Federal Register Vol. 83, No.8,
Federal Register Volume 83, Issue 8 (January 11, 2018)
Federal Register Volume 83, Issue 8 (January 11, 2018)
| Page Range | 1289-1509 | |
| FR Document |
![1292 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations
penalty of not more than $8,697 for each determined by the agency head or his or § 824.4 Civil penalties.
violation. her designee. * * * * *
* * * * * * * * * * (c) The Director may propose
imposition of a civil penalty for
PART 501—ADMINISTRATIVE Appendix A to Part 601 [Amended] violation of a requirement of a
PROCEDURES AND SANCTIONS ■ 15. Appendix A to part 601 is regulation or rule under paragraph (a) of
amended by: this section or a compliance order
■ 11. The authority citation for part 501 issued under paragraph (b) of this
continues to read as follows: ■ a. Removing ‘‘$19,246’’ wherever it
appears and adding in its place section, not to exceed $146,648 for each
Authority: 42 U.S.C. 7101 et seq.; 42 U.S.C. ‘‘$19,639’’. violation.
8301 et seq.; 42 U.S.C. 8701 et seq.; E.O. * * * * *
■ b. Removing ‘‘$192,459’’ wherever it
12009, 42 FR 46267; 28 U.S.C. 2461 note.
appears and adding in its place
■ 12. Section 501.181 is amended by ‘‘$196,387’’. PART 851—WORKER SAFETY AND
revising paragraph (c)(1) to read as ■ c. Removing the second instance of
HEALTH PROGRAM
follows: the phrase ‘‘Any person who fails to file ■ 21. The authority citation for part 851
§ 501.181 Sanctions. the required certification’’ and adding in continues to read as follows:
its place the phrase ‘‘Any person who
* * * * * Authority: 42 U.S.C. 2201(i)(3), (p); 42
fails to file the required statement’’.
(c) * * * (1) Any person who violates U.S.C. 2282c; 42 U.S.C. 5801 et seq.; 42
any provisions of the Act (other than PART 820—PROCEDURAL RULES U.S.C. 7101 et seq.; 50 U.S.C. 2401 et seq.;
section 402) or any rule or order 28 U.S.C. 2461 note.
FOR DOE NUCLEAR ACTIVITIES
thereunder will be subject to the ■ 22. Section 851.5 is amended by
following civil penalty, which may not ■ 16. The authority citation for part 820 revising the first sentence of paragraph
exceed $91,901 for each violation: Any continues to read as follows: (a) to read as follows:
person who operates a powerplant or
Authority: 42 U.S.C. 2201; 2282(a); 7191; § 851.5 Enforcement.
major fuel burning installation under an 28 U.S.C. 2461 note; 50 U.S.C. 2410.
exemption, during any 12-calendar- (a) A contractor that is indemnified
month period, in excess of that ■ 17. Section 820.81 is amended by under section 170d. of the AEA (or any
authorized in such exemption will be revising the first sentence to read as subcontractor or supplier thereto) and
assessed a civil penalty of up to $8 for follows: that violates (or whose employee
each MCF of natural gas or up to $37 for § 820.81 Amount of penalty. violates) any requirement of this part
each barrel of oil used in excess of that shall be subject to a civil penalty of up
authorized in the exemption. Any person subject to a penalty under to $95,237 for each such violation.
42 U.S.C. 2282a shall be subject to a * * *
* * * * *
civil penalty in an amount not to exceed
$205,211 for each such violation. * * * * *
PART 601—NEW RESTRICTIONS ON
■ 23. Appendix B to part 851 is
LOBBYING * * * * *
amended by:
■ 13. The authority citation for part 601 PART 824—PROCEDURAL RULES ■ a. Revising the last sentences of
continues to read as follows: FOR THE ASSESSMENT OF CIVIL paragraphs (b)(1) and (2) in section VI;
PENALTIES FOR CLASSIFIED and
Authority: 31 U.S.C. 1352; 42 U.S.C. 7254
INFORMATION SECURITY ■ b. Revising paragraph 1.(e)(1) in
and 7256; 31 U.S.C. 6301–6308; 28 U.S.C.
2461 note. VIOLATIONS section IX.
The revisions read as follows:
■ 14. Section 601.400 is amended by ■ 18. The authority citation for part 824
revising paragraphs (a), (b) and (e) to Appendix B to Part 851—General
continues to read as follows:
read as follows: Statement of Enforcement Policy
Authority: 42 U.S.C. 2201, 2282b, 7101 et
seq., 50 U.S.C. 2401 et seq.; 28 U.S.C. 2461 * * * * *
§ 601.400 Penalties.
note. VI. Severity of Violations
(a) Any person who makes an
expenditure prohibited herein shall be * * * * *
■ 19. Section 824.1 is amended by
subject to a civil penalty of not less than (b) * * *
revising the second sentence to read as
$19,639 and not more than $196,387 for (1) * * * A Severity Level I violation
follows:
each such expenditure. would be subject to a base civil penalty
(b) Any person who fails to file or § 824.1 Purpose and scope. of up to 100% of the maximum base
amend the disclosure form (see * * * Subsection a. provides that any civil penalty of $95,237.
appendix B to this part) to be filed or person who has entered into a contract (2) * * * A Severity Level II violation
amended if required herein, shall be or agreement with the Department of would be subject to a base civil penalty
subject to a civil penalty of not less than Energy, or a subcontract or up to 50% of the maximum base civil
$19,639 and not more than $196,387 for subagreement thereto, and who violates penalty ($47,618).
each such failure. (or whose employee violates) any * * * * *
* * * * * applicable rule, regulation or order IX. Enforcement Actions
(e) First offenders under paragraph (a) under the Act relating to the security or * * * * *
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or (b) of this section shall be subject to safeguarding of Restricted Data or other 1. Notice of Violation
a civil penalty of $19,639, absent classified information, shall be subject * * * * *
aggravating circumstances. Second and to a civil penalty not to exceed $146,648 (e) * * *
subsequent offenses by persons shall be for each violation. * * * (1) DOE may assess civil penalties of
subject to an appropriate civil penalty ■ 20. Section 824.4 is amended by up to $95,237 per violation per day on
between $19,639 and $196,387, as revising paragraph (c) to read as follows: contractors (and their subcontractors
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![Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations 1293
and suppliers) that are indemnified by Authority: The Constitution of the United 1996 (1996 Act) and the Federal Civil
the Price-Anderson Act, 42 U.S.C. States, Article I, Section 9; 5 U.S.C. 7342; 22 Penalties Inflation Adjustment Act
2210(d). See 10 CFR 851.5(a). U.S.C. 2694; 42 U.S.C. 7254 and 7262; 28 Improvements Act of 2015 (2015 Act)
U.S.C. 2461 note. (collectively, 1990 Act, as amended),
* * * * *
■ 29. Section 1050.303 is amended by requires all Federal agencies with the
PART 1013—PROGRAM FRAUD CIVIL revising the last sentence in paragraph authority to enforce CMPs to evaluate
REMEDIES AND PROCEDURES (d) to read as follows: and adjust, if necessary, those CMPs
each year to ensure that they continue
■ 24. The authority citation for part § 1050.303 Enforcement. to maintain their deterrent value and
1013 continues to read as follows: * * * * * promote compliance with the law.
Authority: 31 U.S.C. 3801–3812; 28 U.S.C. (d) * * * The court in which such Section 3(2) of the 1990 Act, as
2461 note. action is brought may assess a civil amended, defines a civil monetary
penalty against such employee in any penalty 1 as any penalty, fine, or other
■ 25. Section 1013.3 is amended by
amount not to exceed the retail value of sanction that: (1) Either is for a specific
revising paragraphs (a)(1)(iv) and
the gift improperly solicited or received monetary amount as provided by
(b)(1)(ii) to read as follows:
plus $20,021. Federal law or has a maximum amount
§ 1013.3 Basis for civil penalties and [FR Doc. 2018–00206 Filed 1–10–18; 8:45 am] provided for by Federal law; (2) is
assessments. BILLING CODE 6450–01–P assessed or enforced by an agency
(a) * * * pursuant to Federal law; and (3) is
(1) * * * assessed or enforced pursuant to an
(iv) Is for payment for the provision FARM CREDIT ADMINISTRATION administrative proceeding or a civil
of property or services which the person action in the Federal courts.2
has not provided as claimed, shall be 12 CFR Part 622 The FCA imposes and enforces CMPs
subject, in addition to any other remedy through the Farm Credit Act 3 and the
that may be prescribed by law, to a civil RIN 3052–AD29
Flood Disaster Protection Act of 1973, as
penalty of not more than $11,181 for amended. FCA’s regulations governing
Rules of Practice and Procedure;
each such claim. CMPs are found in 12 CFR parts 622 and
Adjusting Civil Money Penalties for
* * * * * Inflation 623. Part 622 establishes rules of
(b) * * * practice and procedure applicable to
(1) * * * AGENCY: Farm Credit Administration. formal and informal hearings held
(ii) Contains or is accompanied by an ACTION: Final rule. before the FCA, and to formal
express certification or affirmation of investigations conducted under the
the truthfulness and accuracy of the SUMMARY: This regulation implements Farm Credit Act. Part 623 prescribes
contents of the statement, shall be inflation adjustments to civil money rules regarding persons who may
subject, in addition to any other remedy penalties (CMPs) that the Farm Credit practice before the FCA and the
that may be prescribed by law, to a civil Administration (FCA) may impose or circumstances under which such
penalty of not more than $11,181 for enforce pursuant to the Farm Credit Act persons may be suspended or debarred
each such statement. of 1971, as amended (Farm Credit Act), from practice before the FCA.
* * * * * and pursuant to the Flood Disaster
Protection Act of 1973, as amended by B. CMPs Issued Under the Farm Credit
PART 1017—IDENTIFICATION AND the National Flood Insurance Reform Act
PROTECTION OF UNCLASSIFIED Act of 1994 (Reform Act), and further The Farm Credit Act provides that
CONTROLLED NUCLEAR amended by the Biggert-Waters Flood any Farm Credit System (System)
INFORMATION Insurance Reform Act of 2012 (Biggert- institution or any officer, director,
Waters Act). employee, agent, or other person
■ 26. The authority citation for part DATES: Effective date: This regulation is participating in the conduct of the
1017 continues to read as follows: effective on January 15, 2018. affairs of a System institution who
Authority: 42 U.S.C. 7101 et seq.; 50 U.S.C. FOR FURTHER INFORMATION CONTACT: violates the terms of a cease-and-desist
2401 et seq.; 42 U.S.C. 2168; 28 U.S.C. 2461 Michael T. Wilson, Policy Analyst, order that has become final pursuant to
note. Office of Regulatory Policy, (703) 883– section 5.25 or 5.26 of the Farm Credit
■ 27. Section 1017.29 is amended by 4124, TTY (703) 883–4056, wilsonm@ Act must pay up to a maximum daily
revising paragraph (c) to read as follows: fca.gov, or Autumn R. Agans, Attorney- amount of $1,000 4 during which such
Advisor, Office of General Counsel, violation continues. This CMP
§ 1017.29 Civil penalty. maximum was set by the Farm Credit
(703) 883–4082, TTY (703) 883–4056,
* * * * * agansa@fca.gov. Amendments Act of 1985, which
(c) Amount of penalty. The Director amended the Farm Credit Act. Orders
SUPPLEMENTARY INFORMATION:
may propose imposition of a civil
penalty for violation of a requirement of I. Objective 1 Note: While the 1990 Act, as amended by 1996
a regulation under paragraph (a) of this and 2015 Acts, uses the term ‘‘civil monetary
The objective of this regulation is to penalties’’ for these penalties or other sanctions, the
section or a compliance order issued adjust the maximum CMPs for inflation Farm Credit Act and the FCA Regulations use the
under paragraph (b) of this section, not through a final rulemaking to retain the term ‘‘civil money penalties.’’ Both terms have the
to exceed $264,093 for each violation. deterrent effect of such penalties. same meaning. Accordingly, this rule uses the term
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civil money penalty, and both terms may be used
* * * * * interchangeably.
II. Background
2 See 28 U.S.C. 2461 note.
PART 1050—FOREIGN GIFTS AND A. Introduction 3 Public Law 92–181, as amended.
DECORATIONS 4 The inflation-adjusted CMP in effect on January
The Federal Civil Penalties Inflation 15, 2017, for a violation of a final order is $2,224
■ 28. The authority citation for part Adjustment Act of 1990, as amended by per day, as set forth in § 622.61(a)(1) of FCA
1050 continues to read as follows: the Debt Collection Improvement Act of regulations.
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![1294 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations
issued by the FCA under section 5.25 or increase, which are assessed after the of 1973, as amended. The adjustment
5.26 of the Farm Credit Act include date the increase takes effect. multiplier is the same for all FCA
temporary and permanent cease-and- Section 5(b) of the 1990 Act, as enforced CMPs, set at 1.02041. The
desist orders. In addition, section amended, defines the term ‘‘cost-of- maximum CMPs for violations were
5.32(h) of the Farm Credit Act provides living adjustment’’ as the percentage (if created in 2012 by the Biggert-Waters
that any directive issued under sections any) for each civil monetary penalty by Act, which amended the Flood Disaster
4.3(b)(2), 4.3A(e), or 4.14A(i) of the which (1) the Consumer Price Index Protection Act of 1973.
Farm Credit Act ‘‘shall be treated’’ as a (CPI) for the month of October of the
calendar year preceding the adjustment, 1. New Penalty Amount in § 622.61(a)(1)
final order issued under section 5.25 of
the Farm Credit Act for purposes of exceeds (2) the CPI for the month of The inflation-adjusted CMP currently
assessing a CMP. October 1 year before the month of in effect for violations of a final order
Section 5.32(a) of the Farm Credit Act October referred to in (1) of the calendar occurring on or after January 15, 2017,
also states that ‘‘[a]ny such institution or year in which the amount of such civil is a maximum daily amount of $2,224.18
person who violates any provision of monetary penalty was last set or Multiplying the $2,224 CMP by the 2017
the [Farm Credit] Act or any regulation adjusted pursuant to law.12 OMB multiplier, 1.02041, yields a total
issued under this Act shall forfeit and The increase for each CMP adjusted of $2,269.39. When that number is
pay a civil penalty of not more than for inflation must be rounded using a rounded as required by section 5(a) of
$500 5 per day for each day during method prescribed by section 5(a) of the the 1990 Act, as amended, the inflation-
which such violation continues.’’ This 1990 Act, as amended, by the 2015 adjusted maximum increases to $2,269.
CMP maximum was set by the Act.13 Thus, the new CMP maximum is $2,269.
Agricultural Credit Act of 1987, which 2. Other Adjustments 2. New Penalty Amount in § 622.61(a)(2)
was enacted in 1988, and amends the If a civil monetary penalty is subject
Farm Credit Act. Current, inflation- The inflation-adjusted CMP currently
to a cost-of-living adjustment under the in effect for violations of the Farm
adjusted CMP maximums are set forth 1990 Act, as amended, but is adjusted
in existing § 622.61 of FCA regulations.6 Credit Act or regulations issued under
to an amount greater than the amount of the Farm Credit Act occurring on or
The FCA also enforces the Flood the adjustment required under the Act
Disaster Protection Act of 1973,7 as after January 15, 2017, is a maximum
within the 12 months preceding a daily amount of $1,005.19 Multiplying
amended by the National Flood required cost-of-living adjustment, the
Insurance Reform Act of 1994,8 which the $1,005 CMP maximum by the 2017
agency is not required to make the cost- OMB multiplier, 1.02041, yields a total
requires FCA to assess CMPs for a of-living adjustment to that CMP in that
pattern or practice of committing certain of $1,025.51. When that number is
calendar year.14 rounded as required by section 5(a) of
specific actions in violation of the
National Flood Insurance Program. The III. Yearly Adjustments the 1990 Act, as amended the inflation-
existing maximum CMP for a violation adjusted maximum increases to $1,026.
A. Mathematical Calculations of 2018 Thus, the new CMP maximum is $1,026.
under the Flood Disaster Protection Act Adjustments
of 1973 is $2,000.9 10 3. New Penalty Amounts for Flood
The adjustment requirement affects
C. Federal Civil Penalties Inflation Insurance Violations Under § 622.61(b)
two provisions of section 5.32(a) of the
Adjustment Act Improvements Act of Farm Credit Act. For the 2018 yearly The existing maximum CMP for a
2015 adjustments to the CMPs set forth by the pattern or practice of flood insurance
Farm Credit Act, the calculation violations pursuant to 42 U.S.C.
1. In General 4012a(f)(5) is $2,090. Multiplying
required by the 2017 White House
The 2015 Act required all Federal Office of Management and Budget $2,090 by the 2017 OMB multiplier,
agencies to adjust the CMPs yearly, (OMB) guidance 15 is based on the 1.02041, yields a total of $2,132.65.
starting January 15, 2017. percentage by which the CPI for October When that number is rounded as
Under Section 4(b) of the 1990 Act, as 2017 exceeds the CPIs for October 2016. required by section 5(a) of the 1990 Act,
amended, annual adjustments are to be The OMB set forth guidance, as required as amended, the new maximum
made yearly no later than January 15 of by the 2015 Act,16 with a multiplier for assessment of the CMP for violating 42
each year.11 Section 6 of the 1990 Act, calculating the new CMP values.17 The U.S.C. 4012a(f)(5) is $2,133. Thus, the
as amended, states that any increase to OMB multiplier for the 2018 CMPs is new CMP maximum is $2,133.
a civil monetary penalty under this 1990 1.02041.
The adjustment also affects the CMPs IV. Notice and Comment Not Required
Act applies only to civil monetary
set by the Flood Disaster Protection Act by Administrative Procedure Act
penalties, including those whose
associated violation predated such The 1990 Act, as amended, gives
12 The CPI is published by the Department of Federal agencies no discretion in the
5 The
Labor, Bureau of Statistics, and is available at its adjustment of CMPs for the rate of
inflation-adjusted CMP in effect on January website: ftp://ftp.bls.gov/pub/special.requests/cpi/
15, 2017, for a violation of the Farm Credit Act or cpiai.txt.
inflation. Further, these revisions are
a regulation issued under the Farm Credit Act is 13 Pursuant to section 5(a)(3) of the 2015 Act, any ministerial, technical, and
$1,005 per day, as set forth in § 622.61(a)(2) of FCA
regulations.
increase determined under the subsection shall be noncontroversial. For these reasons, the
rounded to the nearest $1. FCA finds good cause to determine that
6 Prior adjustments were made under the 1990
14 Pursuant to section 4(d) of the 1990 Act, as
Act. public notice and an opportunity to
amended.
7 42 U.S.C. 4012a.
15 OMB Circular M–18–03, Implementation of comment are impracticable,
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8 Public Law 103–325, title V, 108 Stat. 2160,
Penalty Inflation Adjustments for 2018, Pursuant to unnecessary, and contrary to the public
2255–87 (September 23, 1994). the Federal Civil Penalties Inflation Adjustment Act interest pursuant to the Administrative
9 Public Law 112–141, 126 Stat. 405 (July 6,
Improvements Act of 2015. Procedure Act, 5 U.S.C. 553(b)(B), and
2012). 16 28 U.S.C. 2461 note, section 7(a).
10 The inflation-adjusted CMP in effect on January 17 OMB Circular M–18–03, Implementation of
adopts this rule in final form.
15, 2017, for a flood insurance violation is $2,090, Penalty Inflation Adjustments for 2018, Pursuant to
as set forth in § 622.61(b) of FCA regulations. the Federal Civil Penalties Inflation Adjustment Act 18 12 CFR 622.61(a)(1).
11 Public Law 114–74, sec. 701(b)(1). Improvements Act of 2015. 19 12 CFR 622.61(a)(2).
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V. Regulatory Flexibility Act (2) Amount of civil money penalty for Financial Accounting Standards Board
violation of the Act or regulations: The Accounting Standards Codification
Pursuant to section 605(b) of the
maximum daily amount is $1,026 for Topic 321, Investments—Equity
Regulatory Flexibility Act (5 U.S.C. 601
each violation that occurs on or after Securities.
et seq.), the FCA hereby certifies that
January 15, 2018.
this final rule will not have a significant (b) The maximum civil money penalty DATES: Effective: January 11, 2018.
economic impact on a substantial amount assessed under 42 U.S.C. FOR FURTHER INFORMATION CONTACT:
number of small entities. Each of the 4012a(f) is: $385 for each violation that Brian Staniszewski, Professional
banks in the System, considered occurs on or after January 16, 2009, but Accounting Fellow, Office of the Chief
together with its affiliated associations, before July 1, 2013, with total penalties Accountant at (202) 551–5300 or
has assets and annual income in excess under such statute not to exceed Lindsay McCord, Associate Chief
of the amounts that would qualify them $120,000 for any single institution Accountant, Division of Corporation
as small entities. Therefore, System during any calendar year; $2,000 for Finance at (202) 551–3400, Securities
institutions are not ‘‘small entities’’ as each violation that occurs on or after and Exchange Commission, 100 F Street
defined in the Regulatory Flexibility July 1, 2013, but before August 1, 2016, NE, Washington, DC 20549.
Act. with no cap on the total amount of SUPPLEMENTARY INFORMATION: The
List of Subjects in 12 CFR Part 622 penalties that can be assessed against statements in staff accounting bulletins
any single institution during any are not rules or interpretations of the
Administrative practice and calendar year; and $2,133 for each
procedure, Crime, Investigations, Commission, nor are they published as
violation that occurs on or after January bearing the Commission’s official
Penalties. 15, 2018, with no cap on the total approval. They represent interpretations
For the reasons stated in the amount of penalties that can be assessed and practices followed by the Division
preamble, part 622 of chapter VI, title 12 against any single institution during any of Corporation Finance and the Office of
of the Code of Federal Regulations is calendar year. the Chief Accountant in administering
amended as follows: Dated: January 8, 2018. the disclosure requirements of the
Dale L. Aultman, federal securities laws.
PART 622—RULES OF PRACTICE AND
Secretary, Farm Credit Administration Board.
PROCEDURE List of Subjects in 17 CFR Part 211
[FR Doc. 2018–00336 Filed 1–10–18; 8:45 am]
■ 1. The authority citation for part 622 BILLING CODE 6705–01–P Accounting, Reporting and
continues to read as follows: recordkeeping requirements, Securities.
Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37 Dated: November 29, 2017.
of the Farm Credit Act (12 U.S.C. 2243, 2244, SECURITIES AND EXCHANGE Brent J. Fields,
2252, 2261–2273); 28 U.S.C. 2461 note; and COMMISSION Secretary.
42 U.S.C. 4012a(f). Accordingly, part 211 of title 17 of the
17 CFR Part 211
■ 2. Revise § 622.61 to read as follows: Code of Federal Regulations is amended
[Release No. SAB 117] as follows:
§ 622.61 Adjustment of civil money
penalties by the rate of inflation under the Staff Accounting Bulletin No. 117 PART 211—INTERPRETATIONS
Federal Civil Penalties Inflation Adjustment RELATING TO FINANCIAL REPORTING
Act of 1990, as amended. AGENCY: Securities and Exchange
Commission. MATTERS
(a) The maximum amount of each
ACTION: Publication of Staff Accounting
civil money penalty within FCA’s ■ 1. Add an authority citation for part
Bulletin. 211 to read as follows:
jurisdiction is adjusted in accordance
with the Federal Civil Penalties SUMMARY: This staff accounting bulletin Authority: 15 U.S.C. 77g, 15 U.S.C. 77s(a),
Inflation Adjustment Act of 1990, as modifies portions of the interpretive 15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b),
amended (28 U.S.C. 2461 note), as guidance included in the Staff 17 CFR 78l(b) and 13(b), 17 CFR 78m(b) and
follows: Accounting Bulletin Series in order to 15 U.S.C. 80a–8, 30(e) 15 U.S.C. 80a–29(e),
(1) Amount of civil money penalty make the relevant interpretive guidance 15 U.S.C. 80a–30, and 15 U.S.C. 80a–37(a).
imposed under section 5.32 of the Act consistent with authoritative accounting ■ 2. Amend the table in subpart B by
for violation of a final order issued guidance and Securities and Exchange adding an entry for Staff Accounting
under section 5.25 or 5.26 of the Act: Commission rules and regulations. Bulletin No. 117 at the end of the table
The maximum daily amount is $2,269 Specifically, the staff is updating the to read as follows:
for violations that occur on or after Series in order to bring existing
January 15, 2018. guidance into conformity with the Subpart B—Staff Accounting Bulletins
Subject Release No. Date Fed. Reg. Vol. and page
* * * * * * *
Publication of Staff Accounting Bulletin No. 117 .......... SAB–117 1/11/2018 [INSERT Federal Register CITATION].
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Note: The text of SAB 117 will not appear Staff Accounting Bulletin No. 117 make the relevant interpretive guidance
in the Code of Federal Regulations. consistent with current authoritative
This staff accounting bulletin accounting and auditing guidance and
modifies portions of the interpretive Securities and Exchange Commission
guidance included in the Staff (‘‘Commission’’) rules and regulations.
Accounting Bulletin Series in order to
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Document Created: 2017-12-29 23:38:27
Document Modified: 2017-12-29 23:38:27
| Page and Subject | |
|---|---|
| 83 FR 1507 - Streamlining and Expediting Requests To Locate Broadband Facilities in Rural America | |
| 83 FR 1375 - National Institute on Aging; Notice of Closed Meeting | |
| 83 FR 1373 - National Institute on Aging; Notice of Closed Meeting | |
| 83 FR 1375 - Center for Scientific Review; Notice of Closed Meetings | |
| 83 FR 1396 - Adjustments to Civil Monetary Penalty Amounts | |
| 83 FR 1383 - Hearings of the Judicial Conference Advisory Committee on the Federal Rules of Bankruptcy Procedure | |
| 83 FR 1451 - Administrative Declaration of a Disaster for the State of Louisiana | |
| 83 FR 1449 - Administrative Declaration of a Disaster for the State of Connecticut | |
| 83 FR 1449 - Administrative Declaration of a Disaster for the State of New York | |
| 83 FR 1339 - New England Fishery Management Council; Public Meeting | |
| 83 FR 1338 - New England Fishery Management Council; Public Meeting | |
| 83 FR 1341 - Pacific Fishery Management Council; Public Meeting | |
| 83 FR 1328 - Notice of Public Meeting of the Indiana Advisory Committee to the U.S. Commission on Civil Rights | |
| 83 FR 1340 - Gulf of Mexico Fishery Management Council; Public Meeting | |
| 83 FR 1337 - Pacific Fishery Management Council; Public Meeting | |
| 83 FR 1340 - Western Pacific Fishery Management Council; Public Meeting | |
| 83 FR 1336 - Fisheries of the South Atlantic; South Atlantic Fishery Management Council; Public Meetings | |
| 83 FR 1316 - Proposed Establishment of Restricted Areas R-2201A, B, C, D, E, F, G, H, and J; Fort Greely, AK | |
| 83 FR 1319 - Proposed Amendment for Restricted Area R-4403A; Stennis Space Center, MS | |
| 83 FR 1378 - Center for Substance Abuse Prevention; Notice of Meeting | |
| 83 FR 1303 - Program Fraud Civil Remedies Act of 1986, Civil Monetary Penalties Inflation Adjustment | |
| 83 FR 1448 - Presidential Declaration Amendment of a Major Disaster for Public Assistance Only for the State of Mississippi | |
| 83 FR 1462 - Office of the Chief of Protocol; Gifts to Federal Employees From Foreign Government Sources Reported to Employing Agencies in Calendar Year 2016 | |
| 83 FR 1451 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of California | |
| 83 FR 1450 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of Vermont | |
| 83 FR 1449 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of New Hampshire | |
| 83 FR 1345 - Extension of Approved Information Collection | |
| 83 FR 1450 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of Maine | |
| 83 FR 1371 - Anesthetic and Analgesic Drug Products Advisory Committee; Notice of Meeting; Establishment of a Public Docket; Request for Comments | |
| 83 FR 1365 - Determination of Regulatory Review Period for Purposes of Patent Extension; ENTYCE | |
| 83 FR 1368 - Risk Communication Advisory Committee; Notice of Meeting; Establishment of a Public Docket; Request for Comments | |
| 83 FR 1329 - Initiation of Antidumping and Countervailing Duty Administrative Reviews | |
| 83 FR 1370 - Determination of Regulatory Review Period for Purposes of Patent Extension; MICRA TRANSCATHETER PACING SYSTEM | |
| 83 FR 1363 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Certification To Accompany Drug, Biological Product, and Device Applications or Submissions | |
| 83 FR 1366 - Determination of Regulatory Review Period for Purposes of Patent Extension; EPANOVA | |
| 83 FR 1295 - Staff Accounting Bulletin No. 117 | |
| 83 FR 1382 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Current and Future Landsat User Requirements | |
| 83 FR 1351 - Regular Meeting; Farm Credit System Insurance Corporation Board | |
| 83 FR 1344 - Environmental Management Site-Specific Advisory Board, Oak Ridge Reservation | |
| 83 FR 1458 - Rincon Band of Luiseño Mission Indians of the Rincon Reservation; Amendments to Rincon Alcohol Control Ordinance | |
| 83 FR 1362 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
| 83 FR 1452 - Notice of Continuation and Request for Nominations for the Trade Advisory Committee on Africa | |
| 83 FR 1293 - Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation | |
| 83 FR 1344 - Board of Regents, Uniformed Services University of the Health Sciences; Notice of Federal Advisory Committee Meeting | |
| 83 FR 1327 - Submission for OMB Review; Comment Request | |
| 83 FR 1451 - Secretary of State's Determination Under the International Religious Freedom Act of 1998 | |
| 83 FR 1349 - Watterra Energy, LLC; Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments and Motions To Intervene | |
| 83 FR 1349 - EDF Renewables Energy, Inc. v. Midcontinent Independent System Operator, Inc.; Notice of Complaint | |
| 83 FR 1349 - Sierrita Gas Pipeline LLC; Notice of Applications | |
| 83 FR 1346 - Northwest Pipeline LLC; Notice of Schedule for Environmental Review of the North Seattle Lateral Upgrade Project | |
| 83 FR 1350 - Great River Energy; Notice of Institution of Section 206 Proceeding | |
| 83 FR 1348 - Combined Notice of Filings | |
| 83 FR 1348 - Combined Notice of Filings #2 | |
| 83 FR 1347 - Combined Notice of Filings #1 | |
| 83 FR 1342 - Promoting Stakeholder Action Against Botnets and Other Automated Threats | |
| 83 FR 1378 - Foreign Endangered and Threatened Species; Receipt of Permit Applications | |
| 83 FR 1320 - Periodic Reporting Requirements | |
| 83 FR 1304 - Inflation Adjustment of Civil Monetary Penalties | |
| 83 FR 1383 - Southern California Edison Company, San Onofre Nuclear Generating Station, Units 2 and 3 | |
| 83 FR 1454 - Notice of OFAC Sanctions Actions | |
| 83 FR 1335 - Notice of NIST's Consortium for the Advancement of Genome Editing | |
| 83 FR 1399 - Joint Industry Plan; Notice of Filing and Immediate Effectiveness of Amendment No. 4 to the National Market System Plan Governing the Consolidated Audit Trail by Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., BOX Options Exchange LLC, Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc., Investors' Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE Arca, Inc., NYSE American, LLC and NYSE National, Inc. | |
| 83 FR 1305 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Snapper-Grouper Fishery of the South Atlantic Region; Amendment 41 | |
| 83 FR 1337 - Proposed Information Collection; Comment Request; Economic Survey of Recreational Steelhead Fishermen in Washington State | |
| 83 FR 1339 - Proposed Information Collection; Comment Request; Coral Reef Conservation Program Administration | |
| 83 FR 1338 - Proposed Information Collection; Comment Request; Fishery Capacity Reduction Program Buyback Requests | |
| 83 FR 1391 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Market Data Fees | |
| 83 FR 1388 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Various Fees and Rebates Set Forth in Section I of the Exchanges Schedule of Fees | |
| 83 FR 1428 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 and Order Approving on an Accelerated Basis a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of the Sprott Physical Gold and Silver Trust Under NYSE Arca Rule 8.201-E | |
| 83 FR 1442 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31E Relating to Mid-Point Liquidity Orders and the MTS Modifier and Rule 7.36E To Add a Definition of “Aggressing Order” | |
| 83 FR 1446 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Non-Transaction Fees in the Exchange's Schedule of Fees | |
| 83 FR 1445 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Granting Accelerated Approval of a Proposed Rule Change To Amend Rule 1059 To Make Permanent a Program That Allows Cabinet Trade Transactions To Take Place at a Price Below $1 Per Option Contract | |
| 83 FR 1438 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the iShares Gold Exposure ETF, a Series of the iShares U.S. ETF Trust, Under Exchange Rule 14.11(i), Managed Fund Shares | |
| 83 FR 1453 - Fifty Fifth RTCA SC-224 Standards for Airport Security Access Control Systems Plenary | |
| 83 FR 1454 - Twenty Eighth RTCA SC-222 AMS(R)S Systems Plenary | |
| 83 FR 1454 - Sixty Eighth RTCA SC-186 Plenary Session | |
| 83 FR 1296 - Exemptions From Investment Adviser Registration for Advisers to Small Business Investment Companies | |
| 83 FR 1375 - National Institute on Alcohol Abuse and Alcoholism; Notice of Closed Meeting | |
| 83 FR 1377 - National Cancer Institute; Notice of Closed Meetings | |
| 83 FR 1373 - Center for Scientific Review; Notice of Closed Meetings | |
| 83 FR 1374 - Center for Scientific Review; Notice of Closed Meetings | |
| 83 FR 1351 - Proposed Supervisory Guidance | |
| 83 FR 1328 - Information Systems Technical Advisory Committee; Notice of Partially Closed Meeting | |
| 83 FR 1302 - Air Plan Approval; NH; Approval of Recordkeeping and Reporting Requirements and Single Source Order; Withdrawal of Direct Final Rule | |
| 83 FR 1289 - Inflation Adjustment of Civil Monetary Penalties | |
| 83 FR 1311 - Airworthiness Directives; American Champion Aircraft Corp. | |
| 83 FR 1313 - Airworthiness Directives; Air Comm Corporation Air Conditioning Systems | |
| 83 FR 1321 - Revise and Streamline VA Acquisition Regulation To Adhere to Federal Acquisition Regulation Principles (VAAR Case 2014-V005-Parts 812, 813) | |
| 83 FR 1380 - Draft Habitat Conservation Plan for the California Department of Parks and Recreation Oceano Dunes District, San Luis Obispo County, California; Notice of Intent To Prepare Environmental Assessment or Environmental Impact Statement; Initiation of Public Scoping Process |
Issue
Industry and Security Bureau
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
National Telecommunications and Information Administration
Energy Efficiency and Renewable Energy Office
Federal Energy Regulatory Commission
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Fish and Wildlife Service
Geological Survey
Indian Affairs Bureau
Federal Aviation Administration
Foreign Assets Control Office
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 the General Counsel, U.S. Department of Energy.
Final rule.
The Department of Energy (“DOE”) publishes this final rule to adjust DOE's civil monetary penalties (“CMPs”) for inflation as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (collectively referred to herein as “the Act”). This rule adjusts CMPs within the jurisdiction of DOE to the maximum amount required by the Act.
This rule is effective January 11, 2018.
Preeti Chaudhari, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585, (202) 586-8078.
In order to improve the effectiveness of CMPs and to maintain their deterrent effect, the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461 note (“the Inflation Adjustment Act”), as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74) (“the 2015 Act”), requires Federal agencies to adjust each CMP provided by law within the jurisdiction of the agency. The 2015 Act requires agencies to adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rulemaking and to make subsequent annual adjustments for inflation, notwithstanding 5 U.S.C. 553. DOE's initial catch-up adjustment interim final rule was published June 28, 2016 (81 FR 41790) and adopted as final without amendment on December 30, 2016 (81 FR 96349). The 2015 Act also provides that any increase in a CMP shall apply only to CMPs, including those whose associated violation predated such increase, which are assessed after the date the increase takes effect.
In accordance with the 2015 Act, the Office of Management and Budget (OMB) must issue annually guidance on adjustments to civil monetary penalties. This final rule to adjust civil monetary penalties for 2018 is issued in accordance with applicable law and OMB's guidance memorandum on implementation of the 2018 annual adjustment.
The method of calculating CMP adjustments applied in this final rule is required by the 2015 Act. Under the 2015 Act, annual inflation adjustments subsequent to the initial catch-up adjustment are to be based on the percent change between the October Consumer Price Index for all Urban Consumers (CPI-U) preceding the date of the adjustment, and the prior year's October CPI-U. Pursuant to the aforementioned OMB guidance memorandum, the adjustment multiplier for 2018 is 1.02041. In order to complete the 2018 annual adjustment, each CMP is multiplied by the 2018 adjustment multiplier. Under the 2015 Act, any increase in CMP must be rounded to the nearest multiple of $1.
The following list summarizes DOE authorities containing CMPs, and the penalties before and after adjustment.
The 2015 Act requires that annual adjustments for inflation subsequent to the initial “catch-up” adjustment be made notwithstanding 5 U.S.C. 553.
This rule has been determined not to be a significant regulatory action under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action was not subject to review under that Executive Order by the Office of Information and Regulatory Affairs of the Office of Management and Budget.
DOE has determined that this final rule is covered under the Categorical Exclusion found in DOE's National Environmental Policy Act regulations at paragraph A5 of appendix A to subpart D, 10 CFR part 1021, which applies to a rulemaking that amends an existing rule or regulation and that does not change the environmental effect of the rule or regulation being amended. Accordingly, neither an environmental assessment nor an environmental impact statement is required.
The Regulatory Flexibility Act (5 U.S.C. 601
This final rule imposes no new information collection requirements subject to the Paperwork Reduction Act.
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires Federal agencies to examine closely the impacts of regulatory actions on State, local, and tribal governments. Section 201 excepts agencies from assessing effects on State, local or tribal governments or the private sector of rules that incorporate requirements specifically set forth in law. Because this rule incorporates requirements specifically set forth in 28 U.S.C. 2461 note, DOE is not required to assess its regulatory effects under section 201. Unfunded Mandates Reform Act sections 202 and 205 do not apply to this action because they apply only to rules for which a general notice of proposed rulemaking is published. Nevertheless, DOE has determined that this regulatory action does not impose a Federal mandate on State, local, or tribal governments or on the public sector.
