopper, one lot of unworked pebble and one possible scraper.
In the
Between 1977 and 1984, human remains representing, at minimum, four individuals were collected from sites CA-SNI-11, CA-SNI-12, CA-SNI-13 and CA-SNI-54 by George Kritzman, Fred Reinman, and others during California State University Los Angeles research on SNI and donated to the Southwest Museum at an unknown date.
In the
The 88 associated funerary objects, listed as individual or grouped catalogued items are one lot of undifferentiated animal bone, 81 bone awls, one lot of green abalone fragments, one lot of mussel shell fragments, one coral bead, one lot of sea-matting, cordage and fibers, one shell fragment, and one lot of soil and bone fragments.
In the
The one associated funerary object, listed as an individual catalogued item, is a clam shell.
In the
One additional set of human remains representing, at minimum, 1 individual, that also has no specific information on date of collection/donation or a collector, does have accompanying documentation indicating it was collected from site CA-SNI-11. No known individual was identified. No associated funerary objects are present.
In the
In 1901, human remains representing at minimum, 2 individuals were collected by P.M. Jones and donated to the Lowie Museum of Anthropology (the predecessor of the U.C. Berkeley Phoebe A. Hearst Museum of Anthropology). No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In the
In 1902, human remains representing, at minimum, 24 individuals were collected by Mrs. Blanche Trask during her botanical survey of SNI and donated to the then Lowie Museum of Anthropology. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. The 1 associated funerary object is a large abalone shell lying atop the cranium of the individual human remains cataloged as 382-12-2187.
In the
In the
In the
The human remains were originally donated through the U.C. Museum of Paleontology.
In the
In 1953, human remains representing, at minimum, two individuals (two adult females) were possibly collected by Clement Meighan and Hal Eberhart from site CA-SNI-56/18A. No known individuals were identified. One associated funerary object was collected, a spool-shaped object made from a whale vertebra.
In 1956, human remains representing, at, minimum one individual (an adult female) was surface collected from San Nicolas Island and brought into the UCLA Dickey Biology collections. It was transferred to the Fowler Museum in 1993 for NAGPRA inventory. No known individual was identified. No associated funerary objects are present.
In 1960, human remains representing, at minimum one individual (an infant), was surface collected from San Nicolas Island by Sam-Joe Townsend & S. Rootenberg without further provenience information. No known individual was identified. No associated funerary objects are present.
In the 1930s, human remains representing, at minimum, four individuals were collected by an individual named Howard Arden Edwards of the Antelope Valley Museum. The human remains were transferred to the Natural History Museum of Los Angeles County by Grace Oliver of the Antelope Valley Museum in 1979. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In an unknown year, human remains representing, at minimum, 20 individuals were collected by Roy Moodie and later donated to the Natural History Museum of Los Angeles County in 1970. No specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In an unknown year, human remains representing, at minimum, one individual were donated by S.C. Evans to the Natural History Museum of Los Angeles County. No specific provenience information beyond their SNI origin exists for these human remains. No known individuals were identified. No associated funerary objects are present.
In 1991, human remains representing, at minimum, one individual were collected by Dana Bleitz in a caliche soil sample from CA-SNI-351; the embedded human remains were only identified when the sample was being cleaned ca. 2015. No known individuals were identified. No associated funerary objects are present.
In 1999, human remains representing, at minimum, one individual were collected by CSU Los Angeles during excavation of a historic-period Chinese abalone site, CA-SNI-323H. No known individuals were identified. No associated funerary objects are present.
In 2005, human remains representing, at minimum, one individual were collected by CSULA from CA-SNI-238; but were only identified when unsorted screened material was processed by Far Western Anthropological Research Group, Inc., in 2013. No known individuals were identified. No associated funerary objects are present. Documentation indicates theses human remains were transferred to the San Nicolas Island Curation Facility. These human remains have been missing since 2013.
In 2006, human remains representing, at minimum, one individual were collected by California State University, Fullerton from CA-SNI-503; only identified when previously unsorted screened material was processed by Far Western Anthropological Research Group, Inc. in 2013. No known individuals were identified. No associated funerary objects are present. Documentation
NAGPRA items in collections at the SNI Curation Facility include two funerary objects associated with human remains located at the Fowler Museum at UCLA and reported in subparagraph (i) of this notice. These associated funerary objects, listed as grouped catalogued items, are one lot of spire-lopped shell beads and one lot of bird bone beads that was collected by Sam-Joe Townsend and Fred Reinman in 1959 at sites SNI-14 and SNI-15 as part of the UCLA Archeological Survey.
On an unknown date, human remains representing, at minimum, one individual who had been cremated, were collected from SNI and donated to the San Diego Museum of Man. They were identified during a comprehensive inventory of storage areas. No specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In 1917, human remains representing, at minimum, one individual were collected by an unknown individual and accessioned by the Santa Barbara Museum of Natural History in 2014. No specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In the 1950s, human remains representing, at minimum, two individuals were collected by an unnamed geologist and later given to a local Chumash individual, who donated them to the Santa Barbara Museum of Natural History in 2000. No specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In 1976, human remains representing, at minimum, one individual were collected by R. Russell and initially given to Channel Islands National Park, who then conveyed them to the Santa Barbara Museum of Natural History. No primary documentation or specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
In 1976, human remains representing, at minimum, two individuals were surface collected by an unknown individual and donated to the Santa Barbara Museum of Natural History. No specific provenience information beyond their SNI origin exists for these human remains. No known individual was identified. No associated funerary objects are present.
Navy-controlled NAGPRA items at the Santa Barbara Museum of Natural History also include human remains representing, at minimum, three individuals, that have information on the date of donation (1976, 1992 and 1998, respectively), but lack the name of the collectors or site provenience beyond their SNI origin. No known individual was identified. No associated funerary objects are present.
In 1993, human remains representing, at minimum, one individual were collected by California State University, Fullerton from CA-SNI-38; but were only identified when previously uncatalogued material was cataloged by the Navy Region Southwest Curation Specialist in 2018. The collection was curated at the Naval Base Ventura County (NBVC) San Nicolas Island Curation Facility from the time of excavation until it was transferred to the NAWS China Lake Curation Facility in 2016. No known individuals were identified. The 32 associated funerary objects, listed as individual or grouped catalogued items, are one piece of porphyritic metavolcanic debitage, one piece of metavolcanic debitage, three lots Balanus sp., three lots charcoal, two lots Cirripedia, one lot Decapoda sp., one lot Haliotis cracherodii, one lot Haliotis sp., one lot Helix sp., one lot Lottia gigantea, two lots Mytilus californianus, one lot red ochre, one lot Olivella biplicata, three lots pisces (undiff.), one lot pisces vertebrae, one lot Septifer bifurcates, six lots Strongylocentrotus sp., one lot Tegula sp., and one lot vermitidae.
In the
Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of 547 individuals of Native American ancestry.
In the
Pursuant to 25 U.S.C. 3001(3)(A), the 1,017 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
In the
Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the Native American human remains and associated funerary objects and the Pauma Band of Luiseño Mission Indians of the Pauma & Yuima Reservation, California; Pechanga Band of Luiseño Mission Indians of the Pechanga Reservation, California; Rincon Band of Luiseño Mission Indians of the Rincon Reservation, California; and the Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation, California, hereafter referred to as “The Tribes.”
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Mr. Joseph Montoya, Environmental Planning and Conservation Branch Manager, Naval Base Ventura County, 311 Main Road, Building 1, Code N45V, Point Mugu, CA 93042, telephone (805) 989-3804, email
The Department of the Navy is responsible for notifying The Tribes that this notice has been published.
National Park Service, Interior.
Notice.
Marshall University has completed an inventory of human remains and associated funerary objects, in consultation with the appropriate Indian Tribes or Native Hawaiian organizations, and has determined that there is no cultural affiliation between the human remains and associated funerary objects and any present-day Indian Tribes or Native Hawaiian organizations. Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request to Marshall University. If no additional requestors come forward, transfer of control of the human remains and associated funerary objects to the Indian Tribes or Native Hawaiian
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Marshall University at the address in this notice by December 19, 2018.
Jendonnae Houdyschell, Associate General Counsel, Marshall University, One John Marshall Drive, Huntington, WV 25755-1060, telephone (304) 696-6704, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains and associated funerary objects under the control of Marshall University, Huntington, WV. The human remains and associated funerary objects were removed from the Clover Site (46-CB-40), Cabell County, WV; Snidow Site (46-MC-1 and 46-MC-1/3), Mercer County, WV; Parkersburg, Wood County, WV; and 44-TZ-6, Tazewell County, VA.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3) and 43 CFR 10.11(d). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by Marshall University professional staff in consultation with representatives of the Absentee-Shawnee Tribe of Indians of Oklahoma; Cheyenne River Sioux Tribe of the Cheyenne River Sioux Reservation, South Dakota; Delaware Tribe of Indians; Eastern Shawnee Tribe of Oklahoma; Kaw Nation, Oklahoma; Onondaga Nation; Saginaw Chippewa Indian Tribe of Michigan; Seneca Nation of Indians (previously listed as the Seneca Nation of New York); Seneca-Cayuga Nation (previously listed as the Seneca-Cayuga Tribe of Oklahoma); The Osage Nation (previously listed as the Osage Tribe); and Tonawanda Band of Seneca (previously listed as the Tonawanda Band of Seneca Indians of New York). The Haudenosaunee Standing Committee on Burial Rules and Regulations, Acting Chair (and Tonawanda Band of Seneca NAGPRA representative) also participated in the consultation on behalf of the other member Tribes, which are the Cayuga Nation; Onondaga Nation; Saint Regis Mohawk Tribe (previously listed as the St. Regis Band of Mohawk Indians of New York); Seneca Nation of Indians (previously listed as the Seneca Nation of New York); and the Tuscarora Nation.
An invitation to consult was extended to the Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation, Wisconsin; Bay Mills Indian Community, Michigan; Catawba Indian Nation (aka Catawba Tribe of South Carolina); Cayuga Nation; Cherokee Nation; Chickahominy Indian Tribe; Chickahominy Indian Tribe—Eastern Division; Chippewa Cree Indians of the Rocky Boy's Reservation, Montana (previously listed as the Chippewa-Cree Indians of the Rocky Boy's Reservation, Montana); Delaware Nation, Oklahoma; Delaware Tribe of Indians; Eastern Band of Cherokee Indians; Grand Traverse Band of Ottawa and Chippewa Indians, Michigan; Keweenaw Bay Indian Community, Michigan; Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin; Lac du Flambeau Band of Lake Superior Chippewa Indians of the Lac du Flambeau Reservation of Wisconsin; Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan; Minnesota Chippewa Tribe, Minnesota (Six component reservations: Bois Forte Band (Nett Lake); Fond du Lac Band; Grand Portage Band; Leech Lake Band; Mille Lacs Band; White Earth Band); Monacan Indian Nation; Nansemond Indian Tribe; Omaha Tribe of Nebraska; Oneida Nation (previously listed as the Oneida Tribe of Indians of Wisconsin); Oneida Indian Nation (previously listed as the Oneida Nation of New York); Pamunkey Indian Tribe; Ponca Tribe of Indians of Oklahoma; Ponca Tribe of Nebraska; Rappahannock Tribe, Inc.; Red Cliff Band of Lake Superior Chippewa Indians of Wisconsin; Red Lake Band of Chippewa Indians, Minnesota; Saint Regis Mohawk Tribe (previously listed as the St. Regis Band of Mohawk Indians of New York); Sault Ste. Marie Tribe of Chippewa Indians, Michigan; Shawnee Tribe; Sokaogon Chippewa Community, Wisconsin; St. Croix Chippewa Indians of Wisconsin; Stockbridge Munsee Community, Wisconsin; The Quapaw Tribe of Indians; Tunica-Biloxi Indian Tribe; Turtle Mountain Band of Chippewa Indians of North Dakota; Tuscarora Nation; United Keetoowah Band of Cherokee Indians in Oklahoma; Upper Mattaponi Tribe; and the Wyandotte Nation. These Tribes either did not consult or engaged in limited communication.
Hereafter, all tribes listed in this section are referred to as “The Consulted and Notified Tribes.”
From 1984 through 1986, and again from 1988 through 1989, human remains representing, at minimum, six individuals were removed from the Clover Site (46-CB-40) in Cabell County, WV. The human remains and associated funerary objects were excavated by the Marshall University Archaeological Field School and brought to Marshall University for curation and research. At the time of the excavation, the land was privately owned, it is now owned by the United States. The human remains represent one female aged 12-15 years from Feature 2; one individual (sex indeterminate) aged 14-18 months from Feature 3; one female aged 19-20 years from Feature 4; one male aged 25-26 years from Feature 9; one individual (likely female) more than 25 years old from Feature 21; and one male aged 17-18 years from Feature 27. No known individuals were identified. The 53 associated funerary objects are: One antler flaker, two bone beads, one cannel coal claw pendant, nine lots ceramic sherds, one shell-tempered ceramic vessel, nine chert bifaces, one lump fired clay, one lot C-14 samples, one copper hair ornament, one lot ground stone, eight lots mixed materials, five lots soil samples, three lots faunal material, two lots shell, one mussel shell necklace, one piece worked hematite, two pieces worked shell, one sandstone whetstone, two shell beads, and one stone axe.
In the mid-1970s, and again in 1988 and 1989, human remains representing, at minimum, 26 individuals were removed from the Snidow Site (46-MC-1) and an adjacent site (46-MC-1/3) in Mercer County, WV. In the 1970s, the Sidnow Site was excavated by a member of the West Virginia Archaeological Society. The finds were brought to Marshall University for study and were later donated to Marshall University. In 1988 and 1989, the Snidow Site was excavated by the Marshall University Archaeological Field School. The human remains were brought to Marshall University for curation and research. On an unknown date, Marshall University sent the human remains belonging to one individual that were removed from Feature 213 at the Snidow Site and the human remains
On an unknown date, human remains representing, at minimum, one individual are believed to have been removed from Parkersburg, on the Ohio River, in Wood County, WV. In the 1980s, a display case containing these human remains and unrelated cultural items was donated to the Marshall University by the Huntington Museum of Art. The human remains represent one male aged 24-27. No known individuals were identified. No associated funerary objects are present.
Sometime prior to 1996, human remains representing, at minimum, one individual were removed from the Hogue Site (44-TZ-6) in Tazewell County, VA. The human remains were found in an archeology collection that was donated to Marshall University by a vocational archeologist accessioned by the University in 1996. The human remains are from Burial 32 (Feature 212), and are of indeterminate sex and age. No known individuals were identified. No associated funerary objects are present.
Officials of Marshall University have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice are Native American based on archeological context (Clover and Snidow Sites); the surface wear and coloration of the bone, provenience, and the similarity of the human remains to those from the Clover site, a Late Prehistoric site (Parkersburg site); and the preservation of the bones (Site 44-TZ-6).
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of a minimum of 34 individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A), the 107 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), a relationship of shared group identity cannot be reasonably traced between the Native American human remains and associated funerary objects and any present-day Indian Tribe.
• Treaties, Acts of Congress, or Executive Orders, indicate that the land from which the Native American human remains and associated funerary objects were removed is the aboriginal land of the Absentee-Shawnee Tribe of Indians of Oklahoma; Cayuga Nation; Cherokee Nation; Chickahominy Indian Tribe; Chickahominy Indian Tribe—Eastern Division; Delaware Nation, Oklahoma; Delaware Tribe of Indians; Eastern Band of Cherokee Indians; Eastern Shawnee Tribe of Oklahoma; Monacan Indian Nation; Nansemond Indian Tribe; Oneida Nation (previously listed as the Oneida Tribe of Indians of Wisconsin); Oneida Indian Nation (previously listed as the Oneida Nation of New York); Onondaga Nation; Pamunkey Indian Tribe; Rappahannock Tribe, Inc.; Saint Regis Mohawk Tribe (previously listed as the St. Regis Band of Mohawk Indians of New York); Seneca Nation of Indians (previously listed as the Seneca Nation of New York); Seneca-Cayuga Nation (previously listed as the Seneca-Cayuga Tribe of Oklahoma); Shawnee Tribe; Stockbridge Munsee Community, Wisconsin; Tonawanda Band of Seneca (previously listed as the Tonawanda Band of Seneca Indians of New York); Tuscarora Nation; United Keetoowah Band of Cherokee Indians in Oklahoma; Upper Mattaponi Tribe; and the Wyandotte Nation.
• Other authoritative government sources indicate that the land from which the Native American human remains and associated funerary objects were removed is the aboriginal land of the Bad River Band of Lake Superior Tribe of Chippewa Indians of the Bad River Reservation, Wisconsin; Bay Mills Indian Community, Michigan; Catawba Indian Nation (aka Catawba Tribe of South Carolina); Cheyenne River Sioux Tribe of the Cheyenne River Sioux Reservation, South Dakota; Chippewa Cree Indians of the Rocky Boy's Reservation, Montana (previously listed as the Chippewa-Cree Indians of the Rocky Boy's Reservation, Montana); Grand Traverse Band of Ottawa and Chippewa Indians, Michigan; Kaw Nation, Oklahoma; Keweenaw Bay Indian Community, Michigan; Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin; Lac du Flambeau Band of Lake Superior Chippewa Indians of the Lac du Flambeau Reservation of Wisconsin; Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan; Minnesota Chippewa Tribe, Minnesota (Six component reservations: Bois Forte Band (Nett Lake); Fond du Lac Band; Grand Portage Band; Leech Lake Band; Mille Lacs Band; White Earth Band); Omaha Tribe of Nebraska; Ponca Tribe of Indians of Oklahoma; Ponca Tribe of Nebraska; Red Cliff Band of Lake Superior Chippewa Indians of Wisconsin; Red Lake Band of Chippewa Indians, Minnesota; Saginaw Chippewa Indian Tribe of Michigan; Saint Regis Mohawk Tribe (previously listed as the St. Regis Band of Mohawk Indians of New York); Sault Ste. Marie Tribe of Chippewa Indians, Michigan; Sokaogon
• Pursuant to 43 CFR 10.11(c)(1), the disposition of the human remains and associated funerary objects may be to The Consulted and Notified Tribes.
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Jendonnae Houdyschell, Associate General Counsel, Marshall University, One John Marshall Drive, Huntington, WV 25755-1060, telephone (304) 696-6704, email
Marshall University is responsible for notifying The Consulted and Notified Tribes that this notice has been published.
National Park Service, Interior.
Notice; correction.
The U.S. Department of the Interior, Bureau of Land Management, Utah State Office has corrected an inventory of human remains and associated funerary objects, published in a Notice of Inventory Completion in the
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the Bureau of Land Management, Utah State Office at the address in this notice by December 19, 2018.
Diana Barg, Museum Collections Manager, Bureau of Land Management, 440 W 200 S Suite 500, Salt Lake City, UT 84101, telephone (801) 539-4214, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the correction of an inventory of human remains and associated funerary objects under the control of the U.S. Department of the Interior, Bureau of Land Management, Utah State Office, Salt Lake City, UT. The human remains and associated funerary objects were removed from multiple locations in Washington and Kane Counties, UT.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
This notice corrects the minimum number of individuals published in a Notice of Inventory Completion in the
In the
In 1983, human remains representing a minimum of one individual were removed from site 42Ws392 during legally authorized data recovery efforts as part of the Quail Creek Mitigation Project, Washington County, UT. No known individual was identified. No associated funerary objects are present.
In the
Based on ceramic and architectural styles, site organization, and other archeological information, site 42Ws392 has been identified as a multicomponent Pueblo I and late Pueblo II period occupation site. The site has been assigned to the archeologically defined culture known as Virgin Anasazi, a specific regional manifestation of Puebloan culture.
In the
In 1979, human remains representing a minimum of four individuals were removed from site 42Ws969 Washington County, UT, during legally authorized excavations undertaken by the Southern Utah University Field School.
In the
Officials of the U.S. Department of the Interior, Bureau of Land Management, Utah State Office have determined that, pursuant to 25 U.S.C. 3001 (9-10), the human remains described above represent the physical remains of 12 individuals of Native American ancestry.
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Diana Barg, Museum Collections Manager, Bureau of Land Management, 440 W 200 S Suite 500, Salt Lake City, UT 84101, telephone (801) 539-4214, email
The Bureau of Land Management, Utah State Office is responsible for notifying the Hopi Tribe of Arizona that this notice has been published.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to rescind the limited exclusion order and cease and desist orders issued in this investigation based upon settlement.
Panyin Hughes, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-3042. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. General information concerning the Commission may also be obtained by accessing its internet server at
The Commission instituted Inv. No. 337-TA-1046 on April 12, 2017, based on a complaint filed by Macronix International Co., Ltd. of Hsin-chu, Taiwan and Macronix America, Inc. of Milpitas, California (collectively, “Macronix”). 82 FR 17687-88 (Apr. 12, 2017). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain non-volatile memory devices and products containing the same that infringe certain claims of U.S. Patent No. 6,552,360; U.S. Patent No. 6,788,602 (“the '602 patent”); and U.S. Patent No. 8,035,417. The Notice of Investigation named the following respondents: Toshiba Corporation of Tokyo, Japan; Toshiba America, Inc. of New York, New York; Toshiba America Electronic Components, Inc. of Irvine, California; Toshiba America Information Systems, Inc. of Irvine, California; and Toshiba Information Equipment (Philippines), Inc. of Binan, Philippines (collectively, “Toshiba”). The Office of Unfair Import Investigations was also named as a party to the investigation.
On June 16, 2017, the Commission determined not to review the ALJ's order (Order No. 11) granting an unopposed motion to amend the Notice of Investigation to add Toshiba Memory Corporation of Tokyo, Japan as a respondent.
On April 13, 2018, the ALJ issued her final initial determination finding no violation of section 337 violation with respect to the asserted patents. On June 28, 2018, the Commission determined to review the final ID in part.
On October 15, 2018, Macronix and Toshiba filed a joint petition to rescind the LEO and CDOs based upon a license and settlement agreement. The petition states that rescission is warranted because “the specific conduct covered by the Remedial Orders has become authorized or licensed by way of settlement and license.” Petition at 2. On October 25, 2018, the Commission investigative attorney filed a response in support of the petition. No other party filed response or opposition to the petition.
In view of the settlement agreement between Macronix and Toshiba, the Commission finds that the conditions justifying the remedial orders no longer exist, and therefore, granting the petition is warranted under 19 U.S.C. 1337(k) and 19 CFR 210.76(a). Accordingly, the Commission has determined to rescind the remedial orders.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
The proposed information collection was previously published in the
If you have additional comments, particularly with respect to the estimated public burden or associated response time, have suggestions, need a copy of the proposed information collection instrument with instructions, or desire any additional information, please contact Jason Lynch, United States Bomb Data Center (USBDC) either by mail at 3750 Corporal Road, Redstone Arsenal, AL 35898, by email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
5.
6.
If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
On November 9, 2018, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the District of South Carolina in the lawsuit entitled
This case involves claims for natural resource damages under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601
The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined and downloaded at this Justice Department website:
Please enclose a check or money order for $27.00 (25 cents per page reproduction cost) payable to the United States Treasury.
Occupational Safety and Health Administration (OSHA), Labor.
Renewal of the ACCSH charter.
The Secretary of Labor (Secretary) has renewed the charter for ACCSH.
Mr. Damon S. Bonneau, OSHA Directorate of Construction, Occupational Safety and Health Administration; telephone (202) 693-2020 (TTY (877) 889-5627); email:
The Secretary has renewed the ACCSH
Congress established ACCSH in Section 107 of the Contract Work Hours and Safety Standards Act (Construction Safety Act (CSA)) (40 U.S.C. 3704(d)(4)), to advise the Secretary in the formulation of construction safety and health standards as well as on policy matters arising under the CSA and the Occupational Safety and Health Act of 1970 (OSH Act) (29 U.S.C. 651
ACCSH operates in accordance with the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2), its implementing regulations (41 CFR part 102-3), OSHA's regulations on ACCSH (29 CFR part 1912), Secretary of Labor's Order 04-2018 (83 FR 35680, 7/27/18), and Chapter 1600 of Department of Labor Manual Series 3 (7/18/2016). Pursuant to FACA (5 U.S.C. App. 2, 14(b)(2)), the ACCSH charter must be renewed every two years.
The new charter updates the procedures for appointment of individuals to Department of Labor advisory committees.
The Legal Services Corporation's Board of Directors will meet telephonically on November 26, 2018. Immediately following the Board of Directors telephonic meeting, the Audit and Finance Committees will hold a combined closed telephonic meeting. The meetings will commence at 2:00 p.m., EST, and will continue until the conclusion of the combined Committees' agenda.
John N. Erlenborn Conference Room, Legal Services Corporation Headquarters, 3333 K Street NW, Washington, DC 20007.
Members of the public who are unable to attend in person but wish to listen to the public proceedings may do so by following the telephone call-in directions provided below.
• Call toll-free number: 1-866-451-4981;
• When prompted, enter the following numeric pass code: 5907707348;
• When connected to the call, please immediately “MUTE” your telephone.
Members of the public are asked to keep their telephones muted to eliminate background noises. To avoid disrupting the meeting, please refrain from placing the call on hold if doing so will trigger recorded music or other sound. From time to time, the Chair may solicit comments from the public.
Katherine Ward, Executive Assistant to the Vice President & General Counsel, at (202) 295-1500. Questions may be sent by electronic mail to
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Human Exploration and Operations Committee of the NASA Advisory Council (NAC). This Committee reports to the NAC.
Thursday December 6, 2018, 8:30 a.m. to 4:30 p.m.; and Friday, December 7, 2018, 8:00 a.m. to 11:00 a.m., Eastern Time.
NASA Headquarters, Glennan Conference Center, Room 1Q39, 300 E Street SW, Washington, DC 20546.
Dr. Bette Siegel, Designated Federal Officer, Human Exploration and Operations Mission Directorate, NASA Headquarters, Washington, DC 20546, (202) 358-2245, or
The meeting will be open to the public up to the seating capacity of the room. This meeting will also available telephonically and by WebEx. You must use a touch-tone phone to participate in this meeting. Any interested person may dial the toll free access number 1-888-324-9238 or toll access number 1-517-308-9132, passcode 3403297 followed by the # sign, on both days, to participate in this meeting by telephone.
The agenda for the meeting includes the following topics:
Attendees will be required to sign a register and comply with NASA security requirements, including the presentation of a valid picture ID before receiving access to NASA Headquarters. Foreign nationals attending this meeting will be required to provide a copy of their passport and visa in addition to providing the following information no less than 10 days prior to the meeting: Full name; gender; date/place of birth; citizenship; passport information (number, country, telephone); visa information (number, type, expiration date); employer/affiliation information (name of institution, address, country, telephone); title/position of attendee to Dr. Bette Siegel via email at
National Aeronautics and Space Administration (NASA).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, and the President's 2004 U.S. Space-Based Positioning, Navigation, and Timing (PNT) Policy, the National Aeronautics and Space Administration (NASA) announces a meeting of the National Space-Based Positioning, Navigation, and Timing (PNT) Advisory Board.
Wednesday, December 5, 2018, from 9:00 a.m. to 5:00 p.m.; and Thursday, December 6, 2018, from 9:00 a.m. to 1:00 p.m., Local Time.
Crowne Plaza Redondo Beach, 300 North Harbor Drive, Redondo Beach, CA 90277.
Mr. James J. Miller, Designated Federal Officer, Human Exploration and Operations Mission Directorate, NASA Headquarters, Washington, DC 20546, phone (202) 358-4417, fax (202) 358-4297, or email
The meeting will be open to the public up to the seating capacity of the room. It is imperative that the meeting be held on these dates to accommodate the scheduling priorities of the key participants. Visitors will be requested to sign a visitor's register. The agenda for the meeting includes the following topics:
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Technology, Innovation and Engineering Committee of the NASA Advisory Council (NAC). This Committee reports to the NAC.
Friday, December 7, 2018, 8:00 a.m.-4:30 p.m., Eastern Time.
NASA Headquarters, Room 6H41, 300 E Street SW, Washington, DC 20546.
Mr. Mike Green, Designated Federal Officer, Space Technology Mission Directorate, NASA Headquarters, Washington, DC 20546, (202) 358-4710, or
The meeting will be open to the public up to the seating capacity of the room. This meeting will also available telephonically and by WebEx. You must use a touch-tone phone to participate in this meeting. Any interested person may dial the toll free access number 1-844-467-6272, passcode: 102421 followed by the # sign to participate in this meeting by telephone. NOTE: If dialing in, please “mute” your phone. The WebEx link is
Attendees will be required to sign a register and to comply with NASA security requirements including the presentation of a valid picture ID before receiving access to NASA Headquarters. Foreign nationals attending this meeting will be required to provide a copy of their passport and visa in addition to providing the following information no less than 10 working days prior to the meeting: Full name; gender; date/place of birth; citizenship; visa information (number, type, expiration date); passport information (number, country, expiration date); employer/affiliation information (name of institution, address, country, telephone); title/position of attendee; and home address to Ms. Anyah Dembling via email at
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Heliophysics Advisory Committee (HPAC). This Committee functions in an advisory capacity to the Director, Heliophysics Division, in the NASA Science Mission Directorate. The meeting will be held for the purpose of soliciting, from the science community and other persons, scientific and technical information relevant to program planning.
Tuesday, December 18, 2018, from 9:30 a.m.-5 p.m.; Wednesday, December 19, 2018, from 9 a.m.-5 p.m.; and Thursday, December 20, 2018, from 9 a.m.-1 p.m., Eastern Time.
NASA Headquarters, Room 1Q39, 300 E Street SW, Washington, DC 20546.
Ms. KarShelia Henderson, Science Mission Directorate, NASA Headquarters, Washington, DC 20546, (202) 358-2355, fax (202) 358-2779, or
This meeting will be open to the public up to the capacity of the room. This meeting will also be available telephonically and via WebEx. You must use a touch-tone phone to participate in this meeting. Any interested person may dial the USA toll free conference call number 1-888-809-8966 or toll number 1-210-234-8402, passcode 2100562, followed by the # sign, to participate in this meeting by telephone on all three days. The WebEx link is
The agenda for the meeting includes the following topics:
Attendees will be requested to sign a register and to comply with NASA Headquarters security requirements, including the presentation of a valid picture ID to Security before access to NASA Headquarters. Foreign nationals attending this meeting will be required to provide a copy of their passport and visa in addition to providing the following information no less than 10 days prior to the meeting: Full name; gender; date/place of birth; citizenship; passport information (number, country, telephone); visa information (number, type, expiration date); employer/affiliation information (name of institution, address, country, telephone); title/position of attendee. To expedite admittance, attendees with U.S. citizens and Permanent Residents (green card holders) are requested to provide full name and citizenship status no less than 3 working days in advance by contacting Ms. KarShelia Henderson via email at
National Credit Union Administration (NCUA).
Notice.
The National Credit Union Administration (NCUA) will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice.
Comments should be received on or before December 19, 2018 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of this information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by contacting Dawn Wolfgang at (703) 548-2279, emailing
The financial and statistical information is essential to NCUA in carrying out its responsibility for supervising federal credit unions. The information also enables NCUA to monitor all federally insured credit unions with National Credit Union Share Insurance Fund (NCUSIF) insured share accounts.
By Gerard Poliquin, Secretary of the Board, the National Credit Union Administration, on November 14, 2018.
National Credit Union Administration (NCUA).
Notice and request for comment.
The National Credit Union Administration (NCUA), as part of a continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the following renewal of a currently approved collection, as required by the Paperwork Reduction Act of 1995.
Written comments should be received on or before January 18, 2019 to be assured consideration.
Interested persons are invited to submit written comments on the information collection to Dawn Wolfgang, National Credit Union Administration, 1775 Duke Street, Suite 5080, Alexandria, Virginia 22314; Fax No. 703-519-8579; or Email at
Requests for additional information should be directed to the address above or Dawn Wolfgang at 703-548-2279.
By Gerard Poliquin, Secretary of the Board, the National Credit Union Administration, on November 14, 2018.
In accordance with the Federal Advisory Committee Act (Pub. L. 92- 463, as amended), the National Science Foundation (NSF) announces the following meeting:
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
Advisory Committee for Computer and Information Science and Engineering (CISE) (1115).
December 11, 2018: 8:30 a.m. to 4:30 p.m.
National Science Foundation, 2415 Eisenhower Avenue, Room E2030, Alexandria, VA 22314.
Open.
KaJuana Mayberry, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; Telephone: 703-292-8900.
To advise NSF on the impact of its policies, programs and activities on the CISE community. To provide advice to the Assistant Director for CISE on issues related to long-range planning, and to form ad hoc subcommittees and working groups to carry out needed studies and tasks.
National Science Foundation.
Notice of availability.
The National Science Foundation (NSF) announces the availability of the Final Environmental Impact Statement (FEIS) for Sacramento Peak Observatory, Sunspot, NM. This Final EIS identifies and analyzes the potential environmental consequences of the following alternatives:
The National Science Foundation will execute a Record of Decision no sooner than 30 days after the date of publication of the Notice of Availability published in the
The Final EIS is made available for public inspection online at
Ms. Elizabeth Pentecost, Re: Sacramento Peak Observatory, 2415 Eisenhower Avenue, Room W9152, Alexandria, VA 22314,
Sacramento Peak Observatory is located in Sunspot, New Mexico, within the Lincoln National Forest in the Sacramento Mountains. Established by the U.S. Air Force via a memorandum of agreement with the U.S. Forest Service in 1950, the facility was transferred to NSF in 1976. NSF and the U.S. Forest Service executed a land use agreement (signed in 1980) to formalize this transition and the continued use of the land for the Observatory. The primary research facility in operation at the Sacramento Peak site is the Richard B. Dunn Solar Telescope (DST), currently managed by the National Solar Observatory (NSO). The DST is a high-spatial resolution optical/infrared solar telescope.
Through a series of academic community-based and portfolio reviews, NSF identified the need to divest several facilities from its portfolio in order to retain the balance of capabilities needed to deliver the best performance on the key science of the present decade and beyond. In 2016, NSF completed a feasibility study to inform and define options for the site's future disposition that would involve significantly decreasing or eliminating NSF funding of the Sacramento Peak Observatory. NSF issued a Notice of Intent to prepare an EIS on July 5, 2016, held scoping meetings on July 21, 2016, and held a 30-day public comment period that closed on August 5, 2016.
The Draft EIS was made available for public review and comment from February 8 through March 26, 2018. The full Draft EIS was also posted on the NSF, Division of Astronomical Sciences website (
In accordance with the Federal Advisory Committee Act (Pub., L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
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This Notice will be published in the
Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to relocate Rule 1809(f) (“SPIKES Index Options Settlement”) and Rule 1809, Interpretations and Policies .06 (“SPIKES Special Settlement Auction”) into Rule 503, Openings on the Exchange, new Interpretations and Policies .02 and .03.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt new Interpretations and Policies .02, to Rule 503 (“Openings on the Exchange”), in order to relocate existing Exchange Rule 1809(f), SPIKES Index Options Settlement, to Rule 503. The Exchange also proposes to adopt new Interpretations and Policies .03, to Rule 503, in order to similarly relocate existing Exchange Rule 1809, Interpretations and Policies .06, SPIKES Special Settlement Auction. This proposal seeks to better organize the rules of the Exchange in order to make the rules easier to read and to ensure that these rules apply only to MIAX Options. The Exchange notes that the changes proposed herein are non-substantive rule changes, and do not modify the application the rules which the Exchange proposes to relocate.
The Exchange notes, by way of background, that on June 28, 2018, the Exchange filed with the Commission a proposal to list and trade on the Exchange, options on the SPIKES
The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act
The Exchange believes the proposed change promotes just and equitable principles of trade and removes impediments to and perfects the mechanism of a free and open market and a national market system because the proposed rule change improves the way the Exchange's rulebook is organized, making it easier to read, and avoids confusion by moving rules which are not applicable to the Exchange's affiliate, MIAX PEARL, into a different chapter of rules which is not incorporated by reference into to the rules of MIAX PEARL, therefore, helping market participants to better understand the rules of the Exchange and of its affiliate. The Exchange notes that the proposed change does not alter the application of each rule. As such, the proposed amendment would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national exchange system. In particular, the Exchange believes that the proposed change will provide greater clarity to Members
MIAX Options 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 will have no impact on competition as it is not designed to address any competitive issues but rather is designed to add additional clarity to existing rules and to make a non-substantive change by relocating the rules to a different chapter in the Exchange's rulebook.
The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition as the Rules apply equally to all Exchange Members.
Written comments were neither solicited nor received.
Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend the Volume Incentive Program.
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 the Volume Incentive Program (“VIP”).
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes the proposed amendment to VIP is reasonable because it makes it slightly easier for TPHs to meet the qualifying criteria to receive the Complex credits and notes that no credit amounts are changing. The Exchange notes that VIP will continue to provide an incremental incentive for TPHs to strive for the highest tier level, which provides increasingly higher credits, for both Complex and Simple volume. The Exchange believes the proposed change is equitable and not unfairly discriminatory because the proposed applies to all TPHs uniformly.
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. In particular, the Exchange believes the proposed change does not impose a burden on intramarket competition because it applies uniformly to all TPHs and continues to incentivize the sending of more simple and complex orders to the Exchange, which provides greater liquidity and trading opportunities.
The Exchange believes that the proposed rule change will not cause an unnecessary burden on intermarket competition because the proposed rule change only affects trading on the Exchange. To the extent that the proposed changes make the Exchange a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to 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 August 27, 2018, The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its rules to permit the initial and continued listing of non-convertible corporate debt securities (“bonds” or “non-convertible bonds”) on Nasdaq and to establish fees for listing those bonds.
For the initial listing of a non-convertible bond, the Exchange proposes to require that the following conditions be satisfied: (1) The principal amount outstanding or market value must be at least $5 million;
The Exchange proposes the following requirements for the continued listing of a non-convertible bond: (1) The market value or principal amount of non-convertible bonds outstanding is at least $400,000;
The Exchange proposes to amend its current Rule 5810(c)(3) to provide that the failure of an issuer of a non-convertible bond to meet the $400,000 public float requirement stipulated above for a period of 30 consecutive business days will constitute a deficiency. In such an event, the Exchange's Listings Qualifications Department will promptly notify the deficient issuer, and the issuer will have a period of 180 calendar days from such notification to regain compliance. Compliance will be deemed to be regained by meeting the $400,000 public
The Exchange also proposes to amend its current Rule 5810(c)(1) to provide that the failure of an issuer to meet its obligations on the non-convertible bonds, as determined by the Exchange's Listings Qualifications Department, would result in immediate suspension and the commencement of delisting proceedings.
In addition to the proposed quantitative requirements for listing non-convertible bonds, the issuer of listed bonds would have to comply with other requirements that are generally applicable to companies listed on Nasdaq pursuant to Rule 5250 (Obligations for Companies Listed on The Nasdaq Stock Market).
In addition to the Exchange's rules that would apply to issuers of non-convertible bonds that list on Nasdaq,
Finally, the Exchange proposes to make a non-substantive change to its current Rule 5515(b)(4) to replace references to the American Stock Exchange with NYSE American.
The Exchange proposes to impose a non-refundable application fee of $5,000 to list a class of non-convertible bonds.
The Exchange also proposes to impose an annual fee of $5,000 on the issuer of each class of non-convertible bonds listed pursuant to Rule 5702.
The Exchange also proposes to clarify rule text relating to listing fees for convertible bonds.
In conjunction with the Exchange's proposal to adopt listing rules for non-convertible bonds, the Exchange is proposing to trade such listed non-convertible bonds on an electronic system (“Nasdaq Bond Exchange”) and is proposing rules to govern such trading.
The Exchange proposes to allow Users
The minimum unit of trading on the Nasdaq Bond Exchange will be one non-convertible bond unless the issuer otherwise specifies a larger minimum unit of trading in the bond indenture agreement.
To post an order in a particular bond on the Nasdaq Bond Exchange, a User will be required to enter certain basic information including CUSIP number, order quantity, order type (
The Nasdaq Bond Exchange will be an electronic order-driven matching system.
The Nasdaq Bond Exchange will provide an exception to its normal price/time system to allow Users to avoid internalizing orders.
The Exchange will charge no fees for posting orders or executing trades on the Nasdaq Bond Exchange.
According to the Exchange, most orders matched on the Nasdaq Bond Exchange will be locked-in trades and will be submitted without an omnibus account to the National Securities Clearing Corporation using Universal Trade Capture and then to the Depository Trust Company (“DTC”) for clearance and settlement.
The Nasdaq Bond Exchange will have one trading session per trading day from 8:30 a.m. until 4:00 p.m. E.T. (“Bond Trading Session”) during which non-convertible bonds will be available for trading.
All matters related to clearly erroneous transactions executed on the Nasdaq Bond Exchange will be initiated and adjudicated pursuant to Nasdaq Rule 11890, which governs the process for addressing clearly erroneous trades.
A User that receives an erroneous execution may request the Exchange to review the transaction.