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined this rule and has determined that it would not preempt State law and 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. No further action is required by Executive Order 13132.
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this rule meets the relevant standards of Executive Order 12988.
The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on
As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the issuance of this final rule prior to the effective date set forth at the outset of this rulemaking. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 801(2).
The Secretary of Energy has approved publication of this final rule.
Administrative practice and procedure, Energy, Penalties.
Administrative practice and procedure, Penalties, Petroleum allocation.
Confidential business information, Energy conservation, Household appliances, Imports, Incorporation by reference, Reporting and recordkeeping requirements.
Administrative practices and procedure, Confidential business information, Energy conservation, Incorporation by reference, Reporting and recordkeeping requirements.
Administrative practice and procedure, Energy conservation, Penalties.
Administrative practice and procedure, Electric power plants, Energy conservation, Natural gas, Petroleum.
Government contracts, Grant programs, Loan programs, Penalties.
Administrative practice and procedure, Government contracts, Penalties, Radiation protection.
Government contracts, Nuclear materials, Penalties, Security measures.
Civil penalty, Hazardous substances, Occupational safety and health, Safety, Reporting and recordkeeping requirements.
Administrative practice and procedure, Claims, Fraud, Penalties.
Administrative practice and procedure, Government contracts, National Defense, Nuclear Energy, Penalties, Security measures.
Decorations, medals, awards, Foreign relations, Government employees, Government property, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, DOE amends chapters II, III, and X of title 10 of the Code of Federal Regulations as set forth below.
15 U.S.C. 787
(c) * * * (1) Any person who violates any provision of this subpart or any order issued pursuant thereto shall be subject to a civil penalty of not more than $10,371 for each violation. * * *
15 U.S.C. 751
(b) * * * (1) Any person who violates any provision of this part 218 or any order issued pursuant thereto shall be subject to a civil penalty of not more than $22,464 for each violation.
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
Any person who knowingly violates any provision of § 429.102(a) may be subject to assessment of a civil penalty of no more than $449 for each violation.
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
(b) In accordance with sections 333 and 345 of the Act, any person who knowingly violates any provision of paragraph (a) of this section may be subject to assessment of a civil penalty of no more than $449 for each violation.
42 U.S.C. 7191
(a)
42 U.S.C. 7101
(c) * * * (1) Any person who violates any provisions of the Act (other than section 402) or any rule or order thereunder will be subject to the following civil penalty, which may not exceed $91,901 for each violation: Any person who operates a powerplant or major fuel burning installation under an exemption, during any 12-calendar-month period, in excess of that authorized in such exemption will be assessed a civil penalty of up to $8 for each MCF of natural gas or up to $37 for each barrel of oil used in excess of that authorized in the exemption.
31 U.S.C. 1352; 42 U.S.C. 7254 and 7256; 31 U.S.C. 6301-6308; 28 U.S.C. 2461 note.
(a) Any person who makes an expenditure prohibited herein shall be subject to a civil penalty of not less than $19,639 and not more than $196,387 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see appendix B to this part) to be filed or amended if required herein, shall be subject to a civil penalty of not less than $19,639 and not more than $196,387 for each such failure.
(e) First offenders under paragraph (a) or (b) of this section shall be subject to a civil penalty of $19,639, absent aggravating circumstances. Second and subsequent offenses by persons shall be subject to an appropriate civil penalty between $19,639 and $196,387, as determined by the agency head or his or her designee.
42 U.S.C. 2201; 2282(a); 7191; 28 U.S.C. 2461 note; 50 U.S.C. 2410.
Any person subject to a penalty under 42 U.S.C. 2282a shall be subject to a civil penalty in an amount not to exceed $205,211 for each such violation.
42 U.S.C. 2201, 2282b, 7101
* * * Subsection a. provides that any person who has entered into a contract or agreement with the Department of Energy, or a subcontract or subagreement thereto, and who violates (or whose employee violates) any applicable rule, regulation or order under the Act relating to the security or safeguarding of Restricted Data or other classified information, shall be subject to a civil penalty not to exceed $146,648 for each violation. * * *
(c) The Director may propose imposition of a civil penalty for violation of a requirement of a regulation or rule under paragraph (a) of this section or a compliance order issued under paragraph (b) of this section, not to exceed $146,648 for each violation.
42 U.S.C. 2201(i)(3), (p); 42 U.S.C. 2282c; 42 U.S.C. 5801
(a) A contractor that is indemnified under section 170d. of the AEA (or any subcontractor or supplier thereto) and that violates (or whose employee violates) any requirement of this part shall be subject to a civil penalty of up to $95,237 for each such violation.* * *
The revisions read as follows:
VI. Severity of Violations
(b) * * *
(1) * * * A Severity Level I violation would be subject to a base civil penalty of up to 100% of the maximum base civil penalty of $95,237.
(2) * * * A Severity Level II violation would be subject to a base civil penalty up to 50% of the maximum base civil penalty ($47,618).
IX. Enforcement Actions
(e) * * *
(1) DOE may assess civil penalties of up to $95,237 per violation per day on contractors (and their subcontractors
31 U.S.C. 3801-3812; 28 U.S.C. 2461 note.
(a) * * *
(1) * * *
(iv) Is for payment for the provision of property or services which the person has not provided as claimed, shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $11,181 for each such claim.
(b) * * *
(1) * * *
(ii) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement, shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $11,181 for each such statement.
42 U.S.C. 7101
(c)
The Constitution of the United States, Article I, Section 9; 5 U.S.C. 7342; 22 U.S.C. 2694; 42 U.S.C. 7254 and 7262; 28 U.S.C. 2461 note.
(d) * * * The court in which such action is brought may assess a civil penalty against such employee in any amount not to exceed the retail value of the gift improperly solicited or received plus $20,021.
Farm Credit Administration.
Final rule.
This regulation implements inflation adjustments to civil money penalties (CMPs) that the Farm Credit Administration (FCA) may impose or enforce pursuant to the Farm Credit Act of 1971, as amended (Farm Credit Act), and pursuant to the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994 (Reform Act), and further amended by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act).
Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, (703) 883-4124, TTY (703) 883-4056,
The objective of this regulation is to adjust the maximum CMPs for inflation through a final rulemaking to retain the deterrent effect of such penalties.
The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 (1996 Act) and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act) (collectively, 1990 Act, as amended), requires all Federal agencies with the authority to enforce CMPs to evaluate and adjust, if necessary, those CMPs each year to ensure that they continue to maintain their deterrent value and promote compliance with the law. Section 3(2) of the 1990 Act, as amended, defines a civil monetary penalty
The FCA imposes and enforces CMPs through the Farm Credit Act
The Farm Credit Act provides that any Farm Credit System (System) institution or any officer, director, employee, agent, or other person participating in the conduct of the affairs of a System institution who violates the terms of a cease-and-desist order that has become final pursuant to section 5.25 or 5.26 of the Farm Credit Act must pay up to a maximum daily amount of $1,000
Section 5.32(a) of the Farm Credit Act also states that “[a]ny such institution or person who violates any provision of the [Farm Credit] Act or any regulation issued under this Act shall forfeit and pay a civil penalty of not more than $500
The FCA also enforces the Flood Disaster Protection Act of 1973,
The 2015 Act required all Federal agencies to adjust the CMPs yearly, starting January 15, 2017.
Under Section 4(b) of the 1990 Act, as amended, annual adjustments are to be made yearly no later than January 15 of each year.
Section 5(b) of the 1990 Act, as amended, defines the term “cost-of-living adjustment” as the percentage (if any) for each civil monetary penalty by which (1) the Consumer Price Index (CPI) for the month of October of the calendar year preceding the adjustment, exceeds (2) the CPI for the month of October 1 year before the month of October referred to in (1) of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.
The increase for each CMP adjusted for inflation must be rounded using a method prescribed by section 5(a) of the 1990 Act, as amended, by the 2015 Act.
If a civil monetary penalty is subject to a cost-of-living adjustment under the 1990 Act, as amended, but is adjusted to an amount greater than the amount of the adjustment required under the Act within the 12 months preceding a required cost-of-living adjustment, the agency is not required to make the cost-of-living adjustment to that CMP in that calendar year.
The adjustment requirement affects two provisions of section 5.32(a) of the Farm Credit Act. For the 2018 yearly adjustments to the CMPs set forth by the Farm Credit Act, the calculation required by the 2017 White House Office of Management and Budget (OMB) guidance
The adjustment also affects the CMPs set by the Flood Disaster Protection Act of 1973, as amended. The adjustment multiplier is the same for all FCA enforced CMPs, set at 1.02041. The maximum CMPs for violations were created in 2012 by the Biggert-Waters Act, which amended the Flood Disaster Protection Act of 1973.
The inflation-adjusted CMP currently in effect for violations of a final order occurring on or after January 15, 2017, is a maximum daily amount of $2,224.
The inflation-adjusted CMP currently in effect for violations of the Farm Credit Act or regulations issued under the Farm Credit Act occurring on or after January 15, 2017, is a maximum daily amount of $1,005.
The existing maximum CMP for a pattern or practice of flood insurance violations pursuant to 42 U.S.C. 4012a(f)(5) is $2,090. Multiplying $2,090 by the 2017 OMB multiplier, 1.02041, yields a total of $2,132.65. When that number is rounded as required by section 5(a) of the 1990 Act, as amended, the new maximum assessment of the CMP for violating 42 U.S.C. 4012a(f)(5) is $2,133. Thus, the new CMP maximum is $2,133.
The 1990 Act, as amended, gives Federal agencies no discretion in the adjustment of CMPs for the rate of inflation. Further, these revisions are ministerial, technical, and noncontroversial. For these reasons, the FCA finds good cause to determine that public notice and an opportunity to comment are impracticable, unnecessary, and contrary to the public interest pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b)(B), and adopts this rule in final form.
Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601
Administrative practice and procedure, Crime, Investigations, Penalties.
For the reasons stated in the preamble, part 622 of chapter VI, title 12 of the Code of Federal Regulations is amended as follows:
Secs. 5.9, 5.10, 5.17, 5.25-5.37 of the Farm Credit Act (12 U.S.C. 2243, 2244, 2252, 2261-2273); 28 U.S.C. 2461 note; and 42 U.S.C. 4012a(f).
(a) The maximum amount of each civil money penalty within FCA's jurisdiction is adjusted in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461
(1) Amount of civil money penalty imposed under section 5.32 of the Act for violation of a final order issued under section 5.25 or 5.26 of the Act: The maximum daily amount is $2,269 for violations that occur on or after January 15, 2018.
(2) Amount of civil money penalty for violation of the Act or regulations: The maximum daily amount is $1,026 for each violation that occurs on or after January 15, 2018.
(b) The maximum civil money penalty amount assessed under 42 U.S.C. 4012a(f) is: $385 for each violation that occurs on or after January 16, 2009, but before July 1, 2013, with total penalties under such statute not to exceed $120,000 for any single institution during any calendar year; $2,000 for each violation that occurs on or after July 1, 2013, but before August 1, 2016, with no cap on the total amount of penalties that can be assessed against any single institution during any calendar year; and $2,133 for each violation that occurs on or after January 15, 2018, with no cap on the total amount of penalties that can be assessed against any single institution during any calendar year.
Securities and Exchange Commission.
Publication of Staff Accounting Bulletin.
This staff accounting bulletin modifies portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with authoritative accounting guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with the Financial Accounting Standards Board Accounting Standards Codification Topic 321,
Brian Staniszewski, Professional Accounting Fellow, Office of the Chief Accountant at (202) 551-5300 or Lindsay McCord, Associate Chief Accountant, Division of Corporation Finance at (202) 551-3400, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the federal securities laws.
Accounting, Reporting and recordkeeping requirements, Securities.
Accordingly, part 211 of title 17 of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77g, 15 U.S.C. 77s(a), 15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b), 17 CFR 78l(b) and 13(b), 17 CFR 78m(b) and 15 U.S.C. 80a-8, 30(e) 15 U.S.C. 80a-29(e), 15 U.S.C. 80a-30, and 15 U.S.C. 80a-37(a).
The text of SAB 117 will not appear in the Code of Federal Regulations.
This staff accounting bulletin modifies portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission (“Commission”) rules and regulations.
The following describes the changes made to the Staff Accounting Bulletin Series that are presented at the end of this release:
a. Topic 5.M in the Staff Accounting Bulletin Series entitled
Accordingly, the staff hereby amends the Staff Accounting Bulletin Series as follows:
Topic 5.M is no longer applicable upon a registrant's adoption of ASC Topic 321. Topic 5.M provided the staff's views on evaluating whether an impairment loss should be recognized in net income for investments in equity securities that were measured at fair value with changes in fair value presented in other comprehensive income. ASC Topic 321 establishes new guidance that eliminates the ability to present changes in the fair value of investments in equity securities within other comprehensive income, which eliminates the need for Topic 5.M. Registrants that have not yet adopted ASC Topic 321 should continue to refer to Topic 5.M.
Securities and Exchange Commission.
Final rule.
We are adopting amendments to the rule that defines a venture capital fund (rule 203(
Effective March 12, 2018.
Jennifer Songer, Senior Counsel, or Sara Cortes, Assistant Director, at (202) 551-6787 or
The Commission is adopting amendments to rules 203(
Prior to the enactment of the Fixing America's Surface Transportation Act of 2015 (the “FAST Act”),
The FAST Act amended sections 203(
Advisers who rely on the SBIC adviser exemption are not subject to reporting or recordkeeping provisions under the Advisers Act or examination by our staff.
Since the enactment of the FAST Act, advisers to SBICs have been able to rely on the following exemptions from investment adviser registration with the Commission: (1) The SBIC adviser exemption by advising only SBICs; (2) the venture capital fund adviser exemption by advising both SBICs and venture capital funds (as defined in rule 203(
As discussed above, we proposed to amend the definition of a “venture capital fund” in Advisers Act rule 203(
The venture capital fund adviser exemption in section 203(
Advisers Act rule 203(
The private fund adviser exemption in Advisers Act section 203(m) directs the Commission to provide an exemption from registration to any investment adviser that
Advisers Act rule 203(m)-1(d)(1) defines “assets under management” for purposes of the private fund adviser exemption.
The effective date of the amendments to rules 203(
The Commission is sensitive to the potential economic effects of the amendments to Advisers Act rules 203(
The amendments to Advisers Act rules 203(
To establish a baseline useful for evaluating the economic effects of the amendments, we briefly describe the nature of SBICs and then define the different classes of advisers that could be affected by the amendments.
According to the Small Business Administration (the “SBA”), SBICs are investment funds that make equity and debt investments in qualifying small businesses and are licensed and regulated by the SBA.
Advisers to SBICs may also advise non-SBIC private funds, including venture capital funds. Depending on the amount and type of assets they advise, SBIC advisers belong to one of three categories: (1) Registered investment advisers; (2) exempt reporting advisers; or (3) advisers exempt from registration and reporting requirements. Registered investment advisers are required to file Form ADV and are also subject to other substantive requirements including the establishment of a compliance program and a Code of Ethics.
Prior to the enactment of the FAST Act, an adviser to both SBICs and other non-SBIC private funds qualified for the private fund adviser exemption under Advisers Act rule 203(m)-1 if the adviser had assets under management in the United States, including assets of the SBICs it advised, of less than $150 million. Advisers to SBICs and other non-SBIC private funds that did not qualify for the private fund adviser exemption were required to register with the Commission. In addition, advisers to both venture capital funds and SBICs were required to register with the Commission unless they qualified for the private fund adviser exemption.
In establishing a baseline for the amendments, two additional classes of investment advisers that did not advise SBICs prior to the FAST Act are relevant: (1) Advisers solely to venture capital funds that rely on the venture capital fund adviser exemption from registration and are considered exempt reporting advisers; and (2) advisers solely to private funds with less than $150 million in assets under management in the United States that rely on the private fund adviser exemption from registration and are considered exempt reporting advisers. Prior to the FAST Act, advisers relying on the venture capital fund adviser exemption were required to register with the Commission if they added SBIC clients unless their total assets under management remained under $150 million, in which case they could instead rely on the private fund adviser exemption. In addition, prior to the FAST Act, advisers relying on the private fund adviser exemption were required to register with the Commission if they added SBIC clients that caused their total assets under management in the United States to equal or exceed $150 million.
The FAST Act provided the classes of advisers discussed above with several options. First, registered investment advisers to SBICs and non-SBIC private funds can withdraw from registration and report to the Commission as exempt reporting advisers if their non-SBIC private fund assets under management in the United States are less than $150 million. Second, registered investment advisers to SBICs and venture capital funds can withdraw from registration and report to the Commission as exempt reporting advisers. Finally, advisers that relied on either the venture capital fund adviser or private fund adviser exemption prior to the FAST Act can begin advising SBICs without changing their registration status independent of the amount of assets attributable to SBICs.
For those advisers that benefit from any of the above options, it would have been in their best economic interest to exercise such options following the passage of the FAST Act, particularly after the Commission's Division of Investment Management issued a guidance update regarding the application of the FAST Act.
As of June 30, 2017, there were approximately 12,474 registered investment advisers reporting a total of approximately $70.1 trillion in regulatory assets under management.
The amendments may affect the classes of investment advisers mentioned above, the funds they advise, and the investors in those funds. We discuss the potential economic effects of the amendments on these parties in the next two sections.
In this section, we discuss the costs and benefits that may result from the amendments for each affected party. The economic effects discussed in this section only apply to the extent that advisers have not already exercised the exemption options provided to them under the baseline due to any inconsistencies between the FAST Act and the Advisers Act rules. As discussed above, we believe that it is likely that advisers have already exercised any exemption options provided to them by the FAST Act under the baseline if it were in their interest to do so; thus, we do not expect the magnitude of these effects to be significant. We discuss the amendments' likely impact on efficiency, competition, and capital formation in the next section.
As discussed in the Economic Baseline Section, advisers solely to SBICs are exempt from registering as investment advisers with the Commission. To the extent that any inconsistencies between the FAST Act and Advisers Act rules 203(
The amendments provide registered advisers to SBICs and non-SBIC private funds that have not taken advantage of the venture capital fund adviser and private fund adviser exemptions due to inconsistencies between the FAST Act and the Advisers Act rules with clarification on the option to switch from registered investment adviser to exempt reporting adviser status. This option is difficult to value, but its value is broadly determined by the cost reductions associated with the change in registration status compared to the explicit and implicit costs of withdrawing from registration. Advisers that elect to change from registered to exempt reporting adviser status should expect to face reduced ongoing costs associated with filing Form ADV because, as exempt reporting advisers, they would only be required to complete certain portions of Form ADV.
Investors in private funds, including venture capital funds and SBICs, may experience costs and benefits as a result of the amendments. If investors face fixed costs in transacting with a given adviser, for example in performing any necessary due diligence, they may benefit if the amendments encourage more advisers to advise both SBIC and non-SBIC private funds, allowing investors to consolidate different types of investments with a single adviser. We cannot quantify the extent to which investors prefer to use a single adviser or the number of advisers who will expand into either SBICs or non-SBIC private funds because we do not have the information needed to assess investors' latent demand for consolidated advice services or the number of advisers that have been deterred from expanding their client bases under the baseline. We therefore cannot estimate the magnitude of this potential cost reduction for investors.
In addition, to the extent that the amendments result in advisers changing their status from registered to exempt reporting, it may impose costs on investors. If investors value the transparency provided by complete Form ADV reporting and the safeguards associated with the other substantive requirements of being a registered investment adviser, then the amendments could impose costs on investors if they result in advisers changing their status from registered to exempt reporting. However, such investors have the option of moving their investments to advisers that are registered and, as noted above, we expect that advisers will weigh the benefits and costs associated with remaining registered in connection with any change in reporting status. The amendments could also impose costs on investors if any reduction in transparency or the other substantive requirements associated with registration reduce the ability of the Commission to protect investors from potentially fraudulent investment advisory schemes.
As discussed above, because the amendments potentially reduce the reporting requirements for advisers to both SBICs and non-SBIC private funds, they could result in an increased number of advisers in both markets. Advisers solely to SBICs may enter the market for venture capital or other private fund advisory services, and current advisers to non-SBIC private funds may enter the market for SBIC advisory services. In this section, we discuss the potential effects of these changes on efficiency, competition, and capital formation. As was the case above, the economic effects discussed in this section only apply to the extent that advisers have not already exercised the exemption options provided to them under the baseline due to any inconsistencies between the FAST Act and the Advisers Act rules, and we do not expect the magnitude of these effects to be significant.
Changes in the costs of advising both SBIC and non-SBIC private funds, as described above, could have several competitive effects. First, to the extent that non-SBIC private fund advisers find it profitable to enter the market for SBICs under the amendments, the amendments might increase competition in that market, resulting in reduced profits for SBIC advisers and lower advisory fees for their SBICs and their investors. Similarly, to the extent that SBIC advisers find it profitable to enter the non-SBIC private fund advisory market, the amendments might increase competition in that market, resulting in reduced profits for non-SBIC private fund advisers and lower advisory fees for their non-SBIC private funds and their investors. Whether the amendments result in such a reallocation of advisory services depends on whether advisers find it profitable to expand operations into new markets and whether they can do so without changing the quality or quantity of services in current markets. While we cannot precisely estimate the relative likelihood of the above competitive effects, the fact that the market for SBIC advisers is an order of magnitude smaller than the market for non-SBIC private fund advisers suggests that non-SBIC private fund advisers are more likely to have benefitted from expanding into the SBIC market following the FAST Act's enactment, thereby increasing the amount of competition in that market. As discussed above, it is likely that most advisers would have already exercised this option under the baseline if it was in their economic interest to do so. Therefore, the competitive effects of the amendments are not likely to be significant.
Any relative shift of advisory talent from one segment of the market to another could also have effects on efficiency and capital formation. To the extent that advisers who expand into new markets as a result of the amendments possess skill in identifying investment opportunities, an increase in the supply of advisers in the SBIC or non-SBIC private fund markets, or both, could result in more efficient investment decisions and market prices that more accurately reflect the fundamental value of assets where applicable. Also, any increase in the number of advisers in the SBIC market could make more capital available to small businesses if the increased supply of SBIC advisers attracts more capital to that market. In addition, to the extent that there are economies of scale in the provision of advisory services, advisory services may be provided at lower aggregate cost if the amendments result in an expansion of advisers in either the SBIC or non-SBIC private fund market. To the extent that the amendments result in reduced transparency into advisers because they opt to switch from registered to exempt reporting status, and to the extent that investors rely on that transparency when making investment decisions, the amendments might cause a reduction in the efficiency of investor allocations to these advisers. Any reduction in transparency could also reduce the aggregate amount of capital managed by investment advisers if investors cannot find suitable registered investment advisers as replacements and these investors value transparency more than any benefits, such as potentially lower advisory fees, of the amendments. Finally, if the amendments increase the supply of investment advisers to SBICs and non-SBIC private funds, and these advisers attract assets that were not already invested in other markets, they may increase the aggregate amount of capital investment.
As discussed in the Proposing Release, we do not believe that the amendments to reflect changes made by the FAST Act make any substantive modifications to any existing collection of information requirements or impose any new substantive recordkeeping or information collection requirements
The amendments to reflect the changes made by the FAST Act as described in Section II above may shift the number of advisers between each class of advisers as well as include advisers solely to SBICs that take on additional non-SBIC venture capital fund or private fund clients and therefore would become exempt reporting advisers.
We believe that the current burden and cost estimates for the existing collection of information requirements remain appropriate.
The Commission certified, pursuant to section 605(b) of the Regulatory Flexibility Act of 1980
The Commission is amending rule 203(
Reporting and recordkeeping requirements, Securities.
For the reasons set forth in the preamble, the Commission amends title 17, chapter II of the Code of Federal Regulations as follows.
15 U.S.C. 80b-2(a)(11)(G), 80b-2(a)(11)(H), 80b-2(a)(17), 80b-3, 80b-4, 80b-4a, 80b-6(4), 80b-6a, and 80b-11, unless otherwise noted.
(a)
(d) * * *
(1)
By the Commission.
Environmental Protection Agency.
Withdrawal of direct final rule.
Due to the receipt of adverse comments, the Environmental Protection Agency (EPA) is withdrawing the November 14, 2017 direct final rule approving State Implementation Plan (SIP) revisions submitted by the State of New Hampshire. New Hampshire's SIP revisions modified existing recordkeeping and reporting requirements for sources of air pollution, and modified an existing order for Sturm Ruger & Company. This action is being taken in accordance with the Clean Air Act.
The direct final rule published at 82 FR 52664 on November 14, 2017 is withdrawn effective January 11, 2018.
Bob McConnell, Air Quality Planning Unit, U.S. Environmental Protection Agency, New England Regional Office, 5 Post Office Square, Suite 100 (Mail code OEP05-2), Boston, MA 02109—3912, telephone (617) 918-1046, facsimile (617) 918-0146, email:
In the direct final rule, EPA stated that if adverse comments were submitted by December 14, 2017, the rule would be withdrawn and not take effect. EPA received adverse comments prior to the close of the comment period and,
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Regional haze, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Office of General Counsel, General Services Administration.
Final rule.
In accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015, this final rule incorporates the penalty inflation adjustments for the civil monetary penalties set forth in the United States Code, as codified in our regulations.
Ms. Jessica Hawkins, Assistant General Counsel, General Law Division (LG), General Services Administration, 1800 F Street NW, Washington DC 20405. Telephone Number 202-501-1460.
To maintain the remedial impact of civil monetary penalties (CMPs) and to promote compliance with the law, the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410) was amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-134) to require Federal agencies to regularly adjust certain CMPs for inflation and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 (Sec. 701 of Pub. L. 114-74). As amended, the law requires each agency to make an initial inflationary adjustment for all applicable CMPs, and to make further adjustments at least once every year thereafter for these penalty amounts. The Debt Collection Improvement Act of 1996 further stipulates that any resulting increases in a CMP due to the calculated inflation adjustments shall apply only to violations which occur after the date the increase takes effect,
In 1986, sections 6103 and 6104 of the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99-501) set forth the Program Fraud Civil Remedies Act of 1986 (PFCRA). Specifically, this statute imposes a CMP and an assessment against any person who, with knowledge or reason to know, makes, submits, or presents a false, fictitious, or fraudulent claim or statement to the Government. The General Services Administration's regulations, published in the
In developing this final rule, we are waiving the usual notice of proposed rulemaking and public comment procedures set forth in the Administrative Procedure Act, 5 U.S.C. 553 (APA). The APA provides an exception to the notice and comment procedures when an agency finds there is good cause for dispensing with such procedures on the basis that they are impracticable, unnecessary or contrary to the public interest. We have determined that under 5 U.S.C. 553(b)(3)(B) good cause exists for dispensing with the notice of proposed rulemaking and public comment procedures for this rule. Specifically, this rulemaking comports and is consistent with the statutory authority set forth in the Debt Collection Improvement Act of 1996, with no issues of policy discretion. Accordingly, we believe that opportunity for prior comment is unnecessary and contrary to the public interest, and we are issuing these revised regulations as a final rule that will apply to all future cases under this authority.
Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a not significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Office of Management and Budget (OMB) has reviewed this final rule in accordance with the provisions of E.O. 12866 and has determined that it does not meet the criteria for a significant regulatory action. As indicated above, the provisions contained in this final rulemaking set forth the inflation adjustments in compliance with the Debt Collection Improvement Act of 1996 for specific applicable CMPs. The great majority of individuals, organizations and entities addressed through these regulations do not engage
The Administrator of General Services certifies that this final rule will not have a significant economic impact on a substantial number of small business entities. While some penalties may have an impact on small business entities, it is the nature of the violation and not the size of the entity that will result in an action by the agency, and the aggregate economic impact of this rulemaking on small business entities should be minimal, affecting only those few who have engaged in prohibited conduct in violation of statutory intent.
This final rule imposes no new reporting or recordkeeping requirements necessitating clearance by OMB.
Administrative hearing, Claims, Program fraud.
Accordingly, 41 CFR part 105-70 is amended as set forth below:
40 U.S.C. 121(c); 31 U.S.C. 3809.
Federal Maritime Commission.
Final rule.
The Commission is publishing its adjustments to inflation annually, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act). The 2015 Act requires that agencies adjust and publish their civil penalties by January 15 each year.
This rule is effective on January 15, 2018.
Tyler Wood, General Counsel, Federal Maritime Commission, 800 North Capitol Street NW, Room 1018, Washington, DC 20573, (202) 523-5740.
This rule adjusts the civil monetary penalties assessable by the Commission in accordance with the 2015 Act, which became effective on November 2, 2015, Sec. 701 of Public Law 11-74. The 2015 Act further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), Public Law 101-410, 104 Stat. 890 (codified as amended at 28 U.S.C. 2461 note), in order to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.
The 2015 Act requires agencies to adjust civil monetary penalties under their jurisdiction by January 15 each year, based on changes in the consumer price index (CPI-U) using data from October in the previous calendar year. On December 15, 2017, the Office of Management and Budget published guidance stating that the CPI-U multiplier for October 2017 is 1.02041.
Adjustments under the FCPIAA, as amended by the 2015 Act, are not subject to the procedural rulemaking requirements of the Administrative Procedure Act (APA) (5 U.S.C. 553), including the requirements for prior notice, an opportunity for comment, and a delay between the issuance of a final rule and its effective date.
The rule is not a “major rule” as defined by the Congressional Review Act, codified at 5 U.S.C. 801
The Regulatory Flexibility Act (codified as amended at 5 U.S.C. 601-612) provides that whenever an agency promulgates a final rule after being required to publish a notice of proposed rulemaking under the APA (5 U.S.C. 553), the agency must prepare and make available a final regulatory flexibility analysis (FRFA) describing the impact of the rule on small entities. 5 U.S.C. 604. As indicated above, this final rule is not subject to the APA's notice and comment requirements, and the Commission is not required to prepare an FRFA in conjunction with this final rule.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) requires an agency to seek and receive approval from the Office of Management and Budget (OMB) before collecting information from the public. 44 U.S.C. 3507. The agency must submit collections of information in rules to OMB in conjunction with the publication of the notice of proposed rulemaking. 5 CFR 1320.11. This final rule does not contain any collections of information, as defined by 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).
The Commission assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You
Administrative practice and procedure, Penalties.
For the reasons stated in the preamble, part 506 of title 46 of the Code of Federal Regulations is amended as follows:
28 U.S.C. 2461.
(d)
By the Commission.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS implements management measures described in Amendment 41 to the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (Snapper-Grouper FMP), as prepared and submitted by the South Atlantic Fishery Management Council (South Atlantic Council). This final rule revises commercial and recreational annual catch limits (ACLs), the minimum size limit, commercial trip limits, and the recreational bag limit for mutton snapper in the South Atlantic based on the results of the most recent stock assessment update. The purpose of this final rule is to ensure that mutton snapper is managed based on the best scientific information available to achieve optimum yield (OY) and to prevent overfishing, while minimizing adverse social and economic effects to the extent practicable.
This final rule is effective on February 10, 2018.
Electronic copies of Amendment 41 may be obtained from
Mary Vara, NMFS Southeast Regional Office, telephone: 727-824-5305, or email:
The snapper-grouper fishery in the South Atlantic region includes mutton snapper and is managed under the Snapper-Grouper FMP. The Snapper-Grouper FMP was prepared by the South Atlantic Council and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
On September 26, 2017, NMFS published the notice of availability for Amendment 41 in the
This final rule revises the mutton snapper ACLs for the commercial and recreational sectors in the South Atlantic, increases the minimum size limit for mutton snapper in the commercial and recreational sectors, and modifies the commercial trip limit and the recreational bag limit. Unless
The 2015 updated stock assessment for mutton snapper in the South Atlantic and Gulf of Mexico (Southeast Data, Assessment, and Review (SEDAR) 15A Update) concluded that the mutton snapper stock in the South Atlantic and Gulf of Mexico (Gulf) is neither overfished nor undergoing overfishing. The South Atlantic Council's and Gulf of Mexico Fishery Management Council's (Gulf Council) Scientific and Statistical Committees (SSCs) reviewed the assessment and provided an acceptable biological catch (ABC) recommendation to their Councils. The ABC for the mutton snapper stock in the South Atlantic and Gulf is apportioned between the South Atlantic Council and the Gulf Council in the Snapper-Grouper FMP and the FMP for the Reef Fish Resources of the Gulf of Mexico. The South Atlantic Council set their portion of the ABC for mutton snapper equal to the OY and the total ACL. The South Atlantic Council then further allocated the total ACL between the commercial sector (17.02 percent) and recreational sector (82.98 percent). The catch reference points and sector allocations for South Atlantic mutton snapper were implemented by the final rule for the South Atlantic Council's Comprehensive ACL Amendment (77 FR 15916, March 16, 2012).
Amendment 41 and this final rule revise the ABC and the commercial and recreational mutton snapper ACLs in the South Atlantic for the 2017 through the 2020 and subsequent fishing years, consistent with the existing apportionment of the ABC between the South Atlantic Council and Gulf Council, and the existing sector allocations of the total ACL in the South Atlantic.
As described in Amendment 41, the South Atlantic Council's SSC recommended that the South Atlantic portion of the ABC be specified in numbers of fish, based on landing projections from the SEDAR 15A Update. The South Atlantic Council agreed with this recommendation for the ABC, but specified the commercial ACL in pounds and the recreational ACL in numbers of fish because commercial landings are already tracked in pounds, while recreational landings are tracked in numbers of fish. In addition, because this final rule increases the minimum size limit for mutton snapper, the South Atlantic Council was concerned that specifying the recreational ACL in pounds could increase the risk of exceeding the recreational ACL if the method for converting the ACL in numbers to pounds does not sufficiently address the change in average weight of larger, heavier fish. Therefore, the South Atlantic Council determined that there would be a reduced risk of exceeding the recreational ACL as a result of an increase in the minimum size limit if the ABC and recreational ACL were specified in numbers of fish. As a reference for comparing numbers of fish to pounds of fish, the average weight of a recreationally harvested mutton snapper in 2017 is approximately 4.2 lb (1.9 kg) per fish. The average weight of a commercially harvested mutton snapper is 7.68 lb (3.5 kg) per fish.
To determine the commercial ACL in pounds, the commercial sector allocation of 17.02 percent was applied to the total ACL in pounds (which equals the South Atlantic portion of the mutton snapper ABC). The commercial ACLs for mutton snapper will be 100,015 lb (45,366 kg) for 2017, 104,231 lb (47,278 kg) for 2018, 107,981 lb (48,979 kg) for 2019, and 111,354 lb (50,509 kg) for 2020 and subsequent fishing years.
To determine the recreational ACL in numbers, the recreational sector ACL of 82.98 percent was applied to the total ACL in pounds. That value was divided by approximately 4.2 lb (1.9 kg) per fish to determine the recreational ACL in numbers of fish. The recreational ACLs for mutton snapper will be 116,127 fish for 2017, 121,318 fish for 2018, 124,766 fish for 2019, and 127,115 fish for 2020 and subsequent fishing years.
The South Atlantic portion of the mutton snapper ABC (equal to the total ACL) in numbers of fish is the sum of the commercial and recreational ACLs in numbers of fish. To determine the ABC in numbers of fish, the commercial ACL in pounds was divided by 7.68 lb (3.5 kg) per fish and added to the recreational ACL in numbers. Based on results from the SEDAR 15A Update and ABC recommendations from the South Atlantic and Gulf Councils' SSCs, Amendment 41 decreases the ABC for mutton snapper in the South Atlantic to 129,150 fish for the 2017 fishing year, 134,890 fish for 2018, 138,826 fish for 2019, and 141,614 fish for 2020 and subsequent fishing years.
This final rule increases the minimum size limit from 16 inches (40.6 cm), total length (TL), to 18 inches (45.7 cm), TL. Recent scientific information indicates that the size at which 50 percent of mutton snapper are sexually mature is 16 inches (40.6 cm), TL, for males and 18 inches (45.7 cm), TL, for females. Increasing the minimum size limit to 18 inches (45.7 cm), TL, allows more individual mutton snapper to reach reproductive maturity before being susceptible to harvest, and is also projected to increase the average size and the corresponding average weight of fish harvested.
This final rule replaces the previous seasonal harvest limitation (equivalent to a commercial trip limit) for the commercial sector each year in May and June, and implements commercial trip limits for the purposes of maintaining a year-round commercial fishing season and reducing harvest on mutton snapper when they aggregate to spawn. During the mutton snapper spawning months of April through June, this final rule establishes a commercial trip limit of 5 fish per person per day or 5 fish per person per trip, whichever is more restrictive, for the possession of mutton snapper in or from the exclusive economic zone on board a vessel that has a Federal commercial permit for South Atlantic snapper-grouper. For the remainder of the year (January through March and July through December), this final rule establishes a 500-lb (227-kg) commercial trip limit.
Through this final rule, mutton snapper remains within the existing 10-snapper aggregate recreational bag limit in the South Atlantic, but a reduced recreational bag limit of 5 mutton snapper per person per day applies within the overall 10-snapper aggregate bag limit, year-round. The bag limit is reduced for the purposes of maintaining a year-round recreational fishing season and reducing harvest on mutton snapper spawning aggregations.
In addition to the management measures codified through this final rule, and the ABC that was previously described, Amendment 41 specifies the maximum sustainable yield (MSY), minimum stock size threshold (MSST), and recreational annual catch targets (ACTs) for mutton snapper, as well as designating spawning months.
Amendment 41 changes the MSY definition to the yield produced by the fishing mortality rate at MSY (F
Amendment 41 changes the MSST definition to 75 percent of the spawning stock biomass at MSY, which results in an MSST of 3,486,900 lb (1,581,631 kg). The SEDAR 15A Update estimated the natural mortality for mutton snapper at 0.17, and the MSST for mutton snapper in Amendment 41 is consistent with how the South Atlantic Council has defined MSST for other snapper-grouper stocks with similarly low natural mortality estimates.
For mutton snapper in the South Atlantic, Amendment 41 specifies a revised recreational ACT (equal to 85 percent of the recreational ACL) of 98,708 fish for 2017. The recreational ACT is 103,121 fish for 2018, 106,051 fish for 2019, and 108,048 fish for 2020 and subsequent fishing years. NMFS notes that the revised recreational ACTs are used only for monitoring purposes and do not trigger a recreational accountability measure.