The Exchange proposes that, when determining whether a trade in non-convertible bonds listed on the Nasdaq Bond Exchange is clearly erroneous, a Nasdaq official may consider any and all relevant factors of an execution on a case by case basis including, but not limited to, the following: (i) Execution price; (ii) volume and volatility of a non-convertible bond; (iii) news released for the issuer of the non-convertible bond and/or the related equity security; (iv) trading halts; (v) corporate actions; (vi) general market conditions; (vii) the rating of the non-convertible bond; (viii) interest and/or coupon rate; (ix) maturity date; (x) yield curves; (xi) prior print, if available within a reasonable time frame; (xii) executions inconsistent with the trading pattern of a non-convertible bond; (xiii) current day's trading high/low; (xiv) recent day's and week's trading high/low; (xv) executions outside the 52-week high/low; (xvi) effect of a single large order creating several prints at various prices; and (xvii) quotes and executions of other market centers.
The parties will be promptly notified of the reviewer's determination and, in the event that the Nasdaq official determines that the transaction in dispute is clearly erroneous, the official will declare the transaction null and void.
Rule 11890(b) provides that, in the event of any disruption or a malfunction in the operation of any electronic communications and trading facilities of the Exchange, including the Nasdaq Bond Exchange, in which the nullification of transactions may be necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest, the President of the Exchange or any designated officer or senior level employee of the Exchange (each, a “Senior Official”) may, without the need for a request for review, review such transactions and determine if any are erroneous.
The Exchange proposes to halt or suspend trading in a non-convertible bond on the Nasdaq Bond Exchange in certain circumstances.
The Exchange will disseminate via the Nasdaq Corporates Totalview Data Feed, a real-time data feed, best bid and offer information for non-convertible bonds for which there are orders posted to the Nasdaq Bond Exchange's order book, as well as last sale information (including sale price and trade size) for trades executed on the Nasdaq Bond Exchange.
The Exchange proposes that Members
The Exchange states that Users of the Nasdaq Bond Exchange will gain access to the system via direct or indirect electronic linkages utilizing the Financial Information Exchange or “FIX” protocol.
The Exchange proposes that Users of the Nasdaq Bond Exchange will have to comply with all relevant rules of the
The Exchange represents that it will regulate the Nasdaq Bond Exchange and enforce compliance with its rules by leveraging its existing infrastructure for operating a national securities exchange in compliance with Section 6 of the Act.
The Exchange states that its MarketWatch Department (“MarketWatch”) monitors real time trading in all Nasdaq securities during the trading day for price and volume activity.
The Exchange further notes that Nasdaq Regulation will oversee the process for determining and implementing trade halts and identifying and responding to unusual market conditions.
The Exchange states that the Nasdaq Bond Exchange will operate out of the same data center in Carteret, New Jersey, as does Nasdaq and other exchanges owned by Nasdaq, Inc., but it will use equipment separate from that used by those other exchanges.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment Nos. 1, 2, and 3, is consistent with the requirements of Section 6 of the Act
The development and enforcement of adequate initial and continued listing standards for securities listed on a national securities exchange is of critical importance to financial markets and the investing public. The Commission believes that the Exchange's proposal is reasonably designed to determine which non-convertible bonds warrant listing on the Exchange and ensure that investors receive the protections of the Exchange's listing standards. Specifically, the Exchange's initial listing standards are reasonably designed to ensure that only companies capable of meeting their financial obligations are eligible to have their non-convertible bonds listed on Nasdaq, as the proposal requires these issuers to also have one class of equity security listed on Nasdaq, NYSE, or NYSE American. In addition, by limiting listing to non-convertible bond issues with a principal amount outstanding or a market value of at least $5 million, the proposal is reasonably designed to exclude from Nasdaq Bond Exchange securities that would not have sufficient liquidity for a fair and orderly market. Furthermore, as noted by the Exchange, the proposed initial listing standards for non-convertible bonds are substantially similar to those of NYSE and NYSE American.
For continued listing standards, the Exchange requires that the market value or principal amount of non-convertible bonds outstanding is at least $400,000 and the issuer must be able to meet its obligations on the listed non-convertible bonds. The Commission believes that such continued listing requirements for non-convertible bonds are reasonably designed to enable the Exchange to identify listed issuers that may have insufficient resources to meet their financial obligations or whose non-convertible bonds may lack adequate trading depth and liquidity. In addition, as noted by the Exchange, the proposed continued listing standards for non-convertible bonds are identical to the continued listing requirements for bonds imposed by NYSE American.
The Exchange represents that its proposal to amend Rule 5250(e)(3) to require an issuer to provide at least 10 calendar days advance notice of certain corporate actions related to non-convertible bonds listing on the Exchange will aid its Listings Qualification Department in assessing an issuer's compliance with the continued listing standards.
The Commission further believes it is consistent with the Act for the Exchange to immediately institute delisting proceedings if the Exchange determines that an issuer is unable to meet its obligations on its non-convertible bonds, as bonds with little or no value may not be appropriate for continued listing on the Exchange. Furthermore, the Commission believes that providing a 180-day compliance period for an issuer that fails to meet the $400,000 market value or principal amount outstanding requirement is reasonably designed to ensure that the Exchange has an adequate procedure to permit an issuer to regain compliance before delisting a non-convertible bond that may lack adequate trading depth and liquidity and for which continued exchange trading may not be in the best interests of investors.
The Exchange proposes to establish a new electronic trading platform, the Nasdaq Bond Exchange, to trade non-convertible bonds and to implement rules governing the trading of such bonds. The Commission believes that the establishment of the Nasdaq Bond Exchange to trade non-convertible bonds is generally consistent with the Act and may foster price discovery and competition in the non-convertible bonds market. As described above, the proposal includes provisions regarding access, order entry, order types, manner of execution, priority, trading sessions, trading units, clearing, trade halt and suspension procedures, clearly erroneous executions, reports and recordkeeping, dissemination of trading information, and regulation and surveillance. The Commission finds that these provisions are reasonably designed to promote the efficient functioning of the Nasdaq Bond Exchange and are generally consistent with the Act. The Commission notes that the proposed rules closely parallel, and are substantially similar to, current NYSE Rule 86, which governs trading on NYSE Bonds, and which was filed with and approved by the Commission pursuant to Section 19(b) of the Act.
The Commission notes that the Nasdaq Bond Exchange will only trade non-convertible bonds that are listed on Nasdaq. The Commission further notes that the Exchange is not charging any fees to post or execute trades on the Nasdaq Bond Exchange or for FIX port connectivity to the Nasdaq Bond Exchange or for connectivity to the Nasdaq Bond Exchange's disaster recovery system. In addition, the Nasdaq Corporates Totalview Data Feed will be available free of charge to those who request access.
Section 11(a) of the Act
The Commission believes that the proposed listing fees for non-convertible bonds are an equitable allocation of reasonable fees. The Exchange states that the proposed $5,000 application fee and $5,000 annual fee for listing non-convertible bonds will support the Exchange's regulatory program to review and qualify debt issuances for listing.
The proposed application listing fees will be applicable to all issuers seeking to list non-convertible bonds on the Exchange, other than issuers that switch their listing to the Exchange from NYSE or NYSE American. The Commission believes that the proposed waiver of the application fee and the first year's annual fee for issuers that switch their listings to Nasdaq from NYSE or NYSE American is reasonable and not unfairly discriminatory. The Exchange states that less work is required to process a listing application for a security that is already listed on another exchange than it is to process an application for listing a new security.
Interested persons are invited to submit written data, views, and
• 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.
The Commission finds good cause to approve the proposed rule change, as modified by Amendment Nos. 1, 2, and 3 prior to the thirtieth day after the date of publication of notice of the filing of Amendment Nos. 1, 2, and 3 in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 10, 2018, NYSE Arca, Inc. (“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 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, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1 under the Act, under
ABR Dynamic Funds, LLC (the “Initial Adviser”), a Delaware limited liability company that is registered as an investment adviser under the Investment Advisers Act of 1940, ETF Series Solutions (the “Trust”), a Delaware statutory trust registered under the Act as an open-end management investment company with multiple series, and Foreside Fund Services, LLC, (the “Distributor”), a Delaware limited liability company and broker-dealer registered under the Securities Exchange Act of 1934 (“Exchange Act”).
The application was filed on June 14, 2018, and amended on October 16, 2018 and November 8, 2018.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 10, 2018, and should be accompanied by proof of service on applicants, in the form of an affidavit, or for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090; Applicants: ABR Dynamic Funds, LLC, 48 Wall Street Suite 1100, New York, New York 10005; ETF Series Solutions, 615 East Michigan Street, Milwaukee, Wisconsin 53202; Foreside Fund Services, LLC, Three Canal Plaza, Portland, Maine 04101.
Barbara T. Heussler, Senior Counsel, at (202) 551-6990, or Andrea Ottomanelli Magovern, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or for an applicant using the Company name box, at
1. Applicants request an order that would allow Funds to operate as index exchange traded funds (“ETFs”).
2. Each Fund will hold investment positions selected to correspond generally to the performance of an Underlying Index. In the case of Self-Indexing Funds, an affiliated person, as defined in section 2(a)(3) of the Act (“Affiliated Person”), or an affiliated person of an Affiliated Person (“Second-Tier Affiliate”), of the Trust or a Fund, of the Adviser, of any sub-adviser to or promoter of a Fund, or of the Distributor will compile, create, sponsor or maintain the Underlying Index.
3. Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis. Except where the purchase or redemption will include cash under the limited circumstances specified in the application, purchasers will be required to purchase Creation Units by depositing specified instruments (“Deposit Instruments”), and shareholders redeeming their shares will receive specified instruments (“Redemption Instruments”). The Deposit Instruments and the Redemption Instruments will each correspond pro rata to the positions in the Fund's portfolio (including cash positions) except as specified in the application.
4. Because shares will not be individually redeemable, applicants request an exemption from section 5(a)(1) and section 2(a)(32) of the Act that would permit the Funds to register as open-end management investment companies and issue shares that are redeemable in Creation Units only.
5. Applicants also request an exemption from section 22(d) of the Act and rule 22c-1 under the Act as secondary market trading in shares will take place at negotiated prices, not at a current offering price described in a Fund's prospectus, and not at a price based on NAV. Applicants state that (a) secondary market trading in shares does not involve a Fund as a party and will not result in dilution of an investment in shares, and (b) to the extent different prices exist during a given trading day, or from day to day, such variances occur as a result of third-party market forces, such as supply and demand. Therefore, applicants assert that secondary market transactions in shares will not lead to discrimination or preferential treatment among purchasers. Finally, applicants represent that share market prices will be disciplined by arbitrage opportunities, which should prevent shares from trading at a material discount or premium from NAV.
6. With respect to Funds that effect creations and redemptions of Creation Units in kind and that are based on certain Underlying Indexes that include
7. Applicants request an exemption to permit Funds of Funds to acquire Fund shares beyond the limits of section 12(d)(1)(A) of the Act; and the Funds, and any principal underwriter for the Funds, and/or any broker or dealer registered under the Exchange Act, to sell shares to Funds of Funds beyond the limits of section 12(d)(1)(B) of the Act. The application's terms and conditions are designed to, among other things, help prevent any potential (i) undue influence over a Fund through control or voting power, or in connection with certain services, transactions, and underwritings, (ii) excessive layering of fees, and (iii) overly complex fund structures, which are the concerns underlying the limits in sections 12(d)(1)(A) and (B) of the Act.
8. Applicants request an exemption from sections 17(a)(1) and 17(a)(2) of the Act to permit persons that are Affiliated Persons, or Second-Tier Affiliates, of the Funds, solely by virtue of certain ownership interests, to effectuate purchases and redemptions in-kind. The deposit procedures for in-kind purchases of Creation Units and the redemption procedures for in-kind redemptions of Creation Units will be the same for all purchases and redemptions, and Deposit Instruments and Redemption Instruments will be valued in the same manner as those investment positions currently held by the Funds. Applicants also seek relief from the prohibitions on affiliated transactions in section 17(a) to permit a Fund to sell its shares to and redeem its shares from a Fund of Funds, and to engage in the accompanying in-kind transactions with the Fund of Funds.
9. Section 6(c) of the Act permits the Commission to exempt any persons or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act.
For the Commission, by the Division of Investment Management, under delegated authority.
Social Security Administration (SSA).
Notice of a new matching program.
In accordance with the provisions of the Privacy Act, as amended, this notice announces new matching program with the Centers for Medicare & Medicaid Services (CMS).
This agreement establishes the terms, and conditions, and safeguards under which CMS will disclose to SSA certain individuals' admission and discharge information for care received in a nursing care facility. SSA will use this data to administer the Supplemental Security Income program efficiently and to identify Special Veterans' Benefits beneficiaries who are no longer residing outside of the United States.
The deadline to submit comments on the proposed matching program is 30 days from the date of publication of this notice in the
Interested parties may comment on this notice by either telefaxing to (410) 966-0869, writing to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, G-401 WHR, 6401 Security Boulevard, Baltimore, MD 21235-6401, or emailing
Interested parties may submit general questions about the matching program to Mary Ann Zimmerman, Acting Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, by any of the means shown above.
None.
CMS will match the SSA finder file against data maintained pursuant to the Long Term Care-Minimum Data Set (LTC/MDS) (System Number 09 70 0528) SOR, last fully published on March 19, 2007 (72 FR 12801), amended on April 23, 2013 (78 FR 23938), May 29, 2013 (78 FR 32257), and February 14, 2018 (83 FR 6591); and submit its response file to SSA.
Susquehanna River Basin Commission.
Notice.
This notice lists the projects approved by rule by the Susquehanna River Basin Commission during the period set forth in
October 1-31, 2018.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110-1788.
Jason E. Oyler, General Counsel, telephone: (717) 238-0423, ext. 1312; fax: (717) 238-2436; email:
This notice lists the projects, described below, receiving approval for the consumptive use of water pursuant to the Commission's approval by rule process set forth in 18 CFR 806.22(e) and 806.22(f) for the time period specified above:
Pub. L. 91-575, 84 Stat. 1509
The Federal Aviation Administration (FAA), Department of Transportation (DOT) is the lead agency. The National Aeronautics and Space Administration (NASA), U.S. Air Force, U.S. Fish and Wildlife Service (USFWS), and National Park Service (NPS) are cooperating agencies for this Environmental Assessment (EA) due to their special expertise and jurisdictions.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969, as amended (NEPA), Council on Environmental Quality NEPA implementing regulations, and Federal Aviation Administration (FAA) Order 1050.1F,
Ms. Stacey M. Zee, Environmental Protection Specialist, Federal Aviation Administration, 800 Independence Avenue SW, Suite 325, Washington, DC 20591; email
The Shuttle Landing Facility (SLF) encompasses about 4,432 acres of property at Kennedy Space Center, including the 15,000 foot long, 300 foot wide runway. The SLF, which previously supported the National Aeronautics and Space Administration's Space Shuttle Program, is now a state-licensed private use airport managed by Space Florida. Under the Proposed Action described in the Final EA, Space Florida would construct launch site facilities and the FAA would issue a launch site operator license to Space Florida for the operation of a commercial space launch site at the SLF. The EA may be used to support the issuance of launch licenses or experimental permits to prospective vehicle operators that propose to conduct launches of horizontal takeoff and horizontal landing launch vehicles from the SLF. However, if a prospective launch vehicle operator's vehicle
The Final EA addresses the potential environmental impacts of Space Florida's proposal to construct and operate the SLF as a launch location for horizontally launched and landed rockets. The Final EA considers the potential environmental impacts of the Proposed Action and the No Action Alternative. The successful completion of the environmental review process does not guarantee that the FAA Office of Commercial Space Transportation would issue a Launch Site Operator License to Space Florida. The project must also meet all FAA requirements of a Launch Site Operator License. Individual launch operators proposing to launch from the site would be required to obtain a separate launch operator license.
An electronic version of the Final EA and FONSI/ROD is available on the FAA Office of Commercial Space Transportation website at:
Federal Transit Administration (FTA), DOT.
Notice.
This notice announces final environmental action taken by the Federal Transit Administration (FTA) for a project from the City of Gary to Michigan City, Indiana. The purpose of this notice is to announce publicly the environmental decision by FTA on the subject project and to activate the limitation on any claims that may challenge this final environmental action.
By this notice, FTA is advising the public of final agency actions subject to 23 U.S.C. 139(l). A claim seeking judicial review of FTA actions announced herein for the listed public transportation project will be barred unless the claim is filed on or before April 18, 2019.
Nancy-Ellen Zusman, Assistant Chief Counsel, Office of Chief Counsel, (312) 353-2577 or Juliet Bochicchio, Environmental Protection Specialist, Office of Environmental Programs, (202) 366-9348. FTA is located at 1200 New Jersey Avenue SE, Washington, DC 20590. Office hours are from 9:00 a.m. to 5:00 p.m., Monday through Friday, except Federal holidays.
Notice is hereby given that FTA has taken final agency action by issuing certain approvals for the public transportation project listed below. The action on the project, as well as the laws under which such action was taken, are described in the documentation issued in connection with the project to comply with the National Environmental Policy Act (NEPA) and in other documents in the FTA environmental project file for the project. Interested parties may contact either the project sponsor or the relevant FTA Regional Office for more information. Contact information for FTA's Regional Offices may be found at
This notice applies to all FTA decisions on the listed project as of the issuance date of this notice and all laws under which such action was taken, including, but not limited to, NEPA [42 U.S.C. 4321-4375], Section 4(f) requirements [23 U.S.C. 138, 49 U.S.C. 303], Section 106 of the National Historic Preservation Act [54 U.S.C. 306108], and the Clean Air Act [42 U.S.C. 7401-7671q]. This notice does not, however, alter or extend the limitation period for challenges of project decisions subject to previous notices published in the
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of emergency waiver order.
PHMSA is issuing an emergency waiver order to persons conducting operations under the direction of Environmental Protection Agency (EPA) Region 9 or United States Coast Guard (USCG) Eleventh District within the California Wildfire emergency area. The Waiver is granted to support the EPA and USCG in taking appropriate actions to prepare for, respond to, and recover from a threat to public health, welfare, or the environment caused by actual or potential oil and hazardous materials incidents resulting from the California Wildfires. This Waiver Order is effective immediately and shall remain in effect for 30 days from the date of issuance.
Adam Horsley, Deputy Assistant Chief Counsel for Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration, telephone: (202) 366-4400.
In accordance with the provisions of 49 U.S.C. 5103(c), the Administrator for the Pipeline and Hazardous Materials Safety Administration (PHMSA), hereby declares that an emergency exists that warrants issuance of a Waiver of the Hazardous Materials Regulations (HMR, 49 CFR parts 171-180) to persons conducting operations under the direction of EPA Region 9 or USCG Eleventh District within the California Wildfire emergency area. The Waiver is granted to support the EPA and USCG in taking appropriate actions to prepare for, respond to, and recover from a threat to public health, welfare, or the environment caused by actual or potential oil and hazardous materials incidents resulting from the California Wildfires.
On November 9, 2018, the President issued an Emergency Declaration for the California Wildfires for the counties of Butte, Los Angeles, and Ventura (EM-3409). The President declared a major disaster in California on November 12, 2018 (DR-4407).
This Waiver Order covers all areas identified in the declarations, as amended. Pursuant to 49 U.S.C. 5103(c), PHMSA has authority delegated by the Secretary (49 CFR 1.97(b)(3)) to waive compliance with any part of the HMR provided that the grant of the waiver is: (1) In the public interest; (2) not inconsistent with the safety of transporting hazardous materials; and (3) necessary to facilitate the safe movement of hazardous materials into, from, and within an area of a major disaster or emergency that has been declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
Given the continuing impacts caused by the California Wildfires, PHMSA's Administrator has determined that regulatory relief is in the public interest and necessary to ensure the safe transportation in commerce of hazardous materials while the EPA and USCG execute their recovery and cleanup efforts in California. Specifically, PHMSA's Administrator finds that issuing this Waiver Order will allow the EPA and USCG to conduct their Emergency Support Function #10 response activities under the National Response Framework to safely remove, transport, and dispose of hazardous materials. By execution of this Waiver Order, persons conducting operations under the direction of EPA Region 9 or USCG Eleventh District within the California Wildfire emergency area are authorized to offer and transport non-radioactive hazardous materials under alternative safety requirements imposed by EPA Region 9 or USCG Eleventh District when compliance with the HMR is not practicable. Under this Waiver Order, non-radioactive hazardous materials may be transported to staging areas within 50 miles of the point of origin. Further transportation of the hazardous materials from staging areas must be in full compliance with the HMR.
This Waiver Order is effective immediately and shall remain in effect for 30 days from the date of issuance.
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of emergency waiver order.
PHMSA is issuing an emergency waiver order to persons conducting operations under the direction of Environmental Protection Agency (EPA) Region 9 or United States Coast Guard (USCG) Fourteenth District within the Super Typhoon Yutu emergency area of the Northern Mariana Islands. The Waiver is granted to support the EPA and USCG in taking appropriate actions to prepare for, respond to, and recover from a threat to public health, welfare, or the environment caused by actual or potential oil and hazardous materials incidents resulting from Super Typhoon Yutu. This Waiver Order is effective immediately and shall remain in effect for 30 days from the date of issuance.
Adam Horsley, Deputy Assistant Chief Counsel for Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration, telephone: (202) 366-4400.
In accordance with the provisions of 49 U.S.C. 5103(c), the Administrator for the Pipeline and Hazardous Materials Safety Administration (PHMSA), hereby declares that an emergency exists that warrants issuance of a Waiver of the Hazardous Materials Regulations (HMR, 49 CFR parts 171-180) to persons conducting operations under the direction of EPA Region 9 or USCG Fourteenth District within the Super Typhoon Yutu emergency area of the Northern Mariana Islands. The Waiver is granted to support the EPA and USCG in taking appropriate actions to prepare for, respond to, and recover from a threat to public health, welfare, or the environment caused by actual or potential oil and hazardous materials incidents resulting from Super Typhoon Yutu.
On October 23, 2018, the President issued an Emergency Declaration for Super Typhoon Yutu for the Northern Mariana Islands for the municipalities of the Northern Islands, Rota, Saipan, and Tinian (EM-3408). The President declared a major disaster in the Northern Mariana Islands on October 26, 2018 (DR-4404).
This Waiver Order covers all areas identified in the declarations, as amended. Pursuant to 49 U.S.C. 5103(c), PHMSA has authority delegated by the Secretary (49 CFR 1.97(b)(3)) to waive compliance with any part of the HMR provided that the grant of the waiver is: (1) In the public interest; (2) not inconsistent with the safety of transporting hazardous materials; and (3) necessary to facilitate the safe movement of hazardous materials into, from, and within an area of a major disaster or emergency that has been declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
Given the continuing impacts caused by Super Typhoon Yutu, PHMSA's Administrator has determined that regulatory relief is in the public interest and necessary to ensure the safe transportation in commerce of hazardous materials while the EPA and USCG execute their recovery and cleanup efforts in the Northern Mariana Islands. Specifically, PHMSA's Administrator finds that issuing this Waiver Order will allow the EPA and USCG to conduct their Emergency Support Function #10 response activities under the National Response Framework to safely remove, transport, and dispose of hazardous materials. By execution of this Waiver Order, persons
This Waiver Order is effective immediately and shall remain in effect for 30 days from the date of issuance.
Internal Revenue Service (IRS), Treasury.
Notice.
This notice is provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA) of 1996, as amended. This listing contains the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter ending September 30, 2018. For purposes of this listing, long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship.
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“Commission” or “SEC”) is adopting amendments to Regulation National Market System (“Regulation NMS”) under the Securities Exchange Act of 1934 (“Exchange Act”) to require additional disclosures by broker-dealers to customers regarding the handling of their orders. The Commission is adding a new disclosure requirement which requires a broker-dealer, upon request of its customer, to provide specific disclosures related to the routing and execution of the customer's NMS stock orders submitted on a not held basis for the prior six months, subject to two de minimis exceptions. The Commission also is amending the current order routing disclosures that broker-dealers must make publicly available on a quarterly basis to pertain to NMS stock orders submitted on a held basis, and the Commission is making targeted enhancements to these public disclosures. In connection with these new requirements, the Commission is amending Regulation NMS to include certain newly defined and redefined terms that are used in the amendments. The Commission also is amending Regulation NMS to require that the public order execution report be kept publicly available for a period of three years. Finally, the Commission is adopting conforming amendments and updating cross-references as a result of the rule amendments being adopted in this rule.
Theodore S. Venuti, Assistant Director, at (202) 551-5658, Steve Kuan, Special Counsel, at (202) 551-5624, Sarah Albertson, Special Counsel, at (202) 551-5647, Michael Bradley, Special Counsel, at (202) 551-5594, Amir Katz, Special Counsel, at (202) 551-7653, Emerald Greywoode, Special Counsel, at (202) 551-7965, or Andrew Sherman, Special Counsel, at (202) 551-7255, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The Commission is adopting: (1) Amendments to 17 CFR 242.600 and 242.606 (respectively, “Rule 600” and “Rule 606” of Regulation NMS) under the Exchange Act to require additional disclosures by broker-dealers to customers about the routing of their orders; (2) amendments to 17 CFR 242.605 (“Rule 605” of Regulation NMS) to require that the public order execution reports be kept publicly available for a period of three years; and (3) conforming changes and updated cross-references in 17 CFR 240.3a51-1(a) (“Rule 3a51-1(a) under the Exchange Act”), 17 CFR 240.13h-1(a)(5) (“Rule 13h-1(a)(5) of Regulation 13D-G”), 17 CFR 242.105(b)(1) (“Rule 105(b)(1) of Regulation M”), 17 CFR 242.201(a) and 242.204(g) (“Rules 201(a) and 204(g) of Regulation SHO”), 17 CFR 242.600(b), 242.602(a)(5) and 242.611(c) (“Rules 600(b), 602(a)(5), and 611(c) of Regulation NMS”), and 17 CFR 242.1000 (“Rule 1000 of Regulation SCI”).
In July 2016, the Commission proposed to amend Rules 600 and 606 under Regulation NMS to require additional disclosures by broker-dealers to customers about the handling of their orders, to amend Rules 605 and 607 for consistency with the proposed amendments to Rule 606, and to amend other rules to update cross references as appropriate.
Transparency has long been a hallmark of the U.S. securities markets, and the Commission continuously strives to ensure that investors are provided with timely and accurate information needed to make informed investment decisions. In recent years, the Commission and its staff have undertaken a number of reviews of market structure and market events, and much of this effort has aimed to enhance transparency for investors.
Rule 606 encourages competition by enhancing the transparency of broker-dealer order handling and routing practices.
As the Commission noted when it originally adopted Rule 606, in a fragmented market “the order routing decision is critically important” and “must be well-informed and fully subject to competitive forces,”
To facilitate enhanced transparency regarding broker-dealers' handling and routing of orders in NMS stock, the Commission proposed to amend Rules 600(b) and 606 such that all orders of any dollar value in NMS stock
The Commission received comments on the Proposal.
After careful review and consideration of the comment letters and upon further consideration by the Commission concerning how to further the goal of more useful and effective disclosure of order handling information under Regulation NMS, the Commission is adopting the proposed amendments to Rules 600 and 606 (and the other corresponding proposed amendments) with certain modifications.
Specifically, the Commission is amending Rule 606(b) of Regulation NMS
In connection with the new disclosure requirement, the Commission is amending Rule 600(b) of Regulation NMS
As discussed in Section III.A.7,
The Commission is amending Rule 606(a) of Regulation NMS such that the aggregated order routing disclosures that broker-dealers must make publicly available on a quarterly basis pertain to orders of any dollar value in NMS stock that are submitted on a “held” basis. Further, the Commission is making targeted enhancements to these public disclosures to: (1) Require limit order information to be split into marketable and non-marketable categories (relatedly, the Commission is adopting a definition of the term “non-marketable limit order” under Rule 600(b));
Finally, consistent with the amendments to Rule 606(a), the Commission is amending Rule 605 to require market centers
Consistent with the Proposal, the Commission continues to believe that generally requiring more detailed, standardized, baseline order handling information to be made available to customers upon request for orders in NMS stocks should enable those customers—and particularly institutional customers—to more effectively assess how their broker-dealers are carrying out their best execution obligations and the impact of their broker-dealers' order routing decisions on the quality of their executions, including the risks of information leakage and potential conflicts of interest.
Similar to the Proposal, the Commission believes that simplifying and enhancing the current publicly available disclosures, particularly with respect to financial inducements from trading centers, should assist customers in evaluating better the order routing services of their broker-dealers and how well they manage potential conflicts of interest.
Section III discusses in detail the adopted rule amendments. Subsection A addresses the customer-specific order handling disclosures required by new Rule 606(b)(3) and amended Rule 606(b)(1). This section also discusses a part of the Proposal we are not adopting: Proposed Rule 606(c)'s requirement that broker-dealers make publicly available an aggregated report of the Rule 606(b)(3) customer-specific order handling information across all of their customers. Subsection B addresses the enhanced public report required under amended Rule 606(a). The newly defined and re-defined terms that the Commission is adopting in Rule 600 in connection with the amendments to Rule 606 are discussed where relevant in subsections A and B. The adopted amendment to Rule 605 is discussed in subsection C.
The staff will review these amendments, including in particular the de minimis exceptions described in Section III.A.1.b.iv below, not later than one year after the compliance date of the amendments, and report to the Commission.
The Commission proposed to delineate the types of orders that would trigger a broker-dealer's obligation to provide a customer with the order handling disclosures required by new Rule 606(b)(3) by amending Rule 600(b) to include a definition of “institutional order.”
The Commission's proposed definition of “institutional order” dovetailed with the current definition of “customer order,”
The Commission solicited comment on alternatives to a dollar-value threshold approach. For example, the Commission asked commenters among other things: (1) Whether dollar value is the proper criterion for defining an institutional order, and (2) whether there are other order characteristics the Commission should consider to distinguish between retail and institutional orders, in addition to, or instead of, a dollar-value threshold.
The Commission also asked whether commenters believe a de minimis exemption from customer-specific reporting under proposed Rule 606(b)(3) is appropriate. Specifically, the Commission asked if commenters believe that the rule should include a de minimis exemption for broker-dealers that receive, in the aggregate, less than a certain threshold number or dollar value of institutional orders.
The Commission received comments on the proposed dollar-value threshold as well as comments in response to its questions regarding a potential de minimis exemption from Rule 606(b)(3) and, after further consideration, is modifying its approach.
The Commission received significant comment on the proposed definition of “institutional order” that criticized the proposed $200,000 threshold as an ineffective proxy for institutional trading interest.
Several commenters stated that, for reasons such as obtaining a better price, achieving faster execution, avoiding potential information leakage, avoiding market effect, or the advancement in the sophistication of institutional trading systems, many institutional customers, before submitting their order flow to their broker-dealers, internally divide their order flow into smaller “child” orders that may not meet the proposed $200,000 dollar-value threshold.
One commenter expressed concern that the dollar-value threshold would exclude the majority of orders from institutions from the enhanced institutional order handling disclosure requirements, diminishing the value of the disclosure and forcing institutional investors to continue individual negotiations to obtain order handling information.
As illustrated by these comments, there was broad opposition to the $200,000 dollar-value threshold in the proposed definition of institutional order. The Commission is not adopting the proposed definition. Rather than attempt to capture within a definition of “institutional order” the orders that account for most institutional order dollar volume, the comments indicate that market participants would prefer a different approach to order handling disclosures.
Many commenters urged the Commission to replace the proposed dollar-value threshold with a different approach for identifying the orders covered by the new customer-specific order routing disclosures.
Commenters who supported an order type-based approach suggested that the not held order type classification would be an effective proxy for identifying orders typical of institutional investors for which the existing customer-specific disclosures are inapplicable or inadequate because institutional investor orders are generally not held to the market.
Several commenters also stated that basing the Rule 606(b) disclosure requirements on whether an order is held or not held would be straightforward and minimally burdensome because: Broker-dealers and other market participants are very familiar with these order type classifications; classifying orders as held or not held would be consistent with current industry practice; and the terms held and not held are common terms of usage in the securities markets.
Two commenters objected to the held or not held analysis and stated that the applicability of the new customer-specific disclosures should not be based on order type because the held/not held classification is within the control of the order sender.
Some commenters suggested that the applicability of the customer-specific disclosures should be based on the type of the entity placing the order.
Most of the commenters that supported an entity-centric approach suggested that the Commission rely on FINRA Rule 4512(c), which defines the term “institutional account” for purposes of that rule, as a source for such an approach.
Some commenters offered additional considerations or recommendations regarding how an entity-based approach should be crafted. For example, one commenter suggested that the new customer-specific disclosures should apply to any order attributed to any entity that is a “large trader” under Section 13(h) of the Exchange Act.
In addition to the foregoing commenter recommendations, a few commenters suggested that there should be no distinction between retail and institutional customers for purposes of the new Rule 606(b)(3) order handling reports and that all orders should be
The Commission is not adopting a definition of “institutional order” or an order dollar value-based approach to delineate the applicability of new Rule 606(b)(3).
We believe that basing the applicability of this requirement on whether orders are held or not held serves the purposes of the disclosures. A broker-dealer must attempt to execute a held order immediately; a not held order instead provides the broker-dealer with price and time discretion in handling the order. As a result, the Rule 606(b)(3) disclosures apply to NMS stock orders for which customers have provided their broker-dealers with price and time order handling discretion, and do not apply to orders that the broker-dealer must attempt to execute immediately. The Commission believes that since the disclosures are designed to provide greater transparency into a broker-dealer's exercise of order handling discretion, they should be provided for orders for which broker-dealers actually exercise such discretion. Focusing the customer-specific report in this way will better enable customers to understand their broker-dealers' order routing decisions and the extent to which those decisions may be affected by conflicts of interest or create information leakage. Customers also will be better able to assess their broker-dealers' skill and effectiveness in handling their orders and achieving satisfactory executions.
Importantly, as noted by multiple commenters, broker-dealers and other market participants are familiar with the held and not held order type classifications, classifying orders as held or not held would be consistent with current industry practice, and the terms “held” and “not held” are common terms of usage in the securities markets.
Further, under the Commission's adopted approach, any customer is entitled to receive the Rule 606(b)(3) disclosures for their not held NMS stock orders, subject to two de minimis exceptions. The Commission is not adopting definitions of “institutional order” or “retail order,” and the adopted amendments make no such distinction, based on dollar value of the order or otherwise. In this regard, the Commission's adopted approach is consistent with comments that stated that no such distinction is necessary. Under final Rule 606(b)(3), customers may request the disclosures for any not held NMS stock orders that they submit (subject to the de minimis exceptions, discussed below), including not held NMS stock orders for less than $200,000 in market value, which would have been defined as “retail orders” and not subject to the Rule 606(b)(3) disclosures under the Proposal. The Commission believes it is appropriate to make the Rule 606(b)(3) disclosures available for all not held NMS stock orders (subject to the de minimis exceptions) so customers have information sufficient to evaluate the broker-dealers that are exercising order handling and routing discretion.
The Commission believes that it is appropriate for broker-dealers to provide the Rule 606(b)(3) disclosures to those customers for whom the existing customer-specific order routing disclosures in Rule 606(b) are inapplicable or inadequate. Specifically, the Rule 606(b)(3) disclosures are particularly suited to customers that submit not held NMS stock orders because the disclosures set forth detailed order handling information that is useful in evaluating how broker-dealers exercise the discretion attendant to not held orders and, in the process, carry out their best execution obligations and manage the potential for information leakage and conflicts of interest. Moreover, many of the commenters that criticized the Commission's proposed definition of institutional order suggested that all or nearly all of an institutional customer's orders should be covered by the Rule 606(b)(3) disclosures regardless of order
While some commenters suggested that the new customer-specific disclosures in Rule 606(b)(3) should be available to all orders without any limitation based on entity type or order classification or otherwise, the Commission believes that it is appropriate to differentiate between not held orders and held orders for purposes of order handling information disclosure because broker-dealers generally handle not held orders differently from held orders due to the discretion they are afforded with not held orders but not with held orders.
Indeed, in recent years, routing and execution practices for not held orders have become more automated, dispersed, and complex.
By contrast, the Commission's concern regarding how broker-dealers handle held orders is less about the difficulties posed by more automated, dispersed and complex order routing and execution practices. Rather, the Commission believes that enhanced disclosures for held orders should provide customers with more detailed information including with respect to the financial inducements that trading centers may provide to broker-dealers to attract immediately executable trading interest, as opposed to the different information geared towards not held NMS stock orders that is set forth in Rule 606(b)(3). As noted above and discussed below, the quarterly public disclosures required under Rule 606(a) are indeed being enhanced to provide more detail regarding financial inducements to broker-dealers, and the Commission believes that these disclosures are more appropriately tailored to the characteristics of held order flow and the needs of customers that use held orders.
Also, the Commission does not disagree with one commenter's statement that best execution should be the goal for orders from both institutional customers and retail investors, and that both types of investors deserve to know how their orders are routed and executed.
As noted above, other commenters suggested basing Rule 606(b)(3)'s applicability on the characteristics of the customer that submits the order to the broker-dealer. This entity-centric approach suggested by commenters would require the Commission to set forth the types of customers that may request the Rule 606(b)(3) disclosures for their NMS stock orders, but would not entail any differentiation in the types of orders covered by Rule 606(b)(3). As a result, NMS stock orders from qualifying customers that are submitted on a held basis would be covered by the Rule 606(b)(3) disclosures. This is a sub-optimal outcome. Broker-dealers must attempt to execute held orders immediately and are afforded no discretion in handling them; therefore, applying the Rule 606(b)(3) disclosures to held orders would not provide insight into how a broker-dealer exercises order handling and routing discretion. Moreover, including a customer's held orders in the Rule 606(b)(3) report could obfuscate the reports' depiction of the discretion actually exercised by the broker-dealer with respect to not held orders and undermine the very purpose of these disclosures.
An entity-based approach also would require the Commission to prescribe institutional status criteria that customers must fit in order to be entitled to receive the disclosures. A risk with such an approach is that the criteria could be over-inclusive or under-inclusive. The Commission is particularly concerned about potential under-inclusiveness because customers that do not fit the criteria would not be entitled to receive the disclosures. To mitigate this risk, the Commission, as suggested by commenters, could leverage certain existing rules that already set forth institutional status criteria. For example, several commenters suggested as sources the definitions of “institutional account” and “institutional investor” in FINRA Rules 2210(a)(4) and 4512(c), respectively.
This categorical exclusion of some customer types from Rule 606(b)(3)'s purview is avoided under the Commission's adopted approach. By basing the application of Rule 606(b)(3) on the held and not held order classifications, no customer is categorically excluded from receiving the Rule 606(b)(3) disclosures. The Commission acknowledges that some commenters stated that an entity-centric approach to Rule 606(b)(3)'s coverage based on the noted FINRA rules would coincide with familiar industry standards regarding the types of market participants that are considered to be “institutional.”
Moreover, as noted above, commenters also highlighted the industry familiarity with the not held order classification.
Basing the applicability of Rule 606(b)(3) on customers' not held NMS stock orders is, in the Commission's view, the most tailored approach to aligning the orders covered by Rule 606(b)(3) with the Commission's intent for the rule to provide more detailed disclosure and enhanced transparency regarding how broker-dealers handle NMS stock orders, and to provide such transparency to customers for whose NMS stock orders the current disclosure regime is inapplicable or inadequate. This approach also is likely to avoid the problems inherent in an entity-centric approach. Further, many commenters, as well as EMSAC, supported basing Rule 606(b)(3)'s application on the not held order classification. Accordingly, under Rule 606(b)(3), a broker-dealer must provide the disclosures set forth therein, upon customer request, to any customer that places, directly or indirectly, one or more orders in NMS stock that are submitted on a not held basis with the broker-dealer, subject to the de minimis exceptions discussed below.
The Commission is adopting in new Rules 606(b)(4) and (b)(5) two de minimis exceptions from Rule 606(b)(3)'s requirements, either of which excepts a broker-dealer from the Rule 606(b)(3) requirements. One of the exceptions focuses on the broker-dealer firm and the other focuses on the individual customer. Specifically, a broker-dealer is not obligated to provide the Rule 606(b)(3) report: (i) To any customer if not held NMS stock orders constitute less than 5% of the total shares of NMS stock orders that the broker-dealer receives from its customers over the prior six months,
The Commission received several comments in response to its questions regarding a potential de minimis exception from customer-specific reporting under proposed Rule 606(b)(3). Multiple commenters supported an exception from Rule 606(b)(3) reporting for broker-dealers that have either a de minimis level of institutional customers or a de minimis amount of institutional trading activity as measured by executed shares as a percentage of all executed shares.
Some commenters stated that the costs incurred by retail broker-dealers to create systems to generate the Rule 606(b)(3) reports would exceed any benefits.
Other commenters did not support a de minimis exception even if a broker-dealer has limited institutional customer order flow, so that institutional customers can compare order routing among all broker-dealers.
The Commission believes that a de minimis exception from Rule 606(b)(3) reporting, as set forth in Rule 606(b)(4), presents advantages for certain broker-dealers. Broker-dealers handle different types of order flow, and not all broker-dealers handle a significant amount of not held NMS stock order flow. Indeed, some broker-dealers focus mainly on servicing customers that use held orders in NMS stock, and as such, typically do not handle not held order flow in NMS stock. The Commission believes that it is appropriate to relieve broker-dealers with minimal or zero not held order flow from the obligation to incur the costs associated with having the capability to provide the new Rule 606(b)(3) disclosures for not held NMS stock orders. The Commission does not believe that it would be appropriate to require every broker-dealer, regardless of its customer base and core business, to be compelled to incur the costs required to create the systems and processes necessary to generate the Rule 606(b)(3) reports. The Commission does not intend to introduce a wholesale change in order handling and routing disclosure requirements such that broker-dealers whose order flow consists almost entirely of held orders must also become prepared to provide disclosures that focus on trading activity characteristics of not held orders.
In the Commission's view, the potential benefits of the Rule 606(b)(3) disclosures for customers of such broker-dealers do not justify the costs to such broker-dealers of developing the necessary systems and mechanisms for providing the disclosures. There would be no expected benefits of Rule 606(b)(3) in circumstances where a broker-dealer does not currently handle any not held NMS stock order flow. Nevertheless, absent a de minimis exception, such a broker-dealer could feel compelled to incur the costs and burdens associated with being able to provide the Rule 606(b)(3) disclosures in order to ensure compliance with the rule should it receive not held orders in the future. The Commission believes that it is appropriate to relieve any such broker-dealers of these potential costs and unnecessary burdens.
Likewise, there would be only limited benefits of Rule 606(b)(3) in circumstances where broker-dealers handle a minimal amount of not held orders, and the Commission does not believe that such benefits would justify the costs to broker-dealers in these circumstances. While some commenters opposed a de minimis exemption on grounds that institutional customers should be able to compare orders across all broker-dealers and that broker-dealers capable of handling institutional customer orders should be able to provide the Rule 606(b)(3)
Accordingly, the firm-level de minimis exception to Rule 606(b)(3), as expressed in Rule 606(b)(4), focuses on the broker-dealer's overall order flow across all of its customers. The Commission believes that the scope of this exception will appropriately cover most broker-dealers that handle almost entirely held order flow. A broker-dealer that handles not held NMS stock order flow that is less than 5% of the total shares of NMS stock orders in a six calendar month period that it receives from its customers most likely does not make, as a matter of course, the routing decisions for which Rule 606(b)(3) is designed to provide enhanced transparency. 95% or more of such a broker-dealer's NMS stock order flow would be held orders. The Commission does not believe that it is appropriate to require such a broker-dealer to expend the effort and incur the expense necessary to be able to provide disclosures that are primarily aimed at order handling that is rarely, if ever, employed by the broker-dealer.
The Commission is adopting a firm-level de minimis exception that is based on the “percentage of
The other methods that commenters suggested for calculating a firm-level de minimis threshold—
Indeed, in the aforementioned example, the broker-dealer would likely need to apply more discretion when executing the order for 100,000 shares (to minimize potential information leakage and price impact) than for an order for 10 shares. As discussed above, the new Rule 606(b)(3) disclosures are intended to provide customers with detailed information concerning how broker-dealers exercise discretion, particularly for larger orders (including those broken up into several smaller child orders). Thus, if the firm-level de minimis threshold were calculated in a manner that did not account for shares received, there would be greater risk that a broker-dealer exercising discretion in handling larger orders, potentially as a meaningful portion of its business, would not be subject to the new Rule 606(b)(3) disclosure requirement.
As noted below, Commission supplemental staff analysis found that among 342 broker-dealers that receive not held orders from customers, about 8% (28 broker-dealers) would receive a de minimis exception from Rule 606(b)(3) requirements pursuant to Rule 606(b)(4).
A broker-dealer is covered by the firm-level de minimis exception as long as its customer not held NMS stock order flow continues to be less than the 5% firm-level threshold. A broker-dealer is no longer excepted from the purview of Rule 606(b)(3) once and as long as it meets or surpasses the firm-level threshold of the de minimis exception. Specifically, when a broker-dealer has equaled or exceeded the firm-level threshold, it must comply with Rule 606(b)(3) for at least six calendar months (“Compliance Period”) regardless of the volume of not held NMS stock orders the broker-dealer receives from its customers during the Compliance Period.
The Commission believes that the limited three-month grace period is appropriate because it will allow a firm time to come into compliance with the Rule 606(b)(3) requirements when its not held NMS stock order flow crosses the Rule 606(b)(4) firm-level de minimis threshold for the first time. The grace period affords a broker-dealer time to develop the systems and processes and organize the resources necessary to generate the Rule 606(b)(3) reports. At the same time, should such a broker-dealer subsequently fall below the de minimis threshold, the Commission believes that no such grace period for Rule 606(b)(3) is necessary if and when that broker-dealer's not held NMS stock order flow again meets or crosses the firm-level de minimis threshold such that the broker-dealer is again subject to the Rule 606(b)(3) requirements. The broker-dealer should already have developed the necessary systems and processes for providing the Rule 606(b)(3) report in connection with its subjection to Rule 606(b)(3).
Rule 606(b)(4) requires compliance with Rule 606(b)(3) for “at least” six calendar months for a broker-dealer that equals or exceeds the firm-level de minimis threshold. The Commission believes that it is appropriate to require a minimum Compliance Period of six calendar months in order to coincide with the six-month timeframe of Rule 606(b)(3). Customers of a broker-dealer that is or becomes subject to Rule 606(b)(3) therefore will be able to request a Rule 606(b)(3) report that contains at least one full time period of disclosures contemplated by Rule 606(b)(3).
Rule 606(b)(4) also is designed to enable a broker-dealer that is subject to Rule 606(b)(3) for six calendar months (or longer) subsequently to avail itself of the firm-level de minimis exception if its not held NMS stock order flow no longer equals or exceeds the 5% threshold. Specifically, under Rule 606(b)(4), if, at any time after the end of the Compliance Period, the broker-dealer's not held NMS stock order flow falls below the 5% threshold for the prior six calendar months, the broker-dealer is not required to comply with Rule 606(b)(3), except with respect to orders received during the Compliance Period.
For example, suppose a broker-dealer has equaled or exceeded the firm-level threshold and therefore must comply with Rule 606(b)(3) for a six calendar month period that begins on January 1 and ends on June 30 (assuming this Compliance Period started after a three-month grace period, if this was the first time the broker-dealer has had to comply with Rule 606(b)(3)). If, in the beginning of July, the broker-dealer determines that its not held NMS stock order flow equaled or exceeded the threshold for January 1 through June 30, the broker-dealer must continue to comply with Rule 606(b)(3) for July. If, on the other hand, the broker-dealer determines that its not held NMS stock order flow was below the 5% threshold for January 1 through June, the broker-dealer would not be required to comply with Rule 606(b)(3) for July 1 through July 31. In the beginning of August, the broker-dealer would determine if it is subject to Rule 606(b)(3) based on its order flow for the prior six calendar month period, which this time would be the period from February 1 through July 31. If the broker-dealer met the threshold for that six calendar month period, and had also met it for the period January 1 through June 30 such that it was required to comply with Rule 606(b)(3) for July, the broker-dealer would be required to continue complying with Rule 606(b)(3) through August. If the broker-dealer met the threshold for the February 1 through July 31 period but had not met it for the January 1 through June 30 period and was not required to comply with Rule 606(b)(3) for July, the broker-dealer would start a new Compliance Period that would run from August 1 through January 31 of the following calendar year. In this scenario, the broker-dealer would be required to provide Rule 606(b)(3) disclosures for not held NMS stock orders received from a customer during the prior six calendar months, except for any such orders that the broker-dealer received during July when the broker-dealer was not required to provide reports pursuant to Rule 606(b)(3).
Table A below contains an example of a broker-dealer firm that meets or exceeds the 5% de minimis threshold
The other de minimis exception to Rule 606(b)(3) focuses on each customer's order flow.
The Commission expects that the benefits of the Rule 606(b)(3) disclosures will accrue mainly for customers that trade regularly with significant levels of not held NMS stock order flow. The new customer-specific order handling disclosures are intended to provide such customers with insight into how their brokers exercise order handling discretion over a period of time. In order to accurately reflect a broker's order handling behavior, the customer-specific disclosures must contain ample order data. The Commission believes that $1,000,000 of notional value traded on average each month for the prior six months is a level of order flow that would allow for meaningful order handling disclosures. A Rule 606(b)(3) report covering a customer's prior six months of trading activity would include at least $6 million worth of the customer's trades. The Commission believes that such a sample of trading activity would be large enough to not be misleadingly colored by one-off or infrequent routing choices by the broker-dealer or order handling requests by the customer. Therefore, such a sample size would provide the customer with an accurate and reliable depiction of how its broker-dealer generally handles its not held NMS stock order flow.
The Commission also believes that the customer-level de minimis threshold is set at a sufficiently low level such that the exception captures customers that do not trade regularly or in significant quantity and who would not therefore realize the benefits of the rule. Based on the Commission's experience and understanding of the frequency and quantities in which various market participants tend to trade, the Commission believes that this threshold is a relatively low one for more active traders, including customers that have an interest in evaluating their broker-dealers' order handling services, but high enough such that the exception will capture customers that trade infrequently or in small quantities and for whom the detailed Rule 606(b)(3) report would not be warranted or meaningful. Indeed, customers that trade on average each month for the prior six months less than $1,000,000 of notional value of not held orders through the broker-dealer are not likely to require the more complex order handling tools offered by the broker-dealer that would warrant or make meaningful a detailed review of the broker-dealer's order handling decisions. Even if a customer is sufficiently sophisticated to utilize not held orders and analyze the Rule 606(b)(3) information, unless the customer submits not held orders to a degree that generates a meaningful sample of order handling and routing data, the Rule 606(b)(3) report will not provide a reliable basis for assessing the broker-dealer's activity.
In addition, as discussed below,
While broker-dealers may, by rule, be excepted from Rule 606(b)(3) due to the firm-level de minimis exception, or excepted from providing the Rule 606(b)(3) disclosures to certain customers due to the customer-level de minimis exception, the Commission notes that some broker-dealers, for business reasons, may choose to provide the new customer-specific order handling disclosures to their customers regardless of the de minimis exceptions and that customers below the customer-level de minimis threshold could move their order flow to such firms.
As noted above, the Commission's proposed definition of institutional order explicitly excluded orders for the account of a broker-dealer, and such orders were not covered by proposed Rule 606(b)(3). Consistent with what was proposed, Rule 606(b)(3), as adopted, does not apply to orders from broker-dealers. Some commenters argued that orders for the account of a broker-dealer should be included in the order handling reports required under Rule 606 and, therefore, such orders should not be excluded from the proposed definition of institutional order in Rule 600(b).
To incorporate new Rule 606(b)(3) into the existing regulatory structure, the Commission must make corresponding revisions to Rule 606(b)(1), which is the pre-existing customer-specific order routing disclosure rule. Prior to today, Rule 606(b)(1) did not differentiate between NMS stock orders from customers submitted on a held or not held basis. As a result, absent amendment to Rule 606(b)(1), not held orders in NMS stock that are covered by Rule 606(b)(3) also would be covered by Rule 606(b)(1). This is not the Commission's intent. As discussed above, the Commission is requiring Rule 606(b)(3) disclosures to be available for not held NMS stock orders, subject to two de minimis exceptions. For held NMS stock orders, or for instances when a de minimis exception would except a broker-dealer from providing Rule 606(b)(3) disclosures, the existing disclosure requirements of Rule 606(b)(1) would apply.
The Commission is amending Rule 606(b)(1) to require a broker-dealer, upon customer request, to provide the disclosures set forth in Rule 606(b)(1) for orders in NMS stock that are submitted on a held basis, and for orders in NMS stock that are submitted on a not held basis and for which the
Because there is no dollar-value threshold in Rule 606(b) as adopted, there are two categories of NMS stock orders that would have been covered by Rule 606(b)(3) under the Proposal but instead are covered by Rule 606(b)(1) under the adopted approach. First, a customer's held NMS stock order that has a market value of at least $200,000 will be covered by the Rule 606(b)(1) disclosures (and, as discussed below, the Rule 606(a) public disclosures) whereas, under the Proposal, such an order would have been covered by the Rule 606(b)(3) disclosures.
Second, compared to the Proposal, a not held NMS stock order for at least $200,000 that is from a customer that does not meet the customer-level de minimis threshold or that the customer submits to a broker-dealer that qualifies for the firm-level de minimis exception will be covered by Rule 606(b)(1) whereas, under the Proposal, any not held NMS stock order for at least $200,000 would have been covered by Rule 606(b)(3). The Commission believes that it is the appropriate result for Rule 606(b)(3) not to apply to such an order and for Rule 606(b)(1) to apply instead. As discussed above,
The Commission believes that, in most cases, a customer that trades in NMS stock order dollar values of $200,000 or more and is sufficiently sophisticated to utilize not held orders, will also be sufficiently sophisticated to submit such orders to broker-dealers that are not excepted from Rule 606(b)(3) by the firm-level de minimis exception, should the customer desire the Rule 606(b)(3) information (and meet or surpass the customer-level de minimis threshold). In addition, as discussed above, the customer-level de minimis exception targets customers whose trading activity is not substantial enough to provide a sample of data that would accurately and reliably reflect a broker-dealer's order handling behavior and make the Rule 606(b)(3) disclosures meaningful. Thus, should a customer that submits a not held NMS stock order for $200,000 or more not meet the customer-level de minimis threshold (a scenario that the Commission believes is unlikely to occur in most cases), the Commission believes that Rule 606(b)(1) is the appropriate recourse for the customer regardless of the dollar value of any of the customer's individual orders. If requested, the Rule 606(b)(1) disclosures provide the customer with information as to the venues to which its orders were routed, whether the orders were directed or non-directed, and the time of any transactions that resulted from the orders. The Commission believes that these disclosures provide information that is more meaningful in light of the overall extent to which the customer trades, and are sufficient to provide a basis for the customer to engage in further discussions with its broker-dealer regarding the broker-dealer's order handling practices.
The Commission is adopting revised definitions of the terms “directed order”
Specifically, Rule 600(b) prior to these amendments defines the terms directed order and non-directed order in reference to a “customer order,” and the term “customer order” includes a $200,000 dollar value threshold for NMS stock orders that the Commission is not incorporating into Rule 606 as amended. Thus, the Commission is removing the reference to “customer order” from the definitions of “directed order” and “non-directed order” to eliminate the $200,000 dollar-value threshold for NMS stock orders incorporated into those terms. Accordingly, as amended, the term “directed order” means an order from a customer that the customer specifically instructed the broker-dealer to route to a particular venue for execution, and the term “non-directed order” means any order from a customer other than a directed order.
Otherwise, however, the amended definitions of “directed order” and
To further facilitate the updated order handling disclosure regime, the Commission proposed to amend Rule 600 to include a definition of “actionable indication of interest.”
The Commission is adopting as proposed the definition of actionable indication of interest under Rule 600(b)(1) of Regulation NMS.
By defining actionable IOIs in this manner, the Rule 606(b)(3) order handling reporting requirements mandate that a broker-dealer disclose its activity communicating to external liquidity providers for them to send an order to the broker-dealer in response to a not held NMS stock order of a customer of the broker-dealer. The Commission continues to believe that including these disclosures relating to actionable IOI activity in the Rule 606(b)(3) order handling reports would better enable customers to understand and evaluate how broker-dealers handle their orders, in particular with respect to the potential for information leakage stemming from broker-dealers' use of actionable IOIs. The Commission also continues to believe that the definition of actionable IOI is appropriately designed to capture trading interest that is the functional equivalent to an order or quotation.
Commenters generally supported the creation of a definition of actionable IOI in Rule 600(b), but some commenters expressed concerns about and suggested revisions to the Commission's proposed definition.
As stated above and in the Proposing Release, for an IOI to be actionable it must convey (explicitly or implicitly) information sufficient to attract immediately executable orders to the venue sending the indication of interest.
Whether or not an indication of interest is `firm' will depend on what actually takes place between the buyer and seller. . . . At a minimum, an indication of interest will be considered firm if it can be executed without further agreement of the person entering the indication. Even if the person must give its subsequent assent to an execution, however, the indication will still be considered firm if this subsequent agreement is always, or almost always, granted so that the agreement is largely a formality. For instance, indications of interest where there is a clear prevailing presumption that a trade will take place at the indicated price, based on understandings or past dealings, will be viewed as orders.
The Commission believes that this language is instructive here in light of the Commission's intention for the definition of actionable IOIs to apply to IOIs that are the functional equivalent of orders or quotations,
So-called “conditional” orders referenced by several commenters would not, therefore, constitute actionable IOIs if they require additional agreement by the broker-dealer responsible for the conditional order before an execution can occur, unless facts or circumstances suggest that the broker-dealer's agreement can be presumed. The Commission believes that IOIs that do not enable the IOI recipient to send a marketable order to the IOI sender that is executable against the interest represented by the IOI without further agreement by the IOI sender may not function equivalently to orders or quotations and therefore do not represent the sort of order handling activity that the Rule 606(b)(3) order handling reports are meant to capture.
Moreover, as noted in the Proposal, actionable IOIs have the capacity to communicate information about the existence of a large parent order, and as such their usage, like other components of broker-dealers' order handling and routing practices, creates the potential for information leakage.
In addition, the Commission continues to believe that the four elements contained in the definition of actionable IOI (symbol, side, price, and size) are all necessary pieces of information for an external liquidity provider to respond with an order that is immediately executable against trading interest of a customer of the broker-dealer responsible for the IOI. The Commission emphasizes that these pieces of information may be implicitly conveyed, such as via a course of dealing between the IOI sender and the recipient. For example, given that Rule 611 of Regulation NMS generally prevents trading centers from executing orders at prices inferior to the NBBO, if a broker-dealer sends an IOI communicating an interest to buy a specific NMS stock, the IOI recipient reasonably can assume that the associated price is the NBBO or better.
One commenter stated that, for the purpose of routing brokers determining whether to send an order to a non-displayed venue, an IOI should have, at a minimum, a symbol.
The Commission does not believe that it is necessary for purposes of the definition of actionable IOI to draw a distinction between IOIs that are communicated manually (such as via the telephone, for example) versus IOIs that are communicated electronically. Some commenters drew such a distinction, and suggested that only IOIs that are communicated and accessible electronically should constitute actionable IOIs under Rule 600(b)(1).
One commenter urged the Commission to follow the commenter's characterization of how IOIs were described in the Regulation of Non-Public Trading Interest Proposing Release by targeting IOIs sent by venues such as ATSs, and to consider whether other market participants that send IOIs, such as exchanges, should be included within the scope of the rule.
For similar reasons, the Commission is not excluding from the definition of actionable IOI in Rule 600(b)(1) an IOI for a quantity of NMS stock having a market value of at least $200,000 that is communicated only to those who are reasonably believed to represent current contra-side trading interest of at least $200,000, as suggested by one commenter.
Finally, in response to commenters who requested clarification as to whether rules, regulations, and guidance applicable to quotes or orders would be applicable to actionable IOIs under the final rule,
The Commission proposed in Rule 606(b)(3) that every broker-dealer shall, on request of a customer that places, directly or indirectly, an institutional order with the broker-dealer, disclose to such customer a report on its handling of institutional orders for that customer.
The Commission also noted that the proposed report would cover instances where an institutional order is handled either directly by the broker-dealer or indirectly through systems provided by the broker-dealer.
Further, the Commission did not propose to change the existing definition of customer in Rule 600(b), which states that “customer” means any person that is not a broker-dealer.
Notwithstanding that Rule 606(b)(3) is modified from what was proposed such that the adopted rule covers not held NMS stock orders of any dollar value (subject to the two de minimis exceptions), the person or entity to which the broker-dealer must provide the Rule 606(b)(3) report is the same as under the Proposal. Specifically, under Rule 606(b)(3), every broker-dealer must, on request of a customer that places, directly or indirectly, one or more orders in NMS stock that are submitted on a not held basis with the broker-dealer, disclose to such customer a report on its handling of such orders
For the same reasons as stated in the Proposal, the Commission continues to believe that a broker-dealer should be required to provide the customer-specific order handling report to the customer that places the order with the broker-dealer, even if that customer may be acting on behalf of others and is not the ultimate beneficiary of any resulting transactions, such as when an investment adviser, as the customer of a broker-dealer, places an order with the broker-dealer that represents the trading interest of clients of the investment adviser.
One commenter stated that an account-level report should not be required because accounts often are assigned after the order is entered via an allocation process that is different from the system that handles routing, and thus it would be costly.
Consistent with these comments, the Commission continues to believe that, because the Rule 606(b)(3) customer-specific order handling disclosures will aggregate information to be disclosed to a specific customer across all of the customer's not held NMS stock orders, the risk that such disclosures would reveal sensitive, proprietary information about broker-dealers' order handling techniques should be minimal. The customer-level de minimis exception from Rule 606(b)(3) also is relevant in this regard, as it should help ensure that there is a significant level of trading activity reflected in the aggregated information provided to the customer under Rule 606(b)(3), and not information regarding just one or a few orders from which the customer may be able to discern aspects of the broker-dealer's sensitive or proprietary order handling techniques. A broker-dealer's sensitivity lies with its methods for determining how, where, and when to route a specific, individual order. By providing information for all of the customer's orders in the aggregate, the report conceals a broker-dealer's proprietary determinations with respect to any specific, individual order. Even if the report reflected that the broker-dealer sent a small number of orders to a particular venue, the report would not reveal why the broker-dealer chose that particular venue, when the broker-dealer routed the orders to that venue, what market signals informed the broker-dealer's choices as to venue and timing, or what type of routing strategy the broker-dealer utilized. As to one commenter's assertion that account-level disclosure would require broker-dealers that use third-parties to generate the Rule 606(b)(3) report to disclose sensitive client account numbers to such third-parties, the Commission is not adopting any requirement that the Rule 606(b)(3) disclosures be provided at the client account level, and thus nothing in Rule 606(b)(3) compels a broker-dealer to disclose client account numbers to third-parties.
The Commission further notes that, because it is not altering the broker-dealer exclusion from the definition of customer, and because Rule 606(b)(3) utilizes this defined term, the rule does not require a broker-dealer to report to another broker-dealer. This is consistent with what was proposed and with the order routing disclosure regime that has existed under Rules 606(a) and 606(b)(1).
Some commenters argued that the broker-dealer exclusion should be eliminated because a broker-dealer should be required, under Rule 606(b)(3), to report to the customer that places the order with the broker-dealer even if that customer is itself a broker-dealer.
On the other hand, one commenter asserted that, in a “white-labeling” or leveraged outsourced technology
In response to these comments, as an initial matter, it is worth highlighting that Rule 606(b)(3) requires a broker-dealer, upon request of a customer that places not held NMS stocks order with the broker-dealer, to disclose to such customer a report with respect to
This language from the rule informs the scope of a broker-dealer's obligation in the types of scenarios that commenters raised. As noted by some commenters, broker-dealers sometimes license or outsource technology offerings, such as trading algorithms, from third-parties, including other broker-dealers, to use for routing and executing orders. In these so-called “white-labeling” scenarios, the broker-dealer typically exercises discretion in determining what trading algorithm or other technology offering to utilize on behalf of its customer, as well as how to handle the customer's orders using that technology. For example, the broker-dealer may be able to adjust discretionary parameters that determine the aggressiveness of a particular algorithm,
The Commission understands that broker-dealers typically have access or rights to the execution data for trades made using algorithms or other technology that they license or outsource. As such, the Commission believes that most broker-dealers should be well-positioned to provide the Rule 606(b)(3) information to their customers for orders (or child orders thereof) that they routed or executed using a trading algorithm or other type of technology offering. Ultimately, however, when relying on third-party technology in this manner, broker-dealers will need to ensure that they can provide the information required by Rule 606(b)(3), should it be requested by a customer. Further, consistent with the exclusion of broker-dealers from the definition of customer, broker-dealers are required to report the Rule 606(b)(3) information only to non-broker-dealers.
In another type of arrangement raised by commenters, one broker-dealer, sometimes referred to as an introducing broker-dealer, will route an order on behalf of its customer to another broker-dealer, sometimes referred to as an executing broker-dealer, and the executing broker-dealer will carry out the further routing and ultimate execution of the order, perhaps utilizing trading algorithms or other technology. In this type of scenario, the executing broker-dealer's customer is the introducing broker-dealer because it is the introducing broker-dealer that places the order with the executing broker-dealer. Since, as discussed above, a broker-dealer is required to report only to the customer that places the order with the broker-dealer, in the introducing-broker-dealer/executing-broker-dealer arrangement, the executing broker-dealer is not required to report the Rule 606(b)(3) information to the introducing broker-dealer's customer. Moreover, Rule 606(b)(3) does not require the executing broker-dealer to report to the introducing broker-dealer in light of the broker-dealer exclusion from the definition of customer.
As noted above, some commenters argued that a different result would be appropriate under the rule; specifically, they argued that broker-dealers should be required to provide the Rule 606(b)(3) reports for broker-dealer orders.
For similar reasons, the Commission believes it is appropriate for the Rule 606(b)(3) requirements not to extend to orders handled by exchange-affiliated routing brokers, which are also excluded from Rule 606(b)(3)'s coverage
A broker-dealer is still required to provide the Rule 606(b)(3) report to its customer, upon request, with respect to
Nevertheless, the Commission believes that competitive forces in the market may enable a customer whose orders are routed by its broker-dealer to another broker-dealer to receive detailed order execution information, such as that required by Rule 606(b)(3)(ii) through (iv), for such orders. Customers could choose not to send not held NMS stock orders to broker-dealers that are unable to provide detailed order execution information, the prospect of which could cause such broker-dealers to request the information from their executing broker-dealers that, in turn, may risk losing broker-dealers as customers unless they provide the information. Even if this type of information sharing does not occur, a customer will still be entitled to receive information from its broker-dealer under Rule 606(b)(3) that illustrates how the broker-dealer is handling the customer's orders. With that information, the customer should be in a better position to determine whether its broker-dealer is adequately serving its investing and trading needs, as well as whether it would be better served by utilizing the services of a broker-dealer that is able to provide the full suite of detailed order handling information set forth in Rule 606(b)(3).
The Commission proposed that, for purposes of the customer-specific order handling report required under proposed Rule 606(b)(3), the handling of an institutional order would include the handling of all smaller orders derived from the institutional order.
The Commission is adopting this requirement as proposed. Any child orders derived from an order that is covered by Rule 606(b)(3) are also covered by the rule. Accordingly, Rule 606(b)(3) states that, for purposes of the customer-specific order handling report required under the rule, the handling of an NMS stock order submitted by a customer to a broker-dealer on a not held basis includes the handling of all child orders derived from that order.
Thus, the broker-dealer is required to include any such child orders in the Rule 606(b)(3) customer-specific order handling report. For example, if a broker-dealer splits a customer's not held NMS stock parent order into several child orders to be executed across different venues, the rule adopted today would require that the broker-dealer provide the required information regarding the execution of those child orders in the customer's Rule 606(b)(3) order handling report.
The Commission believes that such a result is consistent with the views of commenters. No commenter suggested that the Rule 606(b)(3) order handling report should not include child orders that were derived from a customer's parent order. To the contrary, several commenters suggested that it is essential that the broker-dealer order handling disclosures include the handling of all smaller (child) orders derived from the parent order.
Proposed Rule 606(b)(3) required a broker-dealer to provide the customer-specific order handling report to the customer within seven business days of receiving the customer's request, and required that the report contain information on the broker-dealer's
The Commission is adopting as proposed Rule 606(b)(3)'s requirement that a broker-dealer provide the customer-specific order handling report to the customer within seven business days of receiving the customer's request, and that the report contain information on the broker-dealer's handling of orders for that customer for the prior six months, broken down by calendar month.
The Commission continues to believe, at this juncture, that it is appropriate to require a broker-dealer to provide the Rule 606(b)(3) report to a customer within seven business days of the customer's request. While Rule 606(b)(1) does not set forth a time limit for broker-dealers to respond to a customer's request for a report, the Rule 606(b)(1) disclosures are not as detailed as the disclosures set forth in Rule 606(b)(3). Furthermore, customers that submit not held NMS stock orders face a greater risk of information leakage than customers that submit held NMS stock orders. As a result, the Commission believes that requiring broker-dealers to respond within seven business days is designed to ensure that customers receive the Rule 606(b)(3) disclosures in a manner that is timely enough to enable them to assess the risk of information leakage from how their orders are routed while still providing the broker-dealer with adequate time to prepare the report.
The Commission acknowledges, as noted in the Proposal, that broker-dealers will need to configure their systems to capture the information necessary to produce the Rule 606(b)(3) reports and, therefore, may not have the ability to produce historical reports about the routing of orders and executions that occurred before such systems are updated.
Even though one commenter expressed concern that a seven business day response window would not be achievable because broker-dealers typically do not receive rebate/fee information from execution venues until the end of the first or second week of the following month, the Commission continues to believe that the seven business day timeframe is important in requiring that all customers receive their order handling information in a timeframe that will allow them to act in a timely fashion in response to the information contained in the report. Relatedly, the Commission notes that the six-month period covered by Rule 606(b)(3) is a six calendar month period.
Proposed Rule 606(b)(3) did not specify the number of times a broker-dealer is required to respond to a customer request for a report on order handling, and the Commission is not adopting any such specification in final Rule 606(b)(3). Consistent with the Commission's guidance in the Proposing Release, Rule 606(b)(3) does not limit the number of times that a customer may place a request for an order handling report and does not preclude a customer from making a standing request to its broker-dealer, whereby the customer would automatically receive a recurring report on a periodic basis without the need to make repeated requests.
The Commission continues to believe that it is appropriate for the data in the Rule 606(b)(3) report to be broken down by calendar month. Consistent with this calendar month breakdown, as noted above, the six month period covered by the Rule 606(b)(3) report is a six calendar month period. Grouping the report data by calendar month should enable customers to assess how changes in fee structures at trading centers, which typically occur on a monthly basis, may affect a broker-dealer's routing decisions. Further, the Commission continues to believe that requiring the report data to be grouped by calendar month will help enable customers to assess how a broker-dealer's order handling practices may change in response to other internal or external factors. Grouping the data by calendar month allows a small aggregation of data, since it is possible that certain trading days may not yield any data points. Therefore, allowing grouping by calendar month may enable customers to evaluate the performance of their broker-dealers based on more meaningful data, and enable customers and broker-dealers to further discuss in a more meaningful manner how orders are routed and executed. The Commission does not believe that the rule should require a finer time period, such as weekly, as suggested by one commenter. The adopted rule does not limit what a customer may request from its broker-dealer, and in certain situations, a customer may request and receive weekly reports from its broker-dealer. The Commission believes that to require by rule a weekly report could increase compliance costs that may not be commensurate with the expected benefits. As such, the Commission does not believe that it is necessary to change the calendar month time period.
One commenter supported the Commission's proposed approach and stated that some institutional customers may request firm-specific customized reports and may not need the additional information in the order handling report.
The Commission is adopting as proposed the aspect of Rule 606(b)(3) that requires a broker-dealer to provide the order handling report upon customer request, and is not adopting any requirement regarding automatic provision of the report in the absence of a customer request or via an internet portal. Commenters that did support such automated delivery mechanisms did not provide a persuasive rationale for the Commission at this time to impose the likely cost to broker-dealers of developing such mechanisms. Not all customers may feel the need to request Rule 606(b)(3) reports from their broker-dealer, and as such it would not be a productive use of resources for broker-dealers automatically to provide reports to such customers. Moreover, under the adopted rule, a customer that wishes to receive the report can request it from the customer's broker-dealer. Mandating an automatic push to all customers would not be efficient, and could provide additional costs to broker-dealers. The Commission believes that the adopted rule strikes an appropriate balance between broker-dealers and customers, and does not believe that the rule should require the disclosure of order information when it is not requested by the customer. Likewise, customers that do request Rule 606(b)(3) reports may not desire to receive them via an internet portal, rendering the provision of internet portal access to such customers unnecessary.
The Commission proposed to require that the Rule 606(b)(3) order handling report be categorized by order routing strategy category for institutional orders for each venue.
The Commission is not adopting the proposed requirement that the Rule 606(b)(3) disclosures be categorized by order routing strategy for each venue to which the broker-dealer routed the customer's orders. The Commission received a significant amount of comment on this proposed requirement, nearly all of which expressed concern about, and none of which supported, the requirement as proposed. Commenters generally believed that the proposed categorization of the Rule 606(b)(3) order handling information for each venue by passive, neutral, or aggressive routing strategies category would be unnecessarily subjective and complex.
The Commission acknowledged in the Proposing Release that the proposed order routing strategy categorization had limitations similar to many of those raised by commenters, including the potential for inconsistency in how broker-dealers categorize an order routing strategy and reduced comparability of order handling reports across broker-dealers, mixed routing strategies that could reasonably fit into more than one category, and customers that provide specific or market condition-dependent order handling instructions to their broker-dealers that affect how a broker-dealer handles an institutional order.
The comments received on this topic indicate, however, that interested market participants widely believe that the proposed order routing strategy categorization would not provide a sufficient benefit that justifies adopting the categorization notwithstanding its limitations. Commenters appear to believe that these limitations are more pervasive and potentially more deleterious to the quality and usefulness of the Rule 606(b)(3) order handling reports than the Commission preliminarily believed. Indeed, the Commission acknowledges that several commenters believed that the proposed order routing strategy categorization would not provide information to customers that is useful for assessing their broker-dealers' order handling performance and, in fact, could impair the utility and comparability of the Rule 606(b)(3) order handling reports. Accordingly, the Commission is persuaded not to include in final Rule 606(b)(3) the proposed order routing strategy categorization and therefore has not included proposed subparagraph (b)(3)(v) in the adopted rule.
As discussed
The Commission did not propose to require that the Rule 606(b)(3) customer-specific order handling report differentiate between orders that the customer directed the broker-dealer to route to a particular venue versus orders that the customer did not so direct.
Several commenters suggested that directed orders and non-directed orders be segregated in the Rule 606(b)(3) order handling reports. As noted above, several commenters asserted that the disclosures in the Rule 606(b)(3) reports would be most useful to customers if they are focused on orders for which the broker-dealer exercised discretion in handling.
The Commission is modifying Rule 606(b)(3) to require that the customer-specific order handling report for not held NMS stock orders be divided into separate sections for the customer's directed orders and non-directed orders, with each section containing the disclosures regarding the customer's order flow with the broker-dealer specified in Rule 606(b)(3), as well as the disclosures for each venue to which the broker-dealer routed orders specified in Rules 606(b)(3)(i)-(iv). The two types of orders are fundamentally different in that, with directed orders,
By providing the order handling information separately for non-directed not held orders, the Rule 606(b)(3) report will provide a customer with a more precise reflection of how and where its broker-dealer is routing the customer's not held NMS stock orders pursuant to the discretion afforded to the broker-dealer. A primary utility of the Rule 606(b)(3) reports is to enable customers to better understand how their broker-dealers exercise discretion in handling their not held orders, and this will be more easily achieved if the reported disclosures for directed and non-directed orders are separate. Otherwise, with directed not held orders and non-directed not held orders commingled in the report, a customer may not be able to accurately differentiate routing behavior for which its broker-dealer exercised discretion in determining where to route an order from routing behavior where the customer itself directed the routing destination. Separating the Rule 606(b)(3) order handling disclosures for non-directed not held orders from those for directed not held orders should help customers evaluate their broker-dealers order handling performance and how their broker-dealers are achieving best execution for their non-directed not held orders while managing the potential impact of information leakage and conflicts of interest.
In addition, the Commission believes that customers will benefit from being able to analyze Rule 606(b)(3) routing disclosures that are specific to their directed not held orders for NMS stock. As discussed below, the Rule 606(b)(3) reports require the broker-dealer to disclose, among other things, information on order execution.
The Commission proposed to require that the customer-specific order handling report required under proposed Rule 606(b)(3) be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission also proposed new format requirements for the existing customer-specific order handling disclosures in Rule 606(b)(1). Specifically, the Commission proposed to require that the customer-specific order routing report required by Rule 606(b)(1) be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission is adopting as proposed the requirement that the customer-specific order handling report required under Rule 606(b)(3) be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission received several comments on the proposed reporting format,
The Commission believes that while XML predates JSON as a standard, XML has proven to be a flexible standard that continues to be incorporated into common desktop applications and is the basis for a variety of financial reporting languages in a way that JSON is not. Moreover, if the Commission did not specify a particular format and instead left it to the discretion of the filer, users of the data would lose their ability to compare the data easily and easily ensure their consistency between filers. XML's Schema is a widely used, stable metadata standard which is better suited for validation than JSON. Validations help ensure data consistency and comparability, which enhances overall data quality for both broker-dealers and customers. Market participants have the necessary tools and experience with analyzing a variety of financial data in the XML format. The use of XML has been adopted in a number of recent Commission rulemakings
As for the suggestions to adopt a CSV, spreadsheet file, or flat-text file format, the Commission does not believe that these formats would be as suitable as XML, since the hierarchical nature of the disclosures required by the amendments being adopted today would require more than a single set of uniformly structured rows, and these formats would not support representing such disclosures easily. Moreover, neither of those formats can incorporate robust validations to address issues such as completeness, required relationships, and correct formatting. If used, a CSV, spreadsheet, or flat text file format would likely have data quality issues of consistency and comparability that would make the data less usable and require repeated corrections by the broker-dealers. Accordingly, the Commission is adopting as proposed the requirement that the customer-specific order handling report be made available using an XML schema to be published on the Commission's website.
While one commenter criticized the use of the PDF renderer, that commenter criticized its use because PDF files cannot be processed and analyzed.
One commenter suggested that the Commission should add headers to rows and columns in the customer-specific report that explains what each category of information means,
The Commission also is adopting as proposed the requirement that the customer-specific order handling report required under Rule 606(b)(1) be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission proposed that the Rule 606(b)(3) order handling report include information on the order flow sent by the customer to the broker-dealer. Specifically, the Commission proposed to require disclosure of: (1) Total number of shares of orders sent to the broker-dealer by the customer during the reporting period; (2) total number of shares executed by the broker-dealer as principal for its own account; (3) total number of orders exposed by the broker-dealer through an actionable IOI; and (4) venue or venues to which orders were exposed by the broker-dealer through an actionable IOI.
The Commission is adopting, with certain modifications, the requirement that the Rule 606(b)(3) order handling report include information on the customer's not held NMS stock order flow with the broker-dealer. The Commission believes that this information would be useful for customers to evaluate their not held order flow with a particular broker-dealer during the reporting period, the broker-dealer's methods for achieving best execution for such order flow, and the potential for conflicts of interests and information leakage associated with
The Commission also is adopting the requirement that the Rule 606(b)(3) report disclose the total number of not held NMS stock orders exposed by the broker-dealer through actionable IOIs. One commenter expressed support for this requirement.
The Commission is adopting, with modifications discussed below, the requirement that broker-dealers disclose the venue(s) to which not held NMS stock orders were exposed by the broker-dealer through an actionable IOI. The Commission continues to believe that disclosure of the specific venue(s) to which a broker-dealer exposed such an order by an actionable IOI would be useful for the customer to further assess the extent, if any, of information leakage of their not held orders and potential conflicts of interest facing their broker-dealers. Specifically, the Commission believes that such information will enable customers to assess whether their broker-dealers are exposing their not held orders to select market participants with which the broker-dealer has affiliations or business relationships, or from which the broker-dealer receives other incentives. In addition, the Commission believes that disclosure of this information will provide the customer with a more complete understanding of the broker-dealer's order handling activities for purposes of assessing the broker-dealer's execution quality generally.
Commenters generally supported requiring a broker-dealer to identify the venue(s) that were sent actionable IOIs.
Some commenters suggested that the Commission should clarify that the reference in proposed Rule 606(b)(3) to the venue(s) to which not held NMS stock orders were exposed by the broker-dealer through an actionable IOI does not include IOIs that a broker-dealer may send to its institutional customers.
The Commission's reference to “venues” for purposes of Rule 606(b)(3) is meant to refer to external liquidity providers to which the broker-dealer may send actionable IOIs. To provide the clarity requested by commenters, the Commission intends in this context for these external liquidity providers generally to include market participants that operate a business of providing liquidity by buying and selling securities for their own account and seek to profit from the spread between such trades, and that may reasonably be assumed by a broker-dealer to be willing to take the opposite side of a trade in connection with that business. The Commission believes that this category of market participants likely would include market centers as defined in Rule 600(b)(38), but may not be limited to such market centers. For example, as noted above, for purposes of Rule 606(b)(3), the Commission believes that the venues referenced by Rule 606(b)(3) generally would include an external liquidity provider that trades proprietarily. Rule 600(b)(38) defines market centers to include OTC market makers, among other things. In this context, an external liquidity provider that trades proprietarily, and to which a broker-dealer sends an actionable IOI, may be an OTC market maker and thus a market center under Rule 600(b)(38). But even if such an external liquidity provider is not an OTC market maker and does not qualify as a market center under Rule 600(b)(38), the Commission generally would consider a venue to be covered by Rule 606(b)(3) if it operates a business of providing liquidity by buying and selling securities for its own account and seeks to profit from the spread from such trades, and may reasonably be assumed by a broker-dealer to be willing to take the opposite side of a trade in connection with that business.
The Commission has considered commenters' concerns regarding the potential disclosure of customer identities if customers to which broker-dealers send actionable IOIs are “venues” under the rule. The Commission believes that it is appropriate to protect the confidentiality of broker-dealer customer information, which can be proprietary. At the same time, the Commission believes that it is important for a customer to receive detailed, standardized disclosures from its broker-dealer that enable the customer to better evaluate the broker-dealer's handling of its not held NMS stock orders. If a broker-dealer exposes a customer's not held NMS stock order to one or more of its other customers via an actionable IOI, the customer should be entitled to that information as it may inform its assessment of its broker-dealer's performance in handling its orders. Accordingly, the Commission is adopting a modification to Rule
One commenter suggested that IOIs should be reported separately from orders.