Amendment 41 designates April through June as “spawning months” for mutton snapper in the South Atlantic. The rest of the year is the “regular season.” To protect spawning fish during April through June each year, the commercial trip limits apply to vessels with a Federal commercial permit for South Atlantic snapper-grouper. The South Atlantic Council considered additional recreational management measures specific to the spawning months but chose to reduce the bag limit year-round instead.
NMFS received 10 comments from individuals, commercial, private recreational, and charter vessel/headboat (for-hire) recreational fishing entities during the public comment period on the notice of availability and proposed rule for Amendment 41. Eight of the comments were in support of the actions in the proposed rule, with commenters specifically citing the increase in the minimum size limit to 18 inches (45.7 cm), TL, and the reduced recreational bag limit of 5 fish per person per day within the 10-snapper aggregate bag limit. Comments that were beyond the scope of the proposed rule and comments that agreed with the proposed actions are not responded to in this final rule. Comments that specifically relate to the actions contained in Amendment 41 and the proposed rule, as well as NMFS' respective responses, are summarized below.
The South Atlantic Council did not consider a commercial trip limit of 25 or 30 fish per vessel during April through June each year in Amendment 41. Prior to this final rule, commercial harvest was limited to 10 mutton snapper per person per day or per trip during the May and June spawning season and no trip limit during April. In Amendment 41, the South Atlantic Council considered commercial trip limit alternatives ranging from no commercial retention to 5 fish per person per day or per trip, whichever was more restrictive, or 10 to 12 fish per vessel per day during the spawning months of April through June. The commercial trip limits implemented by this final rule will restrict commercial harvest during these critical spawning months for mutton snapper, and will also be similar to the recreational bag limit during the spawning months. Furthermore, the South Atlantic Council and NMFS determined that reducing the commercial trip limit to 5 fish per person or per trip during April through June each year, along with the other management measures in this final rule, best meet the purpose to ensure that mutton snapper is managed based on the best scientific information available to achieve and maintain OY, and to prevent overfishing, while minimizing adverse social and economic effects to the extent practicable.
From 2010 through 2014, the average commercial trip that landed mutton snapper harvested less than 5 mutton snapper per person per trip, and that average does not change when including logbook data collected by the NMFS Southeast Fisheries Science Center from landings and trips during 2015 and 2016. NMFS acknowledges that a business with a vessel that has landed more than 5 mutton snapper per person per trip during April through June could experience adverse economic impacts from the spawning season commercial trip limit, especially if that business has a history of intensifying effort during the spawning months. The fleet-wide decrease in ex-vessel value of mutton snapper landings expected to occur as a result of the 5 mutton snapper per person per trip limit during April through June is estimated to be $23,567. Additionally, the reduction of the commercial trip limit during the spawning months from April through June, in combination with the 18-inch (46-cm), TL, minimum size limit would be biologically beneficial by reducing harvest and fishing mortality when the species is aggregated to spawn and most vulnerable to harvest. These measures are necessary to prevent harvest from
Limiting the harvest of mutton snapper during the spawning season through recreational bag limits is expected to be beneficial to mutton snapper, because they form spawning aggregations, which are particularly vulnerable to fishing pressure. The South Atlantic Council examined the effect of various bag or vessel limits and minimum size limit combinations in limiting recreational harvest of mutton snapper during the spawning months, regular season, and year-round. The analyses indicated that changes to the recreational bag limit would have little effect in constraining recreational harvest without additional measures being implemented.
The South Atlantic Council determined that a minimum size limit greater than the previous minimum size limit of 16 inches (41 cm), TL, in addition to a bag limit of 5 fish per person or per trip, whichever is more restrictive, would reduce year-round recreational harvest by approximately 50 percent. The increased minimum size limit and reduced recreational bag limit implemented by this final rule would also control the level of fishing mortality during the spawning season, without changing the expected level of discards. Additionally, setting the bag limit at 1, 2, or 3 fish per person per day would be expected to have larger and unnecessary negative economic effects, since mutton snapper are not currently undergoing overfishing and are not considered to be overfished.
Therefore, the South Atlantic Council determined that a recreational bag limit of 5 mutton snapper per person per day year-round within the existing 10-snapper aggregate bag limit, combined with the 18-inch (45.7-cm), TL, minimum size limit implemented through this final rule, will make regulations for mutton snapper more consistent in state and Federal waters, address stakeholder concerns regarding overexploitation of the stock, benefit the mutton snapper resource by reducing harvest on spawning aggregations, and extend the recreational fishing season.
The OY and total ACL are set equal to the South Atlantic portion of the mutton snapper ABC, and similar to the ABC values, in 2017, the commercial and recreational ACLs initially decrease proportionally from previous levels, and then the sector ACLs will gradually increase proportionally through 2020, and remain at the 2020 levels until modified by the South Atlantic Council. This final rule also increases the minimum size limit for South Atlantic mutton snapper for both the commercial and recreational sectors to 18 inches (45.7 cm), TL. The South Atlantic Council determined that increasing the minimum size limit for both sectors is the most effective change to management measures needed to achieve the reduction in overall harvest and maintain landings within the total ACL implemented by this final rule.
Amendment 41 designates April through June as spawning months for management purposes in both sectors. The rest of the year is the regular season. Prior to this final rule, the possession limit for the commercial sector was 10 per person per day or per trip, whichever was more restrictive, only during May and June each year. This final rule implements a 500-lb (227-kg) commercial trip limit during the regular season, and a limit of 5 fish per person per day or per trip, whichever is more restrictive, during the spawning months of April through June. Prior to this final rule, the recreational bag limit for mutton snapper was 10 fish within the 10-snapper aggregate bag limit. This final rule implements a recreational bag limit of 5 fish per person per day within the 10-snapper aggregate bag limit, year-round. The revised management measures implemented by this final rule for both the commercial and recreational sectors will limit harvest of mutton snapper during the spawning months of April through June each year, as well as year-round, while meeting the objectives of the Snapper-Grouper FMP.
Amendment 41 and the measures implemented by this final rule are based on the best scientific information available and will effectively achieve and maintain OY and prevent overfishing while minimizing, to the extent practicable, adverse social and economic effects.
Additionally, as stated in the response to
The Regional Administrator for the NMFS Southeast Region has determined that this final rule is consistent with Amendment 41, the Snapper-Grouper FMP, the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
The Magnuson-Stevens Act provides the statutory basis for this rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting, record-keeping, or other compliance requirements are introduced by this final rule.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this rule would not have a significant adverse economic impact on a substantial number of small entities. The factual basis for this determination was published in the proposed rule and is not repeated here. No changes to this final rule were made in response to public comments. As a result, a final regulatory flexibility analysis was not required and none was prepared.
NMFS did not receive any comments specific to the certification that there would not be a significant economic impact on a substantial number of small entities. However, NMFS received one public comment related to the economic impact of the commercial trip limit reduction to 5 mutton snapper per person per day or per trip, whichever is more restrictive, during the mutton snapper spawning months of April through June. That comment, also addressed in
Fisheries, Fishing, Mutton snapper, South Atlantic.
For the reasons set out in the preamble, 50 CFR part 622 is amended as follows:
16 U.S.C. 1801
(a) * * *
(4)
(b) * * *
(4)
(i) Within the 10-fish bag limit, no more than 5 fish may be mutton snapper.
(ii) Excluded from this 10-fish bag limit are cubera snapper, measuring 30 inches (76.2 cm), TL, or larger, in the South Atlantic off Florida, and red snapper and vermilion snapper. (See § 622.181(b)(2) for the prohibitions on harvest or possession of red snapper, except during a limited recreational fishing season, and § 622.181(c)(1) for limitations on cubera snapper measuring 30 inches (76.2 cm), TL, or larger, in or from the South Atlantic EEZ off Florida.)
(a) * * *
(13)
(i) From January 1 through March 31, and July 1 through December 31—500 lb (227 kg), round weight.
(ii) From April 1 through June 30—5 fish per person per day or 5 fish per person per trip, whichever is more restrictive.
(o)
(ii) If commercial landings for mutton snapper, as estimated by the SRD, exceed the applicable commercial ACL specified in paragraph (o)(1)(iii) of this section, and the applicable combined commercial and recreational ACL specified in paragraph (o)(3) of this section is exceeded during the same fishing year, and the species is overfished based on the most recent Status of U.S. Fisheries Report to Congress, the AA will file a notification with the Office of the Federal Register to reduce the commercial ACL in the following fishing year by the amount of the commercial ACL overage in the prior fishing year.
(iii) The commercial ACLs for the following fishing years are given in round weight. For 2017—100,015 lb (45,366 kg); for 2018—104,231 lb (47,278 kg); for 2019—107,981 lb (48,979 kg); for 2020 and subsequent fishing years—111,354 lb (50,509 kg).
(2)
(ii) If recreational landings for mutton snapper, as estimated by the SRD, exceed the applicable recreational ACL specified in paragraph (o)(2)(iii) of this section, then during the following fishing year recreational landings will be monitored for a persistence in increased landings, and if necessary, the AA will file a notification with the Office of the Federal Register to reduce the length of the recreational fishing season and the recreational ACL by the amount of the recreational ACL overage, if the species is overfished based on the most recent Status of U.S. Fisheries Report to Congress, and if the applicable combined commercial and recreational ACL specified in paragraph (o)(3) of this section is exceeded during the same fishing year. NMFS will use the best scientific information available to determine if reducing the length of the recreational fishing season and recreational ACL is necessary. When the recreational sector is closed as a result of NMFS reducing the length of the recreational fishing season and ACL, the bag and possession limits for mutton snapper in or from the South Atlantic EEZ are zero.
(iii) The recreational ACLs for the following fishing years are given in numbers of fish. For 2017—116,127; for 2018—121,318; for 2019—124,766; for 2020 and subsequent fishing years—127,115.
(3)
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2017-07-10, which applies to certain American Champion Aircraft Corp. (ACAC) Model 8KCAB airplanes. AD 2017-07-10 requires fabrication and installation of a placard to prohibit aerobatic flight, inspection of the aileron hinge rib and support, and a reporting requirement of the inspection results to the FAA. This AD was prompted by a report of a cracked hinge support and cracked hinge ribs, which resulted in partial loss of control with the aileron binding against the cove. Since we issued AD 2017-07-10, ACAC redesigned the aileron hinge supports with a reinforcement kit to strengthen the supports and prevent future damage from developing. This proposed AD would require repetitive inspections of the aileron hinge support, installation of the aileron hinge support reinforcement kit, and incorporation of revised pages into the service manual. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by February 26, 2018.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact American Champion Aircraft Corp., P.O. Box 37, 32032 Washington Ave., Rochester, Wisconsin 53167; telephone: (262) 534-6315; fax: (262) 534-2395; email:
You may examine the AD docket on the internet at
Wess Rouse, Small Airplane Program Manager, 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone: (847) 294-8113; fax: (847) 294-7834; 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 2017-07-10, Amendment 39-18849 (82 FR 17542, April 12, 2017), (“AD 2017-07-10”), for certain American Champion Aircraft Corp. (ACAC) Model 8KCAB airplanes. AD 2017-07-10 requires fabrication and installation of a placard to prohibit aerobatic flight, inspection of the aileron hinge rib and support, and a reporting requirement of the inspection results to the FAA. AD 2017-07-10 resulted from a report of a cracked hinge support and cracked hinge ribs, which resulted in partial loss of control with the aileron binding against the cove. We issued AD 2017-07-10 to prevent failure of the aileron support structure, which may lead to excessive deflection, binding of the control surface, and potential loss of control.
Since we issued AD 2017-10, ACAC redesigned the aileron hinge supports with a reinforcement kit. This kit, when incorporated, strengthens the supports and prevents future damage from developing.
We reviewed American Champion Aircraft Corp. Service Letter (SL) 442, Revision A, dated August 18, 2017 (ACAC SL No. 442); American Champion Aircraft Corp. Service Letter 444 Initial Revision, dated August 18, 2017 (ACAC SL No. 444); and page 4-1 of the Airworthiness Limitations section and page 5-9 of the Time and Maintenance Checks, both dated October 3, 2017, and included in American Champion Aircraft Corporation SM-601 8KCAB Service Manual, Reissue B, dated October 3, 2017. ACAC SL No. 442 describes procedures and inspection intervals for inspection of the aileron hinge rib and hinge support. ACAC SL No. 444 provides instructions for the installation of the aileron hinge reinforcement kit.
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 the placarding requirement of AD 2017-07-10 to prohibit aerobatic flight until completion of the initial 10-hour inspection. This proposed AD would also require repetitive 100-hour inspections until a maximum of 400 hours is reached, installation of the aileron hinge reinforcement kit, and incorporation of pages into the Airworthiness Limitations and Time and Maintenance Checks sections of the service manual. The existing AD contained a reporting requirement for the inspection results. This proposed NPRM will not include a reporting requirement.
Provided no damage is found during the inspections, an airplane could have up to five inspections before incorporating the reinforcement kit (initially at 10 hours TIS with the retained inspection from AD 2017-07-10, and then four 100-hour inspections up to a maximum of 400 hours TIS).
ACAC SL No. 442 and ACAC SL No. 444 both require installation of the aileron hinge support reinforcement kit within 100 hours TIS for airplanes used for competitive aerobatics. Since the FAA has no way of tracking airplanes used for competitive aerobatics, we require installation of the reinforcement kit within 400 hours TIS. ACAC SL No. 444 requires 100-hour repetitive inspections after installation of the reinforcement kit. This proposed AD does not write those actions into the AD requirements; however, the revised pages of the Airworthiness Limitations section in the service manual include that inspection requirement. Both ACAC SL No. 442 and ACAC SL No. 444 have reporting requirements, but this AD does not include a reporting requirement. The actions of this AD take precedence over the service information.
We estimate that this proposed AD affects 64 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 small airplanes, gliders, domestic business jet transport airplanes, and associated appliances to the Director of the 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, 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.
The FAA must receive comments on this AD action by February 26, 2018.
This AD replaces AD 2017-07-10, Amendment 39-18849 (82 FR 17542, April 12, 2017) (“AD 2017-07-10”).
This AD applies to any American Champion Aircraft Corp. Model 8KCAB airplane, certificated in any category, that either has:
(i) A serial number in the range of 1116-2012 through 1120-2012 or 1122-2012 through 1170-2017; or
(ii) is equipped with part number 4-2142 exposed balance ailerons.
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 57, Wings.
AD 2017-07-10 was prompted by a report of a cracked hinge support and cracked hinge ribs, which resulted in partial loss of control with the aileron binding against the cove. This AD incorporates a newly designed aileron hinge support reinforcement kit. We are issuing this AD to prevent failure of the aileron support structure, which may lead to excessive deflection, binding of the control surface, and potential loss of control.
Comply with this AD within the compliance times specified, unless already done.
(1) As of April 12, 2017 (the effective date retained from AD 2017-07-10), the airplane is restricted to non-aerobatic flight until the actions required in paragraphs (g)(2) through (3) of this AD are done.
(2) Before further flight after April 12, 2017 (the effective date retained from AD 2017-07-10), fabricate a placard using at least
(3) This action may be performed by the owner/operator (pilot) holding at least a private pilot certificate and must be entered into the aircraft records showing compliance with this AD in accordance with 14 CFR 43.9 (a)(1)-(4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(1) Within the next 10 hours time-in-service (TIS) after April 12, 2017 (the effective date retained from AD 2017-07-10), inspect the aileron hinge rib and support for cracks or other damage following American Champion Aircraft Corporation Service Letter (SL) 442, dated February 16, 2017, or American Champion Aircraft Corp. Service Letter (SL) 442, Revision A, dated August 18, 2017 (ACAC SL No. 442).
(2) If no cracks or other damage is found during the initial inspection required in paragraph (h)(1) of this AD, the placard prohibiting aerobatic flight required in paragraph (g)(2) of this AD can be removed.
(3) Within 100 hours TIS from the initial inspection required in paragraph (h)(1) of this AD or within 10 hours TIS after the effective date of this AD, whichever occurs later, and repetitively thereafter at intervals not the exceed 100 hours TIS, inspect the aileron hinge rib and support for cracks or other damage following ACAC SL No. 442.
(4) If cracks or other damage is found during any inspection required in paragraph (h)(1) or (3) of this AD, before further flight, replace any retained parts or structure that are cracked or damaged, and install the aileron hinge reinforcement kit following American Champion Aircraft Corp. Service Letter 444, dated August 18, 2017 (ACAC SL No. 444).
(5) Within 400 hours after the initial inspection required in paragraph (h)(1) of this AD, if not already done as required in paragraph (h)(4) of this AD, install the aileron hinge reinforcement kit following the procedures in ACAC SL No. 444.
(6) After installation of the aileron hinge reinforcement kit required in paragraph (h)(4) or (5) of this AD, as applicable, insert page 4-1 of the Airworthiness Limitations section and page 5-9 of the Time and Maintenance Checks section, both dated October 3, 2017, from the American Champion Aircraft Corporation SM-601 8KCAB Service Manual, Reissue B, dated October 3, 2017, into the maintenance program (service manual).
(7) Installing the aileron hinge reinforcement kit as required in paragraph (h)(4) or (h)(5) of this AD and the insertion of page 4-1 of the Airworthiness Limitations section and page 5-9 of the Time and Maintenance Checks section, both dated October 3, 2017, of the American Champion Aircraft Corporation SM-601 8KCAB Service Manual, Reissue B, dated October 3, 2017, into the maintenance program (service manual), as required in paragraph (h)(6) of this AD is terminating action to this AD. The revised Airworthiness Limitations section includes a 100-hour/annual inspection requirement for the aileron hinge supports.
Although ACAC SL No. 442 and ACAC SL No. 444 specify submitting certain information to the manufacturer, this AD does not require that action.
No aerobatic flight permitted with a special flight permit.
(1) The Manager, Chicago 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 ACO, send it to the attention of the person identified in paragraph (l) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Wess Rouse, Small Airplane Program Manager, 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone: (847) 294-8113; fax: (847) 294-7834; email:
(2) For service information identified in this AD, contact American Champion Aircraft Corp., P.O. Box 37, 32032 Washington Ave., Rochester, Wisconsin 53167; telephone: (262) 534-6315; fax: (262) 534-2395; email:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for Air Comm Corporation (Air Comm) air conditioning systems installed on various model helicopters. This proposed AD would require replacing electrical connectors and would prohibit the installation of other parts. This proposed AD is prompted by reports of overheated connectors. The proposed actions are intended to address an unsafe condition on these products.
We must receive comments on this proposed AD by March 12, 2018.
You may send comments by any of the following methods:
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•
•
•
You may examine the AD docket on the internet at
For service information identified in this proposed rule, contact Air Comm Corporation, 1575 West 124th Ave., Westminster, CO 80234; telephone (303) 440-4075; email
Matthew Bryant, Aerospace Engineer, Denver ACO Branch, Compliance and Airworthiness Division, FAA, 26805 East 68th Ave., Room 214, Denver, CO 80249; telephone (303) 342-1092; 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.
On August 13, 2015, we issued SAIB SW-15-20 to alert owners and operators of Bell Helicopter Textron Canada Limited (Bell) Model 206, 407, and 427; Agusta S.p.A. Model A119; and Airbus Helicopters Model AS350, EC120, and EC130 helicopters of possible overheated and melted connectors in the wiring of certain Air Comm air conditioning system units. SAIB SW-15-20 was prompted by a report of a melted and discolored aft evaporator assembly connector due to poor crimping during installation of the connector or during production. SAIB SW-15-20 recommends inspecting the connecters for evidence of overheating and loose contact by following the Air Comm service bulletins, and if there is evidence of overheating or loose contact, making the air conditioning system inoperable until those connectors are replaced.
Since we issued SAIB SW-15-20, we received additional reports of melted and burned connectors. Further investigation revealed the connector design may be insufficient for some of these model helicopters because of electrical current load, installation location, vibration environment, and susceptibility to environmental factors. As a result, the connector may develop low pin tension between the socket and the pin, leading to high electrical resistance, subsequently resulting in excessive pin and socket temperatures. Overheating of the connector could result in a fire and subsequent loss of control of the helicopter. In July 2016, Air Comm introduced a newly designed connector that can withstand the demands and environment of the aft evaporator blower motor.
Accordingly, we are proposing an AD for certain part-numbered Air Comm air conditioning systems installed on Airbus Helicopters Model AS350B, AS350B1, AS350B2, AS350B3, AS350BA, AS350C, AS350D, AS350D1, and EC130B4, and Bell Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4, and 407 helicopters. This proposed AD would require replacing each aft evaporator blower motor connector with the newly designed connector and would prohibit installing certain parts in the aft evaporator assembly, aft evaporator blower assembly, and aft condenser blower. The actions specified in this proposed AD are intended to prevent overheating of a connector, which could result in a fire and subsequent loss of control of the helicopter.
These Air Comm air conditioning systems may be installed on Airbus Helicopters Model AS350B, AS350B1, AS350B2, AS350B3, AS350BA, AS350C, AS350D, and AS350D1 helicopters per Supplemental Type Certificate (STC) SR00643DE; on Airbus Helicopters Model EC130B4 helicopters per STC SR00543DE; on Bell Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 helicopters per STC SH2750NM; and on Bell Model 407 helicopters per STC SR00222DE. Because field reports revealed that Agusta S.p.A. Model A119, Airbus Helicopters Model EC120, and Bell Model 427 helicopters are not affected by this unsafe condition, we are not including these models in this proposed AD.
We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
We reviewed Air Comm Corporation Service Bulletin (SB) SB AS350-111014 for Airbus Helicopters AS350 series helicopters and SB EC130-6204 for Airbus Helicopters EC130 series helicopters, both Revision B and dated January 10, 2017. We also reviewed SB 206-110414 for Bell 206 series helicopters, Revision C, and SB 407-110414 for Bell Model 407 helicopters, Revision D, both dated January 13, 2017. This service information specifies inspecting certain aft evaporator blower motor and certain condenser blower electrical connectors for indications of overheating, discoloration, and plastic deformation and performing a pull test. This service information also specifies replacing connector housings and contacts that fail the inspection or the pull test.
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 also reviewed the following Air Comm Corporation service information:
• SB AS350-111014 and SB EC130-6204, both Revision A and both dated July 6, 2016;
• SB 206-110414, Revision B, dated January 10, 2017 and Revision A dated June 3, 2016; and
• SB 407-110414, Revision C, dated January 10, 2017, and Revision B, dated July 6, 2016.
This service information contains the same procedures described above. However, SB AS350-111014 and SB EC130-6204, both Revision B and dated January 10, 2017, contain additional instructions and figures for the connectors. SB 206-110414, Revision C, and SB 407-110414, Revision D, both dated January 13, 2017, contain minor corrections.
This proposed AD would require replacing certain connectors with Air Comm connectors and prohibit installing certain part-numbered plugs, sockets, receptacles, and pin in certain part-numbered aft evaporator assemblies, aft evaporator blower assemblies, and aft condenser blowers.
The Air Comm service information specifies a compliance time of 20 flight hours. This proposed AD would require compliance within 90 hours time-in-service. The Air Comm service information specifies inspecting each connector and replacing the connector housings and contacts that have any signs of overheating or that fail a pull test. This proposed AD would require replacing each connector without an inspection. This proposed AD would also prohibit installing certain parts in certain part-numbered aft evaporator assemblies, aft evaporator blower assemblies, and aft condenser blowers.
We estimate that this proposed AD would affect 914 units installed on 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 the connectors would take about 1 work-hour and parts would cost about $60 for a total cost of $145 per helicopter and $132,530 for the U.S. fleet.
According to Air Comm's service information, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage by Air Comm. Accordingly, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
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 the following helicopters, certificated in any category:
(1) Airbus Helicopters Model AS350B, AS350B1, AS350B2, AS350B3, AS350BA, AS350C, AS350D, and AS350D1 helicopters with an Air Comm air conditioning system part number (P/N) AS350-202-1, AS350-202-2, AS350-202-3, AS350-202-4, AS350-202-5, AS350-204-1, AS350-204-2, AS350-204-3, AS350-204-4, AS350-204-5, AS350-204-6, AS350-204-7, AS350-204-8, AS350-204-9, AS350-204-10, AS350-204-11, or AS350-204-12 installed.
(2) Airbus Helicopters Model EC130B4 helicopters with an Air Comm air conditioning system P/N EC130-202-1, EC130-202-2, EC130-202-3, EC130-202-4, EC130-202-5, EC130-202-6, EC130-202-7, or EC130-202-8 installed.
(3) Bell Helicopter Textron Canada Limited (Bell) Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 helicopters with an Air Comm air conditioning system P/N 206EC-200, 206EC-201, 206EC-202, 206EC-203, 206EC-204, 206EC-205, 206EC-206, 206EC-207, 206EC-208, 206EC-209, 206EC-210, 206EC-211, or 206EC-212 installed.
(4) Bell Model 407 helicopters with an Air Comm air conditioning system P/N 407 EC-201, 407 EC-202, or 407 EC-203 installed.
This AD defines the unsafe condition as an overheated connector. This condition could result in a fire and subsequent loss of control of the helicopter.
We must receive comments by March 12, 2018.
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.
(1) Within 90 hours time-in-service:
(i) For Airbus Helicopters Model AS350B, AS350B1, AS350B2, AS350B3, AS350BA, AS350C, AS350D, and AS350D1 helicopters, replace each aft evaporator blower motor connector with an Air Comm connector as depicted in Figures 2, 3, and 4 of Air Comm Service Bulletin (SB) SB AS350-1110014, Revision B, dated January 10, 2017, by using a Deutsch HDT-48-00 or an equivalent MIL-DTL22520 Type 1 crimping tool.
(ii) For Airbus Helicopters Model EC130B4 helicopters, replace each aft evaporator blower motor connector with an Air Comm connector as depicted in Figures 2, 3, and 4 of Air Comm SB EC130-6204, Revision B, dated January 10, 2017, by using a Deutsch HDT-48-00 or an equivalent MIL-DTL22520 Type 1 crimping tool.
(iii) For Bell Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 helicopters, replace each aft evaporator blower motor connector with an Air Comm connector as depicted in Figures 4, 5, and 6 of Air Comm SB 206-110414, Revision C, dated January 13, 2017, by using a Deutsch HDT-48-00 or an equivalent MIL-DTL22520 Type 1 crimping tool.
(iv) For Bell Model 407 helicopters, replace each aft evaporator blower motor connector with an Air Comm connector as depicted in Figures 4, 5, and 6 of Air Comm SB 407-110414, Revision D, dated January 13, 2017, by using a Deutsch HDT-48-00 or an equivalent MIL-DTL22520 Type 1 crimping tool.
(2) After the effective date of this AD, do not install the following in any aft evaporator assembly P/Ns AS350-6202, EC130-6204-1, or EC130-6204-2; aft evaporator blower assembly P/Ns S-6078EC-15, S-6102EC-3, or S-6102EC-4; or aft condenser blower P/Ns S-7060EC-1, S-7060EC-2, S-7062EC-1 or S-7062EC-2:
(i) Plug P/N 03-09-1022, 03-09-1032, and 03-09-1042;
(ii) Socket P/N 02-09-1103 and 02-09-1104;
(iii) Receptacle P/N 03-09-2022, 03-09-2032, and 03-09-2042; and
(iv) Pin P/N 02-09-2103.
Replacing the connectors before the effective date of this AD in accordance with Air Comm SB 206-110414, Revision A, dated June 3, 2016; SB AS350-111014 or SB EC130-6204, both Revision A and both dated July 6, 2016; SB 407-110414, Revision B, dated July 6, 2016; SB 206-110414, Revision B, dated January 10, 2017; or SB 407-110414, Revision C, dated January 10, 2017, is considered acceptable for compliance with the corresponding required actions specified in paragraph (e)(1) of this AD.
(1) The Manager, Denver ACO Branch, FAA, may approve AMOCs for this AD. Send your proposal to: Matthew Bryant, Aerospace Engineer, Denver ACO Branch, Compliance and Airworthiness Division, FAA, 26805 East 68th Ave., Room 214, Denver, CO 80249; telephone (303) 342-1092; 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.
Air Comm SB 206-110414, Revision A, dated June 3, 2016; SB AS350-111014 or SB EC130-6204, both Revision A and both dated July 6, 2016; SB 407-110414, Revision B, dated July 6, 2016; SB 206-110414, Revision B, dated January 10, 2017; and SB 407-110414, Revision C, dated January 10, 2017, which are not incorporated by reference, contain additional information about the subject of this AD. For service information identified in this AD, contact Air Comm Corporation, 1575 West 124th Ave., Westminster, CO 80234; telephone (303) 440-4075; email
Joint Aircraft Service Component (JASC) Code: 2197, Air Conditioning System Wiring.
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (SNPRM).
This SNPRM amends the notice of proposed rulemaking (NPRM) published in the
Comments must be received on or before February 26, 2018.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590-0001; telephone: 1 (800) 647-5527, or (202) 366-9826. You must identify FAA Docket Number FAA-2016-9495 and Airspace Docket Number 15-AAL-6 at the beginning of your comments. You may also submit comments through the internet at
Kenneth Ready, Airspace Policy Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish restricted airspace in the vicinity of Allen Army Airfield, to contain activities deemed hazardous to nonparticipating aircraft.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket Number FAA-2016-9495 and Airspace Docket Number 15-AAL-6) and be submitted in triplicate to the Docket Management Facility (see
Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket Number FAA-2016-9495 and Airspace Docket Number 15-AAL-6.” The postcard will be date/time stamped and returned to the commenter.
All communications received on or before the specified comment closing date will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
The FAA published a notice of proposed rulemaking (NPRM) in the
The NPRM proposed that the restricted areas would be configured in three layers, extending from the surface to Flight Level (FL) 220. R-2201A, B, and C would extend from the surface to but not including 6,000 feet MSL. Areas D, E, and F would extend from 6,000 feet MSL to but not including 15,000 feet MSL. Areas G, H, and J would extend from 15,000 feet MSL to FL 220. The proposed time of designation for all of the above areas was “0700-1900 local time Monday-Friday; other times by NOTAM.”
A total of 39 comments were received in response to the NPRM. All commenters expressed objections to the proposal.
The comments received focused on three main areas of concern: Adverse impacts to general aviation flying under VFR; negative impacts on IFR aircraft; and general impacts to general aviation.
Many commenters wrote that the proposed restricted areas would seriously impact access to a key VFR route to and from the Isabel Pass. This strategically important mountain pass connects interior and southcentral Alaska, offering one of the lowest terrain routes through the Alaska Range. Pilots regularly navigate using the Richardson Highway and Trans Alaska Pipeline to traverse the mountain valley with precipitous terrain on either side. Commenters contended that this major VFR corridor is already constrained by the R-2202 complex to the west. The proposed R-2201 complex would further narrow the airspace available to fly within the corridor. They believe that the prevalence of rapidly rising terrain, high winds, and rapidly changing weather conditions, combined with the narrow corridor, would pose a significant hazard to pilots by leaving them with little or no options for coping with adverse flight conditions.
The FAA is proposing to modify the boundaries of the original proposal to provide a significantly larger VFR corridor along the Richardson Highway, and reduce the proposed altitude structure of the restricted area complex. This proposal also eliminates a section of the proposed restricted airspace that extended part way into the Buffalo MOA exclusion airspace. These measures should lessen the impact to VFR aircraft operations.
Commenters pointed out that the proposed R-2201 complex would be located near two important IFR navigation aids (NAVAIDs): The Big Delta VORTAC (BIG), and the Delta Junction NDB (DJN). These NAVAIDs serve the following airways: A-2, B-25, V-444, V-481, V-515, T-226, and T-232. For IFR aircraft flying below FL 180 to have access to Fairbanks from the east or south, they must use these airways. However, if the full proposed R-2201 complex was active, all routes to and from BIG and DJN would be unavailable. The commenters said that lack of access to these routes would negatively affect air traffic safety and efficiency and increase the cost for aircraft operators to fly in this area.
The FAA is also proposing to reduce the proposed ceiling of the restricted area complex from FL 220 to 11,000 feet MSL, and limit the activation of the proposed restricted airspace between 6,000 feet MSL and 11,000 feet MSL to “by NOTAM 4 hours in advance.” This should provide greater availability of the airways noted above. Additionally, procedures would be incorporated into the Letters of Agreement/Procedure (LOA/LOP) between the controlling agency and the using agency to mitigate access issues. This would include activating only the minimum amount of airspace needed for the specific training mission, allowing the remaining airspace to be utilized by other users of the National Airspace System.
A number of commenters were concerned that the proposed times of activation for each restricted area would amount to 12 hours per weekday, as well as other times by NOTAM. The airspace below 6,000 feet MSL would be most affected since it could be active 60 percent of the time. The remaining altitude layers could be active 40 percent of the time. Due to the frequent occurrence of in-flight icing conditions in the area, the commenters pointed out that the availability of the low altitude portion of the R-2201 complex is extremely important. The potential high activation rate of the restricted areas could impact VFR and IFR aircraft.
As noted above, the modified design, and proposed LOA/LOP procedures between the controlling and using agencies, should lessen impacts on general aviation. Additionally, for situations such as icing, if an aircraft requires an altitude that is within an active restricted area, the LOA/LOP would contain updated procedures that provide for coordination with the using agency to cease operations as necessary to provide for non-participating aircraft access through the SUA area. This provision would be similar to those already contained in LOAs/LOPs for other special use airspace areas in Alaska.
Commenters also expressed concern about the proposed times of use for the complex; specifically, the provision allowing activation by NOTAM. One commenter stated that the lack of an advance notice requirement for
The proposal has been modified so that NOTAMs for activating the restricted areas must be issued four hours in advance.
In addition to the above measures, the Special Use Airspace Information Service (SUAIS) would be updated continually to provide transitioning pilots with the current status of the various special use airspace areas that could affect their flight.
In response to the public comments, the FAA has significantly revised the airspace proposal. The United States Army Alaska (USARAK) re-evaluated its training mission requirements and the amount of restricted airspace needed to contain the various hazardous training events.
The original proposal consisted of nine restricted area subareas (R-2201A, B, C, D, E, F, G, H and J) extending in three layers from the surface up to FL 220. USARAK determined that it could meet its mission training goals with a scaled back restricted area complex consisting of four subareas (R-2201A, B, C, and D) instead of nine.
Further, USARAK concluded that it could accomplish required training within a lower altitude structure that extends from the surface to 11,000 feet MSL, instead of FL 220. R-2201A and B would extend from the surface to but not including 6,000 feet MSL; while R-2201C and D (which would overlie A and B, respectively) would extend from 6,000 feet MSL to 11,000 feet MSL. Most training would be accomplished in R-2201A and B from the surface to 6,000 feet MSL. The originally proposed altitudes above 11,000 feet MSL up to FL 220 are, therefore, removed from the proposal. These changes reduce the amount of proposed restricted airspace by approximately 50 percent.
To address the concerns about the narrow width of the VFR route to and from the Isabel Pass, the proposed western boundaries of the restricted areas were moved eastward, and the southern boundary moved northward, to provide a larger VFR corridor along the Richardson Highway as well additional clearance from the Donnelly Dome area.
The proposed time of designation for the restricted areas has also been revised. In the NPRM, the time of designation for all nine proposed subareas was “0700-1900 local time Monday-Friday; other times by NOTAM.” In the revised proposal, only R-2201A and B (which would extend from the surface to but not including 6,000 feet MSL) would have the specific published times of “0700-1900 local time Monday-Friday”; as well as a provision to activate R-2201A and B at other times by a NOTAM issued 4 hours in advance. The time of designation for R-2201C and D (which would extend from 6,000 feet MSL to 11,000 feet MSL) would be limited to “By NOTAM 4 hours in advance” of the effective time. The proposed requirement that NOTAMs be issued 4 hours in advance was added in response to public comments that at least four hours advanced notice is needed to assist pilots with flight planning to help them avoid the need for reroutes or fuel diversions.
These proposed modifications provide a larger VFR corridor along the Richardson Highway; reduce the overall proposed restricted airspace by approximately 50 percent; and lessen the potential for impact on both VFR and IFR operations.
The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) part 73 to establish restricted areas R-2201A, B, C, and D; Fort Greely, AK. Restricted areas R-2201A and R-2201C would overlie the Combined Arms Collective Training Facility (CACTF), and R-2201B and R-2201D would overlie the Battle Area Complex (BAX).
A chart of the revised R-2201 proposal will be posted on the
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Using agency. U.S. Army, AK (USARAK), Commanding General, Joint Base Elmendorf-Richardson (JBER), AK.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to amend the time of designation for restricted area R-4403A, Stennis Space Center, MS, from “Intermittent, 1000 to 0300 local time, as activated by NOTAM at least 24 hours in advance,” to “Intermittent by NOTAM at least 24 hours in advance.” The National Aeronautics and Space Administration (NASA) requested the change to meet requirements of the Space Launch System (SLS) Core Stage test program.
Comments must be received on or before February 26, 2018.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: 1 (800) 647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2017-1109 and Airspace Docket No. 17-ASO-22, at the beginning of your comments. You may also submit comments through the internet at
Paul Gallant, Airspace Policy Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would support a change in the time of designation for restricted area R-4403A, Stennis Space Center, MS, to accommodate NASA rocket engine test activities.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket No. FAA-2017-1109 and Airspace Docket No. 17-ASO-22) and be submitted in triplicate to the Docket Office at the address listed above. You may also submit comments through the internet at
Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2017-1109 and Airspace Docket No. 17-ASO-22.” The postcard will be date/time stamped and returned to the commenter.
All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may
An electronic copy of this document may be downloaded through the internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person at the Docket Office (see
R-4403A was established by a final rule published in the
The current boundaries and altitudes of R-4403A are sufficient to contain the hazards from hydrogen flaring profiles associated with propulsion testing and are not affected by this proposal. Additionaly, the need for on-going single rocket engine testing in R-4403A remains at approximately 20-40 times per year. On average, NASA activates R-4403A for 7 hours for each event. If technical difficulties or other conditions require, R-4403A has been activated for up to 12 hours. However, the SLS Core Stage testing program entails the simultaneous testing of four rocket engines. The flaring of hydrogen fuel will require NASA to activate R-4403A for up to 48 hours because SLS Core Stage testing cannot confine the hydrogen flare stack hazards within the existing 17-hour daily window available for R-4403A. This requirement is expected to occur 2-3 times per year.
The FAA proposes an amendment to 14 CFR part 73 to change the time of designation for restricted area R-4403A, Stennis Space Center, MS, from “Intermittent, 1000 to 0300 local time, as activated by NOTAM at least 24 hours in advance,” to “Intermittent by NOTAM at least 24 hours in advance.”
This change is required to provide the additional restricted area activation time needed to accommodate NASA's SLS Core Stage engine testing program. The current boundaries and designated altitude for R-4403A remain unchanged by this proposal.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subjected to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
By removing the words “Time of Designation. Intermittent, 1000 to 0300 local time, as activated by NOTAM at least 24 hours in advance,” and adding in their place:
Postal Regulatory Commission.
Advance notice of proposed rulemaking.
The Commission is noticing a recent filing requesting that the Commission initiate an informal rulemaking proceeding to consider revisions to the periodic reporting requirements codified at 39 CFR part 3050. This document 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.
On December 27, 2017, the Postal Service filed a request for the Commission to consider revisions to the periodic reporting requirements codified in 39 CFR part 3050.
The Postal Accountability and Enhancement Act (PAEA) granted the Commission enhanced information gathering and reporting responsibilities.
On December 27, 2017, the Postal Service filed a request for the Commission to consider revisions to the periodic reporting requirements. First, the Postal Service requests that the Commission adjust the deadlines for the quarterly Revenue, Pieces, and Weight (RPW) report; the Quarterly Statistics Report (QSR); the quarterly Billing Determinants report, and the monthly National Consolidated Trial Balance and the Revenue and Expense Summary (Trial Balance) report, to align the deadlines with other financial reporting deadlines. Petition at 1. The Postal Service states that revising the regulations so these deadlines align with other financial reporting deadlines will avoid potential restatements of the earlier filed reports once the data for the later filed reports are finalized.
Specifically, the Postal Service wants to move the deadline for the RPW and QSR reports so that the quarterly and year-end report deadlines are the same as the Form 10-Q and Form 10-K report due dates.
Second, the Postal Service requests that the Commission modify the format of the Monthly Summary Financial Report to make the report more consistent with the Postal Service's quarterly and annual financial reports.
Third, the Postal Service requests that the Commission consider eliminating or modifying any reporting requirements that have become unnecessary or irrelevant since the current periodic reporting rules were first implemented in 2009. Petition at 1. The Postal Service requests that the Commission consider eliminating or modifying these requirements to avoid imposing “unnecessary or unwarranted administrative effort and expense” on the Postal Service.
Interested persons are invited to provide written comments to facilitate the Commission's examination of the periodic reporting requirements. In addition to the specific revisions requested in the Postal Service's petition, the Commission also invites comments on whether specific periodic reporting requirements should be eliminated or modified or whether updates or enhancements to the requirements should be made.
Comments are due no later than March 7, 2018. Reply comments are due no later than April 6, 2018. All comments and suggestions received will be available for review on the Commission's website,
Pursuant to 39 U.S.C. 505, Lauren A. D'Agostino is appointed to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned docket.
1. The Commission establishes Docket No. RM2018-2 to consider revisions to the periodic reporting requirements.
2. Comments are due no later than March 7, 2018. Reply comments are due no later than April 6, 2018.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Lauren A. D'Agostino to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for publication of this notice in the
By the Commission.
Department of Veterans Affairs.
Proposed rule.
The Department of Veterans Affairs (VA) is proposing to amend and update its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VAAM, and to incorporate any new agency specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, will publish them in the
Comments must be received on or before March 12, 2018 to be considered in the formulation of the final rule.
Written comments may be submitted through
Mr. Ricky Clark, Senior Procurement Analyst, Procurement Policy and Warrant Management Services, 003A2A, 425 I Street NW, Washington DC 20001, (202) 632-5276. This is not a toll-free telephone number.
This action is being taken under the authority of the Office of Federal Procurement Policy (OFPP) Act which provides the authority for an agency head to issue agency acquisition regulations that implement or supplement the FAR. This authority ensures that Government procurements are handled fairly and consistently, that the Government receives overall best value, and that the Government and contractors both operate under a known set of rules.
The proposed rule would update the VAAR to current FAR titles, requirements, and definitions; it would correct inconsistencies and removes redundancies and duplicate material already covered by the FAR; it would also delete outdated material or information and appropriately renumber VAAR text, clauses, and provisions where required to comport with FAR format, numbering and arrangement. All amendments, revisions, and removals have been reviewed and concurred with by an Integrated Product Team of agency stakeholders.
The VAAR uses the regulatory structure and arrangement of the FAR and headings and subject areas are broken up consistent with the FAR content. The VAAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, sections, and subsections.
The Office of Federal Procurement Policy Act, as codified in 41 U.S.C. 1707, provides the authority for the Federal Acquisition Regulation and for the issuance of agency acquisition regulations consistent with the FAR.
When Federal agencies acquire supplies and services using appropriated funds, the purchase is governed by the FAR, set forth at Title 48 Code of Federal Regulations (CFR), chapter 1, parts 1 through 53, and the agency regulations that implement and supplement the FAR. The VAAR is set forth at Title 48 CFR, chapter 8, parts 801 to 873.
VA is proposing to revise the VAAR to add new policy or regulatory requirements and to remove any guidance that is applicable only to VA's internal operating processes or procedures. Codified acquisition regulations may be amended and revised only through rulemaking.
The VA proposes to make the following changes to the VAAR in this phase of its revision and streamlining initiative. For procedural guidance cited below that is proposed to be deleted from the VAAR, each section cited for removal has been considered for inclusion in VA's internal agency operating procedures in accordance with FAR 1.301(a)(2). Similarly, delegations of authority that are removed from the VAAR will be included in the VA Acquisition Manual (VAAM) as internal agency guidance.
In VAAR part 812, we propose to replace the 38 U.S.C. 501 citation with 41 U.S.C. 1702 which addresses the acquisition planning and management responsibilities of VA's Chief Acquisition Officer, and add the citation for 38 U.S.C. 8127-8128 which addresses small business concerns owned and controlled by Veterans.
In subpart 812.1, Acquisition of Commercial Items—General, we propose to delete 812.102, Applicability, as unnecessary duplication of language in the FAR.
We propose to add 812.102-70, Applicability of Veterans preferences, to state that the preferences in subpart 819.70 apply to part 812.
We propose to revise 812.301, Solicitation provisions and contract clauses for the acquisition of commercial items, to delete the existing text and replace paragraph (f) with new text prescribing insertion into solicitations and contracts for commercial acquisitions the provision 852.212-70, Provisions Applicable to VA Acquisition of Commercial Items, and the clause 852.212-71, Contract Terms and Conditions Applicable to VA Acquisition of Commercial Items, which will list all VAAR provisions and clauses from other parts that are available for use in commercial acquisitions. We propose to allow a contracting officer to indicate with a checkmark the specific provisions and clauses that apply to the acquisition. We propose to add a new provision 852.212-72, Gray Market Items, to require vendors of medical equipment to be an Original Equipment Manufacturer (OEM), authorized dealer, authorized distributor or authorized reseller of such equipment.
We propose to revise the list of provisions and clauses and to incorporate them into the new provision and clause being prescribed. The following provisions and clauses are not included in revised section 812.301(f) and further action on them will be addressed in future proposed rules—
852.203-71, Display of Department of Veterans Affairs Hotline Poster.
852.207-70, Report of Employment Under Commercial Activities.
852.211-71, Special Notice.
852.211-72, Technical Industry Standards.
852.211-73, Brand Name or Equal.
852.211-74, Liquidated Damages.
852.211-75, Product Specifications.
852.214-70, Caution to Bidders—Bid Envelopes.
852.216-70, Estimated Quantities.
We propose to add the following provisions and clauses to those available for use in commercial acquisitions based on their potential applicability for commercial item purchases—
852.215-70, Service-Disabled Veteran-Owned and Veteran-Owned Small Business Evaluation Factors.
852.215-71, Evaluation Factor Commitments.
852.219-9, VA Small Business Subcontracting Plan Minimum Requirements.
852.219-10, VA Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside.
852.219-11, VA Notice of Total Veteran-Owned Small Business Set-Aside.
852.222-70, Contract Work Hours and Safety Standards Act—Nursing Home Care Contract Supplement.
852.232-72, Electronic Submission of Payment Requests.
852.246-73, Noncompliance with Packaging, Packing, and/or Marking Requirements.
852.247-70, Determining Transportation Costs for Bid Evaluation.
We propose to remove 812.302, Tailoring of provisions and clauses for the acquisition of commercial items, in its entirety since it deals with internal procedures for obtaining a waiver to allow tailoring of provisions and clauses to be inconsistent with customary commercial practice.
In VAAR part 813, we propose to add the citation for 41 U.S.C. 1702 which addresses the acquisition planning and management responsibilities of VA's Chief Acquisition Officer.
We propose to add 813.003-70, Policy, which would explain that the Veterans First Contracting Program has broad applicability in contracts using Simplified Acquisition Procedures, and 813.102, Source list, to require that contracting officers use the Vendor Information Pages (VIP) database to verify Service-Disabled Veteran-Owned Small Business and Veteran-Owned Small Business status.
We propose to remove 813.106, Soliciting competition, evaluation of quotations or offers, award and documentation, since paragraph (a) addresses internal procedures and paragraph (b) contains material that is adequately addressed in FAR. We will retain the title since 813.106-70 is being added.
We propose to remove 813.106-3, Award and documentation, since it is material adequately addressed in FAR.
We propose to remove 813.106-70, Oral purchase orders, because the FAR contains no authority to issue oral purchase orders.
We propose to add 813.106-70, Soliciting competition, evaluation of quotations or offers, award and documentation—the Veterans First Contracting Program, which emphasizes that contracting officers can use other than competitive procedures under specified circumstances when awarding to Service-Disabled Veteran-Owned Businesses (SDVOSBs) or Veteran-Owned Small Businesses (VOSBs).
We propose to revise 813.202, Purchase guidelines, to renumber it as 813.203 to correspond to the FAR coverage; to delete the words “open market” as unnecessary; and to spell out Service-Disabled Veteran-Owned Small Businesses and Veteran-Owned Small Businesses the first times the acronyms are used.
We propose to remove 813.302, Purchase orders and 813.302-5, Clauses, because they incorrectly prescribe a clause in part 837.
We propose to add 813.305-70, VA's imprest funds and third party drafts policy, to state that the Government-wide commercial purchase card and/or convenience checks shall be used in lieu of imprest funds and third party drafts.
We propose to remove 813.307, Forms, and include it in VA's internal procedural guidance.
In VAAR part 852, we propose to replace the 38 U.S.C. 501 citation with 41 U.S.C. 1702 which addresses the acquisition planning and management responsibilities of VA's Chief Acquisition Officer.
In subpart 852.2, we propose to add the provision 852.212-70, Provisions Applicable to VA Acquisition of Commercial Items, to permit the contracting officer to check those that will be applicable to the individual commercial buy.
In subpart 852.2, we propose to add the provision 852.212-71, Contract Terms and Conditions Applicable to VA Acquisition of Commercial Items, to permit the contracting officer to check those that will be applicable to the individual commercial buy.
In subpart 852.2, we propose to add the provision 852.212-72, Gray Market Items, to ensure that new medical equipment for VA Medical Centers is purchased from authorized distributors and that all software licensing, warranty and service associated with the equipment/system shall be in accordance with the Original Equipment Manufacturer's terms and conditions.
Title 48, Federal Acquisition Regulations System, Chapter 8, Department of Veterans Affairs, of the Code of Federal Regulations, as proposed to be revised by this rulemaking, would represent VA's implementation of its legal authority and publication of the Department of Veterans Affairs Acquisition Regulation (VAAR) for the cited applicable parts. Other than future amendments to this rule or governing statutes for the cited applicable parts, or as otherwise authorized by approved deviations or waivers in accordance with Federal Acquisition Regulation (FAR) subpart 1.4, Deviations from the FAR, and as implemented by VAAR subpart 801.4, Deviations from the FAR or VAAR, no contrary guidance or procedures would be authorized. All existing or subsequent VA guidance would be read to conform with the rulemaking if possible or, if not possible, such guidance would be superseded by this rulemaking as pertains to the cited applicable VAAR parts.
Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility. E.O. 12866, Regulatory Planning and Review, defines “significant regulatory action” to mean any regulatory action that is likely to result in a rule that may: “(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order.”
VA has examined the economic, interagency, budgetary, legal, and policy implications of this regulatory action, and it has been determined to be a significant regulatory action under E.O. 12866, because it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order. VA's impact analysis can be found as a supporting document at
Although this action contains provisions constituting collections of information at 48 CFR 813, under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised collections of information are associated with this proposed rule. The information collection requirements for 48 CFR 813 are currently approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 2900-0393.
This proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed rule would generally be small business neutral. The overall impact of the proposed rule would be of benefit to small businesses owned by Veterans or service-disabled Veterans as the VAAR is being updated to remove extraneous procedural information that applies only to VA's internal operating procedures. VA estimates no cost impact to individual business would result from these rule updates. On this basis, the adoption of this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), this regulatory action is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule 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 (adjusted annually for inflation) in any one year. This proposed rule would have no such effect on State, local, and tribal Governments or on the private sector.
Government procurement.
Government procurement, Reporting and recordkeeping requirements.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Gina S. Farrisee, Deputy Chief of Staff, Department of Veterans Affairs approved this document on April 21, 2017, for publication.
For the reasons set out in the preamble, VA proposes to amend 48 CFR parts 812, 813, and 852 as follows:
38 U.S.C. 8127-8128; 40 U.S.C. 121(c); 41 U.S.C. 1702 and 48 CFR 1.301-1.304.
Based on the authority under 38 U.S.C. 8127 and 8128, the Veterans First Contracting Program in subpart 819.70 applies to VA contracts under this part, and the provisions and clauses prescribed reflect agency unique statutes applicable to the acquisition of commercial items.
(f)(1) Contracting officers shall insert the provision 852.212-70, Provisions Applicable to VA Acquisition of Commercial Items, in all solicitations for commercial acquisitions and check only those provisions that apply to the individual solicitation.
(2) Contracting officers shall insert the clause 852.212-71, Contract Terms and Conditions Applicable to VA Acquisition of Commercial Items, in all solicitations and contracts for commercial acquisitions and check only those clauses that apply to the individual contract.
(3) Contracting officers shall insert the clause 852.212-72, Gray Market Items, in all solicitations and contracts for commercial acquisitions of new medical equipment for VA Medical Centers and that include FAR provisions 52.212-1, Instruction to Offerors—Commercial Items, and 52.212-2, Evaluation—Commercial Items.
38 U.S.C. 8127-8128; 40 U.S.C. 121(c); 41 U.S.C. 1702 and 48 CFR 1.301-1.304.
(a) The Veterans First Contracting Program in subpart 819.70 applies to VA contracts (see FAR 2.101, Definitions) under this part and has precedence over other small business programs referenced in FAR part 19.
(b) Notwithstanding FAR 13.003(b)(2), the contracting officer shall make an award utilizing the priorities for veteran-owned small businesses as implemented within the VA hierarchy of small business program preferences, the Veterans First Contracting Program in subpart 819.70. Specifically, the contracting officer shall consider preferences for verified service-disabled veteran-owned small businesses (SDVOSBs) first, then preferences for verified veteran-owned small businesses (VOSBs). These priorities will be followed by preferences for other small businesses in accordance with FAR 19.203, and 819.7004.
(c) When using competitive procedures, the preference for restricting competition to verified SDVOSBs or VOSBs is mandatory whenever market research provides a reasonable expectation of receiving two or more offers/quotes from eligible, capable and verified SDVOSBs or VOSBs at fair and reasonable prices that offer best value to the Government.
(1) Pursuant to 38 U.S.C. 8127, contracts under this part shall be set-aside for SDVOSBs or VOSBs, when supported by market research.
(2) Pursuant to 38 U.S.C. 8128 and to the extent that market research does not support an SDVOSB or VOSB set-aside, the contracting officer shall include evaluation factors as prescribed at 815.304 and the evaluation criteria clause prescribed at 815.304-71(a).
(d) The SDVOSB and VOSB eligibility requirements in part 819.7003 apply, including verification of the SDVOSB and VOSB status of an offeror or awardee at the time of submission of offer/quote and prior to award. The offeror must also represent that it meets the small business size standard for the assigned North American Industry Classification Code System (NAICS) code and other small business requirements in FAR part 19 (
Pursuant to 819.7003, contracting officers shall use the Vendor Information Pages (VIP) database to verify SDVOSB/VOSB status.
(a)
(b) Pursuant to 38 U.S.C 8127(b), contracting officers may use other than competitive procedures to enter into a contract with a verified SDVOSB or VOSB for procurements under the simplified acquisition threshold.
(c) For procurements above the simplified acquisition threshold, pursuant to 38 U.S.C. 8127(c), contracting officers may also award a contract under this part to a firm verified under the Veterans First Contracting Program at subpart 819.70, using procedures other than competitive procedures if—
(1) Such concern is determined to be a responsible source with respect to performance of such contract opportunity;
(2) The anticipated award price of the contract (including options) will exceed the simplified acquisition threshold, but will not exceed $5,000,000; and
(3) In the estimation of the contracting officer, the contract award can be made at a fair and reasonable price that offers overall best value to the government.
Micro-purchases shall be equitably distributed among all qualified Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) or Veteran-Owned Small Businesses (VOSBs), respectively, to the maximum extent practicable.
VA's Government-wide commercial purchase card and/or convenience checks shall be used in lieu of imprest funds and third party drafts.
38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3), and 1702; and 48 CFR 1.301-1.304.
As prescribed in 812.301(f)(1), insert the following provision:
The Contractor agrees to comply with any provision that is incorporated herein by reference or full text to implement agency policy applicable to acquisition of commercial items or components. The following provisions that have been checked by the contracting officer are incorporated by reference or in full text; text requiring fill-ins is shown under the provision's title:
Bids on ___[
For the purpose of evaluating bids and for no other purpose, the delivered price per unit will be determined by adding the nationwide average transportation charge to the f.o.b. origin bid prices. The nationwide average transportation charge will be determined by applying the following formula: Multiply the guaranteed shipping weight by the freight, parcel post, or express rate, whichever is proper, to each destination shown below and then multiply the resulting transportation charges by the anticipated demand factor shown for each destination. Total the resulting weighted transportation charges for all destinations and divide the total by 20 to give the nationwide average transportation charge.
As prescribed in 812.301(f)(2), insert the following clause:
(a) The Contractor agrees to comply with any clause that is incorporated herein by reference to implement agency policy applicable to acquisition of commercial items or components. The following clauses that have been checked by the contracting officer are incorporated by reference; text requiring fill-ins is shown under the clause's title:
The contractor shall obtain all necessary licenses and/or permits required to perform this work. He/she shall take all reasonable precautions necessary to protect persons and property from injury or damage during the performance of this contract. He/she shall be responsible for any injury to himself/herself, his/her employees, as well as for any damage to personal or public property that occurs during the performance of this contract that is caused by his/her employees fault or negligence, and shall maintain personal liability and property damage insurance having coverage for a limit as required by the laws of the State of __[
The contractor guarantees the equipment against defective material, workmanship and performance for a period of __[
(b) All requests for quotations, solicitations, and contracts for commercial item services to be provided to beneficiaries must include the following clause at
As prescribed in 812.301(f)(3), insert the following provision in solicitations and contracts for new medical equipment for VA Medical Centers and that include FAR provisions 52.212-1, Instruction to Offerors—Commercial Items, and 52.212-2, Evaluation—Commercial Items:
(a) Gray market items are Original Equipment Manufacturers' (OEM) goods sold through unauthorized channels in direct competition with authorized distributors. This procurement is for new OEM medical equipment only for VA Medical Centers. No remanufactures or gray market items will be acceptable.
(b) Vendor shall be an OEM, authorized dealer, authorized distributor or authorized reseller for the proposed equipment/system, verified by an authorization letter or other documents from the OEM, such that the OEM's warranty and service are provided and maintained by the OEM. All software licensing, warranty and service associated with the equipment/system shall be in accordance with the OEM terms and conditions.
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 February 12, 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.
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Indiana Advisory Committee (Committee) will hold a meeting on Wednesday January 17, 2018, at 3:00pm EST for the purpose of preparing for its public meeting on voting rights issues in the state.
The meeting will be held on Wednesday, January 17, 2018, at 3:00 p.m. EST.
Melissa Wojnaroski, DFO, at
Members of the public can listen to the discussion. This meeting is available to the public through the above listed toll free number. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit Office, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60615. They may also be faxed to the Commission at (312) 353-8324, or emailed to Carolyn Allen at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available via
The Information Systems Technical Advisory Committee (ISTAC) will meet on January 24 and 25, 2018, 9:00 a.m., in the Herbert C. Hoover Building, Room 3884, 14th Street between Constitution and Pennsylvania Avenues NW, Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration on technical questions that affect the level of export controls applicable to information systems equipment and technology.
The open sessions will be accessible via teleconference to 25 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at
A limited number of seats will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email.
The Assistant Secretary for Administration, with the concurrence of the delegate of the General Counsel, formally determined on January 5, 2018, pursuant to Section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. app. 2 (10)(d)), that the portion of the meeting concerning trade secrets and commercial or financial information deemed privileged or confidential as described in 5 U.S.C. 552b(c)(4) and the portion of the meeting concerning matters the disclosure of which would be likely to frustrate significantly implementation of an agency action as described in 5 U.S.C. 552b(c)(9)(B) shall be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 10(a)(1) and 10(a)(3). The remaining portions of the meeting will be open to the public.
For more information, call Yvette Springer at (202) 482-2813.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) has received requests to conduct administrative reviews of various antidumping and countervailing duty orders and findings with November anniversary dates. In accordance with Commerce's regulations, we are initiating those administrative reviews.
Applicable January 11, 2018.
Brenda E. Brown, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-4735.
Commerce has received timely requests, in accordance with 19 CFR 351.213(b), for administrative reviews of various antidumping and countervailing duty orders and findings with November anniversary dates.
All deadlines for the submission of various types of information, certifications, or comments or actions by Commerce discussed below refer to the number of calendar days from the applicable starting time.
If a producer or exporter named in this notice of initiation had no exports, sales, or entries during the period of review (POR), it must notify Commerce within 30 days of publication of this notice in the
In the event Commerce limits the number of respondents for individual examination for administrative reviews initiated pursuant to requests made for the orders identified below, Commerce intends to select respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports during the period of review. We intend to place the CBP data on the record within five days of publication of the initiation notice and to make our decision regarding respondent selection within 30 days of publication of the initiation
In the event Commerce decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, Commerce has found that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that has requested a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that Commerce may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when Commerce will exercise its discretion to extend this 90-day deadline, interested parties are advised that Commerce does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance has prevented it from submitting a timely withdrawal request. Determinations by Commerce to extend the 90-day deadline will be made on a case-by-case basis.
In proceedings involving non-market economy (NME) countries, Commerce begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is Commerce's policy to assign all exporters of merchandise subject to an administrative review in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate.
To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, Commerce analyzes each entity exporting the subject merchandise. In accordance with the separate rates criteria, Commerce assigns separate rates to companies in NME cases only if respondents can demonstrate the absence of both
All firms listed below that wish to qualify for separate rate status in the administrative reviews involving NME countries must complete, as appropriate, either a separate rate application or certification, as described below. For these administrative reviews,
Entities that currently do not have a separate rate from a completed segment of the proceeding
For exporters and producers who submit a separate-rate status application or certification and subsequently are selected as mandatory respondents, these exporters and producers will no longer be eligible for separate rate status
In accordance with 19 CFR 351.221(c)(1)(i), we are initiating administrative reviews of the following antidumping and countervailing duty orders and findings. We intend to issue the final results of these reviews not later than November 30, 2018.
During any administrative review covering all or part of a period falling between the first and second or third and fourth anniversary of the publication of an antidumping duty order under 19 CFR 351.211 or a determination under 19 CFR 351.218(f)(4) to continue an order or suspended investigation (after sunset review), the Secretary, if requested by a domestic interested party within 30 days of the date of publication of the notice of initiation of the review, will determine whether antidumping duties have been absorbed by an exporter or producer subject to the review if the subject merchandise is sold in the United States through an importer that is affiliated with such exporter or producer. The request must include the name(s) of the exporter or producer for which the inquiry is requested.
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period, of the order, if such a gap period is applicable to the POR.
Interested parties must submit applications for disclosure under administrative protective orders in accordance with the procedures outlined in Commerce's regulations at 19 CFR 351.305. Those procedures apply to administrative reviews included in this notice of initiation. Parties wishing to participate in any of these administrative reviews should ensure that they meet the requirements of these procedures (
Commerce's regulations identify five categories of factual information in 19 CFR 351.102(b)(21), which are summarized as follows: (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). These regulations require any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. The regulations, at 19 CFR 351.301, also provide specific time limits for such factual submissions based on the type of factual information being submitted. Please review the final rule, available at
Any party submitting factual information in an antidumping duty or countervailing duty proceeding must certify to the accuracy and completeness of that information.
Parties may request an extension of time limits before a time limit established under Part 351 expires, or as otherwise specified by the Secretary.
These initiations and this notice are in accordance with section 751(a) of the Act (19 U.S.C. 1675(a)) and 19 CFR 351.221(c)(1)(i).
National Institute of Standards and Technology.
Notice of Research Consortium.
The National Institute of Standards and Technology (NIST), an agency of the United States Department of Commerce is establishing the Genome Editing Consortium with the goal of bringing together stakeholders across the genome editing community to identify and address measurement and standards needs to support this technical area. The Consortium intends to evaluate genome editing assay pipelines, develop benchmark materials, generate benchmark data, develop suggested minimal information reporting for public studies, and generate a common lexicon for genome editing studies, with the intent these resources can be used to increase confidence in evaluating genome editing and lower the risk to utilizing these technologies in research and commercial products. Participation fees will be at least $20,000 annually or in-kind contributions of equivalent value. Participants will be required to sign a Cooperative Research and Development Agreement (CRADA).
NIST will accept letters of interest containing required information for participation in this Consortium until January 1, 2020. Acceptance of participants into the Consortium after the Commencement Date will depend on eligibility as determined by NIST based upon the information provided in the letter of interest and upon the availability resources.
Information in response to this notice, including completed letters of interest or requests for additional information about the Consortium can be directed via mail to the Consortium Manager, Dr. Samantha Maragh, Biosystems and Biomaterials Division of NIST's Material Measurement Laboratory, 100 Bureau Drive, Mail Stop 8312, Gaithersburg, Maryland 20899, or via electronic mail to
For further information about participation opportunities to join the Genome Editing Consortium, please contact Jeffrey DiVietro, CRADA Officer, National Institute of Standards and Technology's Technology Partnerships Office, by mail to 100 Bureau Drive, Mail Stop 2200, Gaithersburg, Maryland 20899, by electronic mail to
Targeted Genome Editing is a technology space where there is a great need for reliable measurement methods for assuring the results of editing. Modalities for targeted genome editing include but are not limited to Zinc Finger Proteins (ZFPs), Homing Endonucleases, Transcription Activator-Like Nucleases (TALENs) and Clustered, Regularly Interspaced Palindromic Repeats (CRISPR). These technologies are being actively pursued by industry, academic, government and non-profit sectors to advance medicine and bioscience in areas such as: Regenerative medicine, synthetic biology, novel antimicrobials and antivirals, protein therapeutic biomanufacturing, agriculture and global food production. Utilizing these technologies for production and medicine will first require robust quantitative assays and measurements to enable high confidence characterization of DNA alterations resulting from genome editing.
NIST has reached out to companies to assess their measurement needs, and has co-led workshops that have brought together experts across the genome editing field including stakeholders in industry, academia and government. These discussions have identified common pre-competitive measurement needs that if resolved can push forward the field as it relates to understanding the reliability of data from assays being used to measuring aspects of genome edited cells.
This Consortium's purpose is to develop measurement solutions and standards to advance confidence in measurements supporting the genome editing technology space.
The Consortium will have three working groups with the following responsibilities:
(1) Specificity Measurements:
a. Design, generate, and evaluate a set of purified DNA samples and mixtures
b. Design and conduct controlled evaluations of assays intended to identify where genome editing enzymes have been active in a genome, with an experimental design that allows for enough power to assess the sources of variability, repeatability, and reproducibility within an assay.
(2) Data and Meta Data:
a. Identify community norms for data formats and tools for benchmarking data analysis including in silico data sets and an experimental data set.
b. Determine the type of meta data that would be needed to be shared, housed, and interrogated from genome editing experiments.
(3) Lexicon: Identify terms and related definitions to form a common genome editing community lexicon.
No proprietary information will be shared as part of the Consortium.
To participate, the eligible applicant will be required to sign a CRADA with NIST.
(1) A description of the experience in genome editing or genome engineering, bioinformatics, next-generation sequencing, detection or quantitation of DNA variants or related expertise to contribute to the Consortium.
(2) Subgroups or topic areas of interest for participation. There is no limit on the number of areas of participation.
(3) List of interested party's anticipated participants.
Letters of interest may not include business proprietary information. NIST will not treat any information provided in response to this Notice as proprietary information. NIST will notify each organization of its eligibility. In order to participate in this Consortium, each eligible organization must sign a CRADA for this Consortium. All participants to this Consortium will be bound by the same terms and conditions. Participants will be required to contribute financial or equivalent in-kind resources, as determined by NIST, of at least $20,000. NIST does not guarantee participation in the Consortium or in any other collaboration to any organization submitting a Letter of Interest.
15 U.S.C. 3710a.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of meeting of the South Atlantic Fishery Management Council's Citizen Science Advisory Panel Projects/Topics Management; Finance & Infrastructure; Volunteers; Communication/Outreach/Education; and Data Management Action Teams.
The South Atlantic Fishery Management Council (Council) will hold an all-hands meeting of its Citizen Science Advisory Panel Projects/Topics Management; Finance & Infrastructure; Volunteers; Communication/Outreach/Education; and Data Management Action Teams via webinar.
The Projects/Topics Management; Finance & Infrastructure; Volunteers; Communication/Outreach/Education; and Data Management Action Team meeting will be held on Wednesday, January 31, 2018 at 9 a.m. The meeting is scheduled to last approximately three hours. Additional Action Team webinar dates and times will publish in a subsequent issue in the
Amber Von Harten, Citizen Science Program Manager, SAFMC; phone (843) 302-8433 or toll free (866) SAFMC-10; fax: (843) 769-4520; email:
The Council created a Citizen Science Advisory Panel Pool in June 2017. The Council appointed members of the Citizen Science Advisory Panel Pool to five Action Teams in the areas of
Each Action Team has been meeting since August 2017 to work on developing recommendations on program policies and operations to be reviewed by the Council's Citizen Science Committee. The January 31, 2018 meeting will bring all members of all five Action Teams together to review and discuss draft recommendations from each Action Team. Public comment will be accepted at the beginning of the meeting.
Items to be addressed during these meetings:
These meetings are physically accessible to people with disabilities. Requests for auxiliary aids should be directed to the council office (see
16 U.S.C. 1801
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before March 12, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Robby Fonner, (206) 302-2469 or
This request is for a new collection of information.
The Northwest Fisheries Science Center and Southwest Fisheries Science Center are undertaking an economics research project to assess the preferences of recreational steelhead anglers for trip attributes including opportunities for catching wild and hatchery steelhead. The Economic Survey of Recreational Steelhead Fishermen (ESRSF) will yield information on angling preferences that will inform management of recreational steelhead resources and steelhead hatchery operations in The Pacific Northwest. More specifically, the ESRSF will collect data needed to (1) assess the socioeconomic characteristics of recreational anglers; (2) assess the economic value of steelhead recreational fishing trips through statistical estimation of models; and (3) assess the change in these values associated with possible changes in recreational steelhead angling opportunities, including catch rates of wild and hatchery fish, site attributes, and travel costs.
A sample of Washington State fishing license holders who intended to fish for steelhead will be screened with an email survey (screener), followed by an internet survey. Sampled anglers who do not have an email address in the license database used for sampling will be sent an invitation by mail to the web-based screener and subsequent survey. Respondents to the internet survey will submit data online.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council (Pacific Council) and the National Oceanic and Atmospheric Administration's (NOAA) Southwest Fisheries Science Center (SWFSC) will hold a meeting that is open to the public.
The meeting will be held Monday, January 29 through Friday, February 2, 2018. The meeting will begin at 1 p.m. the first day and at 8:30 a.m. each subsequent day. The meeting will end each day at 5 p.m., or until business for the day has been completed.
The meeting will be held in the Pacific Conference Room of the NOAA SWFSC, 8901 La Jolla Shores Dr., La Jolla, CA 92037-1508.
Kerry Griffin, Pacific Council; telephone: (503) 820-2409 or Dale Sweetnam, SWFSC; telephone: (858) 546-7170.
The purpose of the meeting is to conduct a methodology review of the NOAA acoustic-trawl survey methodology (ATM), conducted regularly to collect fisheries and oceanographic information in U.S. West Coast waters. The ATM survey has been approved for use in stock assessments for Pacific sardine, but has not yet been approved for use in stock assessments for northern anchovy, Pacific mackerel, or jack mackerel. At its April 2018 meeting, the Pacific Council will consider the results of this review, and will consider whether to approve the ATM for use in stock assessments for stocks other than Pacific sardine. An agenda and other meeting materials will be available by January 15, 2018, on the Pacific Council's ftp site:
Although non-emergency issues not contained in the meeting agenda may be
This public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Dale Sweetnam (858) 546-7170 at least 10 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Groundfish Committee to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Thursday, January 25, 2018 at 9 a.m.
The meeting will be held at the DoubleTree by Hilton, 50 Ferncroft Road, Danvers, MA 01950; phone: (978) 777-2500.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The committee will provide recommendations to the Council on FY2018 recreational measures for Gulf of Maine cod and haddock, and possibly Georges Bank cod. The committee will also consider providing a recommendation to the Council for a new control date for the party/charter fishery. They will also receive an overview of the Council's priorities for 2018. The committee plans discuss the progress on Amendment 23/Groundfish Monitoring. Other business will be discussed as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date. This meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
16 U.S.C. 1801
National Ocean and Atmospheric Administration, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before March 12, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Paul Marx, (301) 427.8771 or
This request is for an extension of a current information collection.
The National Oceanic and Atmospheric Administration's (NOAA) National Marine Fisheries Service (NMFS) established programs to reduce excess fishing capacity by paying fishermen to surrender their vessels/permits. These fishing capacity reduction programs, or buybacks, are conducted pursuant to the Magnuson-Stevens Fishery Conservation and Management Act, and the Magnuson-Stevens Reauthorization Act (Pub. L. 109-479). The buybacks can be funded by a Federal loan to the industry or by direct Federal or other funding. Buyback regulations are at 50 CFR part 600.
The information collected by NMFS involves the submission of buyback requests by industry, submission of bids, referenda of fishery participants and reporting of collection of fees to repay buyback loans. For buybacks involving State-managed fisheries, the State may be involved in developing the buyback plan and complying with other information requirements. NMFS requests information from participating buyback participants to track repayments of the loans as well as ensure accurate management and monitoring of the loans. The recordkeeping and reporting requirements at 50 CFR parts 600.1013 through 600.1017 form the basis for the collection of information.
Paper reports or electronic reports are required from buyback participants. Methods of submittal include mailing of paper reports, electronic submission via the internet, and/or facsimile transmission.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Oceanic and Atmospheric Administration, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before March 12, 2018.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Craig Reid at (240) 533-0783, or
This request is for extension of a currently approved information collection.
The Coral Reef Conservation Act of 2000 (Act) was enacted to provide a framework for conserving coral reefs. The Coral Reef Conservation Grant Program, under the Act, provides funds to broad-based applicants with experience in coral reef conservation to conduct activities to protect and conserve coral reef ecosystems. The information submitted by applicants is used to determine if a proposed project is consistent with the NOAA coral reef conservation priorities and the priorities of authorities with jurisdiction over the area where the project will be carried out. As part of the application, NOAA requires a Data and Information Sharing Plan in addition to the standard required application materials.
The information will be collected by the secure web based tool
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its
This meeting will be held on Wednesday, January 24, 2018 at 9 a.m.
The meeting will be held at the DoubleTree by Hilton, 50 Ferncroft Road, Danvers, MA 01950; phone: (978) 777-2500.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Recreational Advisory Panel will provide recommendations to the Groundfish Committee on FY2018 recreational measures for Gulf of Maine cod and haddock, and possibly Georges Bank cod. The advisory panel will also consider providing a recommendation to the Groundfish Committee for a new control date for the party/charter fishery. They will also receive an overview of the Council's priorities for 2018. Other business will be discussed as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Western Pacific Fishery Management Council (Council) will hold an Archipelagic Plan Team (APT) meeting to discuss and make recommendations on fishery management issues in the Western Pacific Region.
The APT will meet on Friday, January 26, 2018, between 8:30 a.m. and 5 p.m. Hawaii Standard Time.
For specific times and agendas, see
The APT meeting will be held at the Council office, 1164 Bishop St. Suite 1400, Honolulu, HI 96813 and by teleconference and webinar. The teleconference will be conducted by telephone and by web. The teleconference numbers are U.S. toll-free: 1-888-482-3560 or International Access: +1 647 723-3959, and Access Code: 5228220. The webinar can be accessed at:
Kitty M. Simonds, Executive Director, Western Pacific Fishery Management Council; telephone: (808) 522-8220.
Public comment periods will be provided in the agenda. The order in which agenda items are addressed may change. The meetings will run as late as necessary to complete scheduled business.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Gulf of Mexico Fishery Management Council (Council) will hold a four-day meeting to consider actions affecting the Gulf of Mexico fisheries in the exclusive economic zone (EEZ).
The meeting will be held on Monday, January 29 through Thursday, February 1, 2018.
Douglas Gregory, Executive Director, Gulf of Mexico Fishery Management Council; telephone: (813) 348-1630.