Finally, one commenter stated that Rule 606 should require disclosure of routing statistics in response to IOIs received by smart order routers.
As the commenter acknowledged, Rule 606(b)(3) focuses on requiring the disclosure of IOIs sent by routing broker-dealers on behalf of orders received from their customers, not of IOIs received by broker-dealers.
Accordingly, Rule 606(b)(3) requires, with respect to the not held NMS stock order flow sent by the customer to the broker-dealer, the total number of shares of orders sent to the broker-dealer by the customer during the relevant period; the total number of shares executed by the broker-dealer as principal for its own account; the total number of orders exposed by the broker-dealer through an actionable indication of interest; and the venue or venues to which orders were exposed by the broker-dealer through an actionable indication of interest, provided that the identity of such venue or venues may be anonymized if the venue is a person or entity that may place an order with the broker-dealer.
The Commission proposed that the customer-specific order handling report required under proposed Rule 606(b)(3) include specific columns of information for each venue to which the broker-dealer routed orders for the customer, in the aggregate and broken down by passive, medium, and aggressive order routing strategies.
The Commission is adopting as proposed the requirement that the Rule 606(b)(3) customer-specific order handling report include specific columns of information for each venue to which the broker-dealer routed orders for the customer,
Commenters broadly supported the Proposal to require broker-dealers to provide more detailed order handling information to their customers upon request, and expressed varied views on what specific or additional metrics would be most useful and should be included in the report. Some commenters suggested requiring additional execution quality-related metrics in Rule 606(b)(3),
While commenters suggested different order handling metrics that could be useful to customers and provide more in-depth insight into how broker-dealers handle not held NMS stock orders, the Commission's intent in establishing the Rule 606(b)(3) disclosures is not to require broker-dealers to provide every specific piece of data that may be available for an order and potentially valuable to certain customers. Rather, the Commission's intent is to provide a baseline of standardized order handling information that (subject to two de minimis exceptions) all customers that submit not held NMS stock orders to broker-dealers are entitled to receive from their broker-dealers and that customers can use to evaluate their broker-dealers' order handling performance. Rules 606(b)(3)(i) through (iv) require broker-dealers to provide detailed information regarding order routing, order execution, orders that provided liquidity, and orders that removed liquidity. Each of those four categories of information is further divided into several subcategories of specific pieces of data that must be disclosed. The Commission continues to believe that these data points are sufficient to provide the Commission's intended baseline, standardized set of information that customers can use to evaluate how their broker-dealers handle their orders and, in particular, assess how their broker-dealers comply with best execution obligations and manage the potential for information leakage and conflicts of interest.
The Commission does not believe that it is necessary for the achievement of this goal to require, at this time, that the Rule 606(b)(3) order handling report include the additional order handling statistics suggested by commenters. There is a large spectrum of types of customers, and commenters suggested a wide range of order handling statistics. While certain additional data metrics may be more useful to certain types of market participants, the Commission does not view any particular data element suggested by commenters as likely to significantly enhance the degree to which the Rule 606(b)(3) report provides a standardized baseline of order handling information that is broadly useful to all customers that submit orders to their broker-dealers.
Moreover, incorporating additional metrics into the Rule 606(b)(3) report may increase the complexity of the report and the associated costs, and the Commission believes at this time that such costs and complexity would not be justified by the expected benefits to customers in evaluating the order handling performance of their broker-dealers. As summarized above, commenters suggested revised or additional disclosures related to execution quality and fee/rebate information.
In light of the fact that the Commission believes that the Rule 606(b)(3) disclosures are sufficient to provide a baseline, standardized set of information that customers can use to evaluate how their broker-dealers handle their orders, the Commission believes that the compliance costs and added complexity associated with commenters' suggested additional disclosures would not be justified by the marginal utility that these disclosures may add to the report beyond that which is provided by the disclosures. Specifically, the additional metrics related to fees and rebates and economic incentives suggested by commenters could provide customers with additional information on how venue fees and rebates impact how their broker-dealers' handle their orders, particularly in light of the potential for conflicts of interest caused by fees and rebates; however, the Commission believes that the Rule 606(b)(3) disclosures already contain sufficient fee and rebate information for customers to adequately evaluate their broker-dealers' potential conflict of interest. Thus, any added value in the report created by the suggested fee and rebate information would, in the Commission's view, not justify the additional complexity, as well as the additional costs, associated with including the information. Likewise, the additional execution quality metrics suggested by commenters could provide customers with more information regarding how their broker-dealers achieve best execution and attempt to prevent information leakage, but the Commission believes that the Rule 606(b)(3) disclosures, as proposed, already provide a sufficient basis for customers to evaluate their broker-dealers' performance in this regard. Thus, any added value in the report created by the suggested execution quality disclosures would not, in the Commission's view, be justified by the additional costs and complexity associated with including the information.
The Commission believes that adopting the Rule 606(b)(3) report content as proposed will help minimize the reporting complexity and costs, while creating a report that is universally useful across the spectrum of customer types, some of which may be more sophisticated than others in their ability to digest the reported
This determination is not an indication that the Commission has formed a decision on the validity or usefulness of the various different order handling metrics that commenters suggested. Rather, in light of the fact that, as noted above, the Commission believes that Rule 606(b)(3), as proposed, is reasonably designed to provide a standardized baseline of order handling disclosures that (subject to two de minimis exceptions) all customers that submit not held NMS stock orders to their broker-dealers are entitled to receive, the Commission has determined to adopt Rule 606(b)(3) as proposed.
As stated elsewhere herein, customers remain free to negotiate with their broker-dealers for additional disclosures regarding broker-dealers' handling of their orders, and broker-dealers of course remain free to compete by providing more detailed information than is required under Rule 606(b)(3). As a result of the rules being adopted today, customers that choose to negotiate with their broker-dealers for additional disclosures will be doing so from a more standardized baseline of enhanced order routing disclosures, and in the case of customers that previously did not receive detailed order handling disclosures from their broker-dealers, from a strengthened and more informed negotiating position. In light of the Commission's belief that the disclosures required by Rule 606(b)(3), as proposed and as adopted, are reasonably designed to provide such a standardized baseline of order handling information for customers to use to assess their broker-dealers' order handling performance, the Commission believes, at this juncture, that the disclosure of additional order handling statistics would be best left to competitive forces in the market and should not be mandated by Commission rule.
Accordingly, the Commission is adopting as proposed the requirement that certain order routing information be disclosed within the proposed venue segmentation in the Rule 606(b)(3) order handling report. Specifically, Rule 606(b)(3) requires that the order handling information specified in subparagraphs (b)(3)(i) through (iv) of the rule be provided for each venue to which the broker-dealer routed orders for the customer.
The Commission proposed to require a broker-dealer that receives orders covered by Rule 606(b)(3) to make publicly available
In addition, similar to the customer-specific order handling reports required under proposed Rule 606(b),
The Commission is not adopting proposed Rule 606(c), and thus the Commission is not adopting the proposed requirement that broker-dealers publicly report, on a quarterly basis, aggregated Rule 606(b)(3) order handling information. As a result, under the rule amendments being adopted today, for not held orders in NMS stock, broker-dealers are required only to provide the customer-specific order handling reports required by Rule 606(b)(3) (or Rule 606(b)(1), as applicable),
Multiple commenters stated that directed orders should be excluded from the proposed Rule 606(c) public aggregated reports, or alternatively, that directed orders should be reported separately.
In light of the comments submitted and after further consideration, the Commission is not adopting Rule 606(c) or any requirement that a broker-dealer make publicly available an aggregated report with respect to its handling of customers' not held NMS stock orders.
As noted above, broker-dealers may have different types of customers that utilize not held orders in NMS stock. For example, one broker-dealer may serve as a broker-dealer for only quantitative trading firms, while another broker-dealer may serve only investment advisers. Each customer has a unique set of circumstances, goals, and order flow that dictates how a broker-dealer handles that customer's orders. For example, the trading objectives of a quantitative firm primarily trading principally are different from the trading objectives of another type of customer, such as a diversified mutual fund. In light of this, the Commission believes that there would be limited ability to understand the quality of broker-dealers' routing performance or meaningfully compare broker-dealer order handling performance based on the aggregated information for not held NMS stock orders in the proposed public reports without requiring additional disclosures regarding customers and potentially sensitive proprietary information.
Indeed, broker-dealers' order routing behavior differs based on the customers they serve, and understanding the quality of their routing performance would likely require an understanding of the investment or trading needs of their underlying customers, which would not be obtainable from the aggregated information in the public reports. Moreover, some customers give complete discretion to a broker-dealer in handling their orders while other customers may place limits on or provide instructions regarding how a broker-dealer can handle their orders. In fact, orders from certain customers frequently limit broker-dealer discretion in some manner. For example, cost-sensitive customers may place restrictions on the venues a broker-dealer may use to execute their orders, which could have a significant impact on how the broker-dealer routes those orders and the resulting execution metrics. In particular, some customers choose cost-plus fee arrangements and specify a desire to maximize rebates or low pricing venues to the extent practicable. Or, customers may instruct broker-dealers to use certain algorithms or strategies that preference certain routing options or behavior. A taking algorithm acts differently than a posting algorithm, and there may also be routing strategies or configurations available with both taking and posting algorithms. Further, the Commission believes based on its experience that quantitative firms, for example, represent a large segment of the institutional marketplace and a significant portion of them use largely passive trading strategies, which can result in a demand for advantageous pricing arrangements, including cost-plus arrangements with their broker-dealers. This, in turn, can result in selecting rebate maximization strategies. Such strategies are often meaningfully different than the posting strategies used by long-only mutual funds, for example. The Commission believes based on its experience that aggregating the order handling information of cost-sensitive customers or customers that have specified certain algorithms or trading strategies for the broker-dealer to utilize with customers that have given the broker-dealer complete routing discretion creates dilutive effects in the aggregated information that wash out the routing nuances that are relevant to each type of customer and important to understanding a broker-dealer's routing decisions when granted full discretion.
The proposed aggregated public disclosures for not held NMS stock orders could therefore be unclear, and potentially misleading, due to the nature or requests of a broker-dealer's specific customers. A report may reflect apparently substandard order handling practices even though the broker-dealer is performing competently or is satisfying specific customer requests. Even a customer interested in comparing the performance of its specific orders to other orders handled by its own broker-dealer would likely be unable to meaningfully analyze the aggregate order handling report because the customer likely would not know the nature of, practices and requests of the broker-dealer's other customers. Due to the limited utility of the public reports as proposed, the Commission further believes that the burden of compiling and publishing aggregate order handling information for not held NMS stock orders does not at this time justify the expected benefits.
In addition, the Commission recognizes that broker-dealers have proprietary methods for order handling, and is cognizant of the sensitive nature of such business practices and intellectual property. The Commission believes that quarterly public disclosures as proposed may risk the exposure of sensitive proprietary information on the broker-dealers' order handling techniques. The Commission noted in the Proposing Release that it
Furthermore, the Commission believes that not held order handling is not analogous to held order handling and that the benefits that accrue from the public disclosure of aggregated held order handling reports are not likely to accrue from the public disclosure of aggregated not held order handling reports. Currently, Rule 606(a) requires public aggregated reporting of certain order handling information.
The Commission does not believe the same benefits would accrue to customers that utilize not held orders due to the fundamental differences between held order flow and not held order flow. Held orders are typically non-directed orders with no specific order handling instructions for the broker-dealer. Moreover, held order flow generally is handled similarly by broker-dealers—held orders are generally small orders that are internalized or sent to OTC market makers if marketable or fully executed on a single trading center if not marketable.
Prior to today, Rule 606(a) required, among other things, that broker-dealers that route customer orders—which do not include orders for NMS stock above $200,000 in market value or orders for options contracts above $50,000 in value
But as noted above and detailed in the Proposing Release, changes to market structure and order routing practices have led the Commission to analyze the current requirements for public order routing disclosure under Rule 606(a).
Accordingly, the Commission believes that it is appropriate to make limited updates to the Rule 606(a) requirements regarding broker-dealers' public disclosure of their order routing practices, and in conjunction with Rule 606(b)(3)'s applicability to NMS stock orders of any size that are submitted on a not held basis, amend Rule 606(a) such that it applies to NMS stock orders of any size that are submitted on a held basis. Commenters were broadly supportive of enhanced Rule 606(a) order routing disclosures.
As discussed above,
As discussed above,
Specifically, Rule 606(a)(1), as amended, states that every broker-dealer must make publicly available for each calendar quarter a report on its routing of non-directed orders in NMS stocks that are submitted on a held basis and in non-directed orders that are customer orders in NMS securities that are option contracts during that quarter broker down by calendar month. As noted above,
Rule 606(a)(1)'s application to held NMS stock orders of any size works in unison with the customer-specific disclosures contained in Rule 606(b)(1) and Rule 606(b)(3) to ensure that all NMS stock orders are covered by order handling disclosure rules and to avoid overlap between such rules.
For the same reasons as discussed above,
In practice, the coverage of Rule 606(a)(1) as amended is likely to be largely similar to the rule's coverage under its pre-existing application to NMS stock orders of less than $200,000 in market value. The Commission expects that the majority of customer (
Under the Proposal, a non-broker-dealer NMS stock order with a market value of at least $200,000 would have been defined as an institutional order—regardless of whether it was a held or
The Commission proposed to amend Rule 606(a)(1)(i) and (ii) to require the public order routing report to split limit orders and separately disclose them as marketable and non-marketable.
The Commission is adopting as proposed the amendments to Rule 606(a)(1)(i) and (ii) to require the disclosure of order routing information for marketable limit orders separately from non-marketable limit orders.
As noted in the Proposing Release,
In light of the different incentives broker-dealers encounter when handling marketable limit orders versus non-marketable limit orders, and the resulting differences in how and where broker-dealers route marketable limit orders versus non-marketable limit orders, the Commission believes that requiring that the Rule 606(a) reports disclose order routing information separately for marketable limit orders and non-marketable limit orders will significantly enhance their utility. The Commission continues to believe that classifying limit orders into marketable and non-marketable categories will provide greater transparency into broker-dealers' different routing practices for these two categories of limit orders, which will allow customers and other market participants to more fully assess broker-dealers' routing decisions for each type of order and the potential impact on execution quality, including whether broker-dealers are effectively managing their potential conflicts of interest. Providing greater public transparency as to broker-dealers' distinct routing practices for marketable limit orders and non-marketable limit orders also may increase competition among broker-dealers and minimize the potential conflicts of interest between maximizing revenue and the duty of best execution.
The Commission proposed to amend Rule 606(a)(1) to require more detailed disclosures regarding a broker-dealer's relationships with the venues to which it routes orders.
The Commission also proposed to amend the existing payment for order flow disclosures and re-locate them to new Rule 606(a)(1)(iv), which would require that the discussion of the material aspects of the broker-dealer's relationship with a Specified Venue include any terms, written or oral, of payment for order flow arrangements or profit-sharing relationships that may influence a broker-dealer's order routing decision including among other things: (1) Incentives for equaling or exceeding an agreed upon order flow volume threshold, such as additional payments or a higher rate of payment; (2) disincentives for failing to meet an agreed upon minimum order flow threshold, such as lower payments or the requirement to pay a fee; (3) volume-based tiered payment schedules; and (4) agreements regarding the minimum amount of order flow that the broker-dealer would send to a venue.
The Commission is adopting Rule 606(a)(1)(iii) as proposed, and therefore is requiring that, for each Specified Venue, the broker-dealer report the net aggregate amount of any payment for order flow received, payment from any profit-sharing relationship received, transaction fees paid, and transaction rebates received, both as a total dollar amount and on a per share basis, for each of the following non-directed order types: (1) Market orders; (2) marketable limit orders; (3) non-marketable limit orders; and (4) other orders.
One commenter supported requiring the disclosure of the net aggregate amount of any payment for order flow or rebates received from or transaction fees paid to each venue based on order type on a dollar amount and per share basis.
The Commission agrees with commenters that the disclosure of payment for order flow on a per share basis will provide meaningful information to customers regarding the importance of a specific venue to their broker-dealer. The disclosure of the aggregate amount of payment for order flow to a broker-dealer from a specific venue will give customers an even greater understanding of the overall importance of a specific venue to their broker-dealer. The additional cost to a broker of providing this payment for order flow information in aggregate form, if that broker-dealer is already providing this information on a per share basis, will be minimal. The Commission believes that an aggregate measure of a broker-dealer's financial arrangements with Specified Venues will provide additional information to investors and customers regarding the incentives and disincentives underpinning a broker-dealer's routing strategy for customer orders. In turn, this should help give investors and customers a more complete understanding and comprehensive view of the potential conflicts of interest faced by a broker-dealer when routing orders and how the broker-dealer manages those conflicts. The aggregate measure will, by its nature, vary with the amount of the order flow handled by the broker-dealer, but the Commission does not believe that this renders the measure meaningless. To the contrary, an aggregate measure will provide customers and investors with transparency beyond that available prior to these amendments regarding the volume of orders that a broker-dealer handles subject to payment for order flow, profit sharing, or other arrangements. This could be useful information to investors and customers trying to assess what size or type of broker-dealer would best suit their investment needs and goals.
Moreover, the Commission adopted Predecessor Rule 606 primarily to address the serious problems that can arise from market fragmentation.
Additional commenters suggested other changes or limitations to proposed Rule 606(a)(1)(iii).
As noted above, prior to today's rule amendments, Rule 606(a)(1) required a broker-dealer to provide a discussion of the material aspects of its relationship with a Specified Venue, including a description of any arrangement for payment for order flow or any profit-sharing relationship. The Commission believes that the disclosures set forth in Rule 606(a)(1)(iii) as adopted are reasonably designed to provide an additional level of quantification and detail regarding a broker-dealer's relationship with Specified Venues that would help customers better assess the degree to which a broker-dealer faces conflicts of interests in connection with its customer order routing decisions, and how the broker-dealer manages those conflicts of interest. At the same time, the Commission does not believe that the information required by Rule 606(a)(1)(iii) would be overly complicated or burdensome for customers—and retail customers in particular—to consume. For example, Rule 606(a)(1) currently requires, in general, disclosure of any amounts per share or per order that the broker-dealer receives pursuant to any payment for order flow arrangement, any transaction rebates, and the extent to which the broker-dealer would share in profits derived from the execution of non-directed orders under any profit sharing relationship with a Specified Venue.
While some commenters suggested that the rule require different methods of quantification or that the broker-dealer disclose different metrics related to its financial arrangements with Specific Venues, at this juncture, the Commission believes that the required disclosures set forth in Rule 606(a)(1)(iii) are reasonably designed to provide a significant enhancement in the usefulness of the information that customers receive from broker-dealers' with respect to order routing, and should help provide customers with a more complete understanding of the conflicts of interest faced by broker-dealers and how those conflicts are managed.
The Commission also is adopting Rule 606(a)(1)(iv) as proposed, and therefore is requiring that the broker-dealer report the material aspects of its relationship with each Specified Venue, including a description of any arrangement for payment for order flow and any profit-sharing relationship and a description of any terms of such arrangements, written or oral, that may influence a broker's or dealer's routing decision including, among other things, incentives for meeting or disincentives for not meeting an agreed upon order flow threshold, volume-based tiered payment schedules, and minimum order flow agreements.
The Commission is requiring that a broker-dealer disclose any incentives that a Specified Venue provides to the broker-dealer for equaling or exceeding a volume threshold by offering additional payments or a higher rate of payment, or conversely, any disincentives that a Specified Venue provides to the broker-dealer for failing to meet an agreed upon minimum order flow threshold, such as a lower payment or charging a fee.
Further, the Commission is requiring broker-dealers to disclose any volume-based tiered payment schedules with a Specified Venue.
Additionally, the Commission is requiring broker-dealers to disclose agreements regarding the minimum amount of order flow that a broker-dealer would be required to send to a Specified Venue.
Finally, the Commission acknowledges that as market structure evolves, new types of arrangements not specifically listed may arise. The four arrangements referenced in Rule 606(a)(1)(iv) are not an exhaustive list of terms of payment for order flow arrangements or profit-sharing relationships that may influence a broker-dealer's order routing decision that are required to be disclosed. Rule 606(a)(1)(iv) requires a discussion of the material aspects of the broker-dealer's relationship with each Specified Venue, including a description of any terms of such payment for order flow or profit-sharing arrangements that may influence a broker-dealer's order routing decision for the orders covered by Rule 606(a)(1),
As described above, because certain terms of payment for order flow arrangements or profit-sharing relationships may encourage broker-dealers to direct their orders to a specific venue in order to achieve an economic benefit or avoid an economic loss, potential conflicts of interest may arise. The Commission believes that disclosure of such information will be useful for customers to assess the extent to which a broker-dealer's payment for order flow arrangements and profit-sharing relationships may potentially affect or distort the way in which their orders are routed. The Commission further believes that providing customers a comprehensive description of such quantifiable terms of a broker-dealer's relationship with a Specified Venue will allow them to fully appreciate the nature and extent of potential conflicts of interest facing their broker-dealers and assist them in evaluating the broker-dealers' management of such potential conflicts of interest.
Some commenters supported the disclosure of any agreement that may influence a broker-dealer's routing decisions, including oral agreements or arrangements.
Rule 606(a)(1) requires a discussion of the material aspects of a broker-dealer's relationship with a Specified Venue regarding payment for order-flow or profit-sharing. The expansion contained in new Rule 606(a)(1)(iv) is intended to capture all such arrangements with Specified Venues as all such arrangements—whether written or oral—may be relevant to the customer. The Commission acknowledges that some commenters supported additional disclosure in Rule 606(a)(1)(iv), while two commenters—representing the brokers who will be providing this information as opposed to retail customers themselves—believed that Rule 606(a)(i)(iv), as proposed, would disclose too much information to retail customers. The Commission believes that Rule 606(a)(1)(iv) strikes an appropriate balance by, on one hand, providing customers with disclosures that will better enable them to assess their broker-dealers' payment for order flow arrangements and profit-sharing relationships, and the potential for resulting conflicts of interest, while on the other hand providing information that will not be overly voluminous or difficult to comprehend. The Commission believes the information contained in the reports should be straightforward to customers familiar with the operation of the markets, and will thus generally conform to EMSAC's recommendations regarding clarity and comprehension of the reports. To the extent a customer does not understand these disclosures, the Commission expects that the customer would ask its broker-dealer for greater explanation of the arrangement.
The Commission proposed to require that the publicly available quarterly order routing report required by Rule 606(a)(1) be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission is adopting as proposed the requirement that the public order handling reports required under Rule 606(a)(1) be made available using an XML schema and associated PDF renderer published on the Commission's website. Of the comments received on the proposed reporting format, most supported a machine-readable or standardized format
The Commission continues to believe that providing the Rule 606(a)(1) quarterly public reports in the proposed format will promote consistency and comparability of the reports. In contrast to commenters' views noted above, the Commission believes that providing these reports in the commonly used PDF/XML format will create benefits of consistency and comparability of the reports for customers that justify the costs. Accordingly, the Commission believes that it is appropriate to adopt the amendment to Rule 606(a)(1) to require that the quarterly public order routing report be made available using an XML schema and associated PDF renderer published on the Commission's website.
The Commission is adopting as proposed the amendment to Rule 606(a)(1) to require every broker-dealer to keep the reports required by Rule 606(a)(1) posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
In a related issue, in question 116 of the Proposing Release, the Commission asked whether it should require broker-dealers to make publicly available the prior three years' worth of quarterly reports from the effective date of the rule.
The Commission also received comments addressing whether broker-dealers should be required to make the reports available on their own websites or on a centralized website.
One of the chief goals of the rule amendments being adopted today is to enable customers to more readily and meaningfully assess broker-dealers' order handling practices. The
The Commission proposed to amend Rule 606(a)(1) to remove the requirement that Rule 606(a)(1) reports be divided into three separate sections for securities listed on the NYSE, securities that are qualified for inclusion in NASDAQ, and securities listed on the American Stock Exchange or any other national securities exchange.
The Commission is adopting as proposed the amendment to remove the requirement that Rule 606(a)(1) reports be divided into three separate sections for securities listed on the NYSE, securities that are qualified for inclusion in NASDAQ, and securities listed on the American Stock Exchange or any other national securities exchange. The Commission notes that the language is stale, as NASDAQ is now registered as a national securities exchange and the American Stock Exchange is now known as NYSE American LLC.
The Commission requested comment in the Proposing Release regarding whether the Rule 606(a) public order routing reports should instead be categorized according to whether a particular security is included in the Standards & Poor's 500 (“S&P 500”) index.
While the Commission believes that the handling of NMS stocks no longer varies materially based on their primary listing market, the Commission believes that the handling of NMS stocks may vary based on their market capitalization value and trading volume. Thus, customers that place held orders in NMS stock could benefit from a delineation based on S&P 500 index in the Rule 606(a)(1) report. Inclusion in the S&P 500 is based on a variety of factors that may be of utility to customers when reviewing their disclosures, including that S&P 500 constituents must be U.S. companies and must meet market capitalization, public float, financial viability, liquidity, and price requirements.
The Commission proposed to amend Rule 606(a)(1) to require that the public order routing reports required by the rule be broken down by calendar month.
The Commission is adopting as proposed the amendment to Rule 606(a)(1) to require that the publicly available quarterly order routing reports be broken down by calendar month.
The Commission believes that disclosing the information contained in the Rule 606(a)(1) reports by calendar month will allow customers to better assess whether their broker-dealers' routing decisions are affected by changes in fee structures and the extent such changes affect execution quality. In particular, a calendar-month breakdown will provide customers and market participants generally with greater insight into any month-to-month changes in routing behavior by broker-dealers in response to monthly changes in trading center fee structures.
As discussed above, the Commission is adopting targeted, limited enhancements to the public order routing disclosures required under Rules 606(a)(1) that are designed to shed additional light on broker-dealers' routing practices and the extent to which broker-dealers encounter and manage potential conflicts of interest stemming from payment-for-order flow arrangements, profit-sharing relationships, trading venue fees and rebates, or other factors. As the Commission previously noted, commenters were broadly supportive of these enhanced order routing disclosures.
As noted above, the Commission purposely did not propose significant enhancements or modifications to the Rule 606(a) public reports and did not include enhanced requirements regarding execution statistics. Rather, the Commission proposed targeted, limited enhancements in Rule 606(a) that focus on financial inducements connected to broker-dealers' order routing. The Commission believes that these enhancements are appropriately designed to enable customers—and retail customers in particular—to better assess their broker-dealers' order routing performance and, in particular, potential conflicts of interest that their broker-dealers face when routing their orders and how their broker-dealers manage those potential conflicts.
Accordingly, the Commission continues to believe that the limited modifications to Rule 606(a) as proposed are reasonably designed to further the goal of enhancing transparency regarding broker-dealers' order routing practices and customers' ability to assess the quality of those practices. The Commission does not believe that it is necessary for the achievement of this goal to require, at this time, that the Rule 606(a) public order handling reports include the additional, specific execution quality statistics suggested by some commenters. The additional disclosures suggested by the commenters would raise compliance costs and add to the complexity of the report. In adopting the amendments to the report, the Commission is seeking a balance between updating the current reports to provide useful additional information to customers and the cost of compliance by broker-dealers. The Commission believes that the required disclosures, including the new disclosures adopted today, contain sufficient information for customers to make an informed decision to evaluate their broker-dealers' order routing performance. In order to reach this balance between cost and benefit, the Commission is not adopting the additional disclosures recommended by commenters at this time.
The Commission notes, as stated above, that this determination is not an indication that the Commission has formed a decision on the validity or usefulness of the various different execution quality statistics that commenters suggested. Rather, in light of the Commission's belief that Rule 606(a), as proposed, provides an appropriate level of insight into the widespread financial arrangements between broker-dealers and execution venues that may affect broker-dealers' order routing decisions, the Commission believes that it is an appropriate and a balanced approach at this juncture to adopt Rule 606(a) as proposed. The
The Commission proposed to amend Rule 605(a)(2) to require market centers to keep reports required pursuant to Rule 605(a)(1) posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
The Commission is adopting, without any change, the proposed amendment to Rule 605(a)(2) to require market centers to keep reports required pursuant to Rule 605(a)(1) posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
Certain provisions that the Commission is adopting today contain “collection of information requirements” within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
The hours and costs associated with complying with the rule amendments being adopted today constitute reporting and cost burdens imposed by the collection of information for Rule 606. As described in more detail below, certain estimates have been modified, as necessary, to conform to the adopted amendments and to reflect the most recent data available to the Commission.
The Commission requested comment on the collection of information requirements in the Proposing Release. As noted above, the Commission received comment on the Proposing Release. Views of commenters relevant to the Commission's analysis of burdens, costs, and benefits of the rule amendments being adopted today are discussed below.
The amendments to Rule 606, as adopted, contain “collection of information requirements” within the meaning of the PRA for broker-dealers that receive and handle certain orders in NMS stocks. As detailed in Section III,
Rule 606(b)(3) of Regulation NMS, as adopted, requires a broker-dealer, on request of a customer that places with the broker-dealer, directly or indirectly, NMS stock orders of any size that are submitted on a not held basis (subject to two de minimis exceptions) to electronically disclose to such customer within seven business days of receiving the request, a report on the broker-dealer's handling of such orders for that customer for the prior six months, broken down by calendar month. The report would contain certain information on the customer's order flow with the reporting broker-dealer as well as certain columns of information on orders handled by the broker-dealer, as described below, categorized by venue and separated by directed and non-directed orders.
Rule 606(a) of Regulation NMS, as amended: (1) Breaks down the existing limit order disclosures into separate categories of marketable limit orders and non-marketable limit orders;
Rule 606(b)(1), as amended, does not modify any of the current customer-specific disclosure requirements but only requires those disclosures for certain categories of orders. Broker-dealers must now provide the information only for: (i) Orders in NMS stocks that are submitted on a held basis; (ii) orders in NMS stocks that are submitted on a not held basis and are exempt from the disclosure requirements of Rule 606(b)(3); or (iii) orders in NMS securities that are option contracts.
The amendments would require reports produced pursuant to Rules 606(a) and 606(b)(1) to be formatted in the most recent versions of the XML schema and the associated PDF renderer as published on the Commission's website.
Rule 605(a)(2), as amended, requires market centers to keep reports required pursuant to the Rule 605(a)(1) posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
The order handling disclosures required under the adopted amendments to Rule 606 will provide more detailed information to customers that will enable them to evaluate how their orders were handled by their broker-dealers, assess potential conflicts of interest facing their broker-dealers in providing order handling services, and have the ability to engage in informed discussions with their broker-dealers about the broker-dealer's order handling practices. The adopted order handling disclosures can inform future decisions on whether to retain a broker-dealer's services or engage the services of a new broker-dealer. In addition, broker-dealers may use the public disclosures to compete on the basis of order routing services, and academics and others may use the public disclosures pursuant to Rules 605 and 606 to review and analyze broker-dealer routing practices and trading center order executions.
Rule 606(b)(3), as adopted, provides detailed order routing and execution information to a customer regarding its specific NMS stock orders of any size that are submitted on a not held basis (subject to two de minimis exceptions) during the reporting period. Generally, the five groups of information contained in the order handling report will enable customers to understand where and how their not held NMS stock orders were routed or exposed, as well as where their orders were executed during the reporting period. Customers may use the information contained in the order handling report to assess any considerations a broker-dealer may have faced when routing its not held NMS stock orders to various venues and whether those considerations may have affected how a broker-dealer handled its orders, as well as to assess whether a broker-dealer's order routing practices may have led to risks of information leakage.
The requirement that broker-dealers produce one report for directed orders and one report for non-directed orders will provide a customer with a more precise reflection of how and where its broker-dealer is routing the customer's not held NMS stock orders pursuant to the discretion it is afforded.
Rule 606(a), as amended, requires broker-dealers to break down the limit order disclosure in the public order routing reports into separate categories of marketable limit orders and non-marketable limit orders.
As noted above, the amendments to Rule 606(b)(1) do not create new data collection obligations but require the disclosures for certain categories of orders.
The adopted requirement that reports required under Rule 605 be kept posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website may allow customers and others to analyze historical order execution quality at various market centers, such as researchers that could provide analysis to better inform investors. The three years of data may be useful to those seeking to analyze how execution quality has changed over time, in addition to changes in response to regulatory or other developments.
The respondents to the amendments being adopted today are broker-dealers that handle held orders and not held orders received from customers and market centers that create reports pursuant to Rule 605.
In the proposing release the Commission estimated, as of December 2015, that there were approximately 4,156 total registered broker-dealers. Of these, the Commission estimated that 266 were broker-dealers that route retail orders. The Commission estimated that 200 broker-dealers were involved in the practice of routing institutional orders, all of whom also routed retail orders. The Commission estimated that there were 380 market centers to which Rule 605 applies.
The Commission estimates that of the approximately 4,024 total registered broker-dealers,
Of the 200 broker-dealers involved in routing orders subject to the customer-specific disclosures described in Rule 606(b)(3), the Commission initially estimated that 25 broker-dealers that handle orders do not currently have systems that obtain all of the information required by the proposed amendments.
The Commission preliminarily estimated the average burden for a broker-dealer that already captures information required by the proposed rule to format its systems to produce a report to comply with the proposed rule would be 40 hours.
The Commission is revising its initial burden and cost estimates associated with producing the customer-specific reports on order handling required by Rule 606(b)(3)
To the extent these comments are addressed to the initial hourly burden for broker-dealers to produce the customer-specific order handling disclosures required by Rule 606(b)(3),
The commenter also implicitly criticizes the Commission's estimate that only 25 of the 200 total broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) would need to update their data capture systems by stating that “brokers will
The Commission continues to believe that some broker-dealers will implement the changes in-house, while others will engage a third party vendor, which is supported by the commenter's statement that broker-dealers will have to “modify their OMS system or have their OMS vendor make changes.”
The Commission is estimating the total initial burden for broker-dealers that will program their systems in-house to capture the data and produce a report to comply with the rule as 17,420
The commenter states that the Commission did not include an estimate for “monitoring systems for ensuring that strategy definitions are reasonably defined.”
The commenter also suggests that the Commission's estimate for producing the order handling disclosures “does not include the complexities of the IOI reporting.”
The revised initial burden estimate takes into account the requirement that the disclosures apply to NMS stock orders of any size that are submitted on a not held basis (subject to two de minimis exceptions) instead of to “institutional orders” as defined by a dollar-value threshold in the Proposing Release.
The Commission also believes that this initial hourly burden estimate remains unchanged by the adoption today of a requirement that the customer-specific order handling disclosures described by Rule 606(b)(3) be segmented by directed and non-directed orders.
Further, this initial hourly burden estimate is unchanged by the Commission's decision today not to adopt proposed requirements to categorize order routing information by order routing strategy,
Therefore, the total initial burden for all 200 broker-dealers that handle orders subject to the customer-specific order handling disclosures required by Rule 606(b)(3) to implement a system that captures the data required by the rule and format that data into a report is estimated to be 24,070 hours and $5,660,000.
The Commission preliminarily estimated that 135 of the 200 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) would respond to customer requests in-house.
The Commission preliminarily estimated that 65 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) would use a third-party service provider to respond to requests. For these broker-dealers, the Commission preliminarily estimated an annual burden of 1 hour and $100 per response.
Therefore, the Commission preliminarily estimated the total annual burden for all 200 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) to comply with the customer response requirement in proposed Rule 606(b)(3) would be 67,000 hours
The Commission estimates the total annual burden for the 200 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) to comply with Rule 606(b)(3) to be 67,000 hours and $1,300,000, as it did in the Proposing Release, but is updating the monetized hourly burdens to reflect the latest available labor earnings data.
The Commission believes that for the 135 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) that would respond in-house to customer requests pursuant to Rule 606(b)(3), as adopted, the annual hourly burden to comply would be 54,000 hours.
Therefore, the Commission estimates the total annual burden for all 200 broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) to comply with the customer response requirement of Rule 606(b)(3), as adopted, to be 67,000 hours
As discussed above, the Commission is not adopting the proposed requirement that broker-dealers that handle orders subject to the customer-specific disclosures required by Rule 606(b)(3) issue a quarterly public aggregated disclosure on order handling.
As discussed above, the Commission is not adopting the proposed requirement that broker-dealers break down information in the disclosures required by Rule 606(b) by order routing strategies.
The Commission preliminarily estimated that there are 266 broker-dealers to which the proposed disclosures in Rule 606(a)(1) and (b)(1) would apply.
The Commission estimated that the initial burden for a broker-dealer that routes orders subject to the disclosures required by Rule 606(a)(1) to engage a third-party to program the necessary system updates to comply with proposed Rule would be 20 hours and $10,000
For the remaining 216 broker-dealers that the Commission estimated already capture the data required by the proposed modifications to Rule 606(a)(1), the Commission estimated that 108 of such broker-dealers already engage a third-party service provider to provide reports pursuant to existing Rule 606(a)(1) and such broker-dealers would continue to use third-party service providers to format reports to comply with proposed Rule 606(a)(1).
The Commission estimated that the initial burden for the 108 broker-dealers that engage a third-party service provider to format reports to comply with proposed Rule 606(a)(1) would be 8 hours
Finally, the Commission estimated that the initial burden for a broker-dealer that routes orders subject to the disclosures required by Rule 606(a)(1) to review, assess, and disclose its payment for order flow arrangements and profit-sharing relationships would be 10 hours and that all 266 broker-dealers that route such orders would describe such agreements and arrangements themselves.
Therefore, the Commission estimated that the total initial burden to comply with the proposed modifications to Rule 606(a)(1) for all 266 broker-dealers would be 8,084 hours and $2,408,730.
As discussed above, based on more recent data on respondents,
The commenter acknowledges that broker-dealers may either update their systems in-house or engage a third-party vendor to make the changes.
The commenter criticizes the Commission's hourly burden estimate for producing the Rule 606(a)(1) disclosures as too low and suggests an estimate of 240 hours to produce the reports.
Upon consideration of the comments, and in particular the statement that the implementation would require “at least [ ] four weeks of developer time,”
The Commission is estimating the total initial burden for broker-dealers that will program their systems in-house to capture the data and produce a report to comply with the rule as 23,280 hours.
Therefore, the Commission estimates that the total initial burden for all 292 broker-dealers to comply with Rule 606(a)(1), as amended, and format their reports to incorporate such data
The Commission includes in this estimate the initial burden of making the reports available using the most recent versions of the XML schema and the associated PDF renderer as published on the Commission's website, as required by Rule 606(a) and (b)(1), as amended.
Finally, the Commission estimates that the initial burden for a broker-dealer that routes orders subject to the disclosures described by Rule 606(a)(1) to review, assess, and disclose its payment for order flow arrangements and profit-sharing relationships to be 10 hours
As discussed above, Rule 606(b)(1), as amended, does not modify any of the current customer-specific disclosure requirements but modifies the categories of orders to which the disclosure applies. Prior to these amendments, Rule 606(b)(1) applied to all customer orders,
The Commission believes that it is reasonable to estimate that one third of the 292 broker-dealers that route orders subject to the disclosures required by Rule 606(b)(1)—97 broker-dealers—will implement these changes in-house, while the remaining number—195 broker-dealers—will engage a third-party vendor to do so.
Therefore Commission estimates the total initial burden for all 292 broker-dealers to program their systems to comply with Rule 606(b)(1) as 2,913 hours
The Commission preliminarily believed that broker-dealers would need to monitor payment for order flow and profit-sharing relationships and potential SRO rule changes that could impact their order routing decisions and incorporate any new information into their reports. Thus, the Commission estimated the average annual burden for a broker-dealer to comply with the proposed amendments to Rule 606(a)(1)(i) through (iii) would be 10 hours and the total annual burden for all broker-dealers to comply with the proposed amendments would be 2,660 hours.
Finally, the Commission estimated that the average annual burden for a broker-dealer that handles retail orders to describe and update any terms of payment for order flow arrangements and profit-sharing relationships with a Specified Venue that may influence their order routing decisions, as required by proposed Rule 606(a)(1)(iv), would be 15 hours.
The Commission continues to believe that the annual burden to produce a quarterly report will remain the same under Rule 606(a), as amended, as under the previous rule but that all broker-dealers that route retail orders will need to monitor payment for order flow and profit-sharing relationships and potential SRO rule changes that could impact their order routing decisions and incorporate any new information into their reports. The Commission continues to estimate the average annual burden for a broker-dealer to comply with the amendments to Rule 606(a)(1)(i) through (iii), as amended, to be 10 hours
The Commission continues to estimate the average annual burden for a broker-dealer required to describe and update any terms of payment for order flow arrangements and profit-sharing relationships with a Specified Venue that may influence their order routing decisions, as required by Rule 606(a)(1)(iv), as amended to be 15 hours
As discussed above, the amendments being adopted today add several defined terms to Rule 600 of Regulation NMS which will impose an initial burden on market centers and the broker-dealers to review and update compliance manuals and written supervisory procedures and update citation references to any such defined term. Although the Commission did not include an initial estimate for this burden in the Proposing Release, the Commission is now revising its PRA estimate to include this burden. Based on its familiarity with these types of materials and the likelihood that these materials are maintained in an electronic form that facilitates search and replace, the Commission estimates that each of the 381 market centers and 4,024 broker-dealers would make these updates in house at a one-time burden of 2 hours for each respondent.