The meeting will begin in FULL COUNCIL SESSION to review and discuss the appointments for the 2018 Committee Roster. The Spiny Lobster Management Committee will review the
The Reef Fish Management Committee will convene to review and discuss Reef Fish Landings and State Management of Recreational Red Snapper. After lunch, the Committee will receive an update on the implementation of the Generic For-Hire Reporting Amendment; and discuss the analysis of Red Grouper Indices of Abundance. The Committee will review Amendment 41—Allocation-based Management for Federally Permitted Charter Vessels and Amendment 42—Reef Fish Management of Headboat Survey Vessels. The Committee will receive a response from NMFS regarding referendum requirements for auctions and receive a report from the Scientific and Statistical Committee (SSC). The Committee will also receive a summary from the Ad Hoc Private Angler Red Snapper Advisory Panel and a presentation on Modifications to the Greater Amberjack Commercial Fishing Year, and Trip Limits and Recreational Vessel Limits and Split Quotas.
The Full Council will convene in the morning with a Call to Order, Announcements, and Introductions; Adoption of Agenda and Approval of Minutes; receive a presentation from the Louisiana Law Enforcement and an overview presentation of the Aquaculture Fishery Management Plan (FMP). At mid-morning the Council will review Exempted Fishing Permit (EFPs) Applications. After lunch, the Council will continue reviewing and discussing EFPs as well as receive a summary of any public comments on the EFPs. The Council will receive open public testimony from 3 p.m. until 6 p.m. on Fishery Issues or Concerns. Anyone wishing to speak during public comment should sign in at the registration station located at the entrance to the meeting room.
Full Council will receive committee reports from Reef Fish, Spiny Lobster, Administrative/Budget and Sustainable Fisheries Management Committees, and, a report on the members selected to serve on the Ad Hoc Red Snapper and Grouper -Tilefish IFQ Advisory Panel; and, vote on any Exempted Fishing Permit (EFP) applications. The Council will receive updates from the following supporting agencies: South Atlantic Fishery Management Council; Gulf States Marine Fisheries Commission; U.S. Coast Guard; U.S. Fish and Wildlife Service; and, the Department of State.
Lastly, the Council will discuss any Other Business items.
The timing and order in which agenda items are addressed may change as required to effectively address the issue. The latest version will be posted on the Council's file server, which can be accessed by going to the Council's website at
Although other non-emergency issues not contained in this agenda may come before this Council for discussion, those issues may not be the subjects of formal action during these meetings. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided that the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kathy Pereira (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting (webinar).
The Pacific Fishery Management Council's (Pacific Council) is sponsoring a series of webinars presenting information relevant to the Fishery Ecosystem Plan Initiative on Climate and Communities. The webinars are open to the public.
Two webinars have been scheduled. Both will begin at 1:30 p.m. on the dates shown below and last for approximately two hours. The first one, “What do we expect to happen in the California Current under climate change?” will be Thursday, January 25, 2018. The second one, “The state of the art for ecological forecasting at short-, medium- and long-term time frames” will be Thursday, February 1, 2018.
The meeting will be held via webinar. A public listening station is available at the Pacific Council office (address below). To attend the webinar (1) join the meeting by visiting this link
Dr. Kit Dahl, Pacific Council; telephone: (503) 820-2422.
At its September 2018 meeting, the Pacific Council decided to embark on the Climate and Communities Initiative pursuant to its Fishery Ecosystem Plan. The purpose of this initiative is to help the Pacific Council, its advisory bodies, and the public to better understand the effects of near-term climate shift and long-term climate change on our fish, fisheries, and fishing communities and identify ways in which the Council could incorporate such understanding into its decision-making. As a first step, the Council's Ad Hoc Ecosystem Workgroup is working with scientists at NMFS Northwest and Southwest Fisheries Science Centers to present a series of webinars to educate the Pacific Council, advisory bodies, and the interested public about current research and forecasts related to the effects of climate variability/change on the California Current Ecosystem.
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (503) 820-2411 at least 10 business days prior to the meeting date.
National Telecommunications and Information Administration, U.S. Department of Commerce.
Notice, request for public comment.
The Department of Commerce (Department) is requesting comment on a draft Report about actions to address automated and distributed threats to the digital ecosystem as part of the activity directed by Executive Order 13800, “Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure.” Through this Notice, the Department seeks broad input and feedback from all interested stakeholders—including private industry, academia, civil society, and other security experts—on this draft Report, its characterization of risks and the state of the ecosystem, the goals laid out, and the actions to further these goals.
Comments are due on or before 5 p.m. Eastern Time on February 12, 2018.
Written comments may be submitted by email to
Megan Doscher, tel.: (202) 482-2503, email:
The Departments of Commerce and Homeland Security worked jointly on this effort through three approaches—hosting a workshop, publishing a request for comment, and initiating an inquiry through the President's National Security Telecommunications Advisory Committee (NSTAC)—all aimed at gathering a broad range of input from experts and stakeholders, including private industry, academia, and civil society. The Departments worked in consultation with the Departments of Defense, Justice, and State, the Federal Bureau of Investigation, the sector-specific agencies, the Federal Communications Commission, and Federal Trade Commission, as well as other interested agencies. These activities all contributed to the information gathering process for developing a draft Report.
The draft Report, published on January 5, 2018, and available at
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The Report lays out five complementary and mutually supportive goals that would dramatically reduce the threat of automated, distributed attacks and improve the resilience of the ecosystem. They are:
1. Identify a clear pathway toward an adaptable, sustainable, and secure technology marketplace;
2. Promote innovation in the infrastructure for dynamic adaptation to evolving threats;
3. Promote innovation at the edge of the network to prevent, detect, and mitigate bad behavior;
4. Build coalitions between the security, infrastructure, and operational technology communities domestically and around the world; and
5. Increase awareness and education across the ecosystem.
For each goal, the report suggests supporting activities to be taken by both government and private sector actors. With this Request for Comment, the Department is asking for a response to the issues and goals raised by the draft Report, as well as the proposed approach, current initiatives, and next steps. Following the completion of the comment period, the Department will host a workshop to discuss substantive comments and the way forward for the Report. The workshop will be held February 28-March 1, 2018 at the National Cybersecurity Center of Excellence (NCCoE). Additional information regarding the workshop, including logistics and registration information, is available at
Information obtained through this Request for Comment, the NCCoE-hosted workshop, and other stakeholder interactions will be considered for incorporation into the final version of the Report. The final Report is due to the President on May 11, 2018.
The goal of this Request for Comment is to solicit feedback on the draft Report, its characterization of the challenges, and proposed actions. The Department invites comment on the full range of issues that may be presented by this inquiry, including issues that are not specifically raised in the following questions. Respondents are invited to respond to some or all of the questions below:
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Comments submitted by email should be machine-readable and should not be copy-protected. Responders should include the name of the person or organization filing the comment, which will facilitate agency follow up for clarity as necessary, as well as a page number on each page of their submissions. All comments received are a part of the public record and will generally be posted on the NTIA website,
Under Secretary of Defense for Personnel and Readiness, Department of Defense.
Notice of Federal Advisory Committee meeting.
The Department of Defense (DoD) is publishing this notice to announce that the following Federal Advisory Committee meeting of the Board of Regents, Uniformed Services University of the Health Sciences will take place.
Tuesday, February 6, 2018; open to the public from 8:00 a.m. to 10:05 a.m. Closed session will occur from approximately 10:10 a.m. to 10:40 a.m.
Uniformed Services University of the Health Sciences, 4301 Jones Bridge Road, Everett Alvarez Jr. Board of Regents Room (D3001), Bethesda, Maryland 20814.
Jennifer Nuetzi James, 301-295-3066 (Voice), 301-295-1960 (Facsimile),
This meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.140 and 102-3.150.
Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Oak Ridge Reservation. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Wednesday, February 14, 2018, 6:00 p.m.
Department of Energy Information Center, Office of Science and Technical Information, 1 Science.gov Way, Oak Ridge, Tennessee 37831.
Melyssa P. Noe, Alternate Deputy Designated Federal Officer, U.S. Department of Energy, Oak Ridge Office of Environmental Management (OREM), P.O. Box 2001, EM-942, Oak Ridge, TN 37831. Phone (865) 241-3315; Fax (865) 241-6932; E-Mail:
Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy.
Notice and request for comments.
The Department of Energy (DOE) invites public comment on a proposed collection of information that DOE is developing for submission to the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act of 1995. The proposed collection of information relates to DOE's Superior Energy Performance certification and 50001 Ready recognition programs. Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments regarding this proposed information collection must be received on or before March 12, 2018. If you anticipate difficulty in submitting comments within that period, contact the person listed in
Written comments may be sent to Paul Scheihing, EE-5A/Forrestal Building, 1000 Independence Avenue SW, Washington, DC 20585, by fax at 202-586-9234, or by email at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Paul Scheihing, EE-5A/Forrestal Building, 1000 Independence Avenue SW, Washington, DC 20585, by fax at 202-586-9234, or by email at paul
This information collection request contains:
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SEP builds on the ISO 50001 energy management system standard and provides a rigorous, internationally-recognized business process for companies to continually improve their energy performance. The SEP third-party verification of energy performance improvement is unique in the marketplace, and assists to differentiate certified companies from their competitors. This request for information consists of a voluntary data collection process for SEP participation: To enroll industrial facilities, manage and track certification cycles, and relay the costs and benefits of SEP certification to industry. 50001 Ready collects a minimal amount of self-attested information to manage and track recognition cycles and to recognize the achievements of its participants.
There are four types of information to be collected from primary participants: (1) Background data, including contact information and basic information about
Background data will primarily be used to track basic information about SEP and 50001 Ready participants and identify opportunities to provide participants with technical assistance. Basic information about a facility's energy use, energy consumption, and energy performance indicators will be used to administer SEP and 50001 Ready. Information on energy performance improvement will be used by DOE to manage and track participation cycles, and to track the results of participation in SEP and 50001 Ready. For SEP, optional information on costs and benefits of SEP participation will be used to conduct and refine analysis on the costs and benefits of SEP participation. Responses to the DOE's Information Collection Request will be voluntary.
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Accelerating Investment in Industrial Energy Efficiency. Executive Order 13624, 77 FR 54779 (Aug. 30, 2012); 42 U.S.C. 16191.
On May 11, 2017, Northwest Pipeline LLC (Northwest) filed an application with the Federal Energy Regulatory Commission (Commission or FERC) in docket number CP17-441-000 requesting a Certificate of Public Convenience and Necessity pursuant to Sections 7(b) and 7(c) of the Natural Gas Act to construct and operate certain natural gas pipeline facilities. The proposed project is known as the North Seattle Lateral Upgrade Project (Project), and would replace an existing 8-inch-diameter pipeline with a 20-inch-diameter pipeline, increasing the design capacity on Northwest's system to serve Puget Sound Energy.
On October 23, 2017, Northwest filed an amendment to its application, and on November 2, 2017, the Commission the issued a Notice of Amendment to the Application for the revised Project. Among other things, that notice alerted agencies issuing federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on a request for a federal authorization within 90 days of the date of issuance of the Commission staff's Environmental Assessment (EA) for the Project. This instant notice identifies the FERC staff's planned schedule for the completion of the EA for the Project.
If a schedule change becomes necessary, additional notice will be provided so that the relevant agencies are kept informed of the Project's progress.
Northwest proposes to remove approximately 5.8 miles of the 8-inch-diameter North Seattle Lateral pipeline in Snohomish County, Washington and replace it with 20-inch-diameter pipeline, primarily in the same trench. The North Seattle Lateral Upgrade Project would consist of the following facilities:
• Replace 5.8-miles of 8-inch-diameter pipeline with 20-inch-diameter pipeline;
• rebuild the existing North Seattle/Everett meter station in order to accommodate the increased delivery capacity of the North Seattle Lateral;
• relocate an existing 8-inch pig launcher and a 20-inch pig receiver;
• replace an existing 8-inch mainline valve with a 20-inch valve.
On June 21, 2017, the FERC issued a
The primary issues raised by commenters were impacts on residences (including noise, dust, drainage, and vegetation clearing), biological and water resources impacts, alternative routings for crossing the Fritch Mill property, pipeline safety, and impacts on adjacent utility easements and infrastructure.
On October 23, 2017 Northwest amended its application, reducing the Project's incremental firm capacity from 196,311 to 159,299 dekatherms per day; reducing the length of the replacement 20-inch-diameter pipeline by about 1 mile; locating the replacement pig launcher/receiver at milepost 7.76; and changing the pipeline route between mileposts 2.1 and 2.2 so as to divert its pipeline system around the Fritch Mill. Accordingly, on November 21, 2017 we issued a
Comments on the Supplemental NOI concerned the need for relocating the pipeline off the existing right-of-way; impacts to springs, wetlands, and mature forest from the newly routed segment, and alternatives.
In order to receive notification of the issuance of the EA and to keep track of all formal issuances and submittals in specific dockets, the Commission offers a free service called eSubscription. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Additional information about the Project is available from the Commission's Office of External Affairs at (866) 208-FERC or on the FERC website (
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 can be found at:
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 can be found at:
Take notice that the Commission 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:
Take notice that on January 4, 2018, pursuant to sections 206 and 306 of the Federal Power Act, 16 U.S.C. 824(e), 825e, and Rule 206 of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.206, EDF Renewables Energy, Inc. (Complainant) filed a formal complaint against Midcontinent Independent System Operator, Inc. (MISO or Respondent) alleging that MISO's Tariff is no longer just and reasonable because MISO cannot deliver interconnection studies and a generation interconnection agreement in sufficient advanced time to allow proposed wind generation projects to achieve commercial operation as needed to benefit from the Federal Production Tax Credit, all as more fully explained in the complaint.
Complainant certify that copies of the complaint were served on the contacts for MISO as listed on the Commission's list of Corporate Officials.
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. The Respondent's answer and all interventions, or protests must be filed on or before the comment date. The Respondent's answer, motions to intervene, and protests must be served on the Complainants.
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
On November 29, 2017, Watterra Energy, LLC filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Barren River Lake Dam Hydroelectric Project (project), to be located at the existing U.S. Army Corps of Engineers' Barren River Lake Dam on the Barren River near the City of Bowling Green, Barren County, Kentucky. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would consist of the following: (1) A 960-foot-long, 14-foot-diameter steel penstock lining the existing concrete conduit; (2) a 14-foot-long, 14-foot-wide bifurcation structure attached to the proposed penstock, with one 265-foot-long branch extending to the proposed powerhouse, and the other 86-foot-long branch extending to the existing stilling basin to provide an outlet point for the release of floodwaters; (3) a 70-foot-long, 55-foot-wide powerhouse containing two Kaplan generating units with a total capacity of 11.63 megawatts; (4) a 75-foot-long tailrace; (5) a 50-foot-long, 50-foot-wide switchyard; and (6) a 4,210-foot-long, 12.5-kilovolt transmission line. The estimated annual generation of the project would be 41.64 gigawatt-hours, and would operate as directed by the U.S. Army Corps of Engineers.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the eLibrary link of Commission's website at
Take notice that on December 21, 2017, Sierrita Gas Pipeline, LLC (Sierrita), P.O. Box 1087, Colorado Springs, Colorado 80944, has filed two applications, pursuant to sections 7(c)
Specifically, in Docket No. CP18-37-000, Sierrita's Section 7(c) Project consists of: (1) Installing one new Solar Mars 100 turbine/compressor unit that is ISO rated at 15,900 horsepower (HP) located at approximately Milepost (MP) 6 on Line No. 2177; (2) installing an additional gas meter at the existing San Joaquin Meter Station on Line No. 2177; and (3) relocating an existing Mainline Valve 2 (MLV 2) and inspection tool launcher and receiver from MP 1.2 to MP 6.5 on Line No. 2177; all located in Pima County, Arizona. Additionally, in Docket No. CP18-38-000 Sierrita is requesting an amendment to its Section 3 authorization and its Presidential Permit for increased design capacity to 627,000 Mcf/Day at its border crossing into Mexico near the town of Sasabe, Arizona, also in Pima County.
Any questions regarding this application should be directed to Francisco Tarin, Regulatory Director, Sierrita Gas Pipeline LLC, P.O. Box 1087, Colorado Springs, CO 80944, or call (719) 667-7517, or email:
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made in the proceeding with the Commission and must mail a copy to the applicant and to every other party. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the eFiling link at
On January 5, 2018, the Commission issued an order in Docket No. EL18-45-000, pursuant to section 206 of the Federal Power Act, 16 U.S.C. 824e (2012), instituting an investigation into whether Great River Energy's cost-based revenue requirements for providing reactive power from certain of its generating units located in the Midcontinent Independent System Operator, Inc. region may be unjust and unreasonable.
Any interested person desiring to be heard in Docket No. EL18-45-000 must file a notice of intervention or motion to intervene, as appropriate, with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rule 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.214, within 21 days of the date of issuance of the order.
Farm Credit System Insurance Corporation.
Notice, regular meeting.
Notice is hereby given of the regular meeting of the Farm Credit System Insurance Corporation Board (Board).
The meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on January 18, 2018, from 2:00 p.m. until such time as the Board concludes its business.
Farm Credit System Insurance Corporation, 1501 Farm Credit Drive, McLean, Virginia 22102. Submit attendance requests via email to
Dale L. Aultman, Secretary to the Farm Credit System Insurance Corporation Board, (703) 883-4009, TTY (703) 883-4056,
This meeting of the Board will be open to the public (limited space available). Please send an email to
Board of Governors of the Federal Reserve System (Board).
Proposed supervisory guidance.
The Board is seeking comment on proposed guidance describing core principles of effective senior management, the management of business lines, and independent risk management and controls for large financial institutions. The proposal would apply to domestic bank holding companies with total consolidated assets of $50 billion or more; savings and loan holding companies with total consolidated assets of $50 billion or more; the combined U.S. operations of foreign banking organizations with combined U.S. assets of $50 billion or more; any state member bank subsidiaries of the foregoing; and systemically important nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Board.
Comments must be received no later than March 15, 2018.
Interested parties are invited to submit written comments by following the instructions for submitting comments at
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All public comments will be made available on the Board's website at
Michael Hsu, Associate Director, (202) 912-4330, Richard Naylor, Associate Director, (202) 728-5854, Vaishali Sack, Manager, (202) 452-5221, April Snyder, Manager, (202) 452-3099, David Palmer, Senior Supervisory Financial Analyst, (202) 452-2904, Jennifer Su, Senior Supervisory Financial Analyst, (202) 475-6348, Christine Graham, Senior Supervisory Financial Analyst, (202) 452-3005, Division of Supervision and Regulation; Laurie Schaffer, Associate General Counsel, (202) 452-2272, Benjamin W. McDonough, Assistant General Counsel, (202) 452-2036, Scott Tkacz, Senior Counsel, (202) 452-2744, Keisha Patrick, Senior Counsel, (202) 452-3559, or Christopher Callanan, Senior Attorney, (202) 452-3594, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869.
The Board invites comment on proposed guidance setting forth core principles of effective senior management, the management of business lines, and independent risk management (“IRM”) and controls for large financial institutions (“LFIs”). This proposal is part of a broader initiative by the Federal Reserve to develop a supervisory rating system and related supervisory guidance that would align with its consolidated supervisory framework for LFIs. Drawing on lessons from the 2007-2009 financial crisis, the Federal Reserve reevaluated its approach to supervision of LFIs, including systemically important firms. In 2010, the Federal Reserve established the Large Institution Supervision Coordinating Committee (“LISCC”) to coordinate its supervisory oversight for the systemically important firms that pose the greatest risk to U.S. financial
In August 2017, the Board invited comment on two proposals that relate to this guidance, a new rating system for LFIs (“proposed LFI rating system”)
The proposed LFI rating system would provide a supervisory evaluation of whether a firm possesses sufficient financial and operational strength and resilience to maintain safe and sound operations through a range of conditions. Consistent with the LFI supervision framework, the proposed LFI rating system would include assessments of a firm's capital, liquidity, and governance and controls. As discussed further below, the BE proposal and this proposal set forth supervisory expectations relevant to the assessment of a firm's governance and controls.
The governance and controls component would consist of three elements: (i) Effectiveness of a firm's board of directors, (ii) management of business lines and independent risk management and controls, and (iii) recovery planning (for domestic LISCC firms only).
To facilitate comment on the proposed LFI rating system, the preamble to the proposed LFI rating system included a summary which previewed the proposed expectations included in this proposal. This proposal is generally consistent with that summary, with two exceptions. First, this proposal expands the scope of the guidance to foreign banking organizations.
The BE proposal sets forth attributes of an effective board of directors. It is intended to better distinguish the supervisory expectations for boards from those of senior management and encourage boards to focus time and attention on their core responsibilities.
At this time, recovery planning expectations apply only to domestic bank holding companies in the LISCC portfolio.
The proposed LFI rating system would provide a supervisory evaluation of whether a firm possesses sufficient financial and operational strength and resilience to maintain safe and sound operations through a range of conditions. This proposed guidance builds upon the proposed LFI rating system framework by providing additional detail regarding supervisory expectations for a firm's management of business lines and independent risk management and controls. For firms that would be subject to the proposed LFI rating system, these expectations would help inform the Federal Reserve's overall supervisory evaluation, for purposes of the proposed LFI rating system, of each firm's governance and controls to support the firm's financial and operational strength and resilience, which would be reflected by the governance and controls component rating under the proposed LFI rating system.
For firms that would be subject to this proposed guidance but not subject to the proposed LFI rating system, this proposed guidance would help inform the Federal Reserve's evaluation of the firm's overall safety and soundness and the effectiveness of its risk management practices.
The Federal Reserve would not expect to examine all of a firm's business lines which are subject to this proposed guidance during a single year. Instead, consistent with its current supervisory practice, the Federal Reserve would use a risk-based approach to determine which business lines of a firm to examine or review during the year. In conducting its supervisory planning for an upcoming exam cycle, the Federal Reserve would consider factors related to the potential for weaknesses in a firm's governance and controls.
The proposed guidance is intended to consolidate and clarify the Federal Reserve's existing supervisory expectations regarding risk management.
The proposed guidance would apply to domestic bank holding companies with total consolidated assets of $50 billion or more; savings and loan holding companies with total consolidated assets of $50 billion or more; the combined U.S. operations of foreign banking organizations (“FBOs”) with combined U.S. assets of $50 billion or more; any state member bank subsidiaries of the foregoing; and systemically important nonbank financial companies designated by FSOC for supervision by the Board.
For FBOs, the proposed guidance would apply to an FBO's combined U.S. operations, including branch and subsidiary operations. This scope would be consistent with certain requirements of the Board's Regulation YY, which requires, among other things, FBOs to establish a risk management framework that covers both the U.S. branch and U.S. non-branch subsidiary operations, establish a U.S. risk committee to oversee the risks of the combined U.S. operations, and employ a chief risk officer (“CRO”) based in the United States.
Given that an FBO's combined U.S. operations are part of a larger global organization, the proposed guidance notes that certain elements of an FBO's governance framework may be located outside of the United States. In this event, the proposed guidance provides that these elements should enable effective governance and risk management by the U.S. senior management, the U.S. risk committee, and the intermediate holding company (“IHC”) board (as applicable), and should facilitate U.S. supervisors' ability to assess the adequacy of governance and controls in the combined U.S. operations.
The proposed guidance also applies to nonbank financial companies supervised by the Board and insurance or commercial savings and loan holding companies with total consolidated assets of $50 billion or more. The concepts set forth in the proposed guidance relate to fundamental risk management practices that are applicable to all LFIs.
The proposed guidance is organized in three parts: (1) Core principles of effective senior management; (2) core principles of the management of business lines; and (3) core principles of IRM and controls.
The proposed guidance sets forth core principles of effective senior management. Senior management is defined as the core group of individuals directly accountable to the board of directors for the sound and prudent day-to-day management of the firm. Under the board's oversight, a firm's senior management is responsible for managing the day-to-day operations of the firm and ensuring safety and soundness and compliance with laws and regulations, including those related to consumer protection, and internal policies and procedures. Two key responsibilities of senior management are overseeing the activities of the firm's business lines (individually and collectively) and the firm's IRM and system of internal control. In addition to the general expectations regarding senior management, the IRM and controls section of the proposed guidance sets forth specific expectations for the CRO and chief audit executive (“CAE”), as these individuals have specific responsibilities related to IRM and internal audit, respectively.
The proposed guidance tailors the application of these expectations for an FBO, given that the combined U.S. operations are part of a larger global organization. For instance, the proposed guidance notes that the risk tolerance for the combined U.S. operations may be developed separately for the IHC and branch operations, respectively, and notes that the strategy for the combined U.S. operations may mean the manner in which the U.S. operations support the global strategy. The proposal also notes that for an FBO, “senior management” can refer to individuals located inside or outside the United States who are accountable to the IHC board, U.S. risk committee, or global board of directors with respect to the U.S. operations.
The proposed guidance sets forth core principles of the management of business lines. Business line management is defined as the core
For a LISCC firm, due to its size, risk profile, and systemic importance of operations, the core principles of the management of business lines would apply to all of the firm's business lines. For an LFI that is not a LISCC firm, the core principles of the management of business lines would apply to any business line where a significant control disruption, failure, or loss event could result in a material loss of revenue, profit, or franchise value, or result in significant consumer harm.
The proposed guidance does not include specific expectations regarding organizational structure at firms and states that business line management may also serve as senior management. If business line management is not part of senior management, business line management is responsible for fully engaging senior management, so that senior management can effectively carry out their responsibilities.
For an FBO, the proposed guidance acknowledges that a business line in the United States may be part of a larger global business line and clarifies that the guidance applies only to that portion of the business conducted in the United States. The proposed guidance notes that business line management should ensure that business line risks are comprehensively captured, with consideration given to risks outside of the United States that may impact the FBO's U.S. operations.
The proposed guidance describes core principles of a firm's IRM and controls, which refers to a firm's independent risk management function, system of internal control, and internal audit function.
The proposed guidance describes expectations for a firm's IRM, which include evaluating the firm's risk tolerance; establishing enterprise-wide risk limits and monitoring adherence to those limits; identifying, measuring, and aggregating risks; providing an independent assessment of the firm's risk profile; and providing risk reports to the board and senior management. The proposed guidance builds upon the framework set forth in Regulation YY, which requires a firm to have an independent risk management function.
While IRM would be expected to evaluate the firm's risk tolerance, the proposed guidance would not set the expectation that IRM would have sole responsibility for the risk tolerance. Depending on a firm's organizational structure, it may be appropriate for business line management to provide input into the risk tolerance or drive its development. The proposed guidance would assign responsibility for enterprise-wide risk limits to IRM, but acknowledge that business line management may develop its own limits for internal business line use and may provide input to the risk limit-setting process defined by IRM. However, the internal limits of a business line should not be less stringent than the limits set by IRM because the IRM limits should be the operative, formal, and binding limits across the firm.
For internal controls, the proposed guidance expands upon the expectation for internal controls described in SR letter 12-17. As described in the proposed guidance, a firm should identify its system of internal control and demonstrate that that system is commensurate with the firm's size, scope of operations, activities, risk profile, strategy, and risk tolerance; demonstrate that it is consistent with all applicable laws and regulations; regularly evaluate and test the effectiveness of internal controls; and monitor the functioning of controls so that deficiencies are identified and communicated in a timely manner. The proposed guidance provides that developing and maintaining effective internal controls is the responsibility of several parties, including business line management.
The strength of a firm's internal audit practices are an important consideration in the Federal Reserve's supervisory assessment of the effectiveness of the firm's governance and controls. This proposed guidance would not expand upon the Federal Reserve's expectations
The Board invites comments on all aspects of the proposed guidance, including responses to the following questions:
(1) What considerations beyond those outlined in this proposal should be considered in the Federal Reserve's assessment of whether an LFI has sound governance and controls such that the firm has sufficient financial and operational strength and resilience to maintain safe and sound operations?
(2) How could the roles and responsibilities between the board of directors set forth in the proposed board effectiveness guidance, and between the senior management, business line management, and IRM be clarified?
(3) What, if any, aspects of the structure and coverage of IRM and controls should be addressed more specifically by the guidance?
(4) The proposal tailors expectations for FBOs, recognizing that the U.S. operations are part of a larger organization. How could this tailoring be improved?
(5) In what ways, if any, does the guidance diverge from industry practice? How could the guidance better reflect industry practice while facilitating effective risk management and controls? Are there any existing standards for internal control frameworks to which the guidance should follow more closely?
(6) Other supervisory communications have used the term “risk appetite” instead of risk tolerance. Are the terms “risk appetite” and “risk tolerance” used interchangeably within the industry, and what confusion, if any, is created by the terminology used in this guidance?
(7) The proposal would adopt different terminology than is used in the proposed LFI rating system, and the Board expects to align the terminology so the element in the governance and controls component would change from “management of core business lines” to “management of business lines.” Does this proposal clearly explain this expected change? Do commenters anticipate any impact from this change?
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (“PRA”), the Board 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 Board reviewed the proposed supervisory guidance under the authority delegated to the Board by OMB.
The proposed supervisory guidance contains a collection of information subject to the PRA. Recordkeeping requirements are found in the proposed guidance. Among expectations for business line management, the proposed guidance states that business line management should establish specific business and risk objectives for business lines, and establish policies and guidelines that delineate accountability within the business line. In addition, the proposed guidance sets expectations for a firm's IRM function, including related to the scope of a firm's risk limits and an expectation for written risk assessment that would be provided to the senior management and, as appropriate, the board. The proposed guidance also sets expectations for internal audit, including an expectation for an internal audit risk assessment and audit reports.
Comments are invited on:
a. Whether the collections of information are necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy or the estimate of the burden of the information collections, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. 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
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
All comments will become a matter of public record. Comments on aspects of this notice that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to: Secretary, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. A copy of the comments may also be submitted to the OMB desk officer by mail to U.S. Office of Management and Budget, 725 17th Street NW, #10235, Washington, DC 20503; facsimile to (202) 395-6974; or email to
The Federal Reserve is providing an initial regulatory flexibility analysis with respect to this proposal. While the proposed guidance is not being adopted as a rule, the Federal Reserve has considered the potential impact of the proposal on small banking organizations using considerations that would apply if the Regulatory Flexibility Act, 5 U.S.C. 601
Under regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with assets of $550 million or less (“small banking
Governance and controls involves (i) the oversight of a firm by its board of directors, (ii) management of business lines and independent risk management (IRM) and controls, and (iii) for domestic Large Institution Supervision Coordinating Committee (LISCC) firms only, recovery planning. This guidance sets forth the second part of the Federal Reserve's expectations for large financial institutions (LFIs or firms)—core principles of the management of business lines and IRM and controls. This guidance also builds upon supervisory guidance previously issued by the Federal Reserve.
Guidance related to the first part of governance and controls, the oversight of a firm by its board of directors (BE Guidance), was released earlier.
Like the BE Guidance, the supervisory expectations described in this guidance regarding the management of business lines and IRM and controls would help inform the Federal Reserve's overall supervisory evaluation of a firm's governance and controls to support the firm's financial and operational strength and resilience. Among other factors, this evaluation would be an input to the governance and controls component rating under the proposed LFI rating system.
The guidance applies to domestic bank holding companies (BHCs) and domestic savings and loan holding companies with total consolidated assets of $50 billion or more, the combined U.S. operations of foreign banking organizations (FBOs) with combined U.S. assets of $50 billion or more, and any state member bank subsidiaries of the foregoing. The guidance also applies to systemically important nonbank financial companies designated by the Financial Stability Oversight Council (FSOC) for supervision by the Board.
Regulation YY requires FBOs with combined U.S. assets of $50 billion or more to maintain a U.S. risk committee to oversee the risk management framework of the combined U.S. operations.
This guidance sets forth core principles of effective senior management, the management of a firm's business lines
Under the board's oversight, a firm's senior management is responsible for managing the day-to-day operations of the firm, and for ensuring safety and soundness and compliance with internal policies and procedures, laws, and regulations, including those related to consumer protection.
“Board” or “board of directors” also refers to committees of the board of directors, as appropriate.
Senior management is responsible for implementing the firm's strategy and risk tolerance approved by the board.
For an FBO, the U.S. risk committee should approve the risk tolerance for the combined U.S. operations (which may be developed separately for the IHC and branch operations, respectively). The strategy for the combined U.S. operations may mean the manner in which the U.S. operations support the global strategy.
Senior management is responsible for maintaining and implementing an effective risk management framework and ensuring the firm appropriately manages risk consistent with its strategy and risk tolerance.
Senior management should ensure effective communication and information sharing across the entire firm. Senior management should also address any impediments to the effective flow of information, including those that could result in decisions being made or actions being taken in isolation.
In overseeing the firm's day-to-day operations, senior management should base its decisions and actions, as well as its communications with the board, on a full understanding of the firm's risks and activities. Therefore, senior management should have in place robust mechanisms for:
• Keeping apprised of drivers and trends related to current and emerging risks, material limit breaches, and other material issues;
• Maintaining and assessing the firm's system of internal control;
• Staying informed about material deficiencies and limitations in risk management and control practices, and ensuring that such deficiencies are remediated in a timely fashion;
• Assessing the potential impact of the firm's activities and risk positions on the firm's capital,
• Assessing the firm's financial and nonfinancial performance relative to the firm's strategy and risk objectives;
• Maintaining robust management information systems to support oversight of the firm's activities and risk positions, and to provide information to the board; and
• Maintaining current succession and contingency staffing plans for key positions.
Senior management is responsible for providing timely, useful, and accurate information to the board. Senior management should also be responsive to direction from the board and to the board's informational needs. Further, senior management is responsible for ensuring resolution of risk management issues (including those identified by the firm and outstanding supervisory matters), escalating issues to the board, and communicating issues internally when appropriate. Senior management should regularly report to the board on responses to, and remediation of, material audit and supervisory findings, risk management and control deficiencies, material compliance issues (including those related to consumer protection), and the outcomes of risk reviews which may result in remedial actions.
This section sets forth core principles of the management of business lines, including critical operations.
“Critical operations” are those operations, including associated services, functions and support, the failure or discontinuance of which, in the view of the firm or the Federal Reserve, would pose a threat to the financial stability of the United States. All of the expectations for the management of business lines apply to critical operations.
For a LISCC firm, due to its size, risk profile, and systemic importance, these principles apply to all of the firm's business lines. For an LFI that is not a LISCC firm, these principles apply to
A business line may cross legal entities or geographic jurisdictions. In instances where a business line of an FBO is part of a larger business conducted outside of the United States, expectations apply only to the portion of that business conducted in the United States.
This section is organized as follows:
Business line management should establish specific business and risk objectives for each business line that align with the firmwide strategy and risk tolerance. Business line management should inform senior management when the business line's risk management capabilities are insufficient to achieve those business and risk objectives. In addition, during the strategic planning process with senior management, business line management should clearly present the risks emanating from the business line's activities. Business line management should explain how those risks are managed and align with the firm's risk tolerance.
Business line management should provide information to senior management regarding the business line's current and potential risk profile and its alignment with the firm's risk tolerance. Information reported should enable senior management to make critical decisions about the business line's strategic direction and risks.
Business line management should identify, measure, and manage current and emerging risks that stem from the business line's activities and changes to external conditions.
In measuring risks, business line management should consider the size and risk characteristics of the business line's exposures and business activities. Business line management should aggregate risks, including by business activities or products. For instance, management of a large commercial lending business line should understand risks affecting the business line as a whole, and also within segments of the business line, such as large corporate exposures, commercial real estate loans, and small business lending.
The activities of a business line should remain within risk limits established by IRM.
A firm should have policies and procedures for vetting new business products and initiatives. Risks from new businesses should be identified and captured in risk management governance, infrastructure, compliance, and processes before commencing the new business. Business line management should escalate to senior management any required changes or modifications to risk management systems or internal control policies and procedures arising from the adoption of a new business or initiative. Additionally, growth in the new business should be consistent with the firm's risk management capabilities.
Business line management should provide a business line with sufficient resources and infrastructure to meet strategic objectives while maintaining financial and operational strength and resilience over a range of operating conditions, including stressful ones.
“Operational strength and resilience” is defined as maintaining effective governance and controls to provide for continuity of the consolidated organization and its core business lines, critical operations, and banking offices, and promote compliance with laws and regulations, including those related to consumer protection, through a range of conditions.
Business line management should ensure that the business line's
Business line management should ensure that the business line has:
• Clearly defined staff roles and responsibilities for key positions, as well as management reporting lines;
• Appropriate separation of duties and internal controls for effectively managing risk associated with its business strategy;
• Staff with skills and experience commensurate with the business line's activities and risks; and
• Succession and contingency plans for key positions.
Business line management should provide training and development to its staff to ensure sufficient knowledge of business line activities; compliance, operations and risk management processes; controls; and business continuity. Business line management should reinforce balanced risk-taking and provide incentives for appropriate behaviors through talent management processes, compensation arrangements, and other performance management processes.
Business line management should develop and maintain an effective system of internal control for its business line that helps to ensure compliance with laws and regulations, including those related to consumer protection, and supports effective risk management.
Business line management should regularly test to ensure the controls within its business line are functioning as expected and are effective in managing risks. More frequent testing is appropriate for key controls, or controls that have undergone a material change. Business line management should ensure that deficiencies in control design and operating effectiveness are remediated. Business line management should provide periodic reports on the operation of controls to senior management and escalate to senior management material internal control deficiencies and any systematic control violations. Finally, business line management should reassess all key controls periodically to ensure relevancy and alignment with current approved policies.
Business line management should establish policies and guidelines that specify accountability, set forth clear lines of management authority within the business line, and clearly align desired behavior with the firm's performance management incentives. Business line management should hold their staff accountable to the extent behavior that is inconsistent with the board and senior management directives and inform senior management as appropriate. Business line management should ensure that training for new and existing employees explicitly addresses and emphasizes the importance of professional conduct and compliance with laws and regulations, including those related to consumer protection.
Business line management should have ongoing and effective means to prevent, detect, and remediate risk management and compliance failures of business line policies and procedures, as well as policies and limits established by the firm's senior management. Business line management should develop processes with indicators and early warning mechanisms to facilitate timely detection of existent and potential issues. Business line management should actively supervise employees in light of the firm's policies and guidelines.
There are three key areas covered in this section: (1) IRM, which provides an objective, critical assessment of risks and evaluates whether a firm remains aligned with its stated risk tolerance; (2) a system of internal control to guide practices, provide appropriate checks and balances, and confirm quality of operations; and (3) internal audit, which provides independent assessments of the effectiveness of the risk management framework and the system of internal control.
This section is organized as follows:
Except for the roles of the CRO and the CAE, this guidance does not purport to prescribe in detail the governance structure for a firm's IRM and controls. Senior management should establish and maintain clear lines of responsibility and accountability so that activities are conducted in a manner that satisfies supervisory expectations.
Supervisory expectations related to independent risk management apply to the U.S. CRO and the U.S. risk committee of an FBO for the combined U.S. operations in the same manner as these expectations apply to the CRO and risk committee of a domestic holding company. For an FBO, the internal audit function for the combined U.S. operations should have appropriate independent oversight of those.
The Board's Regulation YY requires certain firms to have a CRO with sufficient capability and experience in identifying, assessing, and managing risk exposures of large, complex
As part of overseeing IRM, the CRO should guide IRM to establish and monitor compliance with enterprise-wide risk limits, identify and aggregate the firm's risks, assess the firm's risk positions relative to the parameters of the firm's risk tolerance, and provide relevant risk information to senior management and the board. The CRO should also oversee communication of the firm's risk limits to the board and relevant firm management and staff.
The CRO should inform the board if his or her stature, independence, or authority is not sufficient to provide objective and independent assessments of the firm's risks, risk management activities, and system of internal control.
The CRO should escalate issues to senior management and the board when activities or practices at the firmwide, risk-specific, and business-line level do not align with the firm's overall risk tolerance. For example, the CRO should report concerns to the board's risk committee if the firm does not have sufficient risk management capacity to enter into a proposed merger or new product line and promote the taking of appropriate actions, as warranted. The CRO should recommend constraints on risk-taking and enhancements to risk management practices to senior management and the board. The CRO or IRM should be involved in any proposal to waive or make exceptions to established risk limits, including on a temporary basis, should provide an assessment of any such proposal, and should escalate the proposal to the board of directors as appropriate. The necessary level of approval within IRM and escalation should be clearly articulated in policies and procedures and commensurate with the nature of the risk limit.
The CRO should support the independence of IRM from the business lines by establishing clearly defined roles and responsibilities, and reporting lines. The CRO should periodically assess whether IRM has appropriate staffing and systems; sufficient understanding of the risks and business activities being evaluated; and sufficient authority to identify and escalate material or persistent risk management and control deficiencies and to challenge senior management and business line management when warranted.
A firm should have a CAE, appointed by the board, with sufficient capability, experience, independence and stature to manage the internal audit function's responsibilities appropriate to the size and complexity of the firm.
IRM should provide input into and evaluate the firm's risk tolerance to ensure that it appropriately captures the firm's material risks and aligns with the firm's strategy and the corresponding business activities.
• Addresses risks under normal and stressed conditions and considers changes in the risk environment;
• Includes risks associated with the firm's revenue generating activities, as well as other aspects of risks inherent to the business, such as compliance, information technology, and cybersecurity;
• Incorporates realistic risk and reward assumptions that, for example, do not overestimate expected returns from business activities or underestimate risks associated with business activities; and
• Guides the firm's risk-taking and risk mitigation activities.
IRM should determine whether the firm's risk profile is consistent with the firm's risk tolerance and assess whether the firm's risk management framework has the capacity to manage the risks outlined in the risk tolerance. Specifically, IRM should determine whether there are sufficient resources and infrastructure in the relevant areas of the firm to properly identify, manage, and report the risks associated with the business strategies outlined in the risk tolerance, including during stressful or unanticipated conditions.
Under direction of the CRO, IRM should establish enterprise-wide risk limits that are consistent with the firm's risk tolerance for the firm's full set of risks, including risks associated with revenue generating activities and those inherent to the business. Risk limits should be assigned to specific risk types, business lines, legal entities, jurisdictions, geographic areas, concentrations, products or activities,
Risk limits should be quantitative and qualitative. For instance, quantitative limits can be set relative to earnings, assets, liabilities, capital, liquidity, or other relevant benchmarks. IRM should set qualitative limits—such as an expert assessment to constrain business in a given country—as a proxy for risks or aspects of risks that are more difficult to quantify. Risk limits should include explicit thresholds that, if crossed, strictly prohibit the activity generating the risk.
To the extent possible, risk limits should:
• Consider the range of possible external conditions facing the firm over a period of time;
• Consider the aggregation and interaction of risks across the firm;
• Be consistent with the firm's financial resources, such as available capital and liquidity, as well as with non-financial aspects, such as managerial, technological, and operational resources; and
• Reinforce compliance with laws and regulations, including those related to consumer protection, and consistency with supervisory expectations.
IRM should monitor and update risk limits as appropriate, especially as the firm's risk tolerance is updated, the firm's risk profile changes, or external conditions change. IRM should also identify significant trends in risk levels to evaluate whether risk-taking and risk management practices are consistent with the firm's strategic objectives. IRM should escalate to senior management any material breaches of the firm's enterprise-wide risk limits and risk tolerance, as well as instances where IRM's conclusions differ from the conclusions of a business line.
IRM's activities are conducted in addition to business line risk management activities described above and should provide an objective, critical perspective of a firm's risks. IRM should identify and measure current and emerging risks within and across business lines and risk types, as well as any other relevant perspectives, such as by legal entity or jurisdiction. Where it is difficult to assess risks quantitatively, IRM should still assess the impact of those risks, such as through qualitative means. IRM should conduct its risk identification and measurement work on an ongoing basis to reflect any changes in exposures, business activities, and the broader operating environment, including changes in law and supervisory expectations.
IRM should identify risk types, including credit, market, operational, liquidity, interest rate, legal, compliance and related risks (such as consumer protection and Bank Secrecy Act/anti-money laundering). IRM should establish minimum internal standards for all of its risk identification and measurement practices to ensure consistent quality across different risks. IRM's standards should include both quantitative and qualitative elements, with the latter especially important for risks or aspects of risks that are more difficult to quantify. The standards at a firm should be dynamic, inclusive, and comprehensive.
To conduct effective risk identification and measurement, IRM should have access to timely, reliable, and comprehensive information about all risk-related exposures and activities in the firm. This should include emerging or potential sources of risk. IRM should seek input across the firm in identifying risks. IRM may utilize information collected or used from business lines; however, IRM should not rely on business line information exclusively. IRM staff should also draw upon external information, such as peer data or market information, to supplement their assessments.
IRM should regularly measure identified risks under both normal and stressful operating conditions. In measuring risks, IRM should consider the size and risk characteristics of the firm's exposures and business activities. Within each risk type, IRM should rely on a range of metrics and use measures appropriate to different risk types.
IRM should aggregate risks across the entire firm and assess those risks relative to the firm's risk tolerance.
IRM should conduct risk assessments using information from risk identification, measurement, and aggregation to determine the impact of risks on the firm and to inform senior management and the board about the suitability of risk positions relative to risk limits and the risk tolerance. IRM should assess risks and risk drivers within and across business lines and risk types, as well as any other material perspectives, such as by legal entity or jurisdiction. Further, IRM should analyze any assumptions related to risk diversification. IRM also should assess risk mitigation strategies, including the effectiveness of such mitigation in a range of circumstances, and recommend alternatives if concerns arise.
IRM should identify information gaps, uncertainties, and limitations in risk assessments for senior management, and as appropriate, for the board. For instance, in analyzing a new product area or business line, IRM should acknowledge areas of insufficient information that limit a complete assessment of the risks and provide a measured implementation plan to obtain the necessary information.
Risk reporting should be comprehensive, useful, accurate, and timely. Risk reporting should cover current and emerging risk and adherence to risk limits and risk concentrations as well as the firm's ongoing strategic, capital, and liquidity planning processes. Risk reporting should enable prompt escalation and remediation of material problems; enhance appropriate and timely responses to identified problems; provide current and forward-looking perspectives; and support or influence strategic decision-making. Risk reporting should provide information on aggregate risks within and across business lines and risk types, as well as by legal entity or jurisdiction and significant concentrations.
Risk reporting should be tailored to meet the differing information needs of
Internal controls cover a wide range of activities and processes, and could include the following:
• Policies and procedures that set expectations for and govern the firm's business activities and support functions; establish appropriate levels of authority, responsibility, and accountability for overseeing and executing the firm's activities; and establish standards for prudent risk-taking behaviors.
• Clear assignment of roles and responsibilities and appropriate separation of duties.
• Physical controls for restricting access to tangible assets.
• Approvals and appropriate dual authorizations for key decisions, transactions, and execution of processes.
• Verifications of transaction details and periodic reconciliations, such as those comparing cash flows to account records and statements.
• Access controls, change management controls, data entry and related controls.
• Escalation procedures with a system of checks and balances in situations that allow for managerial or employee discretion.
Internal controls instill confidence in financial reporting and are important to ensure the integrity of the process and information relied upon by the firm to manage itself. Developing and maintaining an effective system of internal control is the responsibility of several parties, including business line management.
A firm should have mechanisms to test its system of internal control and to identify and escalate issues that appear to compromise its effectiveness. A firm should regularly evaluate and test the quality, reliability and effectiveness of internal controls, and monitor any potential deterioration. Generally, testing activities are conducted at specific points in time, whereas monitoring activities are continuous processes. The scope, frequency, and depth of testing should consider the complexity of the firm, the results of the firm's risk assessments, and the number and significance of the deficiencies identified during prior testing. A firm should test and monitor internal controls using a risk-based approach, prioritizing efforts on controls in areas of highest risk and less effective controls.
A firm should evaluate and communicate internal control deficiencies in a timely manner to those parties responsible for taking corrective action, including senior management. Firms should establish management information systems that track internal control weaknesses and escalate serious matters to the board, senior management, and responsible business line management, as appropriate.
An effective internal audit function provides independent assurance to the board and senior management concerning the effectiveness of risk management and internal control systems. The Federal Reserve issued guidance outlining the key components of an effective internal audit function in SR letter 03-5, and followed that with supplemental guidance in SR letter 13-1/CA letter 13-1, “Supplemental Policy Statement on the Internal Audit Function and Its Outsourcing.” The supplemental guidance builds upon the 2003 interagency guidance of SR letter 03-5 and further addresses the characteristics, governance, and operational effectiveness of a firm's internal audit function. That existing audit guidance remains in place and is not superseded by this guidance.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than February 6, 2018.
A.
1.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by February 12, 2018.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The information required under section 402(j)(5)(B) of the Public Health Service Act (PHS Act) (42 U.S.C. 282(j)(5)(B)) is submitted in the form of a certification, Form FDA 3674, which accompanies applications and submissions currently submitted to FDA and already approved by OMB. The OMB control numbers and expiration dates for those applications and submissions are: 21 CFR parts 312 and 314 (human drugs), OMB control number 0910-0014, expiring February 28, 2019, and OMB control number 0910-0001, expiring December 31, 2017; 21 CFR parts 312 and 601 (biological products), OMB control number 0910-0014, expiring February 28, 2019, and OMB control number 0910-0338, expiring March 31, 2020; and 21 CFR parts 807 and 814 (devices), OMB control number 0910-0120, expiring June 30, 2020, and OMB control number 0910-0231, expiring March 31, 2020.
Title VIII of the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85) amended the PHS Act by adding section 402(j). The provisions broadened the scope of clinical trials subject to submitting information and required additional information to be submitted to the clinical trials databank (
One provision, section 402(j)(5)(B) of the PHS Act, requires that a certification accompany human drug, biological, and device product submissions made to FDA. Specifically, at the time of submission of an application under sections 505, 515, or 520(m) of the FD&C Act (21 U.S.C. 355, 360e, or 360j(m)), or under section 351 of the PHS Act (42 U.S.C. 262), or submission of a report under section 510(k) of the FD&C Act (21 U.S.C. 360(k)), such application or submission must be accompanied by a certification, Form FDA 3674, that all applicable requirements of section 402(j) of the PHS Act have been met. Where available, such certification must include the appropriate National Clinical Trial (NCT) numbers that are assigned upon submission of required information to the NIH databank at
The proposed extension of the collection of information is necessary to satisfy the previously mentioned statutory requirement. The importance of obtaining these data relates to adherence to the legal requirements for submissions to the clinical trials registry and results databank, and ensuring that individuals and organizations submitting applications or reports to FDA under the listed provisions of the FD&C Act or the PHS Act adhere to the appropriate legal and regulatory requirements for certifying to having complied with those requirements. The failure to submit the certification required by section 402(j)(5)(B) of the PHS Act, and the knowing submission of a false certification, are both prohibited acts under section 301 of the FD&C Act (21 U.S.C. 331). Violations are subject to civil money penalties. The Form FDA 3674 provides a convenient mechanism for sponsors/applicants/submitters to satisfy the certification requirements of the statutory provision.
To assist sponsors/applicants/submitters in understanding the statutory requirements associated with Form FDA 3674, we have provided a guidance available at:
FDA's Center for Biologics Evaluation and Research (CBER) received 381 new
Based on its experience with current submissions, FDA estimates that approximately 15 minutes on average would be needed per response for certifications that accompany IND applications and clinical protocol amendment submissions. It is assumed that most submissions to investigational applications will reference only a few protocols for which the sponsor/applicant/submitter has obtained an NCT number from
FDA's Center for Devices and Radiological Health (CDRH) received a total of 330 new applications for premarket approvals (PMA), 510(k) submissions containing clinical information, PMA supplements, applications for humanitarian device exemptions (HDE) and amendments in CY 2016. CDRH anticipates that application, amendment, supplement, and annual report submission rates will remain at or near this level in the near future.
FDA's Office of Generic Drugs (OGD) received 1,036 abbreviated new drug applications (ANDAs) in 2016. OGD received 698 bioequivalence amendments/supplements in 2016. OGD anticipates that application, amendment, and supplement submission rates will remain at or near this level in the near future.
Based on its experience reviewing NDAs, BLAs, PMAs, HDEs, 510(k)s, and ANDAs and experience with current submissions of Form FDA 3674, FDA estimates that approximately 45 minutes on average would be needed per response for certifications that accompany NDA, BLA, PMA, HDE, 510(k), and ANDA marketing applications and submissions. It is assumed that the sponsor/applicant/submitter has electronic capabilities allowing them to retrieve the information necessary to complete the form in an efficient manner.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ENTYCE and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that animal drug product.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before March 12, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For animal drug products, the testing phase begins on the earlier date when either a major environmental effects test was initiated for the drug or when an exemption under section 512(j) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360b(j)) became effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the animal drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for an animal drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(4)(B).
FDA has approved for marketing the animal drug product ENTYCE (capromorelin). ENTYCE is indicated for appetite stimulation in dogs. Subsequent to this approval, the USPTO received patent term restoration applications for ENTYCE (U.S. Patent Nos. 6,107,306 and 6,673,929) from RaQualia Pharma Inc., and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated December 1, 2016, FDA advised the USPTO that this animal drug product had undergone a regulatory review period and that the approval of ENTYCE represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ENTYCE is 1,645 days. Of this time, 1,589 days occurred during the testing phase of the regulatory review period, while 56 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 1,826 and 1,827 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for EPANOVA and is publishing this notice of that determination as required by law. FDA has made the determination because of the
Anyone with knowledge that any of the dates as published (in the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before March 12, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product EPANOVA (omega-3-carboxylic acids). EPANOVA is indicated as an adjunct to diet to reduce triglyceride levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia. Subsequent to this approval, the USPTO received
FDA has determined that the applicable regulatory review period for EPANOVA is 4,269 days. Of this time, 3,964 days occurred during the testing phase of the regulatory review period, while 305 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 682 days, 371 days, and 5 years of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice; establishment of a public docket; request for comments.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Risk Communication Advisory Committee. The general function of the committee is to provide advice and recommendations to FDA on regulatory issues. The meeting will be open to the public. FDA is establishing a docket for public comment on this document.
The meeting will be held on March 5, 2018, from 8 a.m. to 5 p.m. and March 6, 2018, from 9 a.m. to 12:30 p.m.
FDA White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002. Answers to commonly asked questions including information regarding special accommodations due to a disability, visitor parking, and transportation may be accessed at:
FDA is establishing a docket for public comment on this meeting. The docket number is FDA-2017-N-6925. The docket will close on April 6, 2018. Submit either electronic or written comments on this public meeting by April 6, 2018. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before April 6, 2018. The
Comments received on or before February 26, 2018 will be provided to the committee. Comments received after that date will be taken into consideration by FDA.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” FDA will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Lee L. Zwanziger, Risk Communication Staff, Office of Planning, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 3363, Silver Spring, MD 20993, 301-796-9151, Fax: 301-847-8611, email:
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's website after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that FDA is not responsible for providing access to electrical outlets.
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Lee L. Zwanziger at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for MICRA TRANSCATHETER PACING SYSTEM and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that medical device.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before March 12, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For medical devices, the testing phase begins with a clinical investigation of the device and runs
FDA has approved for marketing the medical device MICRA TRANSCATHETER PACING SYSTEM. MICRA TRANSCATHETER PACING SYSTEM is indicated for use in patients who have experienced one or more of the following conditions: (1) Symptomatic paroxysmal or permanent high-grade atrioventricular (AV) block in the presence of atrial fibrillation (AF); (2) symptomatic paroxysmal or permanent high-grade AV block in the absence of AF, as an alternative to dual chamber pacing, when atrial lead placement is considered difficult, high risk, or not deemed necessary for effective therapy; (3) symptomatic bradycardia-tachycardia syndrome or sinus node dysfunction (sinus bradycardia or sinus pauses), as an alternative to atrial or dual chamber pacing when atrial lead placement is considered difficult, high risk, or not deemed necessary for effective therapy. Subsequent to this approval, the USPTO received patent term restoration applications for MICRA TRANSCATHETER PACING SYSTEM (U.S. Patent Nos. 7,824,805 and 8,129,622) from Medtronic, Inc., and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated March 13, 2017, FDA advised the USPTO that this medical device had undergone a regulatory review period and that the approval of MICRA TRANSCATHETER PACING SYSTEM represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for MICRA TRANSCATHETER PACING SYSTEM is 788 days. Of this time, 585 days occurred during the testing phase of the regulatory review period, while 203 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 457 days and 494 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice, establishment of a public docket; request for comments.
The Food and Drug Administration (FDA) announces a forthcoming public advisory committee meeting of the Anesthetic and Analgesic Drug Products Advisory Committee. The general function of the committee is to provide advice and recommendations to FDA on regulatory issues. The meeting will be open to the public. FDA is establishing a docket for public comment on this document.
The meeting will be held on February 14, 2018, from 1:30 p.m. to 5 p.m., and February 15, 2018, from 8 a.m. to 5 p.m.
FDA White Oak Campus, 10903 New Hampshire Avenue, Bldg. 31 Conference Center, the Great Room (Rm. 1503), Silver Spring, MD 20993-0002. Answers to commonly asked questions including information regarding special accommodations due to a disability, visitor parking, and transportation may be accessed at:
FDA is establishing a docket for public comment on this meeting. The docket number is FDA-2017-N-6826. The docket will close on February 13, 2018. Submit either electronic or written comments on this public meeting by February 13, 2018. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before February 13, 2018. The
Comments received on or before January 31, 2018, will be provided to the committee. Comments received after that date will be taken into consideration by FDA.
You may submit comments as follows:
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” FDA will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Moon Hee V. Choi, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993-0002, 301-796-9001, Fax: 301-847-8533, email:
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its website prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's website after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that FDA is not responsible for providing access to electrical outlets.
For press inquiries, please contact the Office of Media Affairs at
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with disabilities. If you require accommodations due to a disability, please contact Moon Hee V. Choi at least 7 days in advance of the meeting (See
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our website at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
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.
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.
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 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 meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant and/or contract proposals 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 and/or contract proposals applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to Public Law 92-463, notice is hereby given for the meeting of the Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Substance Abuse Prevention National Advisory Council (CSAP NAC) on February 14, 2018.
The Council was established to advise the Secretary, Department of Health and Human Services (HHS); the Assistant Secretary for Mental Health and Substance Use, SAMHSA; and Director, CSAP concerning matters relating to the activities carried out by and through the Center and the policies respecting such activities.
The meeting will be open to the public and will include the discussion of the substance use prevention workforce and opioid use prevention. The meeting will also include updates on CSAP program developments.
The meeting will be held in Rockville, Maryland. Attendance by the public will be limited to the space available. Interested persons may present data, information, or views, orally or in writing, on issues pending before the Council. Written submissions should be forwarded to the contact person on or before one week prior to the meeting. Oral presentations from the public will be scheduled at the conclusion of the meeting. Individuals interested in making oral presentations should notify the contact on or before one week prior to the meeting. Five minutes maximum will be allotted for each presentation.
To attend onsite, submit written or brief oral comments, or request special accommodations for persons with disabilities, please register at the SAMHSA Committees' website,
Substantive program information may be obtained after the meeting by accessing the SAMHSA Committee website,
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications.
We, the U.S. Fish and Wildlife Service, invite the public to comment on applications to conduct certain activities with foreign endangered and threatened species. With some exceptions, the Endangered Species Act prohibits activities with listed species unless Federal authorization is acquired that allows such activities. The ESA also requires that we invite public comment before issuing these permits.
We must receive comments by February 12, 2018.
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Joyce Russell, 703-358-2023.
You may submit your comments and materials by one of the methods listed under
Please make your comments as specific as possible, confine your comments to issues for which we seek information as described in this notice, and explain the basis for your comments. Include sufficient information with your comments 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. We will not consider or include in our administrative record comments we receive after the close of the comment period (
Comments, including names and street addresses of respondents, will be available for public review online at
If you submit a comment via
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 (16 U.S.C. 1531
We invite the public to comment on applications to conduct certain activities with endangered species. With some exceptions, the ESA prohibits activities with listed species unless Federal authorization is acquired that allows such activities.
The applicant requests reissuance of their permit for scientific research with captive-born giant pandas (
The applicant requests a permit to import biological samples from wild Sumatran orangutan (
The applicant requests authorization to import tissue or blood samples of any avian species (class Aves), reptile species (class Reptilia), and fish (within the taxonomic phylum Chordata) from locations worldwide for the purpose of diagnostic testing for infectious diseases/scientific research. This notification covers activities to be conducted by the applicant over a 5-year period.
The applicant requests authorization to import the skull of an American crocodile (
The following applicants each request a permit to import a sport-hunted trophy of a male bontebok (
If the Service decides to issue permits to any of the applicants listed in this
The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of intent; request for comments.
We, the U.S. Fish and Wildlife Service (Service), intend to prepare draft environmental analysis (either an environmental assessment or an environmental impact statement) under the National Environmental Policy Act (NEPA) for the proposed habitat conservation plan for the California Department of Parks and Recreation Oceano Dunes District (HCP). The HCP is a conservation plan as required under the Endangered Species Act of 1973, as amended (ESA), for issuance of an incidental take permit (ITP). The draft environmental analysis will evaluate the impacts of several alternatives related to the proposed issuance of an ITP to the California Department of Parks and Recreation Oceano Dunes District (CDPR, applicant) for incidental take of threatened and endangered wildlife species that could result from activities covered under the HCP. The HCP would also include conservation measures for endangered plants. We also are announcing the initiation of a public scoping process to engage Federal, Tribal, State, and local governments and the public in the identification of issues and concerns, potential impacts, and possible alternatives to the proposed action.
In order to be included in the analysis, all comments must be received or postmarked on or before March 12, 2018. We will hold public scoping meetings at a location in the vicinity of the proposed plan area. At least one week prior to the meeting dates, we will announce exact meeting locations, dates, and times in local newspapers and on the internet at
Please provide comments in writing by one of the following methods:
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Lena Chang, by U.S. mail (see
We, the U.S. Fish and Wildlife Service (Service), intend to prepare an environmental analysis under the National Environmental Policy Act, as amended (42 U.S.C. 4321
Section 9 of the ESA and its implementing regulations prohibit “take” of fish and wildlife species listed as endangered or threatened (16 U.S.C. 1538; 50 CFR 17.21 and 17.31). Under section 3 of the ESA, the term “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct (16 U.S.C. 1532(19)). The term “harm” is further defined by regulation as an act that actually kills or injures wildlife. Such acts may include significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding, or sheltering (50 CFR 17.3). The term “harass” is also further defined in the regulations as an intentional or negligent act or omission that creates the likelihood of injury to wildlife by annoying it to such an extent as to significantly disrupt normal behavioral patterns, which include, but are not limited to, breeding, feeding, or sheltering (50 CFR 17.3).
Under section 10(a)(1)(B) of the ESA, the Secretary of the Interior may authorize the taking of federally listed species if such taking occurs incidental to otherwise legal activities and where a conservation plan has been developed under section 10(a)(2)(A) that describes: (1) The impact that will likely result from such taking; (2) the steps an applicant will take to minimize and mitigate that take to the maximum extent practicable and the funding that will be available to implement such steps; (3) the alternative actions to such taking that an applicant considered and the reasons why such alternatives are not being utilized; and (4) other measures that the Service may require as being necessary or appropriate for the purposes of the plan. Issuance criteria under section 10(a)(2)(B) for an incidental take permit require the Service to find that: (1) The taking will be incidental to otherwise lawful activities; (2) an applicant will, to the maximum extent practicable, minimize and mitigate the impacts of such taking; (3) an applicant has ensured that adequate funding for the plan will be
A primary purpose of the scoping process is to receive suggestions and information on the scope of issues and alternatives to consider when drafting the environmental documents and to identify significant issues and reasonable alternatives related to the Service's proposed action (issuance of an ITP under the HCP). In order to ensure that we identify a range of issues and alternatives related to the proposed action, we invite comments and suggestions from all interested parties. We will conduct a review of this project according to the requirements of NEPA and its regulations, other relevant Federal laws, regulations, policies, and guidance, and our procedures for compliance with applicable regulations. Once the environmental documents are completed, we will offer further opportunities for public comment.
The proposed action is the issuance of an incidental take permit (ITP) for the covered species for the recreational and management activities within the proposed permit area for a period of 25 years. The proposed HCP, which must meet the requirements of section 10(a)(2)(A) of the ESA by providing measures to minimize and mitigate the effects of the potential incidental take of covered species to the maximum extent practicable, would be developed and implemented by the applicant. This alternative could allow for a comprehensive mitigation approach for unavoidable impacts and reduce permit processing times and efforts for the applicant and the Service.
Activities proposed for coverage under the proposed ITP would be otherwise lawful activities that could occur consistent with the HCP, include, but are not limited to:
1. Park Visitor Activities: Motorized recreation, including off highway vehicle use (
2. Natural Resources and Covered Species Management: Management for bird species (habitat protections, habitat enhancement, monitoring, banding, tracking, predator control, and other ongoing programs, salvaging abandoned eggs and chicks; fish surveys; amphibian surveys and associated management; plant monitoring, propagation, and habitat enhancement; habitat restoration program, including seed collection, propagation, planting, monitoring, and minor grading to access work areas; exotic pest plant and animal control, including prescribed fire, herbicide application, and hand clearing of paths to access work areas; Habitat Monitoring System implementation, including small mammal trapping, point counts, shorebird counts, and coverboards; and water quality monitoring and improvement projects.
3. Park Maintenance: Campground maintenance, including mowing, hazardous tree program, restroom upkeep, and housekeeping; general facilities maintenance; trash control; wind fence installation, maintenance, and removal; sand ramp and other vehicular access maintenance, including roadway resurfacing; street sweeping; routine riparian maintenance; spillway and culvert maintenance; vegetation management along trails and roads; emergent vegetation control; minor flood control maintenance; perimeter and vegetation island fence installation, maintenance, and removal; cable fence maintenance and sand movement; heavy equipment response in all areas of Oceano Dunes State Vehicular Recreation Area; minor grading (less than 50 cubic yards); and boardwalk and other pedestrian access maintenance.
4. Visitor Services: Ranger, lifeguard, and park aide patrols; emergency response, including accidents, injuries, distressed vessels, search and rescue; access by non-CDPR vehicles; American Safety Institute courses, including all-terrain vehicles and recreational utility vehicle courses; concessions; Pismo Beach Golf Course operations; Grover Beach Lodge and Conference Center; natural history and interpretation programs, including stationary programs, roving interpretation, interpretive walks, and driving tours.
5. Other HCP Covered Activities: Motorized vehicle crossing of Arroyo Grande Creek; Pismo Creek estuary seasonal (floating) bridge; recreational riding in 40 acres; replacement of the Safety and Education Center; dust control activities; cultural resources management; management of agricultural lands; maintenance of bioreactor on agricultural lands; Oso Flaco Lake causeway culvert replacement; special projects; and reduction of the Boneyard and 6 exclosures.
We anticipate that the following 10 Federal and State listed species will be included as covered species in the applicant's proposed HCP. *The applicant is seeking incidental take authorization for the four covered animal species.
Candidate and federally listed species not likely to be taken by the covered activities and therefore not covered by the proposed ITP may also be addressed in the proposed HCP to explain why the applicant believes these species will not be taken.
The proposed action presented in the environmental analysis will be compared to the no-action alternative. The no-action alternative compares estimated future conditions without implementation of the proposed HCP to the estimated future conditions with the HCP in place. The no action and one other alternative, including their potential impacts, will be addressed and are outlined below.
Because the proposed covered activities are integral to CDPR's operational mission, these activities would continue regardless of whether this 10(a)(1)(B) ITP is issued. Without a 10(a)(1)(B) ITP, the applicant should avoid impacts to protected species' habitat. Where potential impacts to federally protected species within the proposed permit area could not be avoided, the applicant should seek an individual section 10(a)(1)(B) ITP on a project-by-project basis. Although future activities by the applicant would be similar to those covered by the HCP, not all activities would necessitate an incidental take permit. Thus, under the no-action alternative, the applicant
This alternative is the proposed action without reductions in exclosure boundaries in the Boneyard and 6 exclosure areas. With this alternative, the boundaries of the Boneyard and 6 exclosures would not be reduced in size to increase areas for recreation. Off highway vehicle and camping opportunities in this area would remain as they are under the current management program.
Written comments we receive become part of the public record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that the 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. Comments and materials we receive, as well as supporting documentation we use in preparing the environmental analysis, will be available for public inspection, by appointment, during normal business hours at the Service's Ventura Fish and Wildlife Office in Ventura, California (see
See
Additionally, the purpose of these meetings and public comment period is to solicit suggestions and information on the scope of issues and alternatives for the Service to consider when preparing the draft environmental documents. Oral and written comments will be accepted at the meetings. Comments can also be submitted by methods listed in the
Please note that the meeting location will be accessible to wheelchair users. If you require additional accommodations, please notify us at least 1 week in advance of the meeting.
We publish this notice in compliance with the NEPA and its implementing regulations (40 CFR 1501.7, 1506.6, and 1508.22), and section 10(c) of the ESA.
U.S. Geological Survey (USGS), Interior.
Notice of information collection; request for comment.
We (the USGS) will ask the Office of Management and Budget (OMB) to approve the information collection (IC) described below. As required by the Paperwork Reduction Act (PRA) of 1995, and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this IC.
To ensure that your comments are considered, we must receive them on or before February 12, 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
Rudy Schuster, Branch Chief, at (970) 226-9230 or
We, the U.S.G.S., in accordance with the Paperwork Reduction Act of 1995, provide the general public and other Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
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We are again soliciting comments on the proposed IC 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 USGS; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the USGS enhance the quality, utility, and clarity of the information to be collected; and (5) how might the USGS 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 may 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.
To protect the confidentiality and privacy of survey respondents, the data from the survey will not be associated with any respondent's email address at any time and will only be analyzed and reported in aggregate. All files containing PII will be password-protected, housed on secure USGS servers, and only accessible to the research team. The data from the survey will be aggregated and statistically analyzed and the results will be published in publically available USGS reports.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501,
Advisory Committee on the Federal Rules of Bankruptcy Procedure, Judicial Conference of the United States.
Notice of cancellation of public hearing.
The following public hearing on proposed amendments to the Federal Rules of Bankruptcy Procedure has been canceled: Bankruptcy Rules Hearing on January 30, 2018, in Pasadena, CA.
Rebecca A. Womeldorf, Rules Committee Secretary, Rules Committee Staff, Administrative Office of the United States Courts, Washington, DC 20544, telephone (202) 502-1820.
Announcement for this hearing was previously published in 82 FR 37610.
Nuclear Regulatory Commission.
Exemption; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an exemption from certain power reactor financial protection requirements in response to a September 16, 2015, request from the Southern California Edison Company (the licensee). The exemption would permit the San Onofre Nuclear Generating Station, Units 2 and 3 (SONGS), to reduce the required level of primary financial protection from $450 million to $100 million, as well as to withdraw from participation in the secondary layer of financial protection effective immediately.
Please refer to Docket ID NRC-2018-0003 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Marlayna Vaaler, Office of Nuclear Material Safety and Safeguards; U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-3178; email:
The San Onofre Nuclear Generating Station, Units 1, 2, and 3 (SONGS), operated by the Southern California Edison Company (SCE) is located approximately 4 miles south of San
The SCE submitted the proposed Decommissioning Plan for SONGS, Unit 1, on November 3, 1994 (ADAMS Accession No. ML13319B073). As a result of the 1996 revision to the regulations in section 50.82 of title 10 of the
The SONGS, Units 2 and 3, Docket Nos. 50-361 and 50-362, are Combustion Engineering 1127 MWe pressurized water reactors, which were granted Facility Operating Licenses NPF-10 on February 16, 1982, and NPF-15 on November 15, 1982, respectively. In June 2013, pursuant to 10 CFR 50.82(a)(1)(i), the licensee certified to the NRC that as of June 4, 2013, operations had ceased at SONGS, Units 2 and 3 (ADAMS Accession No. ML131640201). The licensee subsequently certified, pursuant to 10 CFR 50.82(a)(1)(ii), that all fuel had been removed from the reactor vessels of both units, and committed to maintaining the units in a permanently defueled status (ADAMS Accession Nos. ML13204A304 and ML13183A391 for Unit 2 and Unit 3, respectively). Therefore, pursuant to 10 CFR 50.82(a)(2), SCE's 10 CFR part 50 licenses no longer authorize operation of SONGS Units 2 and 3, or emplacement or retention of fuel in the reactor vessels. The licensee is still authorized to possess and store irradiated nuclear fuel. Irradiated fuel is currently being stored onsite in spent fuel pools (SFPs) and in dry casks at an Independent Spent Fuel Storage Installation (ISFSI).
The PSDAR for SONGS, Units 2 and 3, was submitted on September 23, 2014 (ADAMS Accession No. ML14272A121), and the associated public meeting was held on October 27, 2014, in Carlsbad, California (ADAMS Accession No. ML14352A063). The NRC confirmed its review of the SONGS, Units 2 and 3, PSDAR and addressed public comments in a letter dated August 20, 2015 (ADAMS Accession No. ML15204A383). On July 17, 2015, the NRC approved the Permanently Defueled Technical Specifications for SONGS, Units 2 and 3 (ADAMS Accession No. ML15139A390).
Pursuant to 10 CFR 140.8, “Specific exemptions,” SCE requested an exemption from 10 CFR 140.11(a)(4), by letter dated September 16, 2015 (ADAMS Accession No. ML15260B188). The exemption from 10 CFR 140.11(a)(4) would permit the licensee to reduce the required level of primary offsite liability insurance from $450 million to $100 million, and would allow SCE to withdraw from participation in the secondary layer of financial protection (also known as the industry retrospective rating plan). The request to eliminate the requirement to carry secondary financial protection is for SONGS, Units 2 and 3, only. The NRC previously granted an exemption for SONGS, Unit 1, from the requirements of 10 CFR 140.11(a)(4), which permitted SCE's withdrawal from participation in the industry retrospective rating plan in 1994 (Legacy ADAMS Accession No. 9405090151).
The regulation at 10 CFR 140.11(a)(4) requires each licensee to have and maintain primary financial protection in an amount of $450 million. In addition, the licensee is required to participate in an industry retrospective rating plan (secondary financial protection) that commits each licensee to pay into an insurance pool to be used for damages that may exceed primary insurance coverage. Participation in the industry retrospective rating plan will subject SCE to deferred premium charges up to a maximum total deferred premium of $121,255,000 with respect to any nuclear incident at any operating nuclear power plant, and up to a maximum annual deferred premium of $18,963,000 per incident.
The licensee states that the risk of an offsite radiological release is significantly lower at a nuclear power reactor that has permanently shut down and defueled, when compared to an operating power reactor. Similarly, the associated risk of offsite liability damages that would require insurance or indemnification is commensurately lower for permanently shut down and defueled plants. Therefore, SCE is requesting an exemption from 10 CFR 140.11(a)(4), to permit a reduction in primary offsite liability insurance and to withdraw from participation in the industry retrospective rating plan.
Pursuant to 10 CFR 140.8, the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of 10 CFR part 140, when the exemptions are authorized by law and are otherwise in the public interest.
The Price-Anderson Act of 1957 (PAA) requires that nuclear power reactor licensees have insurance to compensate the public for damages arising from a nuclear incident. Specifically, the PAA requires licensees of facilities with a “rated capacity of 100,000 electrical kilowatts or more” to maintain the maximum amount of primary financial protection that is commercially available (currently, $450 million) with access to the aggregate amount of secondary financial protection available to the industry (currently, up to $121,255,000 per reactor covered by the rating plan totaling approximately $13 billion for the industry per incident). The NRC's regulations at 10 CFR 140.11(a)(4) implement these PAA requirements and set forth the amount of primary and secondary financial protection that each power reactor licensee must have.
As noted above, the PAA requirements with respect to primary and secondary financial protection, and the implementing regulations at 10 CFR 140.11(a)(4), apply to licensees of facilities with a “rated capacity of 100,000 electrical kilowatts or more.” When the NRC issues a license amendment to a decommissioning licensee to reflect the defueled status of the facility, the license amendment includes removal of the rated capacity of the reactor from the license. Accordingly, a reactor that is undergoing decommissioning has no “rated capacity.” Removal of the rated capacity from the facility of a
The financial protection limits of 10 CFR 140.11(a)(4) were established to require a licensee to maintain sufficient financial protection, as specified under the PAA, to satisfy liability claims by members of the public for personal injury, property damage, and the legal cost associated with lawsuits, as the result of a nuclear incident at an operating reactor with a rated capacity of 100,000 electric kilowatts (or greater). Thus, the financial protection levels established by this regulation, and as required by the PAA, were associated with the risks and potential consequences of an incident at an operating reactor with a rated capacity of 100,000 electric kilowatts (or greater). The legal and associated technical basis for granting exemptions from 10 CFR part 140 is set forth in SECY-93-127. The legal analysis underlying SECY-93-127 concluded that, upon a technical finding that lesser potential hazards exist after termination of operations (and removal of the rated capacity), the Commission has the discretion under the PAA to reduce the amount of insurance required of a licensee undergoing decommissioning.