The amendment to Rule 605 being adopted today requires that such reports be kept posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website. Because reports were already required to be posted to a website pursuant to Rule 605 prior to today's amendments, and the proposed amendment merely prescribes a minimum period of time for which such reports shall remain posted, the Commission preliminarily estimated the proposed amendment to Rule 605 would not impose an additional burden.
All of the collections of information are mandatory.
To the extent that the Commission receives confidential information pursuant to the collection of information, such information will be kept confidential, subject to the provisions of applicable law.
The quarterly order routing reports prepared and disseminated by broker-dealers pursuant to Rules 606(a), as amended, would be available to the public. The individual responses by broker-dealers to customer requests for order routing information required by Rules 606(b)(1) and (b)(3), as amended, would be made available the customer. The Commission, SROs, and other regulatory authorities could obtain copies of these reports as appropriate.
Pursuant to Rule 606(a), as amended, broker-dealers shall be required to keep quarterly order routing reports posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
For Rule 606(b), as adopted, broker-dealers shall be required to preserve all communications required under these proposed amendments pursuant to Rule 17a-4, as applicable.
Pursuant to the proposed amendments to Rule 605, as amended, market centers shall be required to keep order execution reports posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the website.
The Commission is sensitive to the economic consequences and effects, including costs and benefits, of its rules. The following economic analysis identifies and considers the costs and benefits—including the effects on efficiency, competition, and capital formation—that may result from the amendments to Rules 600, 605, and 606.
Among the primary economic considerations for the adopted amendments to Rule 600, Rule 605, and Rule 606 are transparency for customers placing not held NMS stock orders, transparency for customers placing held NMS stock orders, and enhanced access to order handling reports.
The Commission believes that requiring customer-specific order handling disclosures for orders submitted on a not held basis, as will be required by adopted Rule 606(b)(3), will provide information to customers to enable them to assess broker-dealers' order handling decisions and to incentivize broker-dealers to better manage any potential conflicts of interest the broker-dealers may face, provide customers with higher-quality routing services, and promote competition.
The Commission is also amending Rule 606(b)(1) to require a broker-dealer, upon customer request, to provide disclosures for orders in NMS stock that are submitted on a held basis, and for orders in NMS stock that are submitted on a not held basis and for which the broker-dealer is not required to provide the customer a report under Rule 606(b)(3). The Commission believes that amended Rule 606(b)(1) disclosures will help ensure customers can assess the order routing and execution quality provided by their broker-dealers, which, in turn, enables the customers to evaluate and select broker-dealers, promote competition among broker-dealers, and support overall market efficiency.
The Commission also is amending Rule 606(a) such that the public reports include additional information that will enhance transparency on the routing of customer orders and enhance competition among broker-dealers that route such orders, to the benefit of investors.
The Commission believes that the requirement that the order routing reports required by Rule 606(b) be provided in a consistent, structured format will be useful to customers as such format will allow customers to more easily analyze and compare data across broker-dealers.
Finally, the Commission believes that the amendments to Rules 605 and 606 of Regulation NMS to require that the public order execution and order routing reports be kept publicly available for a period of 3 years will allow the public to more efficiently evaluate the services of broker-dealers because it will be easier for the public to access historic reports and analyze the data over an extended time period.
The Commission believes that these adopted amendments as a whole will allow customers to better assess the held NMS stock order routing and execution quality offered by their broker-dealers. As a result, the Commission believes that these additional disclosures may provide broker-dealers further incentives to improve execution quality for their customers and better manage any potential for conflicts of interest the broker-dealers may face. In addition, the ability of customers to better assess routing and execution quality could also lead to increased competition among broker-dealers with respect to execution quality, which could, in turn, result in broker-dealers providing even higher-
The discussion below presents a baseline of the current practices, a consideration of the costs and benefits of the adopted new requirements, alternatives considered, and a discussion of the potential effects of the adopted amendments.
The baseline for considering the economic impact of amending Rule 606 to require reporting for not held NMS stock orders consists of: (1) Information that customers currently receive from their broker-dealers regarding how their not held NMS stock orders are handled; (2) the format in which such information is currently provided to customers; (3) conflicts of interest broker-dealers currently face; (4) the current use of actionable IOIs; and (5) the ability to assess order routing and execution quality currently provided by different broker-dealers and execution quality currently provided by different trading centers.
The baseline for considering the economic impact of amending Rule 606 for held NMS stock orders and of amending Rule 605 consists of: (1) Information that customers currently receive under Rules 605 and 606 or information that customers currently receive from their broker-dealers that is not required by Rules 605 and 606; (2) the format in which information required by Rule 606 for such orders is provided to customers; (3) conflicts of interest that broker-dealers currently face; (4) how long reports required by Rules 605 and 606 are available to the public; and (5) the ability to assess order routing and execution quality currently provided by different broker-dealers and execution quality currently provided by different trading centers.
Finally, the baseline for considering the economic impact of amending Rules 605 and 606 includes the current competitive landscape in the markets for brokerage services and for execution services and any current limitations on efficiency or capital formation relevant to the adopted amendments. These various baseline factors are discussed in further detail below.
Currently, Rule 606 of Regulation NMS requires public disclosure of a broker-dealer's order routing information for non-directed orders in NMS securities that are in amounts less than (i) $200,000 for NMS stocks, and (ii) $50,000 for option contracts.
In the Proposing Release, the Commission analyzed how the $200,000 relates to orders from institutional customers.
Several commenters also discussed the relationship between the $200,000 threshold and institutional orders and also found that most institutional orders are for trade sizes smaller than $200,000. One commenter stated that its internal analysis of institutional trading volume indicated that 14% of institutional shares and 65% of institutional orders in the month of April 2016 were for less than $200,000, and from a sampling of large retail broker customer orders for 10 trading days in April 2016, over 10% of shares traded and over 20% of the value traded were from orders larger than $200,000.
Currently, as discussed in the Proposing Release, broker-dealers may voluntarily provide some information on routing and execution quality of NMS stock orders of $200,000 and above to individual customers in response to requests by these customers.
The Commission further understands that reports that customers sending orders of at least $200,000 in market value currently receive upon request from their broker-dealers may not provide the consistent and standardized information needed to fully assess or compare the performance of their broker-dealers.
Even if a broker-dealer voluntarily provides information about NMS stock orders of $200,000 and above upon request, it may not do so with respect to all customers. Whether a given customer receives a report and how responsive the report is to the request likely depends on the customer's
While Rules 605 and 606 have not specified the minimum length of time that order execution reports and order routing reports are publicly posted, generally, when new reports are available, some market centers and broker-dealers will remove the previous report from their website and replace it with their most recent report,
As discussed in the Proposing Release, Rule 606(a) requires that broker-dealers provide for covered orders, among other things, a description of any arrangement for payment for order flow
Many commenters agreed with the baseline that payment for order flow, fees, and rebates could result in conflicts of interest in institutional order routing.
As described above and in the Proposing Release, under the rules prior to these amendments, broker-dealers have not been required by regulation or incentivized by marketplace practices to provide customers standardized, comparable reports about the handling of their NMS stock orders of at least $200,000 in market value and instead customers may receive ad hoc reports from broker-dealers upon request.
In contrast to the ad hoc nature of reporting for NMS stock orders of at least $200,000 in market value, Rule 606 has required quarterly public reports on customer order routing and disclosure of customer order routing information upon request. However, the previously existing public reports have not required specific information on payment for order flow received, payment from any profit-sharing relationship received, or transaction rebates and access fees, and they have not been required to separate limit orders into marketable and non-marketable limit orders. Moreover, because Rule 605 reports only cover held orders and previously existing public reports do not distinguish held orders from customer orders, the scope of Rule 605 reports do not directly align with the scope of Rule 606 reports, which limits the ability of customers to assess execution quality of their broker-dealers.
As discussed above and in the Proposing Release, broker-dealers provide some information on routing and execution quality of institutional orders in response to requests from institutional customers in a variety of formats. The reports typically are not in a structured format.
The Commission does not have data to gauge the current level of quality of broker-dealer routing practices for not held NMS stock orders, as Rule 606 requires public disclosure of a broker-dealer's order routing information for non-directed orders in NMS securities that are in amounts less than $200,000 for NMS stocks, and does not require broker-dealers to separately report routing of not held orders.
To encourage additional order flow, some broker-dealers use actionable IOIs to communicate to external liquidity providers that they have unexecuted liquidity. As noted above and in the Proposing Release, because actionable
The Commission recognizes that, although actionable IOIs and conditional orders are similar, many market participants distinguish conditional orders from actionable IOIs because conditional orders require additional negotiation before a trade can be executed.
The adopted amendments are likely to affect competition among broker-dealers that route both not held and held NMS stock orders. These broker-dealers compete in a segment of the market for broker-dealer services. The Commission discussed market conditions for broker-dealer services in the Proposing Release, including that the market is highly competitive, with most business concentrated among a small set of large broker-dealers and thousands of small broker-dealers competing.
As of December 2016, there were approximately 4,024 registered broker-dealers.
Among other factors, broker-dealers may compete for retail and institutional customers by trying to offer them better terms for trading, such as better execution quality. The emergence of discount brokerages has encouraged full-service brokers to compete on price and led to the unbundling of research from execution services.
The market for trading services, which is served by trading centers, relies on competition among these market centers to supply investors with execution services at efficient prices. These market centers, which compete to, among other things, match traders with counterparties, provide a framework for price negotiation and provide liquidity to those seeking to trade. As discussed in Section IV.C., the Commission estimates that there are 381 market centers to which Rule 605 applies.
These market centers compete with each other for order flow on a number of dimensions, including execution quality. Their primary customers are the broker-dealers that route their own orders or their customers' orders for execution at the trading center. One way to attract order flow is to offer payment for order flow. The Commission understands that a large portion of retail order flow is sent to internalizers who pay for retail order flow. Trading centers also may innovate to differentiate themselves from other trading centers to attract more order flow. For example, several exchanges recently started pilots in an attempt to attract more retail order flow.
Transaction costs reflect the level of efficiency in the trading process, with higher transaction costs reflecting less efficiency.
These frictions may have an adverse impact on capital formation. In particular, an increase in transaction costs may hinder customers' trading activity that would support efficient adjustment of security prices and as a result may limit prices' ability to reflect fundamental values. The resulting less efficient prices result in some issuers experiencing a cost of capital that is higher than if their prices fully reflected underlying values while some other issuers might experience the opposite. This, in turn, may limit efficient allocation and capital formation. If an issuer's cost of capital is higher than in perfectly efficient markets, its projects would appear less profitable than they otherwise would be. The opposite would be true for an issuer with a cost of capital lower than in perfectly efficient markets. Thus, on average, inefficiencies can result in funding projects that generate less capital than some unfunded projects would have.
The Commission identified costs and benefits associated with the amendments to Rules 600, 605, and 606, which are discussed below. The Commission quantifies the costs where possible and provides qualitative discussion when quantifying costs and benefits is infeasible. Many, but not all, of the costs of the adopted amendments to Rules 600, 605, and 606 involve a collection of information, and these costs and burdens are discussed in the Paperwork Reduction Act Section above, with those estimates being used in the economic analysis below.
The Commission believes that the adopted approach to Rule 606(b)(3),
In light of the comments received suggesting the order type approach, the Commission staff performed a supplemental analysis of that approach. To examine the usage of not held orders by institutional customers, the staff analyzed the percentage of not held orders received from institutional and individual accounts from the FINRA's OATS data.
Consistent with commenters, the Commission believes that the adopted approach will facilitate identification of orders by broker-dealers that is consistent with many of the broker-dealers' current practices, which in turn could promote the accuracy of order handling information of not held orders and help ensure the benefits to customers that receive the reports. As
The Commission is adopting Rules 606(b)(4) and Rule 606(b)(5) de minimis exceptions from Rule 606(b)(3)'s requirements, which except a broker-dealer from the Rule 606(b)(3) requirements at the firm level or the customer level.
With respect to the Rule 606(b)(4) de minimis, commenters suggested that firms that receive less than 5% of orders from institutions should be exempt from requirements to provide disclosures for institutional orders, both at the individual investor level and in the aggregate,
To assess commenters' suggestions of a 5% de minimis threshold for Rule 606(b)(3) requirements, the staff conducted a supplemental analysis, which found that among 342 broker-dealers that receive not held orders from customers in the sample data, 28 broker-dealers would receive de minimis exceptions from Rule 606(b)(3)'s requirements.
Figure 1
Further, some firms, for business reasons, may choose to provide the Rule 606(b)(3) order handling disclosures to their customers, regardless of the de minimis exceptions. Further, as discussed in Section III.A.1.vi, broker-dealers that qualify for the firm-level de minimis exception still must provide, if requested, the Rule 606(b)(1) reports for
The Commission also acknowledges that adopted Rule 606(b)(5)'s customer-level de minimis exception may limit the benefits of Rule 606(b)(3) for some types of customers because some orders that would have been included in the Rule 606(b)(3) reports would be excluded under this de minimis exception.
The Commission also analyzed how the benefits of Rule 606(b)(1) compare to the scope of rules prior to today's amendments. The Commission believes that amended Rule 606(b)(1) reports are targeting the appropriate orders resulting in the reports being available to those mostly likely to benefit from them. Under the scope of public order handling reports prior to the amendments, customer orders with a market value of less than $200,000 were included in the public order routing reports and broker-dealers would need to prepare Rule 606(b)(1) reports of such orders upon request. In addition, broker-dealers would need to prepare 606(b)(1) reports for orders having a market value of at least $200,000 upon requests under the scope of previously existing reporting requirements. The amended Rule 606(b)(1) requires a broker-dealer, upon customer request, to provide the disclosures set forth in Rule 606(b)(1) for orders in NMS stock that are submitted on a held basis, and for orders in NMS stock that are submitted on a not held basis and for which the broker-dealer is not required to provide the customer a report under Rule 606(b)(3) pursuant to the de minimis exceptions. As discussed in Section III.A.1.b.vi., whereas the Rule 606(b)(3) disclosures are designed primarily for institutional customers, the Rule 606(b)(1) disclosures that cover held NMS stock orders are more retail customer-focused and thus better aligned with the type of customer most likely to submit held NMS stock orders. The staff's supplemental analysis found that about 25% of shares and about 33% of not held orders in the sample would have received 606(b)(1) reports under the requirements prior to today's amendments but will receive Rule 606(b)(3) reports. As discussed in Section V.C.1.a.i,1., Rule 606(b)(3) reports are more likely to benefit these customers submitting not held orders than Rule 606(b)(1) reports are. A staff's supplemental analysis also showed that about close to 41% of total shares and about 66% of total numbers of orders in the sample would be eligible for the disclosures required by Rule 606(b)(1). As discussed above, because customers sending held orders may have a different level of sophistication to understand the benefits of the 606(b)(1) reports and may have less of a need for the detail and granularity in customer-specific reports, these customers may not frequently request the Rule 606(b)(1) reports. However, as broker-dealers are required to provide Rule 606(b)(1) reports on customers' requests, Rule 606(b)(1) could provide an option to these customers to request additional information if they believe that they would benefit from doing so. As a result, the amended Rule 606(b)(1) could keep the same benefits for such customers by providing them the opportunity to better compare and monitor broker-dealers' order routing practices, which could promote better execution quality of held orders and competition among broker-dealers.
The Commission also believes that the benefits of the amended scope are greater than the potential benefits of the Proposal, which would have required standardized customer-specific reports on orders of at least $200,000.
Relative to the proposed $200,000 threshold, the Commission believes that using not held orders to trigger the Rule 606(b)(3) reports better targets the standardized customer-specific reports to the investors most likely to benefit from them and to the orders in which the reports would be more meaningful. Further, the Commission believes that some investors who are not institutions could benefit from Rule 606(b)(3) reports with respect to orders for which they provide more discretion to their broker-dealers and in which they may provide some unique instructions. The not held order type classification better captures this kind of discretion than does the $200,000 threshold.
While the proposed rule intended to target institutional orders for inclusion in the standardized customer-specific reports required by Rule 606(b)(3), the $200,000 threshold would have excluded most institutional trading. As discussed in the Proposing Release, in a Commission staff analysis, approximately 83.2% of the total number of orders from institutions to buy or sell a quantity of an NMS stock
The Commission believes that the adopted approach will create greater benefits than the proposed $200,000 threshold because it provides more accurate identification of the orders to be included in the reports for customers. In particular, to the extent that some orders are unpriced and broker-dealers would need to estimate the dollar price of such orders to determine whether they meet the $200,000 threshold, the proposed rule could create misspecification of orders because of estimation error. If broker-dealers incorrectly assign prices to unpriced orders, orders that should have been included in the Rule 606(b)(3) reports would be excluded from those reports, which could create inaccuracies as to which orders would be covered by the Rule 606(b)(3) reports. As a contrast, the distinction based on not held and held order identification will reduce the inaccuracies of the order handling disclosure because all orders, as discussed above, are already marked as not held or held and thus the identification would require no additional processing, which can introduce errors. Moreover, as discussed above, broker-dealers are already familiar with the identification of orders using the not held and held basis, further facilitating the accuracy as to which the intended orders will be covered by the Rule 606(b)(3) reports.
The Commission also believes that the adopted approach will provide more comprehensive 606(b)(3) reports for customers than the proposed $200,000 threshold, thus providing greater benefits to those customers and potentially benefiting more customers. A staff's supplemental analysis found that close to 60% of all shares and close to 34% of the total number of orders in the sample are not held orders and therefore will receive Rule 606(b)(3) reports under the adopted approach, whereas about 45% of all shares and just above 1% of total number of orders in the sample data have a market value of at least $200,000 and therefore would have received Rule 606(b)(3) reports under the proposed rule.
The Commission believes that the adopted approach will provide benefits to customers placing not held orders having a market value of less than $200,000 whereas the proposed rule would not. The staff's supplemental analysis found that, among the sample orders of less than $200,000, about 45% of the total shares and about 33% of the total number of orders in the analysis were not held orders. These orders were considered as “retail-sized orders” and not entitled to the Rule 606(b)(3) disclosures under the proposed rule. Thus customers sending these orders would not have been entitled the benefit of receiving the Rule 606(b)(3) disclosures. Under the adopted approach, these orders will receive the Rule 606(b)(3) reports. As a result, customers sending not held orders of less than $200,000 in market value will receive the benefits of enhanced transparency in their broker-dealers' order handling disclosure required by Rule 606(b)(3). The Commission therefore believes that customers placing not held orders of less than $200,000 in market value will receive greater benefits as a whole from the Commission's adopted approach as compared to the proposed rule because the adopted rule will require broker-dealers to provide detailed and uniform information pursuant to Rule 606(b)(3) for all not held orders regardless of order dollar value.
The Commission acknowledges that the benefits to customers that place held orders with at least $200,000 in market value could be lower under the adopted rule than under the proposed rule. Specifically, held orders having a market value of at least $200,000 will not be included in the standardized customer-specific reports under adopted Rule 606(b)(3), whereas they would have been included under the Proposal. The staff's supplemental analysis found that among orders having a market value of at least $200,000, close to 23% of total shares and about 36% of the total number of orders in the sample will not receive Rule 606(b)(3) reports under the adopted rule, whereas these orders would have been included in the customer-specific reports under the proposed $200,000 threshold. Thus, some customers that send held orders of a market value of at least $200,000 will not benefit from the order handling transparency under Rule 606(b)(3). However, a customer could request the disclosures set forth in Rule 606(b)(1) for these orders, which would maintain the status quo. Also, customers could switch to sending not held orders from held orders in order to receive the benefits of the Rule 606(b)(3) reports, which could result in a worse execution quality for these orders, assuming customers currently optimize their decision on when to request that an order be handled as not held. However, the Commission recognizes that if the benefits of including large held orders in the standardized customer-specific report under adopted Rule 606(b)(3) outweigh the execution quality cost of requesting not held handling of such orders, the customer could submit such orders as not held.
As discussed in detail below, the Commission recognizes that the scope of orders eligible for the Rule 606(b)(3) reports influences the compliance and other costs of the adopted amendments. First, broker-dealers will incur costs to ensure the Rule 606(b)(3) reports cover the required orders and to implement the de minimis exceptions set forth in Rule 606(b)(4) and Rule 606(b)(5). The Commission believes the compliance costs associated with identifying not held orders are lower than the compliance costs associated with the proposed $200,000 threshold. In addition, the Commission believes that the two de minimis exceptions will reduce the costs to broker-dealer of producing the customer-specific reports of Rule 606(b)(3), but acknowledges that broker-dealers might incur costs in producing the customer-specific reports in Rule 606(b)(1) for the orders that, due to the de minimis exceptions, are not eligible for the customer-specific reports of Rule 606(b)(3). Further, the Commission acknowledges additional costs that will originate from the
The requirement for customer-specific order handling disclosure under Rule 606(b)(3) based on not held or held orders will create compliance costs, as broker-dealers will need to prepare the customer-specific reports for not held orders required by Rule 606(b)(3).
The Commission also acknowledges that the de minimis thresholds in adopted Rules 606(b)(4) and (b)(5) will also create compliance costs to the extent a broker-dealer avails itself of one or both of the exceptions. Specifically, to apply the de minimis thresholds, broker-dealers will need to create systems to identify whether the amount of not held orders broker-dealers receive from customers would meet the threshold of either the firm-level or the customer-level de minimis exception. Broker-dealers will also need to conduct extra data processing to determine whether they or any customers are excepted and to screen out any excepted orders when creating the Rule 606(b)(3) reports.
The amended rule would also impose additional compliance costs on broker-dealers from the requirement set forth in Rule 606(b)(1) prior to today's amendments. As discussed above, Rule 606(b)(1), as amended, requires a broker-dealer, upon customer request, to provide the disclosures set forth in Rule 606(b)(1) for orders in NMS stock that are submitted on a held basis, and for orders in NMS stock that are submitted on a not held basis and for which, under the de minimis exceptions, the broker-dealer is not required to provide the customer a report under Rule 606(b)(3). As discussed above, Rule 606(b)(1), as amended, does not modify any of the customer-specific disclosure requirements prior to today's amendments but rather modifies the categories of orders to which the disclosure applies. Under this modification, Rule 606(b)(1) includes held orders and not held orders subject to the de minimis exceptions. Therefore, broker-dealers that receive such orders could incur costs to respond to customer requests as required by Rule 606(b)(1). However, to the extent that broker-dealers already have systems in place to prepare the reports required by the rule prior to these amendments, the amended rule should not create substantial new costs to these broker-dealers to create a new system to prepare Rule 606(b)(1) reports. Additionally, because broker-dealers would need to prepare Rule 606(b)(1) reports only when customers request such reports, and, as discussed above, to the extent that customers typically placing held orders may not value customer-specific reports required by Rule 606(b)(1) and therefore would not frequently request such reports, Rule 606(b)(1) would not impose significant ongoing compliance costs to broker-dealers.
The Commission also analyzed how the compliance costs of the adopted rule compare to the anticipated compliance costs of the proposed rule. Under the adopted approach, broker-dealers will need to prepare Rule 606(b)(3) reports for not held orders of any dollar value, including not held orders with a market value less than $200,000, and will need to, upon request, prepare Rule 606(b)(1) reports for held orders of any dollar value and for not held orders covered by the de minimis exceptions under Rule 606(b)(4) or 606(b)(5). As discussed in Section V.C.1.a.i., the adopted rule will include more orders in the Rule 606(b)(3) reports than under the proposed rule. The staff's supplemental analysis also found that among the orders of less than $200,000 in the sample data, about 45% of the total shares and about 33% of the total number of orders are not-held.
The Commission believes that the two de minimis exceptions to the adopted rule will further limit the scale of compliance costs on certain broker-dealers to provide Rule 606(b)(3) reports. Specifically, the Commission believes that adopted Rule 606(b)(4), which provides for a firm-level de minimis exception for broker-dealers, will limit the costs to broker-dealers that rarely handle not held NMS stock order flow. Absent a firm-level de minimis threshold, every broker-dealer that handles not held orders, regardless of its customer base and core business, would be subjected to compliance costs to create the systems and processes to generate and deliver the Rule 606(b)(3) reports. The supplemental staff analysis found that among the 342 broker-dealers that receive not held orders from customers in the sample data, about 8% (28 broker-dealers) would qualify for the firm-level de minimis exception from Rule 606(b)(3)'s requirements. Accordingly, the firm-level de minimis exception in Rule 606(b)(4) would result in approximately 8% of broker-dealers not incurring the compliance costs associated with the standardized customer-specific order handling reports required by Rule 606(b)(3). As discussed in Section V.C.1.a.i.2., the number of orders that will be excluded under the de minimis exception would be minimal compared to the current reporting requirement and to the proposal. The minimal amount of not held orders excluded under the firm-level de minimis exception suggests that there would be only limited benefits of Rule 606(b)(3) in circumstances where broker-dealers handle a minimal amount of not held orders, and that the resulting benefits of customer-specific order handling disclosures required by Rule 606(b)(3) may not be as great as intended.
The Commission also believes that the adopted approach of including a de minimis exception at the customer-level under the adopted Rule 606(b)(5) will also limit the compliance costs of broker-dealers associated with the new customer-specific order handling disclosures under Rule 606(b)(3). This exception, therefore, could reduce compliance costs for broker-dealers of processing orders to produce and to deliver Rule 606(b)(3) reports for numerous customers that do not actively place not held orders.
The Commission also believes that the three-month grace period included in the firm-level de minimis exception could further limit the scale of compliance costs of broker-dealers. As discussed in Section III.A.1.b.iv., Rule 606(b)(4) allows broker-dealers to have a grace period of up to three calendar months to provide the new customer-specific disclosures the first time a broker-dealer meets or exceeds the 5% de minimis threshold. The adoption of the grace period will provide time for broker-dealers to create the systems necessary to prepare the 606(b)(3) reports, which could allow the broker-dealers to manage their implementation and ongoing compliance costs. In addition, once the broker-dealers set up the system to comply with the rule during the grace period, the broker-dealers could use the system in the future, which could help reduce the on-going reporting costs in preparing additional Rule 606(b)(3) reports.
The Commission acknowledges that the two de minimis exceptions may create uncertainty as to whether a customer would have access to the Rule 606(b)(3) report and as to whether a broker-dealer would be required to produce Rule 606(b)(3) reports on request. The staff's supplemental analysis found that a small number of broker-dealers fell slightly outside the 5% de minimis threshold during a recent sample period.
Further, as discussed above, the Commission acknowledges that the customer-level de minimis exception under Rule 606(b)(5) may result in certain customers with seasonality in their trading volume exceeding the threshold during certain months and not during others. As discussed above, to the extent that such customers receive net benefits from receiving new customer-specific reports under the requirement of Rule 606(b)(3) and that such customers have flexibility in their trading activities,
The Commission also acknowledges that the firm-level de minimis exception in adopted Rule 606(b)(4) could incentivize broker-dealers to keep their not held trading volume below the 5% threshold. As discussed above, there are a small number of broker-dealers with not held orders slightly below or above the 5% de minimis threshold. Specifically, according to Table 1, for 8 broker-dealers, not held orders account for between 5% and 10% of orders received by that broker-dealer. To avoid the compliance costs, broker-dealers could discourage customers from using not held orders so as not to exceed the 5% threshold and therefore not to be subject to the obligations of providing the new disclosures upon request. Under this scenario, customers sending not held orders to these broker-dealers may not receive the benefit of the disclosure of customer-specific order handling practices required by Rule 606(b)(3) and could face additional execution costs if they suboptimally submit held orders relative to today. However, the Commission notes that for business reasons, some firms might choose to provide the new customer-specific order handling disclosures to its customers, regardless of the de minimis exception, limiting the costs of such incentives on investors. Further, customers that value the Rule 606(b)(3) reports could be willing to incur the cost of switching to the broker-dealers that do not receive or use the firm-level exception in order to ensure receipt of the customer-specific reports. As a result, the threat of losing customers could dampen the broker-dealers' incentives to encourage their customers to use held orders.
The Commission also acknowledges that the customer-level de minimis threshold under Rule 606(b)(5) could result in changes in customers' behavior, including an increase in not held orders over held orders or a consolidation of the customer's not held order flow with one broker-dealer in order to exceed the customer-level threshold to be entitled to receive such reports, which could be less optimal for customers relative to today. As discussed above, a broker-dealer will not be obligated to provide the new Rule 606(b)(3) order handling disclosures to any customer that trades on average each month for the prior six months less than $1,000,000 of notional value of not held orders through the broker-dealer. Therefore, a customer that submits more than $1,000,000 of notional value each month, but not in not held orders or at a single broker-dealer, could qualify for the Rule 606(b)(3) reports by instructing brokers to handle more orders as not held and/or by consolidating its order submission with fewer broker-dealers. However, some firms may choose to provide the new customer-specific order handling disclosures to its customers, regardless of the de minimis exceptions for business reasons, and the expectation of these reports could mitigate customers' incentives.
The required customer-specific order handling disclosures being adopted under Rule 606(b)(3) will provide transparency about order routing and execution quality for not held orders placed by customers.
The Commission believes that Rule 606(b)(3) will benefit customers, because broker-dealers will have an additional incentive to improve their order routing decisions for customers submitting orders on a not held basis, who could also use the reports required by the amendments to Rule 606 to compare routing and execution quality among broker-dealers, which could lead to better execution quality for not held orders. As a result, Rule 606(b)(3), as adopted, could lead to more transparent order routing practices and execution quality disclosures, which could enhance competition in the market for brokerage services. The disclosures in Rule 606(b)(3) will provide customers that submit not held orders, including investment fund managers, standardized information regarding their broker-dealers' order routing practices and execution quality. To the extent that the reports required by Rule 606(b)(3) increase the transparency of order routing and execution quality for customers' not held orders, broker-dealers will be better able to compete along the execution quality dimensions provided in the reports, such as the fill rate, percentage of shares executed at the midpoint and priced at the near or far side of the quote, and average time between order entry and execution or cancellation for orders posted to the limit order book, in addition to commissions and other considerations on which they currently compete.
The Commission believes that amended Rule 606(b)(3) could affect competition between trading centers. Broker-dealers routing more orders to the trading centers that are more beneficial for their customers could further promote competition between trading centers and promote innovation on execution quality. To illustrate, if broker-dealers change their order routing decisions to focus more on execution quality and route fewer orders to a given trading center, that trading center will have an incentive to take measures to attract and gain back order flow by innovating on execution quality. In addition to comparing broker-dealers on the basis of the reports, the amended Rule 606(b)(3) could facilitate and inform customer dialogues with their broker-dealers about the broker-dealers' order routing practices to better match the needs of the customers with the order routing practices of the broker-dealers to whom they send orders. As a result, as several commenters stated, the information on execution quality could better enable customers placing orders on a not held basis to evaluate the impact that routing decisions have on the quality of their order executions and could provide information regarding broker-dealers' potential conflicts of interest.
As adopted, Rule 606(b)(3) will address the concerns that current customer reports are not standardized. As discussed in the Proposing Release,
The Commission believes that the benefits of the reports required by Rule 606(b)(3) may be modest for some customers that already receive reports from their broker-dealers on the handling of their not held orders, depending on the information such customers currently receive and how standardized that information is across broker-dealers. For example, the reports that a particular customer already receives may be more detailed and tailored to that customer. The Commission recognizes that some current ad hoc reports also may provide additional, more detailed, and/or more tailored information than what Rule 606(b)(3) requires. Customers receiving such enhanced reports may not benefit significantly from the information specified in Rule 606(b)(3). Nevertheless, the Rule 606(b)(3) requirement that the disclosures be standardized may allow these customers to more readily compare their broker-dealers, particularly if their broker-dealers currently provide disparate responses to similar requests.
The Commission believes that Rule 606(b)(3) will enable customers to better compare broker-dealers' order handling practices, which will allow customers to more efficiently monitor, evaluate, and select broker-dealers. Under Rule 606(b)(3), customers can obtain detailed information on the broker-dealer internalization rate and payment for order flow received. Currently, broker-dealers may prefer to internalize uninformed order flow.
As adopted, Rule 606(b)(3) requires the inclusion of actionable IOIs in customer-specific order handling disclosures. As adopted, Rule 600(b)(1) defines an actionable IOI as “any indication of interest that explicitly or implicitly conveys all of the following information with respect to any order available at the venue sending the indication of interest: (1) Symbol; (2) side (buy or sell); (3) a price that is equal to or better than the national best bid for buy orders and the national best offer for sell orders; and (4) a size that is at least equal to one round lot.” The Commission believes that the inclusion of actionable IOIs in the adopted reporting requirements of broker-dealers should provide customers a more complete picture of how their not held orders are handled. Since actionable IOIs can convey information similar to that of an order, a response to an actionable IOI may result in an execution at the venue of the IOI sender and thus can represent a portion of the liquidity available at a given price and time. The Commission therefore believes that actionable IOIs should be included in the required disclosure of how not held orders are handled. In addition, because an actionable IOI can convey information similar to that of an order, the use of actionable IOIs may contribute to information leakage in a way similar to that of the use of orders.
The Commission considered whether adopting a definition of actionable IOI in Rule 600(b)(1) may limit its potential benefits. Specifically, the adopted definition is substantively similar to the description of actionable IOI in the Regulation of Non-Public Trading Interest Proposing Release. Comments received on the Regulation of Non-Public Trading Interest Proposing Release indicated that some commenters were concerned that the discussion of actionable IOIs in that release was too stringent.
Several commenters stated that the proposed definition for actionable IOIs is unclear, specifically as to whether the definition of actionable IOI excludes conditional orders.
The Commission is adopting a modification to Rule 606(b)(3) that requires broker-dealers to disclose the fact that actionable IOIs were sent to customers placing not held orders but not the identity of such customers. The Commission believes that such modification should help ensure that customers receive detailed information in their report, while protecting the identity of institutions providing liquidity. The Commission believes that disclosing the specific venue or venues to which a broker-dealer exposed a not held order by an actionable IOI will be useful for the customer to further assess the extent of information leakage of their orders and potential conflicts of interest facing their broker-dealers. Specifically, the Commission believes that such information will enable customers to assess whether their broker-dealers are exposing their not held orders to the select market participants with which the broker-dealer has affiliations or business relationships or from which the broker-dealer receives other incentives. In addition, the Commission believes that disclosure of this information will provide the customer with a more complete understanding of the broker-dealer's order handling activities for purposes of assessing the broker-dealer's execution quality generally. Under the proposed Rule 606(b)(3), the Commission believed that requiring broker-dealers to identify the institutions to which they routed actionable IOIs would allow customers to receive additional details in their reports so that customers could better compare their broker-dealers. Regarding the requirement that broker-dealers identify the institutions to which they routed actionable IOIs, commenters expressed concerns that such identification may discourage institutions from providing liquidity if they do not wish their names to be disclosed to protect their proprietary information.
The Commission also recognizes that, relative to proposed Rule 606(b)(3), this modification could result in customers receiving fewer details in their reports. While customers could have used such details to better compare their broker-dealers, the Commission does not believe that the identities of particular customers placing not held orders would significantly influence customers' decisions. Therefore, this modification does not significantly reduce benefits compared to the Proposal.
An additional benefit of Rule 606(b)(3), and specifically the benefit of having the standardized customer-specific order handling information available upon request, is that customers placing orders on a not held basis could combine the order handling information with existing TCA or enhance their TCA. As noted above, customers sending not held orders often work with independent third-party vendors to perform TCA as a means of evaluating the cost and quality of brokerage services. Customers sending not held orders can also conduct their own TCA in-house. TCA, whether conducted in-house or by a third-party, generally analyzes data on the parent orders, but typically cannot analyze data on the child orders because of the lack of standardization of the current ad hoc order handling information. As a consequence, existing TCA typically does not incorporate information on how many child orders exist, a broker-dealer's order routing strategy of not held orders, or cost, routing, and execution quality for individual child orders. The disclosures required by adopted Rule 606(b)(3) will close this informational gap, so that customers will have more information on how broker-dealers handle and execute parent and child not held orders.
With this additional information, customers placing orders on a not held basis or their third-party vendors could combine the routing information with execution information to conduct a more thorough TCA than they can currently. In particular, the information in adopted Rule 606(b)(3) may be a factor that can explain transaction cost variations, and thus the reports from the adopted amendments could be combined with TCA to help explain differences in transaction costs and in performance as measured by TCA across broker-dealers. For example, TCA often includes transaction cost measures such as implementation shortfall, but adopted Rule 606(b)(3) will not.
Rule 606(b)(3) also requires the customer-specific order handling report to be divided into separate sections for the customer's directed not held orders and non-directed not held orders, with each section containing the disclosures regarding the customer's order flow with the broker-dealer specified in Rule 606(b)(3), as well as the disclosures for each venue to which the broker-dealer routed not held orders specified in Rules 606(b)(3)(i) through (iv). Commenters suggested that directed not held orders be clearly segregated in the reports because this distinction could provide a more qualitative level of transparency and provide a more accurate description of broker-dealer's order routing practices, which could enable customers to better compare and monitor broker-dealers' order routing practices.
The Rule 606(b)(3) reports also require the broker-dealer to disclose, among other things, information on not held order execution.
Finally, Rule 606(b)(1) and Rule 606(b)(3) will require reports to be made available using an XML schema and associated PDF renderer published on the Commission's website.
The required customer-specific order handling disclosures being adopted under Rule 606(b)(3) will require broker-dealers to provide, upon request, standardized reports on not held order handling, which include more detailed information on broker-dealers' order routing practices. These requirements will result in initial and ongoing compliance and reporting costs to broker-dealers. These costs are quantified in Section V.C.1.b.ii.3. Additionally, the customer-specific order handling disclosure requirement under Rule 606(b)(3) could alter the information content of the report if broker-dealers already provide more information than is required by the adopted amendment or broker-dealers try to disguise order routing behavior to avoid customers' monitoring.
As discussed above, some customers currently request reports about the handling of their not held orders from their broker-dealers and those reports may be less or more detailed and provide different, and potentially less or potentially more, information than Rule 606(b)(3) will require. If broker-dealers currently provide more detailed or additional information to customers, reporting requirements under Rule 606(b)(3) could impose a cost on such customers if the broker-dealers stop providing the more detailed or additional information and instead provide only the data required for customer-specific order handling by Rule 606(b)(3). The Commission believes that this scenario is not very likely because, following Rule 606(b)(3)'s implementation, customers could still request additional information or customized reports from their broker-dealers and broker-dealers are likely to satisfy such requests, to the extent they currently do, to retain their customers. As discussed above, the willingness of broker-dealers to provide such customized reports to customers and the level of detail in such a report might depend on the business relationship between the broker-dealer and the customer. Customers that send or may send a large number of orders to broker-dealers might be able to get customized reports that they can more easily compare than customers that send fewer orders; and those reports might be more detailed, compared to reports that customers that send fewer orders receive. While Rule 606(b)(3) reduces this discrepancy, in that all customers will be able to request the standardized reports required by Rule 606(b)(3), the Commission recognizes that, to the extent large customers placing orders on a not held basis are able to receive customized reports that provide information not contained in the required reports, those large customers placing not held orders will continue to have an advantage over smaller customers placing not held orders who are not able to receive the same reports.
In addition, the greater transparency provided as a result of Rule 606(b)(3) might lead broker-dealers to change how they handle not held orders. Given that broker-dealers will be aware of the metrics to be used a priori, they might route not held orders in a manner that promotes a positive reflection on their respective services but that may be suboptimal for their customers. Any changes to broker-dealers' order routing decisions resulting from the Commission's adoption of Rule 606(b)(3) may be intended to benefit customers placing not held orders, but if broker-dealers and customers focus exclusively on the metrics in the reports required by Rule 606(b)(3), the order routing decisions could also be viewed as suboptimal for some customers.
For example, if a broker-dealer routes not held orders so that the orders execute at lower cost with a higher fill rate, shorter duration, and more price improvement than the broker-dealer's competitors, in order to achieve these objectives she might route the majority of non-marketable limit order shares to the trading center offering the highest rebate. A customer placing not held orders that reviews the order handling report might suspect that the broker-dealer acted in its self-interest by selecting the highest rebate venue in order to maximize rebates when, in fact, the broker-dealer made the decision on the basis of other variables, which might not be completely reflected in the amended reports. Under the amendments to Rule 606, the broker-dealer may be concerned about the perception of acting on a conflict of interest, when the broker-dealer is in fact acting in the customers' interests. As a result, a broker-dealer may be incentivized to route fewer non- marketable limit order shares to the trading center offering the highest rebate, even if this imposes additional costs on the broker-dealer's customers, in an effort to ensure that a customer does not misconstrue the intent behind the broker-dealer's routing decisions. Such a potential outcome could reduce the intensity of competition between broker-dealers on the dimension of execution quality.
The disclosure requirements of Rule 606(b)(3) will also impose compliance costs, as the required disclosures could entail some reprogramming by broker-dealers that execute or route orders subject to the customer-specific disclosures required by Rule 606(b)(3). A broker-dealer would have to program
The Commission estimates and discusses compliance burdens and costs for broker-dealers that routes orders subject to the customer-specific disclosures required by Rule 606(b)(3) in Section IV.D.1.ii. The Commission estimates total initial implementation costs for all broker-dealers that route orders subject to the customer-specific order handling disclosures required by Rule 606(b)(3) and that do not currently retain order handling information required by the adopted rule to program systems to comply with the adopted rule change is 24,070 hours, resulting in a monetized total cost burden of $7,789,300.