As a technical matter, the fact that a reactor has permanently ceased operations is not itself determinative as to whether a licensee may cease providing the offsite financial protection coverage required by the PAA and 10 CFR 140.11(a)(4). In light of the presence of freshly discharged irradiated fuel in the spent fuel pool at a recently shutdown reactor, the primary consideration is the risk and potential consequence of an offsite radiological release from a zirconium fire. That risk generally remains the greatest for a period of about 15 to 18 months of decay time for the fuel used in the last cycle of power operation. After that time, the offsite consequences of an offsite radiological release from a zirconium fire are negligible for shutdown reactors, but the SFP is still operational and an inventory of radioactive materials still exists onsite. Therefore, an evaluation of the potential for offsite damage is necessary to determine the appropriate level of offsite insurance post shutdown, in accordance with the Commission's discretionary authority under the PAA to establish an appropriate level of required financial protection for such shutdown facilities.
The NRC staff has conducted an evaluation and concluded that, aside from the handling, storage, and transportation of spent fuel and radioactive materials for a permanently shut down and defueled reactor, no reasonably conceivable potential incident exists that could cause significant offsite damage. During normal power reactor operations, the forced flow of water through the reactor coolant system (RCS) removes heat generated by the reactor. The RCS, operating at high temperatures and pressures, transfers this heat through the steam generator tubes converting non-radioactive feedwater to steam, which then flows to the main turbine generator to produce electricity. Many of the accident scenarios postulated for operating power reactors involve failures or malfunctions of systems that could affect the fuel in the reactor core, which in the most severe postulated accidents, would involve the release of large quantities of fission products. With the permanent cessation of reactor operations at SONGS and the permanent removal of the fuel from the reactor cores, such accidents are no longer possible. The reactors, RCS, and supporting systems no longer operate and have no function related to the storage of the irradiated fuel. Therefore, postulated accidents involving failure or malfunction of the reactors, RCS, or supporting systems are no longer applicable.
As described in the PSDAR, SONGS, Unit 1, is being returned to a condition suitable for unrestricted use. According to SCE, there are no structures, systems, or components (SSCs) classified as safety-related remaining at SONGS, Unit 1. Plant dismantlement is complete and nearly all of the SSCs have been shipped offsite for disposal. Only the spent fuel, reactor vessel, and the below-grade portions of some buildings remain onsite. The principal remaining decommissioning activities are soil remediation, compaction, and grading. This is to be completed in conjunction with the future decommissioning of the ISFSI subsequent to offsite shipment of the spent fuel.
The licensee also stated that decommissioning of SONGS, Units 2 and 3, has begun and the nuclear reactors and essentially all associated SSCs in the nuclear steam supply system and balance of plant that supported the generation of power have been retired in place and are being prepared for removal. The SSCs that remain operable are associated with the SFPs and the spent fuel building, are needed to meet other regulatory requirements, or are needed to support other site facilities (
During reactor decommissioning, the principal radiological risks are associated with the storage of spent fuel onsite. In addition, a site with a permanently shutdown and defueled reactor may contain an inventory of radioactive liquids, activated reactor components, and contaminated materials. For purposes of modifying the amount of financial protection maintained by a permanently shutdown and defueled reactor licensee, the potential radiological consequences of these non-operating reactor nuclear incidents are appropriate to consider, despite their very low probability of occurrence. On a case-by-case basis, licensees undergoing decommissioning have been granted permission to reduce the required amount of primary offsite financial protection from $450 million to $100 million, and to withdraw from the industry retrospective rating plan.
In its September 16, 2015, exemption request, SCE discusses both design-basis and beyond design-basis events involving irradiated fuel stored in the SFPs. The staff independently evaluated the offsite consequences associated with various decommissioning activities, design basis accidents, and beyond design basis accidents at SONGS, in consideration of its permanently shut down and defueled status. The possible design-basis and beyond design basis accident scenarios at SONGS show that the radiological consequences of these accidents are greatly reduced at a permanently shut down and defueled reactor, in comparison to a fueled reactor. Further, the staff has used the offsite radiological release limits established by the U.S. Environmental Protection Agency (EPA) early-phase Protective Action Guidelines (PAGs) of one roentgen equivalent man (rem) at the exclusion area boundary in determining that any possible radiological releases would be minimal and would not require precautionary protective actions (
The only beyond design-basis event that has the potential to a significant radiological release at a decommissioning reactor is a zirconium fire. The zirconium fire scenario is a postulated, but highly unlikely, beyond design-basis accident scenario that involves loss of water inventory from the SFP, resulting in a significant heat-up of the spent fuel, and culminating in substantial zirconium cladding oxidation and fuel damage. The probability of a zirconium fire scenario is related to the decay heat of the irradiated fuel stored in the SFP. Therefore, the risks from a zirconium fire scenario continue to decrease as a function of the time that SONGS has been permanently shut down.
The licensee provided a detailed analysis of the events that could result in an offsite radiological release at SONGS in its March 31, 2014, submittal to the NRC (ADAMS Accession No. ML14092A332), as supplemented by letters dated September 9, October 2, October 7, October 27, November 3, and December 15, 2014 (ADAMS Accession Nos. ML14258A003, ML14280A265, ML14287A228, ML14303A257, ML14309A195, and ML14351A078, respectively). One of these beyond design-basis accidents involves a complete loss of SFP water inventory, where cooling of the spent fuel would be primarily accomplished by natural circulation of air through the uncovered spent fuel assemblies. The licensee's analysis of this accident shows that by August 31, 2014, air-cooling of the spent fuel assemblies will be sufficient to keep the fuel within a safe temperature range indefinitely without fuel cladding damage or offsite radiological release. The NRC staff has confirmed the reduced risks at SONGS by comparing the generic risk assumptions in the analyses in NUREG-1738, “Technical Study of Spent Fuel Pool Accident Risk at Decommissioning Nuclear Power Plants,” dated February 28, 2001 (ADAMS Accession No. ML010430066) to site-specific conditions at SONGS; based on this assessment, the staff determined that the risk values in NUREG-1738 bound the risks presented by SONGS.
The Commission has previously authorized a lesser amount of financial protection, based on an analysis of the zirconium fire risk. In SECY-93-127, “Financial Protection Required of Licensees of Large Nuclear Power Plants during Decommissioning,” dated May 10, 1993 (ADAMS Accession No. ML12257A628), the staff outlined a policy for reducing required liability insurance coverage for decommissioning reactors, and concluded that there was a low likelihood and reduced short-term public health consequences of a zirconium fire once a decommissioning plant's spent fuel has sufficiently decayed. The discussions in SECY-93-127 centered primarily on the public health and safety risks associated with storing fuel in spent fuel pools. In its Staff Requirements Memorandum dated July 13, 1993 (ADAMS Accession No. ML003760936), the Commission approved a policy that would permit reductions in financial protection, when a licensee was able to demonstrate that the spent fuel could be air-cooled if the SFP was drained of water.
Upon demonstration of this technical criterion, the Commission policy allowed decommissioning licensees to withdraw from participation in the industry retrospective rating plan, and permitted reductions in the required amount of primary financial protection from $450 million to $100 million. The staff has used this technical criterion to grant similar exemptions to other decommissioning reactor licensees (
In SECY-00-0145, “Integrated Rulemaking Plan for Nuclear Power Plant Decommissioning,” dated June 28, 2000, and SECY-01-0100, “Policy Issues Related to Safeguards, Insurance, and Emergency Preparedness Regulations at Decommissioning Nuclear Power Plants Storing Fuel in the Spent Fuel Pool,” dated June 4, 2001 (ADAMS Accession Nos. ML003721626 and ML011450420, respectively), the staff discussed additional information concerning SFP zirconium fire risks at decommissioning reactors and associated implications for offsite insurance. Analyzing when the spent fuel stored in the SFP is capable of air-cooling is one measure that demonstrates when the probability of a zirconium fire would be exceedingly low. However, the staff has more recently used an additional analysis that would bound an incomplete drain down of the SFP water, or some other catastrophic event (such as a complete drainage of the SFP with rearrangement of spent fuel rack geometry and/or the addition of rubble to the SFP). The analysis postulates that decay heat transfer from the spent fuel via conduction, convection, or radiation would be impeded. This analysis is often referred to as an adiabatic heat-up analysis.
The licensee's analyses referenced in its exemption request demonstrates that under conditions where the SFP water inventory has drained completely and only air-cooling of the stored irradiated fuel is available, after August 2014 air-cooling of the spent fuel assemblies will be sufficient to keep the fuel within a safe temperature range indefinitely without fuel cladding damage or offsite radiological release. However, a portion of the air-cooling analyses credits operation of the normal fuel building ventilation systems because the fuel building structures are robust and offer little potential for natural air exchange with the environment for cooling. Because the normal fuel building ventilation could become unavailable during an initiating event that would lead to complete SFP drainage (
As discussed in the staff response to a question in SECY-00-0145, “the staff believes that full insurance coverage must be maintained for 5 years or until a licensee can show by analysis that its spent fuel pool is no longer vulnerable to such [a zirconium] fire.” In addition, as discussed in the staff response to another question in SECY-00-0145:
Since the zirconium fire scenario would be possible for up to several years following shutdown, and since the consequences of such a fire could be severe in terms of offsite health consequences, property damage, and land contamination, the staff position is that full offsite liability coverage (both primary and secondary levels) must be retained for five years or until analysis has indicated that a zirconium fire is no longer possible. At that point, primary coverage would be reduced from $200 million to $100 million and participation in the secondary retrospective rating pool would no longer be required.
In addition to the air-cooling scenario, the licensee's adiabatic heat-up analyses demonstrate that as of October 12, 2014, there would be at least 17 hours after the loss of all means of cooling (both air and/or water), before the spent fuel cladding would reach a temperature where the potential for a significant offsite radiological release could occur. The licensee states that for this loss of all cooling scenario, 10 hours is sufficient time for personnel to respond with additional resources, equipment, and capability to restore cooling to the SFPs, even after a non-credible, catastrophic event.
As provided in SCE's letters dated October 7 and December 15, 2014, the licensee furnished information concerning its makeup strategies, in the event of a loss of SFP coolant inventory. The multiple strategies for providing makeup to the SFPs include: Using existing plant systems for inventory makeup; an internal strategy that relies on installed fire water pumps and service water or fire water storage tanks; or an external strategy that uses portable pumps to initiate makeup flow into the SFPs through a seismic standpipe and standard fire hoses routed to the SFPs or to a spray nozzle. These strategies will be maintained by a license condition until such time as all fuel has been moved to dry storage in an onsite ISFSI. The licensee states that the equipment needed to perform these actions are located onsite, and that the external makeup strategy (using portable pumps) is capable of being deployed within 2 hours. The licensee also stated that, considering the very low-probability of beyond design-basis accidents affecting the SFPs, these diverse strategies provide defense-in-depth and time to mitigate and prevent a zirconium fire, using makeup or spray into the SFP before the onset of zirconium cladding rapid oxidation.
In the safety evaluation of the licensee's request for exemptions from certain emergency planning requirements dated June 4, 2015 (ADAMS Accession No. ML15082A204), the NRC staff assessed the SCE accident analyses associated with the radiological risks from a zirconium fire at the permanently shutdown and defueled SONGS site. The NRC staff has confirmed that under conditions where cooling air flow can develop, suitably conservative calculations indicate that by the end of August 2014, the fuel would remain at temperatures where the cladding would be undamaged for an unlimited period. The staff also finds that the additional cooling time provided for the fuel between January 2012 and the issuance of this exemption provides reasonable assurance that zirconium fire risks from the irradiated fuel stored in the SFPs is of negligible concern. For the very unlikely beyond design-basis accident scenario, where the SFP coolant inventory is lost in such a manner that all methods of heat removal from the spent fuel are no longer available, there will be a minimum of 10 hours from the initiation of the accident until the cladding reaches a temperature where offsite radiological release might occur. The staff finds that 10 hours is sufficient time to support deployment of mitigation equipment, consistent with plant conditions, to prevent the zirconium cladding from reaching a point of rapid oxidation.
The NRC staff has determined that the licensee's proposed reduction in primary offsite liability coverage to a level of $100 million, and the licensee's proposed withdrawal from participation in the secondary insurance pool for offsite financial protection, are consistent with the policy established in SECY-93-127 and subsequent insurance considerations, resulting from additional zirconium fire risks, as discussed in SECY-00-0145 and SECY-01-0100. The NRC has previously determined in SECY-00-0145 that the minimum offsite financial protection requirement may be reduced to $100 million and that secondary insurance is not required, once it is determined that the spent fuel in the spent fuel pool is no longer thermal-hydraulically capable of sustaining a zirconium fire based on a plant-specific analysis. In addition, the NRC staff notes that similar exemptions have been granted to other permanently shutdown and defueled power reactors, upon demonstration that the criterion of the zirconium fire risks from the irradiated fuel stored in the SFP is of negligible concern. Finally, the staff notes that in accordance with the SONGS PSDAR, all spent fuel will be removed from the SFPs and moved into dry storage at an onsite ISFSI by the end of 2019, and the probability of an initiating event that would threaten SFP integrity occurring before that time is extremely low, which further supports the conclusion that the risk of a zirconium fire is negligible.
In accordance with 10 CFR 140.8, the Commission may grant exemptions from the regulations in 10 CFR part 140 as the Commission determines are authorized by law. The NRC staff has determined that granting the licensee's proposed exemption will not result in a violation of the Atomic Energy Act of 1954, Section 170, as amended, other laws, or the Commission's regulations, which require licensees to maintain adequate financial protection. Therefore, the proposed exemption for SONGS from the primary offsite liability insurance and secondary financial protection requirements of 10 CFR 140.11(a)(4) is authorized by law.
The financial protection limits of 10 CFR 140.11 were established to require licensees to maintain sufficient offsite liability insurance to ensure adequate funding for offsite liability claims, following an accident at an operating reactor. However, the regulation does not consider the reduced potential for and consequences of nuclear incidents at permanently shutdown and decommissioning reactors.
In SECY-93-127, SECY-00-0145, and SECY-01-0100 provide a basis for allowing licensees of decommissioning plants to reduce their primary offsite liability insurance and to withdraw from participation in the retrospective rating pool for deferred premium charges. As discussed in these documents, once the zirconium fire concern is determined to be negligible, possible accident scenario risks at permanently shutdown and defueled reactors are greatly reduced, when compared to operating reactors, and the associated potential for offsite financial liabilities from an accident are commensurately less. The licensee has analyzed and the staff has confirmed that the possible accidents that could result in an offsite radiological risk are minimal, thereby justifying the proposed reductions in offsite liability insurance and withdrawal from participation in the secondary retrospective rating pool for deferred premium charges.
Additionally, participation in the secondary retrospective rating pool could be problematic for SCE because the licensee would incur financial liability if an extraordinary nuclear incident occurred at another nuclear power plant. Because SONGS is permanently shut down, it does not
The reduced overall risk to the public at decommissioning power plants does not warrant SCE to carry full operating reactor insurance coverage, after the requisite spent fuel cooling period has elapsed, following final reactor shutdown. The licensee's proposed financial protection limits will maintain a level of liability insurance coverage commensurate with the risk to the public. These changes are consistent with previous NRC policy and exemptions approved for other decommissioning reactors. Thus, the underlying purpose of the regulations will not be adversely affected by reductions in the insurance coverage for SONGS.
Accordingly, the proposed exemption for SONGS from the primary offsite liability insurance and secondary financial protection requirements of 10 CFR 140.11(a)(4) is in the public interest.
Pursuant to 10 CFR 51.22(c)(25), the granting of an exemption from the requirements of any regulation in Chapter I of 10 CFR is a categorical exclusion provided that (i) there is no significant hazards consideration; (ii) there is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite; (iii) there is no significant increase in individual or cumulative public or occupational radiation exposure; (iv) there is no significant construction impact; (v) there is no significant increase in the potential for or consequences from radiological accidents; and (vi) the requirements from which an exemption is sought are among those identified in 10 CFR 51.22(c)(25)(vi).
The NRC staff has determined that approval of the exemption request involves no significant hazards consideration because reducing the licensee's offsite liability requirements at the decommissioning San Onofre Nuclear Generating Station, Units 2 and 3, does not (1) involve a significant increase in the probability or consequences of an accident previously evaluated; (2) create the possibility of a new or different kind of accident from any accident previously evaluated; or (3) involve a significant reduction in a margin of safety. The exempted financial protection regulation is unrelated to the operation of SONGS. Accordingly, there is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite, and no significant increase in individual or cumulative public or occupational radiation exposure.
The exempted regulation is not associated with construction, so there is no significant construction impact. The exempted regulation does not concern the source term (
Therefore, pursuant to 10 CFR 51.22(b) and 10 CFR 51.22(c)(25), no environmental impact statement or environmental assessment need be prepared in connection with the approval of this exemption request.
Accordingly, the Commission has determined that, pursuant to 10 CFR 140.8, the exemption is authorized by law, and is otherwise in the public interest. Therefore, the Commission hereby grants SCE exemption from the requirement of 10 CFR 140.11(a)(4) to permit the licensee to reduce primary offsite liability insurance to $100 million, accompanied by withdrawal from participation in the secondary insurance pool for offsite liability insurance.
This exemption is effective upon issuance.
For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend various fees and rebates set forth in Section I of the Exchanges Schedule of Fees.
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 purpose of the proposed rule change is to amend various fees and
By way of background, GEMX currently provides volume-based maker rebates to Market Maker
The highest tier threshold attained above applies retroactively in a given month to all eligible traded contracts and applies to all eligible market participants.
Any day that the market is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from the ADV calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included.
Currently, the Exchange provides a maker rebate to Market Maker orders in Penny Symbols and SPY that is $0.30 per contract in Tier 1, $0.32 per contract in Tier 2, $0.34 per contract in Tier 3, and $0.45 per contract in Tier 4. The Exchange proposes the following changes to the maker rebate provided to Market Maker orders in Penny Symbols and SPY in Tiers 1-3: (i) Decrease the maker rebate to $0.28 per contract in Tier 1, (ii) decrease the maker rebate to $0.30 per contract in Tier 2, and (iii) increase the maker rebate to $0.35 per contract in Tier 3.
Currently, the Exchange provides a maker rebate to Priority Customer orders in Penny Symbols and SPY that is $0.25 per contract in Tier 1 (or $0.32 per contract for members that execute a Priority Customer Maker ADV of 5,000 to 19,999 contracts in a given month), $0.40 per contract in Tier 2, $0.48 per contract in Tier 3, and $0.53 per contract in Tier 4. The Exchange proposes to eliminate the higher maker rebate provided in Tier 1 for members that execute a Priority Customer ADV of 5,000 to 19,999 contracts in a given month.
Currently, the Exchange provides a maker rebate to Market Maker orders in Non-Penny Symbols (excluding index options) that is $0.40 per contract in Tier 1, $0.42 per contract in Tier 2, $0.50 per contract in Tier 3, and $0.75 per contract in Tier 4. The Exchange proposes to decrease the maker rebate provided to Market Maker orders in Non-Penny Symbols (excluding index options) to $0.45 in Tier 3.
Currently, the Exchange provides a maker rebate to Priority Customer orders in Non-Penny Symbols (excluding index options) that is $0.75 per contract in Tier 1 (or $0.76 per contract for members that execute a Priority Customer Maker ADV of 5,000 to 19,999 contracts in a given month), $0.80 per contract in Tier 2, $0.85 per contract in Tier 3, and $1.05 per contract in Tier 4. The Exchange proposes to eliminate the higher maker rebate provided in Tier 1 for members that execute a Priority Customer Maker ADV of 5,000 to 19,999 contracts in a given month.
Currently, the Exchange charges a taker fee for Market Makers and Non-Nasdaq GEMX Market Maker
Currently, the Exchange charges a taker fee for Non-Priority Customer orders in Non-Penny Symbols
Currently, the Exchange charges a taker fee for Priority Customer orders in Non-Penny Symbols (excluding index options) that is $0.82 per contract in Tier 1, and $0.81 per contract for Tiers 2-4, for trades executed against a Non-Priority Customer. The taker fee is $0.85 per contract for all Priority Customer orders in Non-Penny Symbols (excluding index options) for trades executed against a Priority Customer. The Exchange now proposes to increase the taker fee charged to Priority Customer orders in Non-Penny Symbols (excluding index options) to $0.85 per contract in Tiers 1-3 and $0.82 per contract in Tier 4, in each case for trades executed against a Non-Priority Customer.
GEMX currently charges a fee for Responses to Crossing Orders
The Exchange now proposes to increase this fee to $0.50 per contract for all market participants in Penny Symbols and SPY, and $1.00 per contract for all market participants in Non-Penny Symbols (excluding index options).
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that it is reasonable to make the proposed changes to the maker rebates provided to Market Maker and Priority Customer orders in Penny Symbols and SPY, and in Non-Penny Symbols (excluding index options), as further discussed above. While the Exchange is primarily decreasing or eliminating the maker rebates currently provided to certain Market Maker and Priority Customer orders (except for increasing the Tier 3 maker rebate for Market Maker orders in Penny Symbols and SPY), the maker rebates provided to Market Makers and Priority Customers generally remain more favorable than the maker rebates provided to all other GEMX market participants. As such, the Exchange believes that the proposed changes to the Market Maker and Priority Customer maker rebates will continue to incentivize these market participants to send additional order flow to GEMX, thereby creating additional liquidity to the benefit of members and investors that trade on the Exchange. Furthermore, with the proposed changes to the Market Maker rebate amounts, the tiered maker rebates (
The Exchange also believes that the proposed changes to the maker rebates as described above are equitable and not unfairly discriminatory. As has historically been the case, Market Maker and Priority Customer orders will continue to earn more favorable maker rebates in order to encourage that order flow. Market Makers have different requirements and obligations to the Exchange that other market participants do not (such as quoting requirements). In addition, a Priority Customer is by definition not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). This limitation does not apply to participants whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders than Priority Customers. As such, Priority Customer orders remain entitled to more favorable pricing than other market participants.
The Exchange believes that it is reasonable to increase the taker fees charged to all Non-Priority Customer orders in Penny Symbols and SPY from $0.49 to $0.50 per contract in Tiers 1-3 because the proposed change is a modest increase in fees. Furthermore, the proposed taker fees are within the range of similar fees currently charged by other options exchanges, including NOM, which assesses all NOM participants (including customers) a fee for removing liquidity of up to $0.50 per contract in penny pilot options.
Furthermore, the Exchange believes that the proposed increase in the taker fees for Penny Symbols and SPY, and for Non-Penny Symbols (excluding
The Exchange believes that the proposed fees for Responses to Crossing Orders (excluding PIM orders), which are being increased for all market participants to $0.50 per contract in Penny Symbols and SPY, and $1.00 per contract in Non-Penny Symbols (excluding index options), are reasonable because they remain competitive with similar fees assessed by other options exchanges, including, for example, BOX Options Exchange (“BOX”), which charges up to $0.50 and $1.15 per contract for responses in its solicitation or facilitation auction mechanisms for penny pilot and non-penny pilot classes, respectively.
Finally, the Exchange believes that the proposed fees for Responses to Crossing Orders (excluding PIM orders) are equitable and not unfairly discriminatory because they would uniformly apply to all similarly-situated market participants.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the Exchange believes that the proposed fees and rebates in Section I of the Exchange's Schedule of Fees remain competitive with similar fees and rebates offered on other options exchanges. The Exchange operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend the Market Data section of its fee schedule to lower the Internal Distribution
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Market Data section of its fee schedule to lower the fee for Internal Distribution and to adopt separate fees for Professional
The Cboe One Feed is an optional data feed that disseminates, on a real-time basis, the aggregate best bid and offer (“BBO”) of all displayed orders for securities traded on BZX and its affiliated exchanges
The Exchange proposes to amend its fee schedule to lower the fee for Internal Distribution for the Cboe One Summary Feed and to adopt separate fees for Professional and Non-Professional Users.
The Exchange also proposes to extend the current $50,000 per month Enterprise Fee available to External Distributors of the Cboe One Summary Feed to Internal Distributors. In lieu of per User fees, the Enterprise fee will permit Internal Distributors who redistribute the Cboe One Summary Feed to an unlimited number of internal Professional and Non-Professional Users for a set fee of $50,000 per month. For example, if an Internal Distributor had 15,000 Professional Users who each receive the Cboe One Summary Feed at $10.00 per month, then that Internal Distributor will pay $150,000 per month in Professional Users fees. Under the proposed Enterprise Fee, the Internal Distributor will pay a flat fee of $50,000 for an unlimited number of internal
The ETF Implied Liquidity feed is an optional data feed that provides the Exchange's proprietary calculation of the implied liquidity and the aggregate best bid and offer (“BBO”) of all displayed orders on the Cboe Equity Exchange for all standard, non-leveraged U.S. equity Exchange Traded Funds (“ETFs”)
Similar to as proposed above for the Cboe One Summary Feed, the Exchange proposes to amend its fee schedule to lower the fee for Internal Distribution and to adopt separate fees for Professional and Non-Professional Users.
Like External Distributors of the Cboe One Summary Feed and the ETF Implied Liquidity Feed, Internal Distributors that receive the Cboe One Summary Feed and/or ETF Implied Liquidity Feed will be required to count every Professional User and Non-Professional User to which they provide the Cboe One Summary Feed and/or ETF Implied Liquidity Feed, the requirements for which are identical to that currently in place for External Distributors of the Cboe One Summary Feed and ETF Implied Liquidity Feed, as well as other market data products offered by the Exchange.
• In connection with an Internal Distributor's distribution of the Cboe One Summary Feed and/or ETF Implied Liquidity Feed, the Internal Distributor must count as one User each unique User that the Internal Distributor has entitled to have access to the Cboe One Summary Feed and/or ETF Implied Liquidity Feed. However, where a device is dedicated specifically to a single individual, the Internal Distributor must count only the individual and need not count the device.
• The Internal Distributor must identify and report each unique User. If a User uses the same unique method to gain access to the Cboe One Summary Feed and/or ETF Implied Liquidity Feed, the Internal Distributor must count that as one User. However, if a unique User uses multiple methods to gain access to the Cboe One Summary Feed and/or the ETF Implied Liquidity Feed (
• Internal Distributors must report each unique individual person who receives access through multiple devices as one User so long as each device is dedicated specifically to that individual.
• If an Internal Distributor entitles one or more individuals to use the same device, the Distributor must include only the individuals, and not the device, in the count.
The Exchange intends to implement the proposed fees on January 2, 2018.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange believes that the proposed rule change is consistent with Section 11(A) of the Act
In addition, the proposed fees would not permit unfair discrimination because all of the Exchange's customers and market data vendors who subscribe to the Cboe One Summary Feed and ETF Implied Liquidity Feed will be subject to the proposed fees. The Cboe One Summary Feed and ETF Implied Liquidity Feed are distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation purchase this data or to make this data available. Accordingly, Distributors and Users can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Firms have a wide variety of alternative market data products from which to choose, such as similar proprietary data products offered by other exchanges and consolidated data. Moreover, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
In addition, the fees that are the subject of this rule filing are constrained by competition. As explained below in the Exchange's Statement on Burden on Competition, the existence of alternatives to the Cboe One Summary Feed and ETF Implied Liquidity Feed further ensure that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect such alternatives. That is, the Exchange competes with other exchanges (and their affiliates) that provide similar market data products. For example, the Cboe One Summary Feed and/or ETF Implied Liquidity Feed provides investors with alternative market data and competes with similar market data product currently offered by other exchanges. If another exchange (or its affiliate) were to charge less to distribute its similar product than the Exchange charges to create the Cboe One Summary Feed and/or ETF Implied Liquidity Feed, prospective Users likely would not subscribe to, or would cease subscribing to either market data product.
The Exchange notes that the Commission is not required to undertake a cost-of-service or rate-making approach. The Exchange believes that, even if it were possible as a matter of economic theory, cost-based pricing for non-core market data would be so complicated that it could not be done practically.
The Exchange believes that lowering the Internal Distribution fee for both the Cboe One Summary Feed and the ETF Implied Liquidity Feed is equitable and reasonable because the lower fee coupled with the adoption of per User fees is designed to provide a price structure for Internal Distributors that is competitive and attracts additional subscribers to each market data feed. The Exchange also believes that it is reasonable to charge a lower fee to Internal Distributors than External Distributors because External Distributors redistribute the data to their subscribers for a fee while Internal Distributors do not.
The Exchange believes it is reasonable to waive the Distributor fee for Internal Distributors of the ETF Implied Liquidity Feed that also receive the Cboe One Feed as both include the aggregate BBO for all displayed orders on the Cboe Equity Exchanges and an identical waiver is currently granted to External Distributors. The key difference here is that the ETF Implied Liquidity Feed also contains the Exchange's proprietary calculation of the ETF's implied liquidity. Waiver of the Distributor fee for Internal Distributors that also receive and pay the Internal Distributor for the Cboe One Feed is equitable and reasonable because those Internal Distributors are being charged the Internal Distributor fees for the Cboe One Feed, which would be charged the proposed rate of $1,500 per month for Cboe One Summary and the existing rate of $15,000 per month for Cboe One Premium. The fee waiver here is equitable due to both products providing the same key data element—the aggregated BBO of the Cboe Equity Exchanges. While the ETF Implied Liquidity Feed also includes the Exchange's proprietary calculation of an ETF's implied liquidity, the Exchange notes that Internal Distributors of the ETF Implied Liquidity Feed would now be subject to the per User fees. Therefore, the Exchange believes it is equitable and reasonable to waive the Internal Distributor fees in such case. The Exchange did not previously extend this waiver to Internal Distributors because Internal Distributors of the Cboe One Feed were not charged User fees like External Distributors. Since that is no longer the case, the Exchange believes it is reasonable to extend the waiver to Internal Distributors as proposed herein.
The Exchange believes that implementing the Professional and Non-Professional User fees for the Cboe One Summary Feed and the ETF Implied Liquidity Feed are equitable and reasonable because they will result in greater availability to Professional and Non-Professional Users. The addition of per User fees also enables the fee for
The fee structure of differentiated Professional and Non-Professional fees is utilized by the Exchange for the Cboe One Feed and has long been used by other exchanges for their proprietary data products, and by the Nasdaq UTP and the CTA and CQ Plans in order to reduce the price of data to retail investors and make it more broadly available.
The proposed expansion of the Enterprise Fee to Internal Distributors of the Cboe One Summary Feed is reasonable because it could result in a fee reduction for Internal Distributors with a large number of Professional and Non-Professional Users. If an Internal Distributor has a smaller number of Professional Users of the Cboe One Summary Feed, then it may continue using the per User structure. By reducing prices for Internal Distributors with a large number of Professional and Non-Professional Users, the Exchange believes that more Internal Distributors may choose to receive and to distribute the Cboe One Summary Feed, thereby expanding the distribution of this market data for the benefit of investors.
The Exchange further believes that the proposed Enterprise Fee is reasonable because it will simplify reporting for certain Internal Distributors that have large numbers of Professional and Non-Professional Users. Internal Distributors that pay the proposed Enterprise Fee will not have to report the number of Users on a monthly basis as they currently do, but rather will only have to count natural person users every six months, which is a significant reduction in administrative burden. Finally, the Exchange believes that it is equitable and not unfairly discriminatory to establish an Enterprise Fee because it reduces the Exchange's costs and the Distributor's administrative burdens in tracking and auditing large numbers of Users.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. The Exchange's ability to price the Cboe One Summary Feed and the ETF Implied Liquidity Feed is constrained by: (i) Competition among exchanges, other trading platforms, and Trade Reporting Facilities (“TRF”) that compete with each other in a variety of dimensions; (ii) the existence of inexpensive real-time consolidated data and market-specific data and free delayed data; and (iii) the inherent contestability of the market for proprietary data.
The Exchange and its market data products are subject to significant competitive forces and the proposed fees represent responses to that competition. To start, the Exchange competes intensely for order flow. It competes with the other national securities exchanges that currently trade equities, with electronic communication networks, with quotes posted in FINRA's Alternative Display Facility, with alternative trading systems, and with securities firms that primarily trade as principal with their customer order flow. The Cboe One Summary Feed will enhance competition because it not only provides content that is competitive with the similar products offered by other exchanges, but will provide pricing that is competitive as well. The Cboe One Summary Feed provides investors with an alternative option for receiving market data and competes directly with similar market data products currently offered by the NYSE and Nasdaq.
In addition, when establishing the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all Users. The existence of alternatives to the Cboe One Summary Feed and the ETF Implied Liquidity Feed ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase.
Lastly, the Exchange represents that the proposed pricing of the Cboe One Summary Feed and the ETF Implied Liquidity Feed provides investors with alternative market data and competes with similar market data product currently offered by other exchanges.
The Exchange has neither solicited nor received written comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission.
Notice of annual inflation adjustment of civil monetary penalties.
The Securities and Exchange Commission (the “Commission”) is publishing this notice pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the “2015 Act”). This Act requires all agencies to annually adjust for inflation the civil monetary penalties that can be imposed under the statutes administered by the agency and publish the adjusted amounts in the
James A. Cappoli, Assistant General Counsel, Office of the General Counsel, at (202) 551-7923, or Stephen M. Ng, Senior Special Counsel, Office of the General Counsel, at (202) 551-7957.
This notice is being published pursuant to the 2015 Act,
The 2015 Act replaces the inflation adjustment formula prescribed in the DCIA with a new formula for calculating the inflation-adjusted amount of CMPs. The 2015 Act requires that agencies use this new formula to re-calculate the inflation-adjusted amounts of the
A CMP is defined in relevant part as any penalty, fine, or other sanction that: (1) Is for a specific amount, or has a maximum amount, as provided by federal law; and (2) is assessed or enforced by an agency in an administrative proceeding or by a federal court pursuant to federal law.
This notice sets forth the annual inflation adjustment required by the 2015 Act for all CMPs under the Securities Act, the Exchange Act, the Investment Company Act, and the Investment Advisers Act, and certain civil monetary penalties under the Sarbanes-Oxley Act.
Pursuant to the 2015 Act, the penalty amounts in the 2017 Adjustment are adjusted for inflation by increasing them by the percentage change between the Consumer Price Index for all Urban Consumers (“CPI-U”) for October 2016 and the October 2017 CPI-U.
For example, the CMP for certain insider trading violations by controlling persons under Exchange Act Section 21A(a)(3)
Below is the Commission's calculation of the new penalty amounts for the penalties it administers:
Pursuant to the 2015 Act and 17 CFR 201.1001, the adjusted penalty amounts in this notice (and all penalty adjustments performed pursuant to the 2015 Act) apply to penalties imposed after the date the adjustment is effective for violations that occurred after November 2, 2015, the 2015 Act's enactment date. These penalty amounts supersede the amounts in the 2017 Adjustment.
By the Commission.
On December 11, 2017, the Operating Committee for CAT NMS, LLC (the “Company”), on behalf of the following parties to the National Market System Plan Governing the Consolidated Audit Trail (the “CAT NMS Plan” or “Plan”):
Set forth in this Section II is the statement of the purpose and summary of Amendment No. 4, along with the information required by Rule 608(a)(4) and (5) under the Exchange Act,
The following provides an executive summary of the CAT funding model approved by the Operating Committee, as well as Participants' obligations related to the payment of CAT Fees calculated pursuant to the CAT funding model. A detailed description of the CAT funding model and the CAT Fees follows this executive summary.
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Article XI of the CAT NMS Plan requires the Operating Committee to approve the operating budget, including projected costs of developing and operating the CAT for the upcoming year. In addition to a budget, Article XI of the CAT NMS Plan provides that the Operating Committee has discretion to establish funding for the Company, consistent with a bifurcated funding model, where costs associated with building and operating the Central Repository would be borne by (1) Participants and Industry Members that are Execution Venues through fixed tier fees based on market share, and (2) Industry Members (other than Execution Venue ATSs) through fixed tier fees based on message traffic. In its order approving the CAT NMS Plan, the Commission determined that the proposed funding model was “reasonable”
More specifically, the Commission stated in approving the CAT NMS Plan that “[t]he Commission believes that the proposed funding model is reasonably designed to allocate the costs of the CAT between the Participants and Industry Members.”
The Commission believes that the proposed funding model reflects a reasonable exercise of the Participants' funding authority to recover the Participants' costs related to the CAT. The CAT is a regulatory facility jointly owned by the Participants and . . . the Exchange Act specifically permits the Participants to charge members fees to fund their self-regulatory obligations. The Commission further believes that the proposed funding model is designed to impose fees reasonably related to the Participants' self-regulatory obligations because the fees would be directly associated with the costs of establishing and maintaining the CAT, and not unrelated SRO services.
As discussed in Appendix C of the CAT NMS Plan, in developing and approving the approved funding model, the Operating Committee considered the advantages and disadvantages of a variety of alternative funding and cost allocation models before selecting the proposed model.
In particular, the fixed fee model, as opposed to a variable fee model, provides transparency, ease of calculation, ease of billing and other administrative functions, and predictability of a fixed fee. Such factors are crucial to estimating a reliable revenue stream for the Company and for permitting CAT Reporters to reasonably predict their payment obligations for budgeting purposes. Additionally, a strictly variable or metered funding model based on message volume would be far more likely to affect market behavior and place an inappropriate burden on competition.
In addition, reviews from varying time periods of current broker-dealer order and trading data submitted under existing reporting requirements showed a wide range in activity among broker-dealers, with a number of broker-dealers submitting fewer than 1,000 orders per month and other broker-dealers submitting millions and even billions of orders in the same period. Accordingly, the CAT NMS Plan includes a tiered approach to fees. The tiered approach helps ensure that fees are equitably allocated among similarly situated CAT
Accordingly, the CAT NMS Plan contemplates that costs will be allocated across the CAT Reporters on a tiered basis in order to allocate higher costs to those CAT Reporters that contribute more to the costs of creating, implementing and maintaining the CAT and lower costs to those that contribute less.
The CAT NMS Plan states that Industry Members (other than Execution Venue ATSs) will be charged based on message traffic, and that Execution Venues will be charged based on market share.