The Commission estimates and discusses compliance burdens and costs for broker-dealers responding to a Rule 606(b)(3) request (for broker-dealers that handle their own responses) in Section IV.D.1.b. The total annual cost for all 200 broker-dealers that route orders subject to the customer-specific order handling disclosures required by Rule 606(b)(3) to comply with the customer response requirement in Rule 606(b)(3) is estimated to be 67,000 hours, resulting in a cost of $14,928,000, plus an additional fee of $1,300,000 to compensate third-party service providers for producing the reports.
As discussed in Section III.A.6, Rule 606(b)(3) requires the inclusion of actionable IOIs in the reports on order handling that broker-dealers will provide to their customers. The Commission expects that broker-dealers will incur costs from the inclusion of actionable IOIs in the reports as a result of having to process data and run calculations related to actionable IOIs. The estimated cost of including actionable IOIs in the customer-specific order handling reports required by Rule 606(b)(3) is included in the aggregate costs described in the discussion above and in greater detail in Section IV.D.1.
Additionally, as noted above, adopted Rule 606(b)(3) requires segregated reporting of directed not held orders and non-directed not held orders. The Commission expects that broker-dealers will incur costs from separately reporting directed and non-directed not held orders as a result of having to process additional data and run additional calculations. The estimated cost of separate reporting is included in the aggregate costs described in the discussion below and in greater detail in Section IV.D.1.
As discussed above, Rule 606(b)(1), as amended, does not modify any of the current customer-specific disclosure requirements but modifies the categories of orders to which the disclosure applies. Current Rule 606(b)(1) applies to all customer orders,
The Commission believes that it is reasonable to estimate that one third of the 292 broker-dealers that route orders subject to the disclosures required by Rule 606(b)(1)—97 broker-dealers—will implement these changes in-house, while the remaining number—195 broker-dealers—will engage a third-party vendor to do so.
Therefore Commission estimates the total initial burden for all 292 broker-dealers to program their systems to comply with Rule 606(b)(1) as 2,913 hours
Further, as a result of adopting Rule 606(b)(3), broker-dealers that route not held NMS stock orders will likely reevaluate their best execution methodologies to take into account the availability of new statistics and other information that may be relevant to their decision making. This may impose a cost only to the extent that broker-dealers choose to build the required statistics into their best execution methodologies. In addition, they may choose to do so only if the benefits justify the costs.
Another potential cost of adopted Rule 606(b)(3) is that the reports could be viewed as a replacement of TCA and therefore have a negative impact on the market for TCA. Specifying a minimum length of time for making the Rule 606 reports publicly available may further impose a cost on third-party vendors that plan to aggregate the time series of the reports. For example, suppose that a customer chooses to no longer purchase TCA once Rule 606(b)(3) reports become available, because the customer decides that the information contained in the Rule 606(b)(3) reports is sufficient. If fewer customers purchase TCA, it will have a negative impact on third-party providers of TCA as well as third-party data vendors, because of a reduction in the demand for their services, for example. Further, the quality of TCA provided by third-parties may decrease because third-party providers of TCA might have fewer resources for the development and maintenance of their product offerings and because fewer customers would reduce the amount of data that the third-party providers would use to build their models.
The Commission considered whether the customer-specific order handling
To the extent it is likely for customers choose to make the disclosure public, order routing practices of not held NMS stock orders of the customers' broker-dealers could become available publicly, which other customers placing not held NMS stock orders could use in comparing their broker-dealers' order routing. To the extent that the order routing reports could reveal sensitive, proprietary information about broker-dealers' order handling techniques, the broker-dealers' trading strategies could be used by their competitors, specifically, putting smaller broker-dealers at a competitive disadvantage relative to larger broker-dealers, as the majority of their trading strategies could more easily be revealed to other market participants. However, because the customer-specific order handling disclosure required by Rule 606(b)(3) could reveal highly sensitive proprietary information about the revealing customers' trading strategy, it is unlikely that customers would make their own reports public. In addition, even if the customer did share its report, the fact that the information in it is aggregated obscures the broker-dealer's order handling decision for any particular order. Therefore, the Commission believes the risk that the customer-specific order handling disclosure required by Rule 606(b)(3) would reveal sensitive, proprietary information about broker-dealers' order handling techniques would be minimal.
Rule 606(a) requires each broker-dealer to make publicly available quarterly reports on its routing of non-directed orders in NMS securities.
The benefits and costs of each of these amendments are discussed below. Wherever possible, we quantify cost estimates for a given amendment. For the remaining amendments concerning non-directed orders in NMS stocks that are submitted on a held basis, we provide total quantitative cost estimates for these amendments in Section V.C.2.f.
As adopted, Rule 606(a) applies to NMS stock orders of any size that are submitted on a held basis. Rule 606(a) also continues to apply to any order (whether held or not held) for an NMS security that is an option contract with a market value less than $50,000, as the Commission did not propose, and is not adopting, any modifications to Rule 606's coverage of option orders.
Under the scope of public order handling reports prior to these amendments, held orders with market value of at least $200,000 were not included in public order routing reports and broker-dealers may voluntarily provide some information on routing and execution quality in response to requests by these customers that submit such orders. Because the amended rule requires public order routing reports for held orders of all sizes, these orders will be included in the public order routing reports. In addition, pursuant to Rule 606(b)(1), customers sending held orders of at least $200,000 in market value will continue to receive the same information from the pre-existing customer-specific order routing disclosure rule.
The staff's supplemental analysis found that more than 80% of shares and more than 88% of orders received from individual accounts
The Commission believes that, compared to the scope of public order handling reports prior to the amendments, Rule 606(a)(1), as amended, could make the public order routing reports more informative and therefore could improve the value of the public order routing reports. To the extent that broker-dealers generally handle not held orders differently from held orders, and to the extent that typically institutional customers use not held orders,
The Commission believes that the amended rule will enhance benefits for customers sending held orders having a market value of at least $200,000 relative to the baseline and the proposed definition of retail orders. As discussed above, to the extent that the majority of orders from individual accounts are held orders, customers sending held orders of at least $200,000 will receive information from public order routing reports that better reflect held orders under the amended rule. Because the amended rule includes held orders of all sizes, the public order routing reports will include all relevant orders and therefore customers could use the reports to compare and monitor broker-dealers order routing practices. As a result, customers sending held orders of at least $200,000 could use the information from the public order routing reports in assessing broker-dealers' order routing practices, which could promote better execution quality and competition among broker-dealers. In addition, from the disclosures set forth in Rule 606(b)(1), customers sending held orders of at least $200,000 in market value will continue to receive the same information from the pre-existing customer-specific order routing disclosure rule, in addition to the information from the public order routing reports.
Amended Rule 606(a) will create compliance costs, as broker-dealers will need to distinguish held orders from all customer orders they receive and prepare public order routing reports regarding these held orders and prepare reports, subject to the de minimis exceptions in Rules 606(b)(4) and (b)(5). The related compliance costs are discussed in Section V.C.2.f. The costs related to Rules 606(b)(4) and (b)(5) are discussed in Section V.C.1.a.ii.
The Commission believes that the amended Rule 606(a) will result in implementation costs but might not create substantial ongoing costs for broker-dealers. As discussed in detail in Section V.C.1.a.i., broker-dealers' familiarity with held and not held orders would facilitate compliance with and may contain potential compliance costs imposed on broker-dealers because broker-dealer could use less processing time to identify held orders as compared to the proposed $200,000 threshold. The staff's supplemental analysis
The Commission also acknowledges that the amended rule will create additional compliance costs for broker-dealers that receive held orders of at least $200,000. As discussed above, under the amended rule, broker-dealers would need to prepare for the reports, subject to the de minimis exceptions in Rules 606(b)(4) and (b)(5), for all held orders, in addition to the public order routing reports. As previously discussed, the staff analysis showed that close to 23% of total shares and about 36% of total numbers of orders that are not included in the scope of public order handling reports prior to these amendments will be included under the amended rule subject to the de minimis exceptions set forth in Rules 606(b)(4) and (b)(5). The staff analysis also suggests that depending on the amount of held orders relative to total orders that broker-dealers receive, the compliance costs would vary across
The Commission believes that the broker-dealers already have a system to produce public order routing reports and therefore may simply send the received orders of at least $200,000 to the system they use to generate public order routing reports without a creating a completely creating a new system to capture held order with a market value of at least $200,000. Furthermore, as discussed in Section V.C.1.a.i., because broker-dealers are already familiar with held and not held distinction, and broker-dealers already characterize on a held or not held basis to comply with Rule 605's covered order requirement and other rules such as FINRA Rule 5320, broker-dealers would not incur additional costs in distinguishing held orders from not held orders. Additionally, as the staff analysis indicates, to the extent that broker-dealers receiving orders of both at least $200,000 and less than $200,000 value would already have systems in place to prepare for the reports required by the previously existing, the amended rule would not create substantial costs to these broker-dealers that are subject to reporting requirement of both amended Rule 606(a) and 606(b)(1). Therefore, the Commission believes that the amended rule would not impose significant compliance costs to the broker-dealers that need to include held orders having a market value at least $200,000 to the public order routing reports.
The Commission also believes amended Rule 606(a) would not impose substantial costs on the customers whose orders would have been included in public order routing reports under the baseline and the proposed definition of retail orders but will not be included in the reports under the amendment. The staff's supplemental analysis found that among the orders of less than $200,000 in market value, about 45% of total shares and about 33% of the total number of orders in the sample of 120 NMS stocks will not be included in aggregated public order routing reports under the adoption, whereas these orders would have been included in the public routing reports under the baseline and the proposed definition of retail orders. Thus, customers that send not held orders of less than $200,000 in market value would not receive the benefit from the enhanced order handling transparency provided in the public order routing reports under the amended Rule 606(a). Instead, the orders that were included in the public routing reports under the baseline and the proposed definition of retail orders and are not included under the amended rule are subject to Rule 606(b)(3) and therefore would be included in the customer-specific reports required by Rule 606(b)(3). As discussed above, customers placing not held orders likely have a different level of sophistication in understanding the price and time discretion embedded in not held orders. Moreover, the enhanced Rule 606(b)(3) reports will be very detailed and of more value to those likely to make special requests of their broker-dealers, such as those who use not held orders. As a result, under the amendment, customers placing not held orders of less than $200,000 in market value would receive reports that target their needs and sophistication. Moreover, as discussed above, to the extent that the amendment to Rule 606(a) could better target the public order routing to the needs of investors that typically use held orders, the amended would not affect customers typically placing not held orders. Therefore, even though a customer's not held orders are not included in the public routing reports, the customer would receive Rule 606(b)(3) reports and therefore would receive the benefit of increased transparency from the customer-specific order handling disclosure required by Rule 606(b)(3).
The Commission believes that the amendments to Rule 606(a) that require broker-dealers to differentiate marketable and non-marketable limit orders will create an opportunity for more detailed analysis.
In particular, the amendments could allow the public, including customers placing orders subject to Rule 606(a)(1), to better understand the potential conflicts of interest broker-dealers face when routing such orders,
As adopted, the amendments to Rule 606(a) requiring broker-dealers to differentiate between marketable and non-marketable limit orders will impose costs on broker-dealers. Specifically, broker-dealers will incur new compliance and reporting costs if they do not currently break down marketable and non-marketable limit orders and will need to break out this information in their internal systems. The estimates for compliance costs are contained in the estimates for the costs of producing the reports discussed in Section V.C.2.f. One commenter indicated that the amendment will require broker-dealers to obtain a searchable, historical store of all NMS quotes to be integrated into the reporting system, so that marketability
As discussed above in Section V.C.2.b.i., the information required by Rule 606(a)(1)(iii) could also allow the public, including customers placing orders covered by Rule 606(a)(1), to better understand the potential conflicts of interest broker-dealers face when routing such orders which could incentivize broker-dealers to better manage these and other potential conflicts of interest, which may result in improved order routing decisions and execution quality for orders.
Under Rule 606(a)(1)(iii), customers and the public could use information on net payment for order flow, payment from any profit-sharing relationship received, transaction fees paid, and transaction rebates received per share and in total to gauge whether payments for order flow or maker-taker fees affect the order routing decisions of broker-dealers.
In addition, as discussed in Section V.C.2.b.i., if broker-dealers improve their order routing for orders covered by Rule 606(a)(1), which may result in changes to which trading centers they route such orders to, it could promote competition between trading centers, leading to innovation or new entrants to the market. The trading centers may change their fees or attempt otherwise to attract such order flow, and the quarterly public reports that are broken down by calendar month will allow them to see effects of any changes they implement.
Commenters in general indicated that information on any payment for order flow, payment from any profit-sharing relationship received, the transaction fees paid, and transaction rebates in the report as required by Rule 606(a)(1) could allow customers to better assess their broker-dealers' order routing practices and provide additional incentives to broker-dealers to monitor the potential conflicts of interest.
Some commenters raised concerns that enhanced reporting requirements under Rule 606(a)(1)(iii) will generate extensive information and may undermine the Commission's transparency goals. Specifically, some commenters stated that the Commission's transparency goals may be limited because the disclosure presents too much information and could create more confusion than provide clarity to retail investors.
Adopted Rule 606(a)(1)(iii) will impose initial compliance costs on broker-dealers in creating a new process to complete the reports and increase ongoing costs related to incorporating additional information into the reports. The estimates for the compliance costs are contained in the estimates for the costs of producing the reports discussed in Section V.C.2.f.
In addition to compliance costs, amended Rule 606(a)(1)(iii) could result in costs to broker-dealers or investors, depending on how broker-dealers and investors adjust their behavior in response to the increased transparency. Increased transparency from adopted Rule 606(a)(1)(iii) about the net aggregate amount of any payment for order flow, payment from any profit-sharing relationship, transaction fees paid, and transaction rebates received, and subsequent scrutiny by customers—
Increased transparency Rule 606(a)(1)(iii) about net payment for order flow and payments from profit-sharing relationships, and subsequent scrutiny by customers, the public, academics, regulators, and the financial media, might also lead broker-dealers to alter their payment for order flow or profit-sharing relationships or not enter into such relationships. Broker-dealers might do this if they perceive the potential costs from increased public scrutiny to be relatively high compared to a broker-dealer's benefit from such relationships. This could lead to lower payments received from such relationships. The affected broker-dealers might offset these lower revenues or higher costs by increasing brokerage commissions or other fees for customers.
The Commission believes that the additional information provided by Rule 606(a)(1)(iv) will help ensure consistent, accurate, and comprehensive disclosure of terms of payment for order flow and profit-sharing relationships that influence broker-dealer order routing decisions. This will make the public reports required by amended Rule 606(a) more useful to customers and the public, and the benefits of the description required by Rule 606(a)(1)(iv) are similar to the benefits of the disclosures of the net payment for order flow and transaction fees and rebates by Specified Venue required by Rule 606(a)(1)(iii) and discussed in Section V.C.2.c.i.
Consistent with the limit order disclosure discussion above,
The Commission agrees with comments that stated that the disclosure of any agreement that may influence a broker-dealer's routing decisions could be useful for customers to assess the potential conflicts of interest facing broker-dealers when implementing their order routing decisions and the enhanced disclosures provide more complete information for customers to better understand and evaluate a broker-dealer's order routing decision.
Some commenters indicated that voluminous information may limit the transparency benefits for customers because it may not be easy to find or use the information to assess and compare broker-dealers.
The Commission recognizes that the amendments to Rule 606(a)(1)(iv) will impose initial and ongoing compliance costs on broker-dealers. As discussed in Section IV.D.4.b.ii., the Commission estimates the total initial paperwork cost for complying with Rule 606(a)(1)(iv), as adopted, to be 2,920 hours, resulting in a cost of $986,960.
More detailed disclosure about payment for order flow arrangements and profit-sharing relationships might impose other costs to customers that submit orders covered by Rule 606(a)(1) if it leads broker-dealers to decrease the amount of internalization used in the execution of market and marketable limit orders and to alter such arrangements and relationships. Broker-dealers have a variety of choices for order routing and execution, and the venue that a broker-dealer chooses may have a tangible effect on the execution quality of an order. Broker-dealers face conflicts of interest when routing orders, such as affiliations with trading centers, receipt of payment for order flow or receipt of payment from any profit-sharing relationship, and liquidity rebates. Similar to the discussion in Section V.C.2.c.ii., increased transparency from adopted Rule 606(a)(1)(iv) about payment for order flow arrangements and profit-sharing relationships could lead to subsequent scrutiny by customers and the public might lead broker-dealers to decrease the degree to which they internalize orders and route orders to high-rebate or low-fee exchanges to avoid the perception of conflicts of interest. If broker-dealers were to perceive the
In addition to the amendments discussed above, the Commission is adopting other amendments to Rule 606(a)(1) reports.
The Commission believes that S&P 500 inclusion is an important determinant of execution quality and, therefore, is important for order routing strategies. In particular, a Commission staff analysis finds that the amendment to divide the Rule 606(a)(1) order routing reports required by securities included in the S&P 500 Index and other NMS stocks could provide customers with relevant information on how their orders are routed. Because the S&P 500 index is correlated with certain liquidity and trading characteristics (which are a determinant of execution quality),
Specifically, the Commission staff analyzed execution quality as measured by effective spreads from Rule 605 reports (“Rule 605 data”) for common stocks with S&P 500 index inclusion and on different market centers
While the staff's analysis is not a direct test of whether order routing differs for stocks included in S&P 500 versus those not included in the S&P 500,
Table 2 presents the results of the staff's analysis of effective spreads for common stocks traded on all existing exchanges and off exchange, after controlling for differences due to stock and order characteristics. The methodology in the staff analysis does not allow the analysis to treat IEX as a separate market center for the entire period because IEX data became available from September 2016, so the analysis divides the analysis into two subperiods.
For illustration, the intercept in Column 1 indicates that the average effective spread for market order NMS stocks that are executed on the NYSE is 21.55 basis points. The 20.34 estimate for Exchange A indicates that the effective spreads on Exchange A are 20.34 basis points greater than those on the NYSE. The estimate -12.04 for S&P 500 index indicates that the effective spreads for S&P 500 stocks are 12.04 basis points less than non-S&P 500 stocks. And, the estimate for the interaction between Exchange A and the S&P 500 index indicates that the effective spreads for S&P 500 stocks traded on Exchange A are 20.95 basis
The analysis of Table 2 suggests that partitioning the Rule 606 reports by S&P 500 index inclusion will be useful. Specifically, the structure of the regressions in Table 2 allows for a ranking of the exchanges by effective spread to gauge whether the exchanges that provide the better execution quality in S&P 500 stocks are different than those that provide the better execution quality in other NMS stocks. If the relative ranking of exchanges in S&P 500 stocks is similar to the relative ranking in other NMS stocks, then partitioning the order routing reports by S&P 500 inclusion would not provide information useful for considering the impact of broker-dealer routing on execution quality.
Upon examination, Table 2 shows that the ranking of the market centers by effective spreads is different depending on stocks in that market center being included in the S&P 500 index. For example, the five market centers with the best execution quality relative to the NYSE traded stocks are Exchange M, E, B, J, and I, in descending order. However, in comparing S&P 500 stocks that are traded in these five trading centers, the ranking of the market centers for S&P 500 stocks by effective spreads changes. For S&P 500 stocks, the five market centers that have the best execution quality relative to the NYSE traded stocks are stocks traded on Exchange I, A, J, C, and M, in descending order.
Commenters suggested removing the requirement that the report be divided by listing market and separating reports by S&P 500 and non-S&P 500 stocks because the division based on the S&P 500 index could give retail customers more meaningful data, as S&P 500 stocks have the largest market capitalization and have significant retail customer interest. Commenters mentioned that S&P 500 stocks, therefore, could have a different correlated execution quality level than lower volume issuances, providing useful information to retail customers.
The amendment to Rule 606(a)(1), as adopted, will result in initial compliance costs to prepare separate disclosures and ongoing costs to adjust reporting when the constituents of the S&P 500 change. The Commission acknowledges that the S&P 500 index is a proprietary index, which is accessible via a fee-based subscription. The Commission also notes that the list of S&P 500 index stocks is readily available on the internet on many free websites and thus obtaining the constituents of the index should be at a minimal cost to broker-dealers. Moreover, as discussed in Section III.B.5.b., many data dissemination services obtain this information from the S&P and redistribute this information as part of data packages consumed by broker-dealers as a part of the broker-dealers normal course of business. Thus, the Commission believes that there will be few or no additional data costs to broker-dealers resulting from this requirement.
Additionally, on the basis of staff analysis, not separating order routing reports by primary listing market could also reduce some informational value relative to the public order handling reports prior to today's amendments. In particular, the staff analysis indicates that removal of primary listing exchanges could reduce the value of the 606(a)(1) reports for monitoring execution quality from broker-dealers, because reporting by listing exchange still provides information distinct from the S&P 500 index.
Similar to Table 2 in Section V.C.2.d.i.1., the staff's analysis focuses on whether customers or others can use the market-specific routing information to assess the execution quality they get from their broker-dealers. Specifically, if the order routing decisions by broker-dealers differ by the exchanges where stocks are listed,
In the Proposing release, the Commission reported the results of a staff analysis that found that reporting order routing information by listing exchange would provide useful information and, therefore, removing this partition would impose a cost on investors. Because the Commission is adopting a different partition than proposed, specifically replacing a listing-exchange partition with a partition based on S&P 500 inclusion, the Commission staff has revised its analysis to examine whether a listing-exchange partition would provide useful information beyond that information investors could learn from S&P 500 inclusion. Specifically, the analysis examines whether, after accounting for S&P 500 inclusion, listing exchange still affects the relative rank of costs to trade on the various market centers. Such a result would indicate that an S&P 500 partition is not a direct substitute for all of the information captured by a listing-exchange partition. The staff's analysis controls for stock and order characteristics.
Table 3 presents the results of the staff's analysis of effective spreads for common stocks listed on the NYSE, NASDAQ, and AMEX. Columns 1 through 3 report the results for each of these primary listing exchanges. The market center rows in the table report the basis point difference between the average effective spreads on that market center and the average effective spreads on the primary listing exchange. The S&P 500 index rows in the table report the basis point difference between the average effective spreads on stocks that are included in the S&P 500 index and the average effective spreads on each listing exchange. The rows for interaction terms of each market center and S&P 500 index in the table report the basis point difference between the average effective spreads of S&P 500 stocks on that market center and the average effective spreads on each listing exchange.
As an illustrative example, the intercept in Column 1 indicates that the average effective spread for market orders for NYSE-listed stocks that are executed on the NYSE is 18.60 basis points and the -3.47 estimate for Exchange A indicates that the effective
Table 3 indicates that the average effective spreads vary significantly by the market center where the orders were executed. Table 3 shows that most market center effective spreads are significantly different than those of the listing exchange. For example, after controlling for the effect of stock and order characteristics and the effect of the S&P 500 index inclusion, Column 1 shows that, for NYSE-listed stocks, the average effective spread on Exchange A is 3.47 basis points less than on the NYSE itself, and the average effective spread on NASDAQ is 1.31 basis points higher than on the NYSE. Table 3 also indicates that the average effective spreads vary significantly by listing exchange. For example, the staff's analysis suggests that NASDAQ-listed stocks tend to have higher average effective spreads than NYSE-listed stocks because the intercept estimates are much larger in Column 2 compared to Column 1.
The results in the table suggest that because the relative ranking of each market center changes depending on the listing exchange, the adopted amendment to remove listing exchanges from the report could reduce the usefulness of Rule 606 reports. If the ranking of the effective spreads on each market center were the same across the three primary listing exchanges, where a stock is listed will have little or no relationship to whether order routing information informs on execution quality. Such a result implies that removing listing exchanges from order routing reports would not reduce the amount of information in the reports. However, upon examination, Table 3 shows that the ranking of the market centers by effective spreads is different depending on the primary listing exchange even after considering the effect of the S&P 500 index.
For example, the five market centers that have the best execution quality relative to the NYSE-listed stocks are Exchange B, J, F, G, and A, in descending order. However, for the same NYSE-listed stocks, the ranking of the market centers for S&P 500 stocks by effective spreads changes. For S&P 500 stocks, the five market centers that have the best execution quality relative to the NYSE-listed stocks are Exchange J, B, H, G, and L, in descending order.
On the basis of the staff's analysis, the Commission recognizes that replacing the listing exchange partition with an S&P 500 index partition, as in the adopted amendment, could provide additional information to customers and the public, as discussed in Section V.C.2.e.i.1. At the same time, the Commission also acknowledges that eliminating the listing information from the report required by Rule 606(a)(1), as in the adopted amendment, could reduce the information content of the reports.
The Commission recognizes that because the amendments change which orders are covered by Rule 606(a)(1), the analysis does not directly provide evidence of the costs of eliminating the listing information from the report, but rather provides an indication of potential costs. The public order handling reports will cover a different set of orders than are covered in the Rule 605 data, and the Rule 605 data do not have information to distinguish orders covered by Rule 606(a)(1) from orders covered by Rule 606(b)(3). Therefore, Commission staff cannot conduct a separate analysis for orders covered by Rule 606(a)(1). The Commission believes, however, that it can reasonably assume that execution quality for orders covered by Rule 606(a)(1) is sufficiently correlated with the execution quality for orders covered by Rule 606(b)(3) for the analysis to provide informative results because exchanges have few mechanisms that would treat the orders differently.
The Commission believes that the amendments to Rule 606(a)(1) to require quarterly public order routing reports to be broken down by calendar month will allow customers to better assess whether their broker-dealers' routing decisions are affected by changes in fee structures and the extent to which such changes affect execution quality. Multiple commenters stated that disclosing the information contained in the public routing reports by calendar month could enable customers to better assess and monitor broker-dealers' routing decisions.
In addition, the Commission is adopting the requirement that the public order routing report required by Rule 606(a)(1) and the customer-specific order routing report required by Rule 606(b)(1) be made available using an XML schema and associated PDF renderer published on the Commission's
Finally, the Commission is amending Rules 605(a)(2) and 606(a)(1), as adopted, to require market centers and broker-dealers to keep the reports posted on a website that is free and readily accessible to the public for a period of three years from the initial posting on the website. As commenters stated,
Regarding the requirement to make the reports available for three years, the Commission believes that, once the report is posted, maintaining the reports on the website will not pose any additional burden on broker-dealers, and thus any additional costs to maintain the report on the website will be negligible.
As discussed in more detail in Section IV.D.4., the Commission estimates the costs to comply with the amendments to Rule 606(a) that require broker-dealers to distinguish between marketable and non-marketable limit orders and with adopted Rule 606(a)(1)(iii) that requires disclosure of net payment for order flow and transaction fees and rebates by Specified Venue are as follows.
As discussed in Section IV.D.4.ii., the Commission estimates that the initial hourly burden will be 240 hours
The Commission estimates that all 292 broker-dealers that route orders covered by Rule 606(a)(1) will need to update their systems to capture the information required by the rule. The Commission believes that some broker-dealers will implement the changes in-house, while others will engage a third party vendor. Accordingly, the Commission believes that it is reasonable to estimate that one third of the 292 broker-dealers that route such orders—97 broker-dealers—will implement the changes in-house, while the remaining number—195 broker-dealers will engage a third-party vendor to do so.
The Commission estimates the initial burden for broker-dealers that will program their systems in-house to capture the data and produce a report to comply with the rule as 23,280 hours.
Therefore, the Commission estimates that the total initial burden to comply with Rule 606(a) for all 292 broker-dealers that the Commission estimates route retail orders is 27,180 hours, resulting in a monetized cost burden of $8,699,550,
The Commission believes that once the initial costs described above have been incurred to allow a broker-dealer to obtain the required information, the cost to produce a quarterly report will remain the same compared to a quarterly report previously required under Rule 606(a).
As discussed in Section IV.D.4.a.ii., because Rule 606(b)(1) prior to today's amendments applies to all customer orders, broker-dealers must now modify their systems to provide the disclosures for the following types of orders, regardless of market value: (i) Orders in NMS stocks that are submitted on a held basis; (ii) orders in NMS stocks that are submitted on a not held basis and are exempt from the disclosure requirements of Rule 606(b)(3); or (iii) orders in NMS securities that are option contracts.
The Commission believes that it is reasonable to estimate that one third of the 292 broker-dealers that route orders subject to the disclosures required by Rule 606(b)(1)—97 broker-dealers—will implement these changes in-house, while the remaining number—195 broker-dealers—will engage a third-party vendor to do so.
Therefore Commission estimates the total initial burden for all 292 broker-dealers to program their systems to comply with Rule 606(b)(1) as 2,913 hours
As discussed in Section IV.5., the amendments being adopted today add several defined terms to Rule 600 of Regulation NMS which will impose an initial burden on market centers and the broker-dealers that will have to review and update compliance manuals and written supervisory procedures and update citation references to any such defined term. The Commission estimates that it will take each of 381 market centers and 4,024 broker-dealers two hours to make these updates in house at a one-time burden of two hours for each respondent.
The adopted amendment to Rule 605(a)(2) requires market centers to keep reports required pursuant to Rule 605(a)(1) posted on a website that is free and readily accessible to the public for a period of three years from the initial date of posting on the Website.
Similar to the analogous requirements in Rules 606(a), as adopted, described above, the Commission believes that requiring the previous three years of past order execution information to be available to customers and the public generally should be useful to those seeking to analyze historical order execution information at various market centers. This will allow broker-dealers to compare different market centers more easily, market centers to compare themselves to other market centers more easily, and third-party vendors to provide their services on the basis of the data more easily. Several commenters stated that the adopted amendment to Rule 605(a)(2) could better enable investors to evaluate the impact that routing decisions have on the quality of their order executions and provide information regarding broker-dealers' potential conflicts of interest.
As discussed in Section V.C.2.e. above, the Commission believes that the costs to market centers for making the order execution reports readily accessible to the public for a period of three years from the date of initial publication are negligible. In addition, specifying a minimum length of time for making the Rule 605 reports available may make the data owned by third-party vendors aggregating the time series of 605 reports less useful because, for three years, the data will be publicly available and more easily accessible.
The Commission is adopting the requirement that the Rule 606(b)(1) order routing and Rule 606(b)(3) order handling reports be made available using the Commission's XML schema and associated PDF renderer. The Commission is also adopting the requirement that the public order handling reports required under Rule 606(a)(1) be made available using an XML schema and associated PDF renderer published on the Commission's website. As discussed earlier, the Commission believes that requiring the reports to be made available in an XML format will facilitate enhanced search capabilities and statistical and comparative analyses across broker-dealers and date ranges.
The Commission understands that varying degrees of structuring have varying costs. Most, if not all, broker-dealers already have experience applying the XML format to their data. For example, all FINRA members must use FINRA's Web EFT system, which requires that all data be submitted in XML.
The Commission also believes that if the reports are provided in a structured format, users could avoid costs associated with third-party sources that might otherwise extract and structure the data and then charge for access to that structured data. Users could also avoid the additional time it would take for them to manually review and individually structure the data if they wanted to conduct large-scale analysis, comparison, or aggregation. The Commission also acknowledges that the required reporting in structured format could hurt certain third-party vendors that charge for access to structured data of data reported in an unstructured format, because customers may find that third-party service is less useful for them. However, without the need to spend time in manually reviewing and rekeying the unstructured information for analysis, some third-party vendors may be able to conduct more comprehensive analysis in a more timely fashion than they could have offered previously.
The XML schema will also incorporate certain validations to help ensure consistent formatting among all reports help to ensure data quality. However, these validations will not be designed to ensure the underlying accuracy of the data.
The Commission considered alternative formats to XML, such as CSV and XBRL. The Commission does not believe the CSV format is suitable, because it does not lend itself to validations. As a result, the data quality of the reports will likely be diminished as compared to XML, impairing comparability, aggregation, and large-scale analysis. While the XBRL format enables users to capture the rich complexity of financial information presented in accordance with U.S. Generally Accepted Accounting Principles, XBRL is not necessary to accurately capture the information for the required reports. The Commission believes the simpler characteristics of the information in the required reports are better suited for XML.
Two commenters raised concerns regarding the need for providing such reports in the XML/PDF format specifically of the Rule 606(b)(1) reports, stating that customers rarely request these reports, and stating their view that the cost of implementing the proposed format would outweigh the benefits.
The Commission believes that the amendments to Rule 600(b)(54) will help ensure consistent and correct interpretation and application of the adopting amendments to Rule 606(a)(1) for retail orders. The Commission also believes that there are no costs associated with adopting Rule 600(b)(54), because it is a definition that is widely used by market participants.
The Commission believes that Rules 600(b)(58) and (59), as adopted, will help ensure consistent and correct interpretation and application of Rule 606(b)(3), as adopted, for institutional orders. The Commission also believes that there are no costs associated with adopted Rules 600(b)(58) and (59) because the Commission understands that the two definitions are widely used by market participants.
In addition to the alternative of adopting the proposed $200,000 threshold in the definition of “institutional order,” as discussed above, the Commission also considered an alternative in which the Commission would adopt a new entity-centric definition of “institutional order” and require order handling disclosure in Rule 606(b)(3) for such “institutional” orders. Several commenters suggested that the applicability of the customer-specific disclosures be based on the entity placing the order.
The definition of “institutional investor” in FINRA Rule 2210(a)(4) and the definition of “institutional account” in FINRA Rule 4512(c) are well-established existing definitions that are familiar to most market participants and apply to entities that the Commission believes are broadly considered to be institutional by market participants. Therefore, broker-dealers' familiarities with FINRA definitions would facilitate compliance with and might reduce potential compliance costs for such a definition for participants already familiar with the FINRA rules. In addition, commenters suggested that funds are considered to be institutional market participants and that their orders should qualify as institutional orders,
The Commission recognizes that the alternative definition, which is an entity-based definition of an institutional order, would capture most orders submitted by institutional market participants and is likely to reduce the potential misclassification of institutional orders as non-institutional orders and vice versa. The Commission also recognizes that the scope of FINRA Rules 2210(a)(4) and 4512(c), as incorporated into the definition of institutional order in the alternative, is generally tailored to cover the broad range of institutions that would likely benefit from the order handling disclosures required by Rule 606(b)(3), while minimizing the potential misclassification of institutional orders. However, as explained below, the Commission did not adopt this alternative.
As discussed in Section III.A.1.b.ii., the entity-centric approach suggested by commenters would require the Commission to set forth the types of customers that may request the Rule 606(b)(3) disclosures for their NMS stock orders, but would not entail any differentiation in the types of orders covered by Rule 606(b)(3). As result, NMS stock orders from qualifying customers that are submitted on a held basis would be covered by the Rule 606(b)(3) disclosures. This is a suboptimal outcome that is avoided by the adopted order type-based approach to Rule 606(b)(3)'s applicability. Including held orders within the Rule 606(b)(3) disclosures would be inconsistent with the purpose of the disclosures to provide insight into how a broker-dealer exercises order handling and routing discretion because broker-dealers must attempt to execute held orders immediately and are provided no discretion in handling them. Moreover, including a customer's held orders in the Rule 606(b)(3) report could obfuscate the reports' depiction of the discretion actually exercised by the broker-dealer. Order handling and routing behavior dictated by the fact that the customer submitted a held order could be misunderstood in the report as the product of broker-dealer discretion.
The alternative approach also would require the Commission to prescribe institutional status criteria that customers must fit in order to be entitled to receive the disclosures. A risk with such an approach is that the criteria could be over-inclusive or under-inclusive. The Commission is particularly concerned about potential under-inclusiveness because customers that do not fit the criteria would not be entitled to receive the disclosures. Under FINRA Rule 4512, a broker-dealer is not required to obtain for “institutional accounts” certain additional information that it is required to obtain for accounts that are not “institutional accounts.”
The alternative could create costs to customers because of misclassification of orders if broker-dealers are not able to easily discern whether an order meets the definition to be included in the customer-specific reports. Specifically, orders for NMS stock from persons that have total assets under $50 million and that are not a type of market participant expressly covered by the adopted definition would not be included in the reports under the alternative. Broker-dealers would not be obligated to provide these persons with the order handling disclosures in the adopted Rule 606(b)(3), because these persons do not fall within the definition under this alternative. Therefore, these persons would not benefit from the increased order handling transparency provided for in new Rule 606(b)(3). These persons instead would receive the order handling disclosures made available by amended Rule 606(b)(1).
Furthermore, the alternative could create costs to retail investors due to misclassification of orders if broker-dealers cannot easily discern whether an order meets the definition of a retail order. Such a misclassification would exclude retail market participants that should be included, or include an institutional market participant that should be excluded. Under this scenario, the 606(a)(1) report could contain less accurate information regarding retail order routing, reducing the benefit of increased transparency of the public retail order report. Also, because misclassified retail orders would be subject to the requirements of 606(b)(3) reports under the adopted rule, retail investors would not receive the benefit of 606(a)(1) reports. As discussed in Section V.C.1.a.i.1., information pertinent to understanding broker-dealers' order handling practices for customers' orders that retail investors typically place is not the same as for institutional market participants. In addition, as discussed in Section V.C.2.a.i., because the information contained in 606(a)(1) reports could be more relevant to retail orders than 606(b)(3) reports, misclassification of orders would limit the benefits that retail customers could receive from the enhanced transparency of the retail order routing reports.
The Commission is adopting the Rule 606(b)(3) requirement that every broker-dealer must, on request of a customer that places, directly or indirectly, one or more orders in NMS stocks that are submitted on a not held basis with the broker-dealer, disclose to such customer a report on its handling of institutional orders for that customer, unless a de minimis exception in Rules 606(b)(4) or (b)(5) applies. In addition, the Commission is maintaining the exclusion of broker-dealers from the current definition of “customer” and that exclusion is maintained for purposes of Rule 606(b)(3), which cross-references the term “customer.”
The Commission considered an alternative that would apply the disclosure requirements to broker-dealers that receive not held NMS stock orders from other broker-dealers. Compared to the adopted Rule 606(b)(3), this alternative could enable customers to receive more comprehensive order handling data, which could improve customers' understanding of execution details of their orders, such as payment for order flow, rebates, and access fees. As some commenters stated, this alternative could help customers make more informed investment decisions.
However, this alternative could also increase compliance and reporting costs to broker-dealers. As one commenter stated,
Additionally, the competition among broker-dealers could provide incentives for broker-dealers to provide order-handling information to customers regardless of the scope of the reporting requirements. For instance, customers could choose not to send orders on a not held basis to introducing broker-dealers that are unable to provide the information, which could incentivize introducing broker-dealers to request the information from their executing broker-dealers that, in turn, may risk losing introducing broker-dealers as customers unless they provide the information. As one commenter stated, such competitive market forces could motivate broker-dealers to provide additional information that could address customers' expectations.
Proposed Rule 606(c) required public quarterly reports broken down by
Prior to and after today's amendments, Rule 606 does not require a broker-dealer to provide public reports for not held NMS stock orders.
The Commission considered the proposed Rule 606(c) as an alternative to this adopted rule. Specifically, this alternative would require broker-dealers to publicly report, on a quarterly basis, aggregated Rule 606(b)(3) order handling information. As discussed in Section III.B., several commenters provided critiques of or suggested revisions to the proposed rule regarding the proposed public aggregated order handling reports.
As discussed in the Proposing Release, proposed Rule 606(c) would provide the benefits of increasing the transparency of order handling and providing additional information to customers beyond that provided by customer-specific reports required by amended Rule 606(b)(3). Customers would be able to compare their broker-dealers not just based on the orders they send to the broker-dealers, but also based on all Rule 606(b)(3) orders handled by the broker-dealers.
In light of the comments received and after further consideration, the Commission now believes that the aggregated information in the proposed public report would provide more limited benefits than those described in the Proposal. In particular, the reports might not allow for meaningful insight into the quality of broker-dealers' order routing performance or comparisons of order handling performance across broker-dealers. Moreover, the aggregation required for the reports would dilute the information necessary to compare one customer to a broker-dealer's customers more generally or to compare across broker-dealers.
Further, the Commission does not believe that it could easily design the aggregated reports to limit such dilution without raising the risk of revealing sensitive information of customers that submit not held NMS stock orders, in particular the institutional customers that typically submit such orders. Each customer has a unique set of circumstances, goals, and order flow that dictates how a broker-dealer handles that customer's orders. For example, if a broker-dealer were to aggregate together the orders of both its quantitative trading firm and mutual fund clients in a single, aggregated public report, the dilutive effect would result in a washing out of the routing nuances that are relevant to each type of customer and that are important to understanding a broker-dealer's routing decisions when granted full discretion.
In addition, not held NMS stock orders from customers frequently limit broker-dealer discretion in some manner, which would reduce the value of the reports in providing information about the broker-dealer's own decisions in order handling. For broker-dealers that do not typically have full discretion on the handling of a not held NMS stock order, an aggregated order handling report could be more of an indication of its client mix and the preferences of its clients than about the broker-dealer's performance.
Even a customer comparing its own individual report to the aggregate report of its own broker-dealer might not be able to realize the potential benefit of making meaningful comparisons without knowing the specific nature, practices, and requests of the broker-dealer's other customers. In theory, a customer could ask its broker-dealers to explain how the customer's report fits into the aggregate report, which could allow the customer to make meaningful comparisons and receive the benefits of additional transparency. However, this would result in additional costs to broker-dealers and customers because the broker-dealers would need to spend their time and resources to provide explanations to their customers regarding how individual reports fit into aggregated information. The greater these costs to the customers, the less likely they would be to use the reports.
Further, a broker-dealer may not be willing to provide a lengthy explanation of its public aggregated report to an institutional or retail investor that is not its customer, significantly limiting the potential benefit to customers of comparing their broker-dealers to broker-dealers the customer does not have a business relationship with. This may also lead to public analyses and
Even in the absence of public aggregated reports, consultants and providers of TCA for customers—particularly institutional customers—could perform aggregate analysis, but in a much more meaningful and productive way by aggregating the data of customers that submit NMS stock orders on a not held basis with like trading characteristics. Consultants could collect information with the permission of such customers, aggregate the data of customers with like trading characteristics, and provide reports that would be more readily and meaningfully comparable across broker-dealers. Although using consultants might provide comparable reports to customers, it would result in monetary costs to customers in paying for the service of consultants.
In addition to viewing the benefits to public aggregated reports in proposed Rule 606(c) to be somewhat more limited than those in the discussion in the Proposing Release, the Commission believes the aggregated reports would have the potential to result in additional costs for broker-dealers and their customers. In particular, customers could be confused to the extent that an aggregated public report suggests substandard order handling practices even if a broker-dealer is performing very competently. Broker-dealers would be at a disadvantage if the reports did not adequately summarize relevant information about the quality of customer service. Such a misinterpretation of the aggregate report could result in the customer sub-optimally switching broker-dealers. For example, a customer could use the aggregated public reports to compare its broker-dealer to other broker-dealers and could switch to another broker-dealer. If the new broker-dealer is performing worse than the previous broker-dealer, the customer could get worse order handling treatment. This would also result in costs to the original broker-dealer because of the loss of customers.
Given the Commission's understanding of the limitations of the benefits and the addition of costs per the discussion of the public aggregated reports in the Proposing Release, the Commission believes that customers could alter their behavior in recognition of the limitations of the public report in the long-run if not in the short-run. For example, communications with broker-dealers in explaining how the customer's data fits into the aggregate report could facilitate the customer's learning process, which could help customers potentially achieve some positive benefits from the reports and avoid responding in a manner that results in worse order handling for them. On the other hand, the customers could also manage this cost by deciding not to use the reports at all. Such a response would also result in no benefits from the report. In addition, under this alternative, broker-dealers would incur additional reporting costs because they would need to prepare public reports and disseminate the order routing information to the public regularly. As stated in the Proposing Release,
The Commission considered an alternative to adopted Rule 606(b)(3) that would not require that customers request customer-specific standardized reports on not held NMS stock order handling, but would instead require broker-dealers to provide them to customers automatically, either by sending the reports out or by providing a portal where customers can view or download the reports. This alternative could reduce the cost to customers, compared to both the baseline and the amendment, of acquiring such order handling reports, because customers would not need to request the reports. At the same time, this alternative may not benefit customers compared to the adopted amendment, as discussed in the Proposing Release.
With respect to the costs to broker-dealers, the alternative would impose additional initial costs compared to the baseline, as broker-dealers would be required to automatically provide reports to all customers, not just those that request reports, and would have to build infrastructure to generate these reports. The Commission believes, however, that these initial costs likely would be minimal, because the alternative would involve slight modifications to the systems that produce the required order handling reports. Moreover, as discussed in the Proposing Release, the effect of this alternative on the costs to broker-dealers, compared to the cost of the rule as adopted, is unclear.
The Commission considered an alternative to adopted Rule 606(b)(3) that would require these customer-specific order handling reports to be submitted to the Commission. With direct access to the reports under this alternative, the Commission could potentially use the reports, to investigate best execution concerns, assist in risk-based examination decisions, and/or conduct market analyses on order handling to promote data-driven rulemaking, which could benefit investors and the market in the form of enhanced investor protection and better informed rulemaking.
While providing some benefits, this alternative would also impose additional costs to broker-dealers to submit their reports to the Commission. Further, the Commission believes that acquiring the reports from each broker-dealer could impose burdens on Commission resources, though the magnitude of those burdens is unknown. Receiving customer-specific order handling reports could impose further costs on the Commission, as the Commission would need to take steps to safeguard personally sensitive information, though it might be able to leverage its experience dealing with the receipt of sensitive information in other contexts to minimize those costs.
The Commission considered an alternative that would partition the report required by Rule 606(a)(1) by both listing markets and S&P 500 index inclusion instead of by S&P 500 index inclusion alone. As discussed in Section V.C.2.e.i., the Commission staff's analysis indicates that partitioning by listing exchange could provide additional information to customers beyond the information contained in reporting by S&P 500 index inclusion. Therefore, this additional partition could allow customers to combine the Rule 606(a)(1) reports with the Rule 605 reports to help investors better judge the effect of broker-dealers' routing decisions on execution quality.
This alternative could result in broker-dealers incurring additional reporting and compliance costs relative to the adopted rule, because broker-dealers would need to change the reporting format to include both S&P 500 index inclusion and listing markets information. Compared to the adopted rule, the benefits of such order reports could be limited to the extent that the Rule 606(a)(1) order reports divided by both listing markets and S&P 500 index are less clear for customers and the public to understand. As discussed in Section V.C.2.e.i., staff analysis showed that S&P 500 index and listing markets have distinct information that is correlated with execution quality. To the extent that customers may not understand the information content of the order reports divided by both listing markets and S&P 500 index, customers would not be able to better assess the order routing and execution quality under this alternative, which, in turn, could make it less efficient for the customers to evaluate and select broker-dealers.
The Commission considered requiring additional measures to be included in adopted Rule 606(b)(3) reports for orders submitted on a not held basis. In particular, the Commission considered an alternative that would categorize orders by routing strategy in the reports and an alternative to report additional execution quality statistics.
Currently, as such order handling reports are not standardized and vary by broker-dealer or by customer, the Commission understands that some of these reports group order routing strategies by their aggressiveness, while other reports do not. Rule 606(b)(3) does not require the order handling report to be categorized by order routing strategy for each venue to which the broker-dealer routed the customer's orders submitted on a not held basis.
The Commission considered the proposed categorization as an alternative to the adopted rule. Under the alternative, order routing strategies for such orders would be categorized into three general strategy categories: (1) A “passive order routing strategy,” which emphasizes the minimization of price impact over the speed of execution of the entire order; (2) a “neutral order routing strategy,” which is relatively neutral between the minimization of price impact and speed of execution of the entire order; and (3) an “aggressive order routing strategy,” which emphasizes speed of execution of the entire order over the minimization of price impact.
This alternative could facilitate comparisons among broker-dealers by customers placing not held NMS stock orders because it would allow customers to control for the fact that broker-dealers may get different types of order flow. For example, to satisfy customer order instructions one broker-dealer may tend to use an aggressive order routing strategy and another broker-dealer may tend to use a passive order routing strategy, and simply comparing these two broker-dealers without considering the order routing strategy category may lead to incorrect or misleading conclusions.
Customers preferring passive order routing strategies may be willing to wait longer for an execution but may want to limit price impact. Customers preferring aggressive order routing strategies, however, may endure some price impact to trade quickly. Therefore, a broker-dealer implementing a passive order routing strategy may, compared to an aggressive order routing strategy, tend to route to a dark pool where execution may be less certain, but likely at a better price.
The alternative to differentiate the adopted disclosures into the three order routing strategy categories could help mitigate the possibility that the reports could be interpreted incorrectly. However, there could still be differences among broker-dealers in how they classify orders into the three strategy categories, which could make straight comparisons between broker-dealers difficult.
This alternative could also create unnecessary subjectivity, as broker-dealers may categorize similar routing strategies differently, which could limit the utility and comparability of the reports. Moreover, as several commenters stated,
Moreover, this alternative could result in higher implementation costs relative to adopted Rule 606(b)(3), by requiring differentiating order routing strategies for not held NMS stock orders into three types. The Commission believes that broker-dealers would incur costs associated with creating their methodologies, assigning each order routing strategy for such orders into one of these three categories according to the methodologies, and promptly updating the assignments any time an existing strategy is amended or a new strategy is created.
Furthermore, as adopted, customers remain able to negotiate with their broker-dealers for additional disclosures or categorizations that could address their interests better, such as categorizations by routing strategy. With this information, institutional customers could obtain information to evaluate and monitor their broker-dealers performance in order routing.
The Commission considered another alternative that would require Rule 606(b)(3) reports to contain additional execution quality measures, such as realized spread and effective spread, price improvement statistics, the percentages of effective spreads and quoted spread percentages, time to execution, or implementation shortfall, which represent varying dimensions of execution quality. As several commenters stated, adding these statistics would increase the information content and the usefulness of the reports relative to Rule 606(b)(3), and would provide execution quality statistics that would reflect changes in market structure.
This alternative could result in higher implementation costs relative to adopted Rule 606(b)(3) by requiring additional execution quality statistics in the report. In addition, for some execution quality metrics, the computation costs would be larger than for others. Furthermore, as raised by a number of commenters,
Furthermore, if customers wish to obtain additional information on execution quality, customers could negotiate for additional execution quality statistics with their broker-dealers that could address customers' interests better. By doing so, customers could obtain relevant information to evaluate their broker-dealers performance in order routing.
The Commission considered requiring the order handling information required by Rule 606(b)(3) to be reported at the individual stock level rather than aggregated across stocks. This alternative would enhance transparency to customers relative to Rule 606(b)(3) because the reports would be more detailed as discussed in the Proposing Release.
Because the reports would be more detailed, however, this alternative would increase the costs of producing the reports, as well as the costs of using the reports relative to Rule 606(b)(3). However, as discussed in the Proposing Release, the Commission believes that any potential increase in costs of producing the reports would be negligible.
The Commission considered requiring broker-dealers and market centers to make the reports required by Rule 605(a) and 606(a)(1) available for a minimum length of time of less than three years or more than three years. If public reports are available for less than three years, then historical data might not be as readily available to customers and the public who are seeking to analyze past routing behavior of broker-dealers or past execution quality of market centers, as it would be under the adoption of a three-year posting period. Customers and the public would either have to download the data more often or have to rely on third-party vendors who download and aggregate the data. Compared to the adopted three-year posting period, this alternative would reduce the execution quality of market centers and the transparency of broker-dealer routing decisions for customers placing orders covered by the reports required by Rule 605(a) and 606(a)(1). A shorter minimum length of time would reduce the costs broker-dealers incur associated with posting reports relative to a three-year posting period. However, as discussed above, the Commission believes these incremental costs to be small and that the cost savings associated with a shorter minimum length of time would not justify the costs of historical data potentially being less readily available to customers and the public.
If public reports are available for more than three years, the historical data would be even more readily available to customers and the public who are seeking to analyze past routing behavior of broker-dealers or past execution quality of market centers than it would be under a three-year posting period. Customers and the public would have to download the data less frequently to have access to historical data that is older than three years. However, the Commission believes that the additional benefit of a minimum length of time of more than three years would be small because three years is a meaningful time period considering the rapid changes in financial markets and customers, and the public would only need to download data every three years to be able to access historical data older than three years. While some commenters stated similar benefits of keeping public reports for more than three years as discussed above, commenters also stated the out-of-date information may lead to misleading analysis of past routing behavior of broker-dealers or past execution quality of market centers.
Section 23(a)(2) of the Exchange Act requires the Commission, when making rules under the Exchange Act, to consider the anti-competitive effects of any rules it adopts.
The adopted amendments to Rule 606(a)(1) require broker-dealers that route non-directed orders in NMS stocks submitted on a held basis and non-directed orders that are customer orders in NMS securities that are options contracts to make public enhanced aggregated reports regarding such orders detailing order routing practices and information regarding marketable and non-marketable limit orders in addition to information on payment for order flow arrangements, payment from any profit-sharing relationship received, and transaction fees paid and rebates received per share and in aggregate for such orders. In addition, the adopted amendments to Rules 606(a)(1) require those reports to be made available using an XML schema and associated PDF renderer on the Commission's website. Finally, the adopted amendment to Rule 606(a)(1) requires the public reports to be maintained on a website that is free and readily accessible to the public for a period of 3 years.
As explained in detail below, the Commission believes that the enhanced disclosures for orders covered by Rule 606(a)(1), which require broker-dealers to describe any terms of payment for order flow arrangements and profit-sharing relationships with Specified Venues that may influence their order routing decisions for such orders, should promote competition and enhance efficiency.
First, per the discussion above, the additional information required by the amendments relative to the information required by Rule 606(a)(1) will allow customers to better assess the order routing and execution quality provided by their broker-dealers,
In addition, if broker-dealers change their routing behavior in response to the public reports required by adopted amendments to Rule 606(a)(1), the Commission believes that competition between trading centers might be enhanced as trading centers could better compete for such order flow, which might result in better execution quality for such orders and innovation by existing or new trading centers. As discussed in Section V.C.1.b.i.1., one way a trading center can attract order flow is through innovation, thereby differentiating itself from other trading centers.
Further, to the extent that the adopted amendments to Rule 606(a) lead to better execution quality provided by broker-dealers and trading centers, the Commission believes that the adopted amendments will lead to lower transaction costs for customers. Because transaction costs can be viewed as a measure for efficiency in the trading process, lower transaction costs would indicate enhanced efficiency in the trading process. In addition, to the extent that the adopted amendments to Rule 606(a) make the trading process more efficient by lowering trading costs, the Commission believes the adopted amendments will reduce market friction and therefore have a positive effect on the efficiency of prices.
As discussed above, however, the adopted amendments to Rule 606(a)(1) could result in costs that may have an effect on efficiency and competition. For example, the adopted amendments will impose certain costs on broker-dealers that currently route orders covered by Rule 606(a)(1) as well as on broker-dealers that would like to start routing such orders and will also have to comply with the adopted amendments to Rule 606(a)(1). To the extent that the costs for a broker-dealer entering the market for such orders are higher following the amendments to Rule 606(a)(1), these higher costs could lead to a higher barrier to entry and thereby reduce competition. However, the Commission believes that any difference in costs under amended Rule 606(a)(1) would be relatively small and, alone, would not deter broker-dealers from entering the market for routing such orders.
Under the adopted amendments to Rule 606(a)(1), the broker-dealer may be concerned about the perception of acting on a conflict of interest. As a result, a broker-dealer may be incentivized to route fewer non-marketable limit orders to the trading center offering the highest rebate, even if this negatively affects execution quality, in an effort to ensure that a customer does not misconstrue the intent behind the broker-dealer's routing decisions. Such a potential outcome could reduce to some degree the intensity of competition between broker-dealers on the dimension of execution quality. However, the Commission believes that such a scenario is not likely as customers are likely to review the 606(a)(1) reports in conjunction with execution quality statistics currently required pursuant to Rule 605 and can discuss with their broker-dealers the order routing and execution quality the broker-dealer provides.
The adopted amendments to Rule 606(b)(1) require a broker-dealer, upon customer request, to provide the disclosures set forth in Rule 606(b)(1) for orders in NMS stock that are submitted on a held basis, and for orders in NMS stock that are submitted on a not held basis and for which the broker-dealer is not required to provide the customer a report under Rule 606(b)(3). In addition, the adopted amendments to 606(b)(1) require those reports to be made available using an XML schema and associated PDF renderer on the Commission's website.
The Commission believes that the adopted amendments to Rule 606(b)(1), which require broker-dealers to provide, upon customer request, information relating to orders not covered by Rule 606(b)(3), should promote competition and enhance efficiency. As discussed in Section III.A.1.b.vi., Rule 606(b)(1) disclosures will allow customers to better assess the order routing and execution quality provided by their broker-dealers, which, in turn, will enable the customers to more efficiently evaluate and select broker-dealers. If requested, these disclosures provide the customer with information as to the venues to which its orders were routed, whether the orders were directed or non-directed, and the time of any transactions that resulted from the orders. Rule 606(b)(1) cover held NMS stock orders and should provide customers that submit NMS stock orders on a held basis with disclosures designed to provide more transparency into potential financial inducements and potential conflicts of interest faced by broker-dealers. The Commission believes that these disclosures provide information that is sufficient to provide a basis for the customer to engage in further discussions with its broker-dealer regarding the broker-dealer's order handling practices, should the customer so choose. As a result, the Commission believes that competition between broker-dealers could provide better execution quality for orders covered by Rule 606(b)(1).
In addition, if broker-dealers change their routing behavior in response the customer-specific reports required by the adopted amendment to Rule 606(b)(1), the Commission believes that competition between trading centers might be enhanced as trading centers could better compete for such order flow, which might result in better execution quality for such orders and innovation by existing or new trading centers. As discussed in Section V.C.1.b.i.1., one way a trading center can attract order flow is through innovation, thereby differentiating itself from other trading centers.
The Commission also believes that the adopted amendment to Rule 606(b)(1) will provide additional benefits of better execution quality and reduced transaction costs, but acknowledges that these benefits are attainable only when customers request 606(b)(1) reports. To the extent that customers actually request Rule 606(b)(1) reports and the adopted amendments to Rule 606(b)(1) lead to better execution quality provided by broker-dealers and trading centers, the Commission believes that the adopted amendments will lead to lower transaction costs for customers. Because transaction costs can be viewed as a measure for efficiency in the trading process, lower transaction costs would indicate enhanced efficiency in the trading process. In addition, to the extent that the adopted amendments to Rule 606(b)(1) make the trading process more efficient by lowering trading costs, the Commission believes the adopted amendments will reduce market friction and therefore have a positive effect on the efficiency of prices.
As discussed above, however, the adopted amendments to Rule 606(b)(1) could result in costs that may have an effect on efficiency and competition. For example, the adopted amendments will impose certain costs on broker-dealers that currently route orders covered by Rule 606(b)(1), as well as on broker-dealers that would like to start routing such orders and will also have to comply with the adopted amendments to Rule 606(b)(1). To the extent that the costs for a broker-dealer entering the market for such orders are higher following the amendments to Rule 606(b)(1), these higher costs could lead to a higher barrier to entry and thereby reduce competition. However, the Commission believes that any difference in costs under amended Rule 606(b)(1) would be relatively small and, alone, would not deter broker-dealers from entering the market for routing such orders.
For NMS stock orders submitted on a not held basis, Rule 606(b)(3), as adopted, will require broker-dealers that route such orders to provide detailed reports to customers that submit such orders upon the request of the customer, unless such broker-dealer is excepted from this requirement as provided in new Rules 606(b)(4) and (b)(5). In addition, these rules will require reports on such orders to be provided using an XML schema and associated PDF renderer published on the Commission's website. As discussed below, the Commission believes that these disclosures of order routing decisions by broker-dealers for such orders could promote competition and enhance efficiency.
First, the disclosures required by Rule 606(b)(3) will inform customers as to the order routing practices of and the execution quality provided by a particular broker-dealer, as described in further detail above. As a result, customers will be able to use that information to compare the order routing and execution quality of their broker-dealers, on the basis of the orders submitted to those broker-dealers as reported in the customer-specific reports required by Rule 606(b)(3).
These enhanced disclosures will better enable customers to analyze order routing and execution quality provided by broker-dealers, which will allow customers to more efficiently monitor, evaluate, and select broker-dealers. In addition, customers and broker-dealers will be able to evaluate execution quality of orders covered by Rule 606(b)(3) on different trading centers more efficiently.
Further, the Commission believes that Rule 606(b)(3), as adopted, might enhance competition between trading centers. First, if broker-dealers change their routing decisions in response to the reports required by Rule 606(b)(3), trading centers will have an additional incentive to compete for order flow covered by Rule 606(b)(3). Second, the reports required by Rule 606(b)(3) are structured by trading center, so that the execution quality at each trading center would be clearly visible. This may lead broker-dealers to change their routing behavior, but also, more directly, customers could compare the execution quality of all trading centers, which may again lead to enhanced competition among trading centers. The Commission believes that the enhanced competition between trading centers could lead to innovation by existing and new trading centers, resulting in better execution quality for customers placing orders covered by Rule 606(b)(3). As discussed in Sections V.C.2.b.i., V.C.2.c.i., and V.C.2.d.i., if a trading center were to lose order flow to other trading centers because of lower execution quality, it would have the incentive to innovate to improve its execution quality.
To the extent that Rule 606(b)(3) leads to broker-dealers and trading centers providing better execution quality, the Commission believes that the rule might lead to lower transaction costs for orders covered by Rule 606(b)(3). As discussed above, lower transaction costs indicate enhanced efficiency in the trading process, and the Commission believes that, as a result, the adopting rules will reduce market friction and therefore have a positive effect on the efficiency of prices.
In addition, the Commission believes that the requirement of standardized customer-specific order handling reports in Rule 606(b)(3) will enhance efficiency for customers in processing the information contained in the reports, as compared to the ad hoc reports customers may currently receive from their broker-dealers.
In addition, as discussed above, the Commission understands that not held NMS stock orders are typically submitted by institutional customers and many broker-dealers that handle institutional orders currently voluntarily provide reports to institutional customers upon request. However, the Commission understands that how willing a broker-dealer is to provide such reports and the level of detail in the reports might depend on the size of an institutional customer. To that extent, larger institutional customers have an advantage over smaller institutional customers. Rule 606(b)(3), as adopted, will provide access to reports on order handling to all customers, regardless of their size, unless an exception in Rules 606(b)(4) or (b)(5) applies.
The Commission notes that, even without the adoption of Rule 606(b)(3), institutional and other customers could still request customized reports from their broker-dealers and broker-dealers would have an incentive to provide such reports in order to attract order flow. As is currently the case, broker-dealers might be more willing to provide such customized reports to larger institutional customers and the customized reports might provide more detailed information for larger institutional customers. While the Commission believes that Rule 606(b)(3), as adopted, mitigates the advantage of larger institutional customers in that respect, the Commission believes that larger institutional customers are likely to continue to have an advantage over smaller institutional customers to the extent that they are able to obtain customized reports more easily and that those customized reports contain information not contained in the reports required by Rule 606(b)(3). The Commission believes that by reducing the informational advantage of larger institutional customers over smaller institutional customers, Rule 606(b)(3), as adopted, will improve information asymmetries between larger institutional customers and smaller investors will have more information than before regarding broker-dealers' routing behavior. Smaller institutional customers will be able to evaluate and select their broker-dealers with more efficiency, thereby increasing the efficiency of their investment process. The Commission believes that this will provide smaller institutional customers with information to select the broker-dealers that promote better execution quality, to the benefit of their investors.
As discussed above, however, Rule 606(b)(3) could result in certain costs to broker-dealers that currently route orders covered by Rule 606(b)(3), as well as those who would like to start routing such orders and thus will have to comply with Rule 606(b)(3). These costs could lead to a higher barrier to entry and thereby reduce competition.
However, the Commission believes that the costs associated with Rule 606(b)(3) are not large enough to meaningfully affect the barriers to entry and the level of competition due to potential new entrants into the market for such orders. In addition, the Commission believes that any negative effect on competition due to heightened barriers to entry are justified by the expected positive effect on competition of the disclosures required by Rule 606(b)(3).
In addition, the adoption of Rule 606(b)(3) may cause broker-dealers to change how they handle orders covered by Rule 606(b)(3) because customers' preferences could be skewed toward the metrics as opposed to their true objectives, which could skew broker-dealer incentives, potentially limiting the efficiency and competition benefits of the adopted amendments. First, given that broker-dealers will be aware of the metrics to be used a priori, they may handle such orders in a manner that promotes a positive reflection on their respective services but that may be suboptimal for customers.
For example, suppose a broker-dealer routes orders covered by Rule 606(b)(3) so that the orders execute at lower cost with a higher fill rate, shorter duration, and more price improvement than the broker-dealer's competitors. However, it could be the case that, in order to achieve these objectives, the broker-dealer routes the majority of non-marketable limit order shares to the trading center offering the highest rebate. A customer that reviews the adopted order handling reports might suspect that the broker-dealer acted in its self-interest by selecting the highest rebate venue in order to maximize rebates when, in fact, the broker-dealer made the decision on the basis of factors
The Commission believes that the amendments to Rules 600, 605, and 606, as adopted, might have positive effects on capital formation, but predicting the magnitude of such effects is difficult, as the effects likely will be indirect rather than a direct result of the adopted amendments.
As discussed, the Commission believes the adopted amendments to Rules 600, 605, and 606 will enhance competition among broker-dealers and trading centers resulting in better execution quality for customers that place both held or not held NMS stock orders and, to the extent that better execution quality will lead to lower friction in the trading process, the adopted amendments will increase market efficiency in both the trading process and asset pricing. This could lead to more efficient asset allocation because better execution quality and greater market efficiency lead to more efficient investment decisions by customers that place orders with broker-dealers.
Another potential effect on capital formation could derive from the relation between and liquidity and cost of capital. In particular, the less liquid an asset is,
The Regulatory Flexibility Act (“RFA”)
For purposes of Commission rulemaking in connection with the RFA
The amendments to Rule 606 are discussed in detail in Sections II and III above. We discuss the economic impact, including the estimated compliance costs and burdens, of the amendments in Section IV (Paperwork Reduction Act) and Section V (Economic Analysis) and above. Based on the Commission's analysis of existing information relating to broker-dealers that would be subject to the amendments to Rule 606, the Commission believes that such broker-dealers do not fall within the definition of “small entity,” as defined above.
Pursuant to the Exchange Act, and particularly Sections 3(b), 5, 6, 11A, 15, 17, and 23(a) thereof, 15 U.S.C. 78c, 78e, 78f, 78k-1, 78o, 78q, and 78w(a), the Commission is amending Sections 240.3a51-1, 240.13h-1, 242.105, 242.201, 242.204, 242.600, 242.602, 242.605, 242.606, 242.611, and 242.1000 of chapter II of title 17 of the Code of Federal Regulations in the manner set forth below.
Brokers, Dealers, Registration, Securities.
Brokers, Reporting and recordkeeping requirements, Securities.
For the reasons stated in the preamble, the Commission is amending title 17, chapter II of the Code of Federal Regulations as follows:
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2), 78i(a), 78j, 78k-1(c), 78
The additions and revisions read as follows:
(b) * * *
(1)
(i) Symbol;
(ii) Side (buy or sell);
(iii) A price that is equal to or better than the national best bid for buy orders and the national best offer for sell orders; and
(iv) A size that is at least equal to one round lot.
(20)
(49)
(50)
(54)
(55)
The additions read as follows:
This section requires market centers to make available standardized, monthly reports of statistical information concerning their order executions. This information is presented in accordance with uniform standards that are based on broad assumptions about order execution and routing practices. The information will provide a starting point to promote visibility and competition on the part of market centers and broker-dealers, particularly on the factors of execution price and speed. The disclosures required by this section do not encompass all of the factors that may be important to investors in evaluating the order routing services of a broker-dealer. In addition, any particular market center's statistics will encompass varying types of orders routed by different broker-dealers on behalf of customers with a wide range of objectives. Accordingly, the statistical information required by this section alone does not create a reliable basis to address whether any particular broker-dealer failed to obtain the most favorable terms reasonably available under the circumstances for customer orders.
(a) * * *
(2) * * * Every market center shall keep such reports posted on an internet website that is free and readily accessible to the public for a period of three years from the initial date of posting on the internet website.
(a)
(i) The percentage of total orders for the section that were non-directed orders, and the percentages of total non-directed orders for the section that were market orders, marketable limit orders, non-marketable limit orders, and other orders;
(ii) The identity of the ten venues to which the largest number of total non-directed orders for the section were routed for execution and of any venue to which five percent or more of non-directed orders were routed for execution, the percentage of total non-directed orders for the section routed to the venue, and the percentages of total non-directed market orders, total non-directed marketable limit orders, total non-directed non-marketable limit orders, and total non-directed other orders for the section that were routed to the venue;
(iii) For each venue identified pursuant to paragraph (a)(1)(ii) of this section, the net aggregate amount of any payment for order flow received, payment from any profit-sharing relationship received, transaction fees paid, and transaction rebates received, both as a total dollar amount and per share, for each of the following non-directed order types:
(A) Market orders;
(B) Marketable limit orders;
(C) Non-marketable limit orders; and
(D) Other orders.
(iv) A discussion of the material aspects of the broker's or dealer's relationship with each venue identified pursuant to paragraph (a)(1)(ii) of this section, including a description of any arrangement for payment for order flow and any profit-sharing relationship and a description of any terms of such arrangements, written or oral, that may influence a broker's or dealer's order routing decision including, among other things:
(A) Incentives for equaling or exceeding an agreed upon order flow volume threshold, such as additional payments or a higher rate of payment;
(B) Disincentives for failing to meet an agreed upon minimum order flow threshold, such as lower payments or the requirement to pay a fee;
(C) Volume-based tiered payment schedules; and
(D) Agreements regarding the minimum amount of order flow that the broker-dealer would send to a venue.
(2) A broker or dealer shall make the report required by paragraph (a)(1) of this section publicly available within one month after the end of the quarter addressed in the report.
(b)
(i) Orders in NMS stocks that are submitted on a held basis;
(ii) Orders in NMS stocks that are submitted on a not held basis and the broker or dealer is not required to provide the customer a report under paragraph (b)(3) of this section; and
(iii) Orders in NMS securities that are option contracts, the identity of the venue to which the customer's orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any, that resulted from such orders. Such disclosure shall be made available using the most recent versions of the XML schema and the associated PDF renderer as published on the Commission's website for all reports required by this section.
(2) A broker or dealer shall notify customers in writing at least annually of the availability on request of the information specified in paragraph (b)(1) of this section.
(3) Except as provided for in paragraphs (b)(4) and (5) of this section, every broker or dealer shall, on request of a customer that places, directly or indirectly, one or more orders in NMS stocks that are submitted on a not held basis with the broker or dealer, disclose to such customer within seven business days of receiving the request, a report on its handling of such orders for that customer for the prior six months by calendar month. Such report shall be made available using the most recent versions of the XML schema and the associated PDF renderer as published on the Commission's website for all reports required by this section. For purposes of such report, the handling of a NMS stock order submitted by a customer to a broker-dealer on a not held basis includes the handling of all child orders derived from that order. Such report shall be divided into two sections: One for directed orders and one for non-directed orders. Each section of such report shall include, with respect to such order flow sent by the customer to the broker or dealer, the total number of shares sent to the broker or dealer by the customer during the relevant period; the total number of shares executed by the broker or dealer as principal for its own account; the total number of orders exposed by the broker or dealer through an actionable indication of interest; and the venue or venues to which orders were exposed by the broker or dealer through an actionable indication of interest, provided that, where applicable, a broker or dealer must disclose that it exposed a customer's order through an actionable indication of interest to other customers but need not disclose the identity of such customers. Each section of such report also shall include the following columns of information for each venue to which the broker or dealer routed such orders for the customer, in the aggregate:
(i)
(B) Total shares routed marked immediate or cancel;
(C) Total shares routed that were further routable; and
(D) Average order size routed.
(ii)
(B) Fill rate (shares executed divided by the shares routed);
(C) Average fill size;
(D) Average net execution fee or rebate (cents per 100 shares, specified to four decimal places);
(E) Total number of shares executed at the midpoint;
(F) Percentage of shares executed at the midpoint;
(G) Total number of shares executed that were priced on the side of the spread more favorable to the order;
(H) Percentage of total shares executed that were priced at the side of the spread more favorable to the order;
(I) Total number of shares executed that were priced on the side of the spread less favorable to the order; and
(J) Percentage of total shares executed that were priced on the side of the spread less favorable to the order.
(iii)
(B) Percentage of shares executed of orders providing liquidity;
(C) Average time between order entry and execution or cancellation, for orders providing liquidity (in milliseconds); and
(D) Average net execution rebate or fee for shares of orders providing liquidity (cents per 100 shares, specified to four decimal places).
(iv)
(B) Percentage of shares executed of orders removing liquidity; and
(C) Average net execution fee or rebate for shares of orders removing liquidity (cents per 100 shares, specified to four decimal places).
(4) Except as provided below, no broker or dealer shall be required to provide reports pursuant to paragraph (b)(3) of this section if the percentage of shares of not held orders in NMS stocks the broker or dealer received from its customers over the prior six calendar months was less than five percent of the total shares in NMS stocks the broker or dealer received from its customers during that time (the “five percent threshold” for purposes of this paragraph). A broker or dealer that equals or exceeds this five percent threshold shall be required (subject to paragraph (b)(5) of this section) to provide reports pursuant to paragraph (b)(3) of this section for at least six calendar months (“Compliance Period”) regardless of the percentage of shares of not held orders in NMS stocks the broker or dealer receives from its customers during the Compliance Period. The Compliance Period shall begin the first calendar day of the next calendar month after the broker or dealer equaled or exceeded the five percent threshold, unless it is the first time the broker or dealer has equaled or exceeded the five percent threshold, in which case the Compliance Period shall begin the first calendar day four calendar months later. A broker or dealer shall not be required to provide reports pursuant to paragraph (b)(3) of this section for orders that the broker or dealer did not receive during a Compliance Period. If, at any time after the end of a Compliance Period, the percentage of shares of not held orders in NMS stocks the broker or dealer received from its customers was less than five percent of the total shares in NMS stocks the broker or dealer received from its customers over the prior six calendar months, the broker or dealer shall not be required to provide reports pursuant to paragraph (b)(3) of this section, except for orders that the broker or dealer received during the portion of a Compliance Period that remains covered by paragraph (b)(3) of this section.
(5) No broker or dealer shall be subject to the requirements of paragraph (b)(3) of this section with respect to a customer that traded on average each month for the prior six months less than $1,000,000 of notional value of not held orders in NMS stocks through the broker or dealer.
By the Commission.
Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC).
Notice of proposed rulemaking with request for public comment.
The OCC, the Board, and the FDIC (collectively, the agencies) are inviting comment on a proposed rule that would implement section 205 of the Economic Growth, Regulatory Relief, and Consumer Protection Act by: Expanding the eligibility to file the agencies' most streamlined report of condition, the FFIEC 051 Call Report, to include certain insured depository institutions with less than $5 billion in total consolidated assets that meet other criteria; and, establishing reduced reporting on the FFIEC 051 Call Report for the first and third reports of condition for a year. The OCC and Board also are proposing similar reduced reporting for certain uninsured institutions that they supervise with less than $5 billion in total consolidated assets that otherwise meet the same criteria. This
Comments must be received by January 18, 2019.
Comments should be directed to:
• Federal eRulemaking Portal—“
• Click on the “Help” tab on the
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The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) are inviting comment on this notice of proposed rulemaking (proposed rule) that would implement reduced reporting on the Consolidated Reports of Condition and Income (Call Report)
The proposed reduced reporting would be available to smaller, non-complex institutions, with domestic offices only, that meet the definition of “covered depository institution.” That term generally is defined in the proposed rule to mean an institution that has less than $5 billion in total consolidated assets, has no foreign offices, is not required to or has not elected to use Subpart E (Internal Ratings-Based and Advanced Measurement Approaches) of the agencies' regulatory capital rules to calculate its risk-based capital requirements, and is not a large or highly complex institution for purposes of the FDIC's assessment regulations.
The proposed rule would provide for reduced reporting by allowing covered depository institutions to file the FFIEC 051 Call Report, with fewer data items required in the reports for the first and third calendar quarters. For covered depository institutions, the principal areas of reduced reporting in the first and third calendar quarters generally would include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related services assets and income, and troubled debt restructurings by loan category. In addition, covered depository institutions that previously were ineligible to file the FFIEC 051 Call Report (
In their statutory roles of chartering, licensing, supervising, or insuring institutions,
The agencies recognize that institutions devote staffing and resources in order to complete and file Call Reports. In December 2014, the Federal Financial Institutions Examination Council (FFIEC), which is responsible for developing uniform reporting systems (including the Call Reports) for federally supervised financial institutions,
As part of the FFIEC's Call Report burden-reduction initiative, FFIEC members conducted outreach with community banks and industry representatives to better understand what aspects of the Call Report process are significant sources of reporting burden for financial institutions; accelerated the statutorily mandated review of the Call Report;
The FFIEC 051 Call Report first took effect as of March 31, 2017, and contained approximately 40 percent fewer data items than were included in the FFIEC 041 Call Report, which is the Call Report filed by institutions that have $1 billion or more in total assets, only have domestic offices, and are not branches of foreign banks. In addition, the initial FFIEC 051 Call Report collected approximately 4 percent of data items less frequently than the FFIEC 041 Call Report in effect at that time.
In June and November 2017, the agencies proposed further reductions to the FFIEC 051 Call Report based on public comments and additional feedback from Call Report data users from the FFIEC members.
Section 205 of EGRRCPA amended section 7(a) of the Federal Deposit Insurance Act (FDI Act) and requires the agencies to issue regulations that allow for a reduced reporting requirement for a covered depository institution when the institution makes the first and third report of condition for a calendar year. Section 205 of EGRRCPA defines “covered depository institution” as an insured depository institution “that— (i) has less than $5 billion in total consolidated assets; and (ii) satisfies such other criteria as the [agencies] determine appropriate.”
The proposed rule would implement section 205 of EGRRCPA by expanding the number of insured depository institutions eligible to file the FFIEC 051 Call Report and establishing the reduced reporting in the FFIEC 051 Call Report permissible for such institutions for the first and third reports of condition for a year.
As discussed below, the agencies propose to implement reduced reporting by expanding the scope of institutions permitted to file the FFIEC 051 Call Report every quarter through the definition of “covered depository institution.” As noted, the FFIEC 051 Call Report is the most streamlined version of the Call Report and is familiar to institutions and their Call Report service providers and, therefore could be readily used by covered depository institutions for reduced reporting in the first and third calendar quarters.
The agencies expect to propose additional reductions to the FFIEC 051 Call Report in connection with the implementation of section 201 of EGRRCPA. Section 201 of EGRRCPA requires the agencies to adopt a community bank leverage ratio in place of the existing regulatory capital rules for qualifying community banks,
Section 205 of EGRRCPA defines “covered depository institution” as an insured depository institution “that— (i) has less than $5 billion in total consolidated assets; and (ii) satisfies such other criteria as the [agencies] determine appropriate.”
The agencies would allow reduced reporting for “insured depository institutions”, as such term is defined in section 3 of the FDI Act, 12 U.S.C. 1813, and as required by section 205 of EGRRCPA. The OCC and Board also would extend reduced reporting to certain uninsured institutions that they supervise and that would otherwise meet the same criteria.
The proposed rule would define “total consolidated assets” as total assets as reported in an institution's report of condition. An institution would determine whether it meets the asset-size criterion and is eligible to file the FFIEC 051 Call Report based on the total assets it reported in its report of condition (Schedule RC, Item 12 in the Call Reports), which is calculated on a consolidated basis, in the institution's report of condition for the second calendar quarter of the previous calendar year. This approach is consistent with the current FFIEC 051 Call Report instructions for determining eligibility to file the FFIEC 051 Call Report based on asset size.
This approach should allow an institution sufficient time to address any accounting or reporting systems changes or other preparation process changes that may be needed if the institution wants to take advantage of, or is no longer eligible for, filing the FFIEC 051 Call Report with its reduced reporting in the following calendar year. For example, an institution that meets the asset-size criterion based on its report of condition as of June 30, 2018, may be eligible to file the FFIEC 051 Call Report for the entire 2019 calendar year, even if its assets increase to $5 billion or more later in 2018 or 2019, provided it also continues to meet the non-asset-size criteria discussed below. If the same institution reports $5 billion or more in total assets on its Call Report as of June 30, 2019, the institution could continue to file the FFIEC 051 Call Report for report dates through December 31, 2019 (based on its total assets as of June 30, 2018), including reduced reporting in the third calendar quarter of 2019 as long as it continued to meet the non-asset-size criteria. However, because the institution exceeded the asset-size criterion as of June 30, 2019, the institution would be ineligible to file the FFIEC 051 Call Report in the 2020 calendar year.
The agencies are also proposing that an institution satisfy other criteria to be eligible for reduced reporting, consistent with section 205. These other criteria are based on an institution's
Under the FDIC's assessment regulations, large and highly complex institutions are assessed using combined CAMELS
Under the FDIC's assessments regulations, an institution that increases or decreases in asset size is reclassified as a small institution, large institution, or highly complex institution generally after such institution reports assets of less than $10 billion, $10 billion or more, or more than $50 billion,
This proposed eligibility criterion ensures that an institution that meets the asset-size criterion based on its report of condition for the second calendar quarter of a previous year, but is treated as a large or highly complex institution for assessment purposes, will continue to file the FFIEC 031 or FFIEC 041 Call Report, as appropriate, which contain the data items required by the FDIC to calculate the institution's assessment rate.
The agencies propose to implement the reduced reporting required by section 205 of EGRRCPA by first allowing the broader group of covered depository institutions to file the FFIEC 051 Call Report each calendar quarter. The proposed rule would extend eligibility to file the FFIEC 051 Call Report to all covered depository institutions with $1 billion or more, but less than $5 billion, in total assets and that meet the non-asset-size criteria. As discussed in the PRA section below, the agencies propose revising the eligibility criteria for filing the FFIEC 051 Call Report to match the criteria to qualify as a covered depository institution under the proposal. As a result, this approach would provide significant relief through reduced reporting to covered depository institutions that currently are required to file the FFIEC 041 Call Report. For example, the current version of the FFIEC 051 Call Report includes 1,147 reportable data items in each of the first and third calendar quarters, compared with 2,029 reportable data items required on the FFIEC 041 Call Report in those calendar quarters, which is the version of the Call Report currently completed by most institutions with total assets of $1 billion or more, but less than $5 billion. Under the proposal, covered depository institutions with total assets between $1 billion and less than $5 billion would be eligible to file the FFIEC 051 Call Report in each calendar quarter of a calendar year (provided that they continue to meet the non-asset-size eligibility criteria), which would provide substantial reporting relief for these institutions compared to the FFIEC 041 Call Report currently used by most of those institutions.
In addition to expanding the number of institutions eligible to file the FFIEC 051 Call Report, the agencies propose to implement the reduced reporting required by section 205 of EGRRCPA by further reducing the reporting required on the FFIEC 051 Call Report for all covered depository institutions in the first and third calendar quarters. The agencies propose to achieve this by reducing the frequency of reporting in the FFIEC 051 Call Report for approximately 37 percent of the existing data items in this report—from quarterly to semiannual—as described in the PRA section below. The principal areas of reduced reporting in the first and third quarters include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related services assets and income, and troubled debt restructurings by loan category. This reduction in frequency for certain data items would provide all covered depository institutions, including those with less than $1 billion in total assets that currently file the FFIEC 051 Call Report, with further reduced reporting in the first and third calendar quarters.
The proposed rule includes a reservation of authority that would allow the appropriate Federal banking agency, in consultation with the applicable state chartering authority, and on an institution-specific basis, to require a covered depository institution to file the FFIEC 041 Call Report, or any successor thereto, in any calendar quarter or quarters in which the covered depository institution would otherwise be eligible to file the FFIEC 051 Call Report, based on the appropriate Federal banking agency's determination that such filing is necessary for supervisory purposes. In making such a determination, the appropriate Federal banking agency may consider criteria including whether the institution is significantly engaged in one or more complex, specialized, or other higher-risk activities, such as those for which limited information is reported in the FFIEC 051 Call Report compared to the FFIEC 041 Call Report. For example, if a covered depository institution has a considerable concentration of either trading assets or mortgage banking activities, the appropriate Federal banking agency may seek additional information from that institution by requiring the institution to file the FFIEC 041 Call Report. Generally, a covered depository institution's safety and soundness, size, complexity, activities, risk profile, and other factors, such as an increase in a covered depository institution's asset size resulting from a merger or acquisition, also may be taken into consideration.
If, after considering such factors, the appropriate Federal banking agency determines that the covered depository institution should be required to file the
This authority would provide the agencies with the flexibility to require an institution to report and disclose additional Call Report data if warranted by an institution's individual circumstances and risk profile. Consistent with current supervisory practices and experience, the exercise of the reservation of authority generally would be a decision made by a member of the appropriate agency's senior management and would not be at the discretion of examination staff.
The proposed rule is expected to broaden the number of institutions that may file the FFIEC 051 Call Report and be eligible for reduced reporting in the first and third calendar quarters.
The agencies estimate the average quarterly reporting burden hours per institution for the current FFIEC 041 and FFIEC 051 Call Reports are 64.49 hours and 52.31 hours, respectively, for institutions that would become eligible to file the FFIEC 051 Call Report in 2019. Thus, each covered depository institution that switches from filing the current FFIEC 041 Call Report to the FFIEC 051 Call Report (amended as proposed in the PRA section) is expected to save, on average, 12.18 hours per quarter. Assuming that newly eligible covered depository institutions would file the FFIEC 051 Call Report at the same rate as currently eligible institutions file the FFIEC 051 Call Report (77 percent), the agencies estimate a total reporting burden reduction of 5,130 hours per quarter for these institutions.
The proposed rule also provides for reduced reporting in the first and third calendar quarters for covered depository institutions. As discussed below in the PRA section, the agencies are proposing to remove approximately 37 percent of data items from being reported in the FFIEC 051 Call Report for covered depository institutions in the first and third calendar quarters. The principal areas of reduced reporting in the first and third calendar quarters include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules, fiduciary and related service assets and income, and troubled debt restructurings by loan category. These data items are currently collected every calendar quarter on the FFIEC 051 Call Report. Every covered depository institution that files the FFIEC 051 Call Report would experience a reduction in reporting for the first and third calendar quarters as a result of this aspect of the proposed rule. The agencies estimate that the proposed removal of approximately 37 percent of data items from the reporting requirements of covered depository institutions in the first and third calendar quarters would reduce the average quarterly reporting burden by 1.18 hours for the 3,714 institutions that filed the FFIEC 051 Call Report for the June 30, 2018, report date. This represents a total estimated burden reduction of 4,383 hours per quarter for these institutions.
As also discussed below in the PRA section, the agencies are proposing to add certain data items to the FFIEC 051 Call Report for covered depository institutions with $1 billion or more, but less than $5 billion, in total assets. Based on Call Report data as of June 30, 2018, 533 institutions with $1 billion or more, but less than $5 billion, currently file the FFIEC 041 Call Report, but would meet the definition of “covered depository institution” under the proposed rule. Because these 533 institutions already report these data items on the FFIEC 041 Call Report, the proposed addition of these data items to the FFIEC 051 Call Report for these institutions would not represent an increase in reporting burden as these institutions would experience an overall net decrease in reporting burden by switching to the FFIEC 051 Call Report. Furthermore, only one of these items would be collected quarterly; the other items would be collected semiannually or annually. In addition, these data items would not be required to be completed by institutions with less than $1 billion in total assets that file the FFIEC 041 or FFIEC 051 Call Reports, so institutions that are currently eligible to file the FFIEC 051 Call Report would not be affected by the addition of these items.
Based on the agencies' total hourly wage rate for Call Report preparation of $117 and the reduction in reporting hours resulting from the proposed reduced reporting discussed in the PRA section, it is estimated that reporting costs could be $600,210 less each quarter, on average, for the 547 eligible institutions that reported $1 billion or more, but less than $5 billion, in total assets on their June 30, 2018, Call Report.
Finally, the proposed rule could impose some minor additional regulatory costs, in the first year of implementation, that are associated with changes to internal systems or processes for affected institutions that are not currently eligible for, or do not currently file, the FFIEC 051 Call Report. The agencies expect that these additional costs should be relatively low as the FFIEC 051 Call Report shares defined terms and data item identifiers with the other Call Reports, so institutions that switch to the FFIEC 051 Call Report should not necessitate significant reporting system changes. However, these costs are also difficult to estimate accurately with available information because they depend upon the individual characteristics of each institution, its recordkeeping and reporting systems, and the decisions of its senior management.
The agencies recognize that while the statutory mandate is to allow for reduced reporting in the first and third calendar quarters for covered depository institutions, the implementation of section 205 of EGRRCPA presents an additional opportunity to provide broader regulatory relief to smaller, less complex institutions that are currently required to file the FFIEC 041 Call Report because they have $1 billion or more in total assets. In developing the proposal, the agencies sought to reduce the reporting burden on institutions with total consolidated assets of less than $5 billion, consistent with the mandate in section 205, while also ensuring that the agencies' data needs for institutions in the size range would continue to be met.
The agencies considered two alternative approaches to implementing section 205 as part of the development of the proposed rule. In considering these alternatives, the agencies reviewed prior PRA notices in which Call Report changes were discussed and comments were addressed. Additionally, the agencies considered comments received on the Call Report burden reduction initiative announced in December 2014 that resulted in the creation of the FFIEC 051 Call Report. The agencies note that the FFIEC Call Report burden-reduction initiative involved significant outreach to community banks and to users of Call Report data and that the guiding principles developed as part of the initiative informed the development of the approach taken in this proposal.
The Board does not currently have a rule that sets forth the report of condition filing requirements of state-chartered banks that are members of the Federal Reserve System (state member banks), and instead relies on its statutory authority under section 9 of the Federal Reserve Act (FRA) and section 7(a)(3) of the FDI Act to require state member banks to provide reports of condition. In light of section 205 of EGRRCPA's requirement that the Board issue a rule that allows for reduced reporting by certain eligible Board-supervised insured depository institutions, the Board proposes to add a new subpart to Regulation H, which governs the membership of state banking institutions in the Federal Reserve System. The Board proposes to add new subpart K to Regulation H, which will incorporate the rule text implementing section 205. In addition to insured state member banks, the Board also supervises uninsured state member banks, such as nondepository trust companies. The Board requires such institutions to use the Call Report to submit financial data. The Board's proposed rule also would extend the use of the reduced reporting requirement to uninsured state member banks if they meet the criteria for covered depository institutions identified in the rule.
The Board also proposes to include in new subpart K, pursuant to its statutory authority under section 9 of the FRA and section 7(a)(3) of the FDI Act, subsection 208.122 that will set forth the general requirement that all state member banks file consolidated reports of condition and income in accordance with the instructions for these reports.
The FDIC proposes to amend Part 304 of its Rules and Regulations, by restructuring the regulation and creating a “Subpart A” and “Subpart B.” In Subpart A, the FDIC would put the current text of Part 304, with limited technical, non-substantive changes. The technical, non-substantive changes include: (1) Updating the address and contact information in section 304.2; (2) clarifying that sections 304.3(a) and (b) apply to insured depository institutions; (3) updating references in section 304.3(a) to the various Call Reports to include the recently implemented FFIEC 051 Call Report; and (4) updating the references to FDIC divisions to reflect changes in nomenclature. In Subpart B, the FDIC proposes to include the regulatory text implementing Section 205.
The FDIC believes that the proposed approach to restructuring Part 304 will incorporate the entirety of the new, substantive text of the proposed rule that implements Section 205 of the EGRRCPA with minimal effect to the current text. Thus, a state nonmember bank or state savings association that believes it qualifies as a covered depository institution would be able to make that determination based on the regulatory text contained in Subpart B.
Insured depository institutions identified in section 205 include insured Federal branches of foreign banks, as defined under section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)). While these insured Federal branches are included in the statute, they currently file the FFIEC 002 report of condition. The FFIEC 002 is used by insured and uninsured state and Federal branches and agencies of foreign banks and contains a significant amount of information relating to the operations and foreign connections of these entities. As described above in the
In addition to insured depository institutions, which are specifically identified in section 205, the OCC also supervises a number of uninsured national banks, such as trust banks. The OCC has permitted some of these institutions to use the Call Report to submit financial data and to use the existing FFIEC 051 if they meet the current eligibility requirements for filing that Call Report. Therefore, the OCC's proposed rule would also extend the use of the reduced reporting requirement to uninsured national banks if they meet the criteria for covered depository institutions identified in the rule.
Certain provisions of the proposed rule affect “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
The agencies reviewed the proposed rule, including the changes to the FFIEC 051 Call Report that are discussed in this PRA section, and determined that it would result in changes to certain reporting requirements that have been previously cleared by the OMB under various control numbers. The proposed rule would expand the eligibility to file the FFIEC 051 Call Report to certain institutions with $1 billion or more, but less than $5 billion, in total assets that meet other eligibility criteria. In addition to the expanded eligibility to file this report, the agencies also are proposing other revisions to the FFIEC 051 Call Report, as discussed under Current Actions below. These revisions to the FFIEC 051 Call Report are proposed to take effect as of the March 31, 2019, report date. The agencies are proposing to extend for three years, with revision, these information collections.
First, as described above, the agencies are proposing to revise the criteria for determining whether an institution is eligible to file the FFIEC 051 Call Report to match the criteria in the proposed rule. While the proposed rule provides for reduced reporting on reports filed for the first and third calendar quarters, the agencies also propose to revise the eligibility criteria to extend to all eligible institutions with less than $5 billion in total assets that meet other criteria in the rule the option to file the FFIEC 051 Call Report for all four calendar quarters. Therefore, if an institution is eligible to file the FFIEC 051 Call Report for the first and third calendar quarters pursuant to the rule, the institution also could file the FFIEC 051 Call Report for the second and fourth calendar quarters provided the institution continues to meet the non-asset-size criteria. The revisions to the filing eligibility would be made in the General Instructions section of the Call Report instructions and would include the increase in the asset-size threshold to less than $5 billion in total assets as well as the addition of a criterion to exclude institutions that are treated as large or highly complex institutions for deposit insurance assessment purposes. The Call Report instructions currently provide that, beginning with the first quarterly report date following the effective date of a business combination, a transaction between entities under common control, or a branch acquisition that is not a business combination involving an institution and one or more other depository institutions, the resulting institution, regardless of its size prior to the transaction, must file the FFIEC 041 Call Report if its consolidated total assets after the consummation of the transaction are $1 billion or more. The agencies are proposing to remove this provision from the instructions, but the resulting institution may be required to file the FFIEC 041 Call Report consistent with the reservation of authority in the rule. All of the proposed FFIEC 051 Call Report eligibility criteria, along with justifications, are provided above in section II.A. of the Supplementary Information section (“Covered Depository Institution”). Based on June 30, 2018, Call Report data, there were 547 institutions with $1 billion or more, but less than $5 billion in total assets that likely would meet the definition of “covered depository institution” in the proposed rule.
Second, the agencies are proposing to revise the reporting frequency and
Third, for covered depository institutions with total assets of $1 billion or more, but less than $5 billion, the agencies are proposing to add to the FFIEC 051 Call Report certain data items that these institutions currently report on the FFIEC 041 Call Report, but generally with reduced reporting frequency. The agencies are proposing to add these items to meet the agencies' data needs and assist the agencies in fulfilling their missions of ensuring the safety and soundness of depository institutions and the financial system, as well as the protection of consumer financial rights and providing deposit insurance.
The agencies are proposing, for the reasons explained below, to reduce the frequency of the following items on the FFIEC 051 Call Report from quarterly to semiannual (
• Schedule RI, Income Statement, Memorandum item 14. Institutions currently report the amount of other-than-temporary impairment losses on certain debt securities that are recognized through earnings in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this amount on a quarterly basis, as most of these institutions are not currently reporting losses in this item given current economic conditions. The agencies note that changes in the accounting for credit losses will eliminate the need for this item for an ever increasing percentage of institutions through year-end 2022. In the interim, the agencies can review other-than-temporary impairment information for the first and third calendar quarters, as necessary, as part of on-site examinations or through other periodic monitoring.
• Schedule RC-C, Part I, Loans and Leases, Memorandum items 1.a through 1.f, and Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets, Memorandum items 1.a through 1.f. Institutions currently report breakdowns of troubled debt restructurings by loan category, separately for those restructurings in compliance with their modified terms in Schedule RC-C and those restructurings that are past due 30 days or more or in nonaccrual status in Schedule RC-N. Institutions would still be required to report the totals for their troubled debt restructurings in Schedule RC-C, Part I, Memorandum item 1.g, and Schedule RC-N, Memorandum item 1.g, on a quarterly basis. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide the breakdowns of troubled debt restructurings on a quarterly basis. The agencies can review information on troubled debt restructurings by loan category for the first and third quarters as part of on-site examinations or through other periodic monitoring, as necessary.
• Schedule RC-E, Deposit Liabilities, Memorandum item 1.a. Institutions currently report the total amount of Individual Retirement Account and Keogh plan deposits in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide these amounts on a quarterly basis as this item generally does not fluctuate significantly between quarters for most eligible institutions. The agencies can review information on these deposits for the first and third quarters as part of on-site examinations or through other periodic monitoring, as necessary.
• Schedule RC-E, Memorandum item 5. Institutions currently report whether they offer consumer deposit products in this Memorandum item. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this information on a quarterly basis, as this item does not change frequently for most eligible institutions.
• Schedule RC-M, Memoranda, items 8.a through 8.c. In these items, institutions currently report their primary internet website address, addresses for other websites used to solicit deposits, and alternate trade names used by the institutions. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide this information on a quarterly basis as these items do not change frequently for most eligible institutions.
• Schedule RC-R, Part II, Regulatory Capital Risk-Weighted Assets, items 1 through 25, columns A through S. In these items, institutions currently report detailed information about the risk-weighting of various types of assets and other exposures under the agencies' regulatory capital rules. Institutions still would need to calculate risk-weighted assets, maintain appropriate documentation for this calculation, and report items 26 through 31 of Part II, if applicable, on a quarterly basis. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to provide the details of their risk-weighting allocations and calculations in Schedule RC-R, Part II, on a quarterly basis as the agencies can adequately review regulatory capital calculations for the first and third calendar quarters as part of on-site examinations or through other types of periodic monitoring, as necessary.
• Schedule RC-R, Part II, Memorandum items 1 through 3, including all subitems and columns. Institutions currently report detailed information in these items about derivative exposures that are elements of the risk-weighting process for these exposures. The agencies do not believe it is necessary for institutions eligible to file the FFIEC 051 Call Report to continue to report these amounts on a quarterly basis. Generally, institutions eligible to file the FFIEC 051 Call Report do not have a significant amount of derivatives contracts, and the agencies can review information about institutions' risk-weighting calculations for derivative exposures for the first and third calendar quarters, as necessary, as part of on-site examinations or through other periodic monitoring.
• Schedule RC-T, Fiduciary and Related Services, items 4 through 13, columns A through D; items 14 through 22; and Memorandum items 3.a through 3.h, for institutions with total fiduciary assets greater than $250 million but less than or equal to $1 billion, and gross fiduciary and related services income less than or equal to 10 percent of total revenue.
Detail for each affected data item described above is shown in Appendix A.
The agencies are proposing to add certain data items to the FFIEC 051 Call Report that would apply only to covered depository institutions with total assets of $1 billion or more. These items are currently reported by institutions with total assets of $1 billion or more that file the FFIEC 031 or FFIEC 041 Call Report, but they are not required to be completed by institutions with less than $1 billion in total assets that file the FFIEC 031, FFIEC 041, or FFIEC 051 Call Reports. Therefore, the additional data items would not represent new data items for covered depository institutions with total assets of $1 billion or more, but rather are items carried over from the FFIEC 041 version of the Call Report, generally using the same definitions and calculations and with reduced reporting frequency.
• Schedule RI, Memorandum items 15.a. through 15.d. These items provide data on the three key categories of service charges on certain deposit accounts: Overdraft-related service charges on consumer accounts, monthly maintenance charges on consumer accounts, and consumer ATM fees. The agencies and the Bureau of Consumer Financial Protection (Bureau) propose to collect these items on an annual reporting frequency as they provide the only comprehensive data source from which supervisors and policymakers can estimate or evaluate the composition of consumer deposit account-related fees and how they affect consumers and a depository institution's earnings stability. The addition of these items to the Call Report in 2015 has supported the agencies and the Bureau in monitoring these types of transactional costs incurred by consumers. The data specific to overdraft-related fees is particularly pertinent for supervisors and policymakers because they compose the majority of consumer deposit service charges (and for many institutions, of total deposit service charges). Continuing to collect these data on an annual basis from covered depository institutions with $1 billion or more in total assets will support the agencies and the Bureau in monitoring these activities and informing any potential future rulemaking. The agencies are proposing to add these items to the FFIEC 051 on an annual basis (December 31) for covered depository institutions with total assets of $1 billion or more that respond affirmatively to the screening question (Schedule RC-E, Memorandum item 5, regarding whether an institution offers a consumer deposit account product), while institutions with total assets less than $1 billion will not need to report these items regardless of their response to the screening question. Institutions with total assets between $1 billion and less than $5 billion that file the FFIEC 041 Call Report currently report this information quarterly, so the proposed annual reporting would represent a frequency reduction for institutions filing the FFIEC 051 Call Report, while still meeting the agencies' need for this information.
• Schedule RI-C, Disaggregated Data on the Allowance for Loan and Lease Losses (ALLL). The agencies are proposing to add a condensed version of the existing FFIEC 041 Schedule RI-C to the FFIEC 051 Call Report and reduce the reporting frequency of this condensed schedule from quarterly to semiannual (
• Schedule RC-E, Memorandum items 6 and 7, including all subitems. Institutions report disaggregated data on balances in consumer and non-consumer deposit accounts in these items. These items are critical to the agencies' and the Bureau's consumer deposit product monitoring and rulemaking mandates for several reasons. As noted in the agencies' 2013 notice
• Schedule RC-O, Other Data for Deposit Insurance and FICO Assessments, Memorandum item 2, “Estimated amount of uninsured deposits, including related interest accrued and unpaid.” The agencies are proposing to add this data item on a quarterly basis for institutions with total assets of $1 billion or more but less than $5 billion. The FDIC uses this data item for the calculation of estimated insured deposits, which is the denominator of the Deposit Insurance Fund (DIF) reserve ratio. (The numerator is the balance of the DIF.) The DIF reserve ratio is a key measure in assessing the adequacy and viability of the fund and is a driving force behind setting deposit insurance assessment rate schedules. For example, the FDIC evaluates whether assessment rates are likely to be sufficient to meet statutory requirements related to the minimum reserve ratio.
Detail for each affected data item described above is shown in Appendix B.
The revisions to the FFIEC 051 Call Report described above are proposed to take effect as of the March 31, 2019, report date. The less than $5 billion asset-size test for determining eligibility to file the FFIEC 051 Call Report beginning March 31, 2019, would be based on the total assets reported on an institution's June 30, 2018, Call Report. An institution eligible to file the FFIEC 051 Call Report also has the option to file the FFIEC 041 Call Report. For an institution with less than $5 billion in total assets that qualifies to use the FFIEC 051 Call Report for the first time as a result of the agencies' proposal to increase the asset reporting threshold for the FFIEC 051 Call Report from less than $1 billion to less than $5 billion, and that desires to use that report form but is unable to do so for the March 31, 2019, Call Report date, the institution may begin reporting on the FFIEC 051 Call Report as of the June 30, 2019, report date or in a subsequent calendar quarter of 2019. Alternatively, the institution could wait until March 31, 2020, to begin reporting on the FFIEC 051 Call Report, assuming it meets the asset-size threshold for eligibility as of June 30, 2019, and meets the non-asset-size criteria as of March 31, 2020. Beginning in 2020, an institution should file whichever version of the Call Report it was both eligible and chose to file in the first quarter of that year for the remainder of that year if it continues to meet the non-asset-size criteria.
The proposed changes in this notice would be effective beginning with the March 31, 2019, Call Report.
OCC:
Board:
FDIC:
When the estimates are calculated across the agencies considering all expected filers of the FFIEC 051 Call Report under this proposal, the estimated average burden hours per calendar quarter for this report are 39.95. The burden hours for current FFIEC 051 Call Report filers are 39.39. The proposed revisions to the FFIEC 051 Call Report in this notice would represent a reduction in estimated average burden hours per quarter of 1.18 hours to 38.21 hours for the current FFIEC 051 Call Report filers. For newly eligible filers, the average burden hours would decrease from approximately 64.49 hours to 52.31 hours, a reduction of 12.18 hours per quarter. The estimated burden per response for the quarterly filings of the Call Report is an average that varies by agency because of differences in the composition of the institutions under each agency's supervision (
Public comment is requested on all aspects of this joint notice. Comment is specifically invited on:
a. Whether institutions would find the proposal to reduce the reporting frequency of the risk-weighting data for the various types of assets and other exposures that are reported in Schedule RC-R, Part II, items 1 through 25, columns A through S, to be beneficial in terms of reducing some of the reporting burden associated with the Call Report even though institutions would still need to calculate, maintain appropriate documentation for, and report the total amount of their risk-weighted assets in Schedule RC-R, Part II. How would semiannual reporting of these risk-weighting data in Schedule RC-R, Part II affect an institution's ability to determine its compliance each calendar quarter with the prompt corrective action requirements in 12 CFR part 6 (OCC); 12 CFR part 208 (Board); 12 CFR 324, subpart H (FDIC)?
b. Whether the data items that the agencies propose for reduced reporting for covered depository institutions are appropriate. Why or why not?
c. The agencies are proposing to discontinue the treatment in the current FFIEC 051 Call Report instructions for institutions with less than $1 billion in total assets that immediately disqualifies the institution from filing the FFIEC 051 Call Report if it exceeds the asset-size criterion due to a merger or acquisition. Is this appropriate and why?
Comments also are invited on:
d. Whether the collection of information is necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
e. The accuracy or the estimate of the burden of the information collections, including the validity of the methodology and assumptions used;
f. Ways to enhance the quality, utility, and clarity of the information to be collected;
g. Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
h. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
The Regulatory Flexibility Act
The Board has considered the potential impact of the proposed rule on small entities in accordance with the RFA. Based on its analysis and for the
As discussed in the Supplementary Information, the agencies are proposing to implement section 205 of EGRRCPA, which requires the agencies to allow for a reduced reporting requirement for a “covered depository institution” when an institution files the first and third Call Reports for a year. The proposal would define “covered depository institution” and establish the reduced reporting permissible for such institutions in the Call Report for the first and third calendar quarters of a year. In connection with the implementation of reduced reporting mandated by section 205, the Board is proposing to set forth the general requirement that all state member banks must file consolidated reports of condition pursuant to its statutory authority under section 9 of the FRA and section 7(a)(3) of the FDIA.
As discussed above, the agencies' objectives in proposing this rule are to reduce the reporting burden for covered depository institutions by allowing them to file the FFIEC 051 Call Report in the first and third quarters of a calendar year. The Board has explicit authority under section 7 of the FDI Act, 12 U.S.C. 1817(a)(3) and (12), and section 9 of the Federal Reserve Act, 12 U.S.C. 324, to establish reporting requirements and eligibility criteria to file a reduced report of condition for state member banks.
The Board's proposal would apply to state member banks. Under regulations issued by the SBA, a small entity includes a state member bank with total assets of $550 million or less. As of June 30, 2018, there were approximately 533 state member banks that qualified as small entities. The requirement set forth in section 208.122 of the Board's proposed rule requiring state member banks to file reports of condition would apply to all state member banks, regardless of size. However, proposed section 208.122 does not establish a new requirement, but only implements in Board regulation a statutory requirement to which state member banks were already subject.
Section 208.123 of the Board's proposed rule would allow state member banks that qualify as covered depository institutions to file reduced reporting in first and third calendar quarters of the year, which would apply to approximately 533 state member banks that qualify as small entities. However, proposed section 208.123 would allow but not require these small state member banks to file reduced reporting. Accordingly, the proposed rule would not have a significant economic impact on a substantial number of small entities.
The proposed rule would not impose any new reporting, recordkeeping, or other compliance requirements on small state member banks. First, state member banks are already required to file reports of condition each quarter of the calendar year in accordance with the instructions of such reports. Second, the proposed rule would allow small state member banks that qualify as covered depository institutions to reduce their reporting, recordkeeping, and compliance burden by filing the FFIEC 051 Call Report, the shortest version of the Call Report, with further reduced reporting in the first and third calendar quarters. As a result, the Board expects that the proposed rule will reduce the reporting and associated recordkeeping and compliance costs for the majority of small state member banks.
The Board has not identified any likely duplication, overlap and/or potential conflict between the proposed rule and any Federal rule.
The Board believes the proposed rule will not have a significant economic impact on small state member banks and, as discussed in Supplementary Information IV, does not believe there are any significant alternatives to the proposal that would reduce the impact of the proposal.
As of June 30, 2018 Call Report data, the FDIC supervises 3,575 insured depository institutions, of which 2,763 are considered small entities for the purposes of RFA. For the reasons described below, the FDIC certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities.
As the agencies discussed in the Supplementary Information section above, the proposed rule would implement section 205 of EGRRCPA by defining “covered depository institution” to, among other things, expand eligibility for filing the FFIEC 051 Call Report to insured depository institutions with $1 billion or more, but less than $5 billion in total assets. Through a related PRA notice, the agencies are proposing to reduce the reporting frequency for more than 400 data items on the FFIEC 051 Call Report for the first and third reports of condition for a year, and to add certain data items to the FFIEC 051 Call Report that would apply only to covered depository institutions with total assets of $1 billion or more. Out of the additional data items, only 1 would be required to be reported every quarter, while the remaining only would be required semiannually or annually (
The FDIC estimates that under the proposed definition of “covered depository institution,” 295 FDIC-supervised depository institutions that reported total assets of $1 billion or more, but less than $5 billion, could be eligible to file the FFIEC 051 Call Report assuming they meet the other non-asset-
As the agencies discussed in the PRA section, the FDIC is proposing to reduce the reporting frequency of more than 400 data items on the FFIEC 051 Call Report for the first and third calendar quarters. These data items are currently collected every calendar quarter on the FFIEC 051 Call Report. Every covered depository institution with less than $5 billion in total assets that files the FFIEC 051 Call Report would experience a reduction in reporting for the first and third calendar quarters as a result of this proposal. The FDIC estimates that the proposed reduction in reporting frequency of more than 400 data items for covered depository institutions in the first and third calendar quarters would reduce the average quarterly burden hours by 1.18 hours per institution. For the 2,221 small, FDIC-supervised depository institutions that filed the FFIEC 051 Call Report for the June 30, 2018 report date, this represents a total estimated burden reduction of 2,621 hours per quarter.
Based on the agencies' total hourly wage rate of $117 for Call Report preparation, and the reduction in reporting hours resulting from the proposed reduced reporting frequency of certain items in the FFIEC 051 Call Report discussed in the PRA section, it is estimated that annual reporting costs could be $1,226,628 less for small, FDIC-supervised insured depository institutions that file the FFIEC 051 Call Report, or 0.011 percent of total annualized non-interest expenses.
The proposed rule could pose some additional regulatory costs for small, FDIC-supervised depository institutions that file the FFIEC 051 Call Report that are associated with changes to internal systems or processes. The FDIC anticipates that costs associated with either switching to file the FFIEC 051 Call Report, or reprogramming for reduced reporting in the first and third calendar quarters, would be one-time costs. However, these costs are difficult to estimate accurately with available information because they depend upon the individual characteristics of each insured depository institution, their recordkeeping and reporting systems, and the decisions of senior management.
Based on the information above, the FDIC certifies that the proposed rule would not have a significant economic impact, although a substantial number of small entities would be affected.
The FDIC invites comments on all aspects of the supporting information provided in this RFA section. In particular, would this rule have any significant effects on small entities that the FDIC has not identified?
Section 722 of the Gramm-Leach-Bliley Act requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The agencies have sought to present the proposed rule in a simple and straightforward manner, and invite comment on the use of plain language. For example:
• Have the agencies organized the material to suit your needs? If not, how could they present the rule more clearly?
• Are the requirements in the rule clearly stated? If not, how could the rule be more clearly stated?
• Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that?
• Is this section format adequate? If not, which of the sections should be changed and how?
• What other changes can the agencies incorporate to make the regulation easier to understand?
The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on IDIs, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.
Because the proposal would not impose additional reporting, disclosure, or other requirements on IDIs, section 302 of the RCDRIA therefore does not apply. Nevertheless, the requirements of RCDRIA will be considered as part of the overall rulemaking process. In addition, the agencies also invite any other comments that further will inform the agencies' consideration of RCDRIA.
The OCC analyzed the proposed rule under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in 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 for inflation). There are 123 national banks and Federal savings associations with total assets between $1 billion and less than $5 billion that could be eligible for reduced reporting under the proposed rule. The OCC estimates that each of these institutions that switches to the FFIEC 051 could save approximately $6,000 per year. Savings may be less during the first year of implementation due to costs associated with updating systems and processes, but these costs are not expected to exceed the estimated savings. Therefore, the OCC has determined that this proposed rule would not result in expenditures by State, local, and Tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, the OCC has not prepared a written statement to accompany this proposal.
The following data items are currently collected on the FFIEC 051 quarterly. The data items are proposed to be collected semiannually in the June and December reports only.
The following data items on Schedule RC-T are currently collected on the FFIEC 051 quarterly for institutions with total fiduciary assets greater than $250 million (as of the preceding December 31) or with gross fiduciary and related services income greater than 10 percent of revenue (net interest income plus noninterest income) for the preceding calendar year.
The data items are proposed to be collected semiannually in the June and December reports only for institutions with total fiduciary assets greater than $250 million but less than or equal to $1 billion (as of the preceding December 31) that do not meet the fiduciary income test for quarterly reporting.
The following data item is currently collected on the FFIEC 041 from institutions with $1 billion or more in total assets. The data item is proposed to be reported quarterly by institutions with $1 billion or more in total assets on the FFIEC 051.
The following data items are currently collected quarterly on the FFIEC 041 from institutions with $1 billion or more in total assets. The data items are proposed to be reported on the FFIEC 051 by institutions with $1 billion or more in total assets with a reduction in the frequency of collection.
The following data items are currently being proposed to be collected quarterly on the FFIEC 041 by those institutions with $1 billion or more in total assets that have adopted ASU 2016-13.
For this proposal, the data items are proposed to be reported on the FFIEC 051 by institutions with $1 billion or more in total assets that have adopted ASU 2016-13 with a reduction in the frequency of collection.
Banks, banking, Reporting and recordkeeping requirements.
Accounting, Agriculture, Banks, banking, Confidential business information, Consumer protection, Currency, Insurance, Investments, Mortgages, Reporting and recordkeeping requirements, Securities
Bank deposit insurance, Banks, banking, Freedom of information, Reporting and recordkeeping requirements.
12 U.S.C. 93a, 161, 1463(a), 1464(v), and 1817(a)(12).
(a)
(b)
A national bank, Federal savings association, or insured Federal branch that meets the following criteria:
(1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year;
(2) Has no foreign offices, as defined in this subpart;
(3) Is not required to or has not elected to use 12 CFR part 3, subpart E (for advanced approaches banks) to calculate its risk-based capital requirements;
(4) Is not a large institution or highly complex institution, as such terms are defined in 12 CFR 327.8, or treated as a large institution, as requested under 12 CFR 327.16(f); and
(5) Is not subject to the filing requirements for the FFIEC 002 report of condition.
(1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility;
(2) An international banking facility as such term is defined in 12 CFR 204.8;
(3) A majority-owned Edge Act or Agreement subsidiary as defined in 12 CFR 28.2, including both its U.S. and its foreign offices; and
(4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession.
A covered depository institution may file the FFIEC 051 version of the Call Report, or any successor thereto, to satisfy its requirement to file a report of condition for the first and third calendar quarters of a year.
The OCC may determine that a covered depository institution shall not use the reduced reporting in § 52.3. In making this determination, the OCC will consider whether the institution is significantly engaged in complex, specialized, or higher risk activities, for which a reduced reporting requirement would not provide sufficient information. The institution has 30 days following notification from the OCC to inform the OCC, in writing, of why it should continue to be eligible to use reduced reporting or cannot cease using reduced reporting in the OCC's proposed timeframe. The OCC will make a final decision after reviewing any response. Nothing in this part shall be construed to limit the OCC's authority to obtain information from a covered depository institution.
For the reasons set forth in the joint preamble, the Board proposes to amend 12 CFR part 208 as follows:
12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12),
(a)
(b)
(1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year;
(2) Has no foreign offices, as defined in this subpart;
(3) Is not required to or has not elected to use 12 CFR part 217, subpart E to calculate its risk-based capital requirements; and
(4) Is not a large institution or highly complex institution, as such terms are defined in 12 CFR 327.8, or treated as a large institution, as requested under 12 CFR 327.16(f).
(1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility;
(2) An international banking facility as such term is defined in 12 CFR 204.8;
(3) A majority-owned Edge Act or Agreement subsidiary including both its U.S. and its foreign offices; and
(4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession.
(a) A state member bank is required to file the report of condition (Call Report) in accordance with the instructions for these reports. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of, the Call Report. The Board uses Call Report data to monitor the condition, performance, and risk profile of individual state member banks and the banking industry. Reporting state member banks must also submit annually such information on small business and small farm lending as the Board may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council,
(b) Every insured U.S. branch of a foreign bank is required to file the FFIEC 002 version of the report of condition (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks) in accordance with the instructions for the report. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of the report. The Board uses the reported data to monitor the condition, performance, and risk profile of individual insured branches and the banking industry. Insured branches must also submit annually such information on small business and small farm lending as the Board may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council,
A covered depository institution may file the FFIEC 051 version of the report of condition, or any successor thereto, which shall provide for reduced reporting for the reports of condition for the first and third calendar quarters for a year.
(a) Notwithstanding § 208.123, the Board in consultation with the applicable state chartering authority may require an otherwise eligible covered depository institution to file the FFIEC 041 version of the report of condition, or any successor thereto, based on an institution-specific determination. In making this determination, the Board may consider criteria including, but not limited to, whether the institution is significantly engaged in one or more complex, specialized, or other higher risk activities, such as those for which limited information is reported in the FFIEC 051 version of the report of condition compared to the FFIEC 041 version of the report of condition. Nothing in this part shall be construed to limit the Board's authority to obtain information from a state member bank.
(b) Nothing in this subpart limits the authority of the Board under any other provision of law or regulation to take supervisory or enforcement action, including action to address unsafe or unsound practices or conditions or violations of law.
5 U.S.C. 552; 12 U.S.C. 1464, 1817, 1831, 1867.
Part 304 informs the public where it may obtain forms and instructions for reports, applications, and other submittals used by the FDIC, and also describes certain forms that are not described elsewhere in FDIC regulations.
Forms and instructions used in connection with applications, reports, and other submittals used by the FDIC can be obtained by contacting the FDIC Public Information Center (550 17th Street NW, Washington, DC 20429; telephone: (877) 275-3342 or (703) 562-2200), except as noted below in § 304.3. In addition, many forms and instructions can be obtained from FDIC regional offices. A list of FDIC regional offices can be obtained from the FDIC Public Information Center, or found at the FDIC's website at
(a) Consolidated Reports of Condition and Income, Forms FFIEC 031, 041, and 051. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) and other applicable law, every insured depository institution is required to file Consolidated Reports of Condition and Income (also known as the Call Report) in accordance with the instructions for these reports. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of, the Call Report. The FDIC uses Call Report data from all insured depository institutions to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual banks and the banking industry. Reporting banks must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from the Division of Insurance and Research (DIR), FDIC, 550 17th Street NW, Washington, DC 20429 or through the website of the Federal Financial Institutions Examination Council,
(b) Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks, Form FFIEC 002. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) and other applicable law, every insured U.S. branch of a foreign bank is required to file a Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks in accordance with the instructions for the report. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of the report. The FDIC uses the reported data to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual insured branches and the banking industry. Insured branches must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. Because the Board of Governors of the Federal Reserve System collects and processes this report on behalf of the FDIC, the report forms and instructions can be obtained from Federal Reserve District Banks or through the website of the Federal Financial Institutions Examination Council,
(c) Summary of Deposits, Form FDIC 8020/05. Form 8020/05 is a report on the amount of deposits for each authorized office of an insured depository institution with branches; institutions with only a main office are exempt from reporting. Reports as of June 30 of each year must be submitted no later than the immediately succeeding July 31. The report forms and the instructions for completing the reports will be furnished to all such banks by, or may be obtained upon request from, the Division of Insurance and Research (DIR), FDIC, 550 17th Street NW, Washington, DC 20429.
(d) Notification of Performance of Bank Services, Form FDIC 6120/06. Pursuant to Section 7 of the Bank Service Company Act (12 U.S.C. 1867), as amended, FDIC-supervised banks must notify the agency about the existence of a service relationship within thirty days after the making of the contract or the performance of the service, whichever occurs first. Form FDIC 6120/06 may be used to satisfy the notice requirement. The form contains identification, location and contact information for the bank, the servicer, and a description of the services provided. In lieu of the form, notification may be provided by letter. Either the form or the letter containing the notice information must be submitted to the regional director—Division of Risk Management Supervision (RMS) of the region in which the bank's main office is located.
12 U.S.C. 1464(v), 1817(a), and 1819 Tenth.
(a)
(b)
(c)
(d)
(a)
(1) Has less than $5 billion in total consolidated assets as reported in its report of condition for the second calendar quarter of the preceding year;
(2) Has no foreign offices, as defined in this subpart;
(3) Is not required to or has not elected to use 12 CFR part 324, subpart E to calculate its risk-based capital requirements;
(4) Is not a large institution or highly complex institution, as such terms are
(5) Is not a state-licensed insured branch of a foreign bank, as such terms are defined in section 3(s) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(s).
(b)
(c)
(1) A branch or consolidated subsidiary in a foreign country, unless the branch is located on a U.S. military facility;
(2) An international banking facility as such term is defined in 12 CFR 204.8;
(3) A majority-owned Edge Act or Agreement subsidiary including both its U.S. and its foreign offices; and
(4) For an institution chartered or headquartered in any U.S. state or the District of Columbia, a branch or consolidated subsidiary located in a U.S. territory or possession.
(d)
(e)
A covered depository institution may file the FFIEC 051 version of the report of condition, or any successor thereto, which shall provide for reduced reporting for the reports of condition for the first and third calendar quarters for a year.
Notwithstanding § 304.13, the Corporation, in consultation with the applicable state chartering authority, may require an otherwise eligible covered depository institution to file the FFIEC 041 version of the report of condition, or any successor thereto, based on an institution-specific determination. In making this determination, the Corporation may consider criteria including, but not limited to, whether the institution is significantly engaged in one or more complex, specialized, or other higher-risk activities, such as those for which limited information is reported in the FFIEC 051 version of the report of condition compared to the FFIEC 041 version of the report of condition. Nothing in this part shall be construed to limit the Corporation's authority to obtain information from insured depository institutions.
By order of the Board of Governors of the Federal Reserve System, October 30, 2018.
Dated at Washington, DC, on October 17, 2018.
By order of the Board of Directors.
| 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 |