In contrast to Industry Members, which determine the degree to which they produce message traffic that constitute CAT Reportable Events, the CAT Reportable Events of the Execution Venues are largely derivative of quotations and orders received from Industry Members that they are required to display. The business model for Execution Venues (other than FINRA), however, is focused on executions in their markets. As a result, the Operating Committee believes that it is more equitable to charge Execution Venues based on their market share rather than their message traffic.
Focusing on message traffic would make it more difficult to draw distinctions between large and small Execution Venues and, in particular, between large and small options exchanges. For instance, the Operating Committee analyzed the message traffic of Execution Venues and Industry Members for the period of April 2017 to June 2017 and placed all CAT Reporters into a nine-tier framework (
The CAT NMS Plan's funding model also is structured to avoid a “reduction in market quality.”
The funding model also is structured to avoid a reduction market quality because it discounts Options Market Maker and equity market maker quotes when calculating message traffic for Options Market Makers and equity market makers, respectively. As discussed in more detail below, the Operating Committee determined to discount the Options Market Maker quotes by the trade to quote ratio for options when calculating message traffic for Options Market Makers. Similarly, to avoid disincentives to quoting behavior on the equities side as well, the Operating Committee determined to discount equity market maker quotes by the trade to quote ratio for equities when calculating message traffic for equity market makers. The proposed discounts recognize the value of the market makers' quoting activity to the market as a whole.
The CAT NMS Plan is further structured to avoid potential conflicts raised by the Operating Committee determining fees applicable to its own members—the Participants. First, the Company will operate on a “break-even” basis, with fees imposed to cover costs and an appropriate reserve. Any surpluses will be treated as an operational reserve to offset future fees and will not be distributed to the Participants as profits.
The funding model also is structured to take into account distinctions in the securities trading operations of Participants and Industry Members. For example, the Operating Committee designed the model to address the different trading characteristics in the OTC Equity Securities market. Specifically, the Operating Committee proposes to discount the OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities as well as the market share of the FINRA ORF by the average shares per trade ratio between NMS Stocks and OTC Equity Securities to adjust for the greater number of shares being traded in the OTC Equity Securities market, which is generally a function of a lower per share price for OTC Equity Securities when compared to NMS Stocks. In addition, the Operating Committee also proposes to discount Options Market Maker and equity market maker message traffic in recognition of their role in the securities markets. Furthermore, the funding model creates separate tiers for Equity and Options Execution Venues due to the different trading characteristics of those markets.
Finally, by adopting a CAT-specific fee, the Operating Committee will be fully transparent regarding the costs of the CAT. Charging a general regulatory fee, which would be used to cover CAT costs as well as other regulatory costs, would be less transparent than the selected approach of charging a fee designated to cover CAT costs only.
A full description of the funding model is set forth below. This description includes the framework for the funding model as set forth in the CAT NMS Plan, as well as the details as to how the funding model will be applied in practice, including the number of fee tiers and the applicable fees for each tier. The complete funding model is described below, including those fees that are to be paid by Industry Members. Proposed Exhibit B, however, does not apply to Industry Members; proposed Exhibit B only applies to Participants. The CAT Fees for Industry Members will be imposed separately pursuant to rules adopted by the individual self-regulatory organizations (“SROs[sic]).
Section 11.2 of the CAT NMS Plan sets forth the principles that the Operating Committee applied in establishing the funding for the Company. The Operating Committee has considered these funding principles as well as the other funding requirements set forth in the CAT NMS Plan and in Rule 613 in developing the proposed funding model. The following are the funding principles in Section 11.2 of the CAT NMS Plan:
• To create transparent, predictable revenue streams for the Company that are aligned with the anticipated costs to build, operate and administer the CAT and other costs of the Company;
• To establish an allocation of the Company's related costs among Participants and Industry Members that is consistent with the Exchange Act, taking into account the timeline for implementation of the CAT and distinctions in the securities trading operations of Participants and Industry Members and their relative impact upon the Company's resources and operations;
• To establish a tiered fee structure in which the fees charged to: (i) CAT Reporters that are Execution Venues, including ATSs, are based upon the level of market share; (ii) Industry Members' non-ATS activities are based upon message traffic; (iii) the CAT Reporters with the most CAT-related activity (measured by market share and/or message traffic, as applicable) are generally comparable (where, for these comparability purposes, the tiered fee structure takes into consideration affiliations between or among CAT Reporters, whether Execution Venue and/or Industry Members);
• To provide for ease of billing and other administrative functions;
• To avoid any disincentives such as placing an inappropriate burden on competition and a reduction in market quality; and
• To build financial stability to support the Company as a going concern.
Under Section 11.3(b) of the CAT NMS Plan, the Operating Committee is required to establish fixed fees to be payable by Industry Members, based on message traffic generated by such Industry Member, with the Operating Committee establishing at least five and no more than nine tiers.
The CAT NMS Plan clarifies that the fixed fees payable by Industry Members pursuant to Section 11.3(b) shall, in addition to any other applicable message traffic, include message traffic generated by: (i) An ATS that does not execute orders that is sponsored by such Industry Member; and (ii) routing orders to and from any ATS sponsored by such Industry Member. In addition, the Industry Member fees will apply to Industry Members that act as routing broker-dealers for exchanges. The Industry Member fees will not be applicable, however, to an ATS that qualifies as an Execution Venue, as discussed in more detail in the section on Execution Venue tiering.
In accordance with Section 11.3(b), the Operating Committee approved a tiered fee structure for Industry Members (other than Execution Venue ATSs) as described in this section. In determining the tiers, the Operating Committee considered the funding principles set forth in Section 11.2 of the CAT NMS Plan, seeking to create funding tiers that take into account the relative impact on CAT System resources of different Industry Members, and that establish comparable fees among the CAT Reporters with the most Reportable Events. The Operating Committee has determined that establishing seven tiers results in an allocation of fees that distinguishes between Industry Members with differing levels of message traffic. Thus, each such Industry Member will be placed into one of seven tiers of fixed fees, based on “message traffic” for a defined period (as discussed below).
A seven tier structure was selected to provide a wide range of levels for tiering Industry Members such that Industry Members submitting significantly less message traffic to the CAT would be adequately differentiated from Industry Members submitting substantially more message traffic. The Operating Committee considered historical message traffic from multiple time periods, generated by Industry Members across all exchanges and as submitted to FINRA's Order Audit Trail System (“OATS”), and considered the distribution of firms with similar levels of message traffic, grouping together firms with similar levels of message
Each Industry Member (other than Execution Venue ATSs) will be ranked by message traffic and tiered by predefined Industry Member percentages (the “Industry Member Percentages”). The Operating Committee determined to use predefined percentages rather than fixed volume thresholds to ensure that the total CAT Fees collected recover the expected CAT costs regardless of changes in the total level of message traffic. To determine the fixed percentage of Industry Members in each tier, the Operating Committee analyzed historical message traffic generated by Industry Members across all exchanges and as submitted to OATS, and considered the distribution of firms with similar levels of message traffic, grouping together firms with similar levels of message traffic. Based on this, the Operating Committee identified seven tiers that would group firms with similar levels of message traffic.
The percentage of costs recovered by each Industry Member tier will be determined by predefined percentage allocations (the “Industry Member Recovery Allocation”). In determining the fixed percentage allocation of costs recovered for each tier, the Operating Committee considered the impact of CAT Reporter message traffic on the CAT System as well as the distribution of total message volume across Industry Members while seeking to maintain comparable fees among the largest CAT Reporters. Accordingly, following the determination of the percentage of Industry Members in each tier, the Operating Committee identified the percentage of total market volume for each tier based on the historical message traffic upon which Industry Members had been initially ranked. Taking this into account along with the resulting percentage of total recovery, the percentage allocation of costs recovered for each tier were assigned, allocating higher percentages of recovery to tiers with higher levels of message traffic while avoiding any inappropriate burden on competition. Furthermore, by using percentages of Industry Members and costs recovered per tier, the Operating Committee sought to include elasticity within the funding model, allowing the funding model to respond to changes in either the total number of Industry Members or the total level of message traffic.
The following chart illustrates the breakdown of seven Industry Member tiers across the monthly average of total equity and equity options orders, cancels, quotes and executions in the second quarter of 2017 as well as message traffic thresholds between the largest of Industry Member message traffic gaps. The Operating Committee referenced similar distribution illustrations to determine the appropriate division of Industry Member percentages in each tier by considering the grouping of firms with similar levels of message traffic and seeking to identify relative breakpoints in the message traffic between such groupings. In reviewing the chart and its corresponding table, note that while these distribution illustrations were referenced to help differentiate between Industry Member tiers, the proposed funding model is driven by fixed percentages of Industry Members across tiers to account for fluctuating levels of message traffic over time. This approach also provides financial stability for the CAT by ensuring that the funding model will recover the required amounts regardless of changes in the number of Industry Members or the amount of message traffic. Actual messages in any tier will vary based on the actual traffic in a given measurement period, as well as the number of firms included in the measurement period. The Industry Member Percentages and Industry Member Recovery Allocation for each tier will remain fixed with each Industry Member's tier to be reassigned periodically, as described below in Section A(2)(I).
Based on the above analysis, the Operating Committee approved the following Industry Member Percentages and Industry Member Recovery Allocations:
For the purposes of creating these tiers based on message traffic, the Operating Committee determined to define the term “message traffic” separately for the period before the commencement of CAT reporting and for the period after the start of CAT reporting. The different definition for message traffic is necessary as there will be no Reportable Events as defined in the Plan, prior to the commencement of CAT reporting. Accordingly, prior to the start of CAT reporting, “message traffic” will be comprised of historical equity and equity options orders, cancels, quotes and executions provided by each exchange and FINRA over the previous three months. Prior to the start of CAT reporting, orders would be comprised of the total number of equity and equity options orders received and originated
After an Industry Member begins reporting to the CAT, “message traffic” will be calculated based on the Industry Member's Reportable Events reported to the CAT as will be defined in the Technical Specifications.
Quotes of Options Market Makers and equity market makers will be included in the calculation of total message traffic for those market makers for purposes of tiering under the CAT funding model both prior to CAT reporting and once CAT reporting commences.
The Operating Committee has determined to calculate fee tiers every three months, on a calendar quarter basis, based on message traffic from the prior three months. Based on its analysis of historical data, the Operating Committee believes that calculating tiers based on three months of data will provide the best balance between reflecting changes in activity by Industry Members while still providing predictability in the tiering for Industry Members. Because fee tiers will be calculated based on message traffic from the prior three months, the Operating Committee will begin calculating message traffic based on an Industry Member's Reportable Events reported to the CAT once the Industry Member has been reporting to the CAT for three months. Prior to that, fee tiers will be calculated as discussed above with regard to the period prior to CAT reporting.
Under Section 11.3(a) of the CAT NMS Plan, the Operating Committee is required to establish fixed fees payable by Execution Venues. Section 1.1 of the CAT NMS Plan defines an Execution Venue as “a Participant or an alternative trading system (“ATS”) (as defined in Rule 300 of Regulation ATS) that operates pursuant to Rule 301 of Regulation ATS (excluding any such ATS that does not execute orders).”
The Operating Committee determined that ATSs should be included within the definition of Execution Venue. The Operating Committee believes that it is appropriate to treat ATSs as Execution Venues under the proposed funding model since ATSs have business models that are similar to those of exchanges, and ATSs also compete with exchanges.
Given the differences between Execution Venues that trade NMS Stocks and/or OTC Equity Securities and Execution Venues that trade Listed Options, Section 11.3(a) addresses Execution Venues that trade NMS Stocks and/or OTC Equity Securities separately from Execution Venues that trade Listed Options. Equity and Options Execution Venues are treated separately for two reasons. First, the differing quoting behavior of Equity and Options Execution Venues makes comparison of activity between such Execution Venues difficult. Second, Execution Venue tiers are calculated based on market share of share volume, and it is therefore difficult to compare market share between asset classes (
Section 11.3(a)(i) of the CAT NMS Plan states that each Execution Venue that (i) executes transactions or, (ii) in the case of a national securities association, has trades reported by its members to its trade reporting facility or facilities for reporting transactions effected otherwise than on an exchange, in NMS Stocks or OTC Equity Securities will pay a fixed fee depending on the market share of that Execution Venue in NMS Stocks and OTC Equity Securities, with the Operating Committee establishing at least two and not more than five tiers of fixed fees, based on an Execution Venue's NMS Stocks and OTC Equity Securities market share. For these purposes, market share for Execution Venues that execute transactions will be calculated by share volume, and market share for a national securities association that has trades reported by its members to its trade reporting facility or facilities for reporting transactions effected otherwise than on an exchange in NMS Stocks or OTC Equity Securities will be
In accordance with Section 11.3(a)(i) of the CAT NMS Plan, the Operating Committee approved a tiered fee structure for Equity Execution Venues and Option Execution Venues. In determining the Equity Execution Venue Tiers, the Operating Committee considered the funding principles set forth in Section 11.2 of the CAT NMS Plan, seeking to create funding tiers that take into account the relative impact on system resources of different Equity Execution Venues, and that establish comparable fees among the CAT Reporters with the most Reportable Events. Each Equity Execution Venue will be placed into one of four tiers of fixed fees, based on the Execution Venue's NMS Stocks and OTC Equity Securities market share. In choosing four tiers, the Operating Committee performed an analysis similar to that discussed above with regard to the non-Execution Venue Industry Members to determine the number of tiers for Equity Execution Venues. The Operating Committee determined to establish four tiers for Equity Execution Venues, rather than a larger number of tiers as established for non-Execution Venue Industry Members, because the four tiers were sufficient to distinguish between the smaller number of Equity Execution Venues based on market share. Furthermore, the selection of four tiers serves to help establish comparability among the largest CAT Reporters.
Each Equity Execution Venue will be ranked by market share and tiered by predefined Execution Venue percentages, (the “Equity Execution Venue Percentages”). In determining the fixed percentage of Equity Execution Venues in each tier, the Operating Committee reviewed historical market share of share volume for Execution Venues. Equity Execution Venue market shares of share volume were sourced from market statistics made publicly-available by Bats Global Markets, Inc. (“Bats”). ATS market shares of share volume was sourced from market statistics made publicly-available by FINRA. FINRA trade reporting facility (“TRF”) and ORF market share of share volume was sourced from market statistics made publicly available by FINRA. Based on data from FINRA and otcmarkets.com, ATSs accounted for 39.12% of the share volume across the TRFs and ORFs during the recent tiering period. A 39.12/60.88 split was applied to the ATS and non-ATS breakdown of FINRA market share, with FINRA tiered based only on the non-ATS portion of its market share of share volume.
The Operating Committee determined to discount the OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities as well as the market share of the FINRA ORF in recognition of the different trading characteristics of the OTC Equity Securities market as compared to the market in NMS Stocks. Many OTC Equity Securities are priced at less than one dollar—and a significant number at less than one penny—per share and low-priced shares tend to trade in larger quantities. Accordingly, a disproportionately large number of shares are involved in transactions involving OTC Equity Securities versus NMS Stocks. Because the proposed fee tiers are based on market share calculated by share volume, Execution Venue ATSs trading OTC Equity Securities and FINRA would likely be subject to higher tiers than their operations may warrant. To address this potential concern, the Operating Committee determined to discount the OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities and the market share of the FINRA ORF by multiplying such market share by the average shares per trade ratio between NMS Stocks and OTC Equity Securities in order to adjust for the greater number of shares being traded in the OTC Equity Securities market. Based on available data for the second quarter of 2017, the average shares per trade ratio between NMS Stocks and OTC Equity Securities is 0.17%.
Based on this, the Operating Committee considered the distribution of Execution Venues, and grouped together Execution Venues with similar levels of market share. The percentage of costs recovered by each Equity Execution Venue tier will be determined by predefined percentage allocations (the “Equity Execution Venue Recovery Allocation”). In determining the fixed percentage allocation of costs to be recovered from each tier, the Operating Committee considered the impact of CAT Reporter market share activity on the CAT System as well as the distribution of total market volume across Equity Execution Venues while seeking to maintain comparable fees among the largest CAT Reporters. Accordingly, following the determination of the percentage of Execution Venues in each tier, the Operating Committee identified the percentage of total market volume for each tier based on the historical market share upon which Execution Venues had been initially ranked. Taking this into account along with the resulting percentage of total recovery, the percentage allocation of cost recovery for each tier were assigned, allocating higher percentages of recovery to the tier with a higher level of market share while avoiding any inappropriate burden on competition. Furthermore, by using percentages of Equity Execution Venues and cost recovery per tier, the Operating Committee sought to include elasticity within the funding model, allowing the funding model to respond to changes in either the total number of Equity Execution Venues or changes in market share.
Based on this analysis, the Operating Committee approved the following Equity Execution Venue Percentages and Recovery Allocations:
Section 11.3(a)(ii) of the CAT NMS Plan states that each Execution Venue that executes transactions in Listed Options will pay a fixed fee depending on the Listed Options market share of that Execution Venue, with the Operating Committee establishing at least two and no more than five tiers of fixed fees, based on an Execution Venue's Listed Options market share. For these purposes, market share will be calculated by contract volume.
In accordance with Section 11.3(a)(ii) of the CAT NMS Plan, the Operating Committee approved a tiered fee structure for Options Execution Venues. In determining the tiers, the Operating Committee considered the funding principles set forth in Section 11.2 of the CAT NMS Plan, seeking to create funding tiers that take into account the relative impact on system resources of different Options Execution Venues, and that establish comparable fees among the CAT Reporters with the most Reportable Events. Each Options Execution Venue will be placed into one of two tiers of fixed fees, based on the Execution Venue's Listed Options market share. In choosing two tiers, the Operating Committee performed an analysis similar to that discussed above with regard to Industry Members (other than Execution Venue ATSs) to determine the number of tiers for Options Execution Venues. The Operating Committee determined to establish two tiers for Options Execution Venues, rather than a larger number, because the two tiers were sufficient to distinguish between the smaller number of Options Execution Venues based on market share. Furthermore, due to the smaller number of Options Execution Venues, the incorporation of additional Options Execution Venue tiers would result in significantly higher fees for Tier 1 Options Execution Venues and reduce comparability between Execution Venues and Industry Members. Furthermore, the selection of two tiers served to establish comparable fees among the largest CAT Reporters.
Each Options Execution Venue will be ranked by market share and tiered by predefined Execution Venue percentages, (the “Options Execution Venue Percentages”). To determine the fixed percentage of Options Execution Venues in each tier, the Operating Committee analyzed the historical and publicly available market share of Options Execution Venues to group Options Execution Venues with similar market shares across the tiers. Options Execution Venue market share of share volume were sourced from market statistics made publicly-available by Bats. The process for developing the Options Execution Venue Percentages was the same as discussed above with regard to Equity Execution Venues.
The percentage of costs to be recovered from each Options Execution Venue tier will be determined by predefined percentage allocations (the “Options Execution Venue Recovery Allocation”). In determining the fixed percentage allocation of cost recovery for each tier, the Operating Committee considered the impact of CAT Reporter market share activity on the CAT System as well as the distribution of total market volume across Options Execution Venues while seeking to maintain comparable fees among the largest CAT Reporters. Furthermore, by using percentages of Options Execution Venues and cost recovery per tier, the Operating Committee sought to include elasticity within the funding model, allowing the funding model to respond to changes in either the total number of Options Execution Venues or changes in market share. The process for developing the Options Execution Venue Recovery Allocation was the same as discussed above with regard to Equity Execution Venues.
Based on this analysis, the Operating Committee approved the following Options Execution Venue Percentages and Recovery Allocations:
The Operating Committee determined that, prior to the start of CAT reporting, market share for Execution Venues would be sourced from publicly-available market data. Options and equity volumes for Participants will be sourced from market data made publicly available by Bats while Execution Venue ATS volumes will be sourced from market data made publicly available by FINRA and OTC Markets. Set forth in Appendix B to this letter are two charts, one listing the current Equity Execution Venues, each with its rank and tier, and one listing the current Options Execution Venues, each with its rank and tier.
After the commencement of CAT reporting, market share for Execution Venues will be sourced from data reported to the CAT. Equity Execution Venue market share will be determined by calculating each Equity Execution Venue's proportion of the total volume of NMS Stock and OTC Equity shares reported by all Equity Execution Venues during the relevant time period (with the discounting of OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities as well as the market share of
The Operating Committee has determined to calculate fee tiers for Execution Venues every three months based on market share from the prior three months. Based on its analysis of historical data, the Operating Committee believes calculating tiers based on three months of data will provide the best balance between reflecting changes in activity by Execution Venues while still providing predictability in the tiering for Execution Venues.
In addition to the funding principles discussed above, including comparability of fees, Section 11.1(c) of the CAT NMS Plan also requires expenses to be fairly and reasonably shared among the Participants and Industry Members. Accordingly, in developing the proposed fee schedules pursuant to the funding model, the Operating Committee calculated how the CAT costs would be allocated between Industry Members and Execution Venues, and how the portion of CAT costs allocated to Execution Venues would be allocated between Equity Execution Venues and Options Execution Venues. These determinations are described below.
In determining the cost allocation between Industry Members (other than Execution Venue ATSs) and Execution Venues, the Operating Committee analyzed a range of possible splits for revenue recovery from such Industry Members and Execution Venues, including 80%/20%, 75%/25%, 70%/30% and 65%/35% allocations. Based on this analysis, the Operating Committee determined that 75 percent of total costs recovered would be allocated to Industry Members (other than Execution Venue ATSs) and 25 percent would be allocated to Execution Venues. The Operating Committee determined that this 75%/25% division maintained the greatest level of comparability across the funding model. For example, the cost allocation establishes fees for the largest Industry Members (
Furthermore, the allocation of total CAT cost recovery recognizes the difference in the number of CAT Reporters that are Industry Members versus CAT Reporters that are Execution Venues. Specifically, the cost allocation takes into consideration that there are approximately 23 times more Industry Members expected to report to the CAT than Execution Venues (
The Operating Committee also analyzed how the portion of CAT costs allocated to Execution Venues would be allocated between Equity Execution Venues and Options Execution Venues. In considering this allocation of costs, the Operating Committee analyzed a range of alternative splits for revenue recovered between Equity and Options Execution Venues, including a 70%/30%, 67%/33%, 65%/35%, 50%/50% and 25%/75% split. Based on this analysis, the Operating Committee determined to allocate 67 percent of Execution Venue costs recovered to Equity Execution Venues and 33 percent to Options Execution Venues. The Operating Committee determined that a 67%/33% allocation between Equity and Options Execution Venues maintained the greatest level of fee equitability and comparability based on the current number of Equity and Options Execution Venues. For example, the allocation establishes fees for the larger Equity Execution Venues that are comparable to the larger Options Execution Venues. Specifically, Tier 1 Equity Execution Venues would pay a quarterly fee of $81,047 and Tier 1 Options Execution Venues would pay a quarterly fee of $81,379. In addition to fee comparability between Equity Execution Venues and Options Execution Venues, the allocation also establishes equitability between larger (Tier 1) and smaller (Tier 2) Execution Venues based upon the level of market share. Furthermore, the allocation is intended to reflect the relative levels of current equity and options order events.
The Operating Committee determined to establish a CAT-specific fee to collectively recover the costs of building and operating the CAT. Accordingly, under the funding model, the sum of the CAT Fees is designed to recover the total cost of the CAT. The Operating Committee has determined overall CAT costs to be comprised of Plan Processor costs and non-Plan Processor costs, which are estimated to be $50,700,000 in total for the year beginning November 21, 2016.
The Plan Processor costs relate to costs incurred and to be incurred through November 21, 2017 by the Plan Processor and consist of the Plan Processor's current estimates of average yearly ongoing costs, including development costs, which total $37,500,000. This amount is based upon the fees due to the Plan Processor pursuant to the Company's agreement with the Plan Processor.
The non-Plan Processor estimated costs incurred and to be incurred by the Company through November 21, 2017 consist of three categories of costs. The first category of such costs are third party support costs, which include legal fees, consulting fees and audit fees from November 21, 2016 until the date of filing as well as estimated third party support costs for the rest of the year. These amount to an estimated $5,200,000. The second category of non-Plan Processor costs are estimated cyber-insurance costs for the year. Based on discussions with potential cyber-insurance providers, assuming $2-5 million cyber-insurance premium on $100 million coverage, the Company has estimated $3,000,000 for the annual cost. The final cost figures will be determined following receipt of final underwriter quotes. The third category of non-Plan Processor costs is the CAT operational reserve, which is comprised of three months of ongoing Plan Processor costs ($9,375,000), third party support costs ($1,300,000) and cyber-insurance costs ($750,000). The Operating Committee aims to accumulate the necessary funds to establish the three-month operating reserve for the Company through the CAT Fees charged to CAT Reporters for the year. On an ongoing basis, the Operating Committee will account for any potential need to replenish the operating reserve or other changes to total cost during its annual budgeting process. The following table summarizes the Plan Processor and non-
Based on these estimated costs and the calculations for the funding model described above, the Operating Committee determined to impose the following fees:
For Industry Members (other than Execution Venue ATSs):
For Execution Venues for NMS Stocks and OTC Equity Securities:
For Execution Venues for Listed Options:
The Operating Committee has calculated the schedule of effective fees for Industry Members (other than Execution Venue ATSs) and Execution Venues in the following manner. Note that the calculation of CAT Fees assumes 52 Equity Execution Venues, 15 Options Execution Venues and 1,541 Industry Members (other than Execution Venue ATSs) as of June 2017.
(F) Comparability of Fees
The funding principles require a funding model in which the fees charged to the CAT Reporters with the most CAT-related activity (measured by market share and/or message traffic, as applicable) are generally comparable (where, for these comparability purposes, the tiered fee structure takes into consideration affiliations between or among CAT Reporters, whether Execution Venue and/or Industry Members). Accordingly, in creating the model, the Operating Committee sought to establish comparable fees for the top tier of Industry Members (other than Execution Venue ATSs), Equity Execution Venues and Options Execution Venues. Specifically, each Tier 1 CAT Reporter would be required to pay a quarterly fee of approximately $81,000.
Under Section 11.1(c) of the CAT NMS Plan, to fund the development and implementation of the CAT, the Company shall time the imposition and collection of all fees on Participants and Industry Members in a manner reasonably related to the timing when the Company expects to incur such development and implementation costs. The Company is currently incurring such development and implementation costs and will continue to do so prior to the commencement of CAT reporting and thereafter. In accordance with the CAT NMS Plan, all CAT Reporters, including both Industry Members and Execution Venues (including Participants), will be invoiced as promptly as possible following the latest
Section 11.3(d) of the CAT NMS Plan states that “[t]he Operating Committee shall review such fee schedule on at least an annual basis and shall make any changes to such fee schedule that it deems appropriate. The Operating Committee is authorized to review such fee schedule on a more regular basis, but shall not make any changes on more than a semi-annual basis unless, pursuant to a Supermajority Vote, the Operating Committee concludes that such change is necessary for the adequate funding of the Company.” With such reviews, the Operating Committee will review the distribution of Industry Members and Execution Venues across tiers, and make any updates to the percentage of CAT Reporters allocated to each tier as may be necessary. In addition, the reviews will evaluate the estimated ongoing CAT costs and the level of the operating reserve. To the extent that the total CAT costs decrease, the fees would be adjusted downward, and to the extent that the total CAT costs increase, the fees would be adjusted upward.
The Operating Committee has determined to calculate fee tiers every three months based on market share or message traffic, as applicable, from the prior three months. For the initial tier assignments, the Company will calculate the relevant tier for each CAT Reporter using the three months of data prior to the commencement date. As with the initial tier assignment, for the tri-monthly reassignments, the Company will calculate the relevant tier using the three months of data prior to the relevant tri-monthly date. Any movement of CAT Reporters between tiers will not change the criteria for each tier or the fee amount corresponding to each tier.
In performing the tri-monthly reassignments, the assignment of CAT Reporters in each assigned tier is relative. Therefore, a CAT Reporter's assigned tier will depend, not only on its own message traffic or market share, but also on the message traffic/market share across all CAT Reporters. For example, the percentage of Industry Members (other than Execution Venue ATSs) in each tier is relative such that such Industry Member's assigned tier will depend on message traffic generated across all CAT Reporters as well as the total number of CAT Reporters. The Operating Committee will inform CAT Reporters of their assigned tier every three months following the periodic tiering process, as the funding model will compare an individual CAT Reporter's activity to that of other CAT Reporters in the marketplace.
The following demonstrates a tier reassignment. In accordance with the funding model, the top 75% of Options Execution Venues in market share are categorized as Tier 1 while the bottom 25% of Options Execution Venues in market share are categorized as Tier 2. In the sample scenario below, Options Execution Venue L is initially categorized as a Tier 2 Options Execution Venue in Period A due to its market share. When market share is recalculated for Period B, the market share of Execution Venue L increases, and it is therefore subsequently reranked and reassigned to Tier 1 in Period B. Correspondingly, Options Execution Venue K, initially a Tier 1 Options Execution Venue in Period A, is reassigned to Tier 2 in Period B due to decreases in its market share.
For each periodic tier reassignment, the Operating Committee will review the new tier assignments, particularly those assignments for CAT Reporters that shift from the lowest tier to a higher tier. This review is intended to evaluate whether potential changes to the market or CAT Reporters (
The Operating Committee developed the proposed funding model by analyzing currently available historical data. Such historical data, however, is not as comprehensive as data that will be submitted to the CAT. Accordingly, the Operating Committee believes that it will be appropriate to revisit the funding model once CAT Reporters have actual experience with the funding model. Accordingly, the Operating Committee determined to include an automatic sunsetting provision for the proposed fees. Specifically, the Operating Committee determined to include a provision in the proposed fee schedule which states that “[t]hese Participant CAT Fees will automatically expire two years after their operative date.” The Operating Committee intends to monitor the operation of the funding model during this two year period and to evaluate its effectiveness during that period. Such a process will inform the Operating Committee's approach to funding the CAT after the two year period.
The Operating Committee proposes to add Exhibit B to the CAT NMS Plan to add a fee schedule setting forth the CAT Fees applicable to Participants. Proposed Exhibit B is set forth in Appendix A to this letter. Paragraph (a)(1) of proposed Exhibit B sets forth the CAT Fees applicable to Execution Venues for NMS Stocks and OTC Equity Securities. Specifically, paragraph (a)(1) states that the Company will assign each Execution Venue for NMS Stocks and/or OTC Equity Securities to a fee tier once every quarter, where such tier assignment is calculated by ranking each such Execution Venue based on its total market share (with a discount for the OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities as well as the market share of the FINRA OTC reporting facility based on the average shares per trade ratio between NMS Stocks and OTC Equity Securities) for the three months prior to the quarterly tier calculation day and assigning each such Execution Venue to a tier based on that ranking and predefined percentages for such Execution Venues. The Execution Venues for NMS Stocks and/or OTC Equity Securities with the higher total quarterly market share will be ranked in Tier 1, and such Execution Venues with the lowest quarterly market share will be ranked in Tier 4. Specifically, paragraph (a)(1) states that, each quarter, each Execution Venue for NMS Stocks and/or OTC Equity Securities shall pay in the manner prescribed by the Company the following CAT Fee corresponding to the tier assigned by the CAT NMS, LLC for such Execution Venue for that quarter:
In addition, paragraph (a)(2) of the proposed Exhibit B states that the Company will assign each Execution Venue for Listed Options to a fee tier once every quarter, where such tier assignment is calculated by ranking each such Execution Venue based on its total market share for the three months prior to the quarterly tier calculation day and assigning each such Execution Venue to a tier based on that ranking and predefined percentages for such Execution Venues. The Execution Venues for Listed Options with the higher total quarterly market share will be ranked in Tier 1, and such Execution Venues with the lower quarterly market share will be ranked in Tier 2. Specifically, paragraph (b)(1) states that, each quarter, each Execution Venue for Listed Options shall pay in the manner prescribed by the Company the following CAT Fee corresponding to the tier assigned by the CAT NMS, LLC for such Execution Venue for that quarter:
The proposed funding model set forth in this amendment is a revised version of the Plan amendment filed with the Commission on May 9, 2017 (“Original Proposal”).
This Amendment No. 4 makes the following changes to the Original Proposal: (1) Adds two additional CAT Fee tiers for Equity Execution Venues; (2) discounts the OTC Equity Securities market share of Execution Venue ATSs trading OTC Equity Securities as well as the market share of the FINRA ORF by the average shares per trade ratio between NMS Stocks and OTC Equity Securities (calculated as 0.17% based on available data from the second quarter of 2017) when calculating the market share of Execution Venue ATSs trading OTC Equity Securities and FINRA; (3) discounts the Options Market Maker
In the Original Proposal, the Operating Committee proposed to establish two fee tiers for Equity Execution Venues. The Commission and commenters raised the concern that, by establishing only two tiers, smaller Equity Execution Venues (
Specifically, the Original Proposal had two tiers of Equity Execution Venues. Tier 1 required the largest Equity Execution Venues to pay a quarterly fee of $63,375. Based on available data, these largest Equity Execution Venues were those that had equity market share of share volume greater than or equal to 1%.
To address concerns about the potential for the $38,820 quarterly fee to impose an undue burden on smaller Equity Execution Venues, the Operating Committee determined to move to a four tier structure for Equity Execution Venues. Tier 1 would continue to include the largest Equity Execution Venues by share volume (that is, based on currently available data, those with market share of equity share volume greater than or equal to one percent), and these Equity Execution Venues would be required to pay a quarterly fee of $81,048. The Operating Committee determined to divide the original Tier 2 into three tiers. The new Tier 2 Equity Execution Venues, which would include the next largest Equity Execution Venues by equity share volume, would be required to pay a quarterly fee of $37,062. The new Tier 3 Equity Execution Venues would be required to pay a quarterly fee of $21,126. The new Tier 4 Equity Execution Venues, which would include the smallest Equity Execution Venues by share volume, would be required to pay a quarterly fee of $129.
In developing the proposed four tier structure, the Operating Committee considered keeping the existing two tiers, as well as shifting to three, four or five Equity Execution Venue tiers (the maximum number of tiers permitted under the Plan), to address the concerns regarding small Equity Execution Venues. For each of the two, three, four and five tier alternatives, the Operating Committee considered the assignment of various percentages of Equity Execution Venues to each tier as well as various percentage of Equity Execution Venue recovery allocations for each alternative. As discussed below in more detail, each of these options was considered in the context of the full model, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. The Operating Committee determined that the four tier alternative addressed the spectrum of different Equity Execution Venues. The Operating Committee determined that neither a two tier structure nor a three tier structure sufficiently accounted for the range of market shares of smaller Equity Execution Venues. The Operating Committee also determined that, given the limited number of Equity Execution Venues, that a fifth tier was unnecessary to address the range of market shares of the Equity Execution Venues.
By increasing the number of tiers for Equity Execution Venues and reducing the proposed CAT Fees for the smaller Equity Execution Venues, the Operating Committee believes that the proposed fees for Equity Execution Venues would not impose an undue or inappropriate burden on competition under Section 6 or Section 15A of the Exchange Act. Moreover, the Operating Committee believes that the proposed fees appropriately take into account the distinctions in the securities trading operations of different Equity Execution Venues, as required under the funding principles of the CAT NMS Plan.
Accordingly, Amendment No. 4 proposes to amend paragraph (a)(1) of the proposed fee schedule as set forth in the Original Proposal to add the two additional tiers for Equity Execution Venues, to establish the percentages and fees for Tiers 3 and 4 as described, and to revise the percentages and fees for Tiers 1 and 2 as described.
In the Original Proposal, the Operating Committee proposed to group Execution Venues for OTC Equity Securities and Execution Venues for NMS Stocks in the same tier structure. The Commission and commenters raised concerns as to whether this determination to place Execution Venues for OTC Equity Securities in the same tier structure as Execution Venues for NMS Stocks would result in an undue or inappropriate burden on competition, recognizing that the application of share volume may lead to different outcomes as applied to OTC
As commenters noted, many OTC Equity Securities are priced at less than one dollar—and a significant number at less than one penny—and low-priced shares tend to trade in larger quantities. Accordingly, a disproportionately large number of shares are involved in transactions involving OTC Equity Securities versus NMS Stocks, which has the effect of overstating an Execution Venue's true market share when the Execution Venue is involved in the trading of OTC Equity Securities. Because the proposed fee tiers are based on market share calculated by share volume, Execution Venue ATSs trading OTC Equity Securities and FINRA may be subject to higher tiers than their operations may warrant.
The practical effect of applying such a discount for trading in OTC Equity Securities is to shift Execution Venue ATSs trading OTC Equity Securities to tiers for smaller Execution Venues and with lower fees. For example, under the Original Proposal, one Execution Venue ATS trading OTC Equity Securities was placed in the first CAT Fee tier, which had a quarterly fee of $63,375. With the imposition of the proposed tier changes and the discount, this ATS would be ranked in Tier 3 and would owe a quarterly fee of $21,126.
In developing the proposed discount for Equity Execution Venue ATSs trading OTC Equity Securities and FINRA, the Operating Committee evaluated different alternatives to address the concerns related to OTC Equity Securities, including creating a separate tier structure for Execution Venues trading OTC Equity Securities (like the separate tier for Options Execution Venues) as well as the proposed discounting method for Execution Venue ATSs trading OTC Equity Securities and FINRA. For these alternatives, the Operating Committee considered how each alternative would affect the recovery allocations. In addition, each of these options was considered in the context of the full model, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. The Operating Committee did not adopt a separate tier structure for Equity Execution Venues trading OTC Equity Securities as they determined that the proposed discount approach appropriately addresses the concern. The Operating Committee determined to adopt the proposed discount because it directly relates to the concern regarding the trading patterns and operations in the OTC Equity Securities markets, and is an objective discounting method.
By increasing the number of tiers for Equity Execution Venues and imposing a discount on the market share of share volume calculation for trading in OTC Equity Securities, the Operating Committee believes that the proposed fees for Equity Execution Venues would not impose an undue or inappropriate burden on competition under Section 6 or Section 15A of the Exchange Act. Moreover, the Operating Committee believes that the proposed fees appropriately take into account the distinctions in the securities trading operations of different Equity Execution Venues, as required under the funding principles of the CAT NMS Plan.
Accordingly, Amendment No. 4 proposes to amend paragraph (a)(1) of the proposed fee schedule as set forth in the Original Proposal to indicate that the OTC Equity Securities market share for Execution Venue ATSs trading OTC Equity Securities as well as the market share of the FINRA ORF would be discounted. In addition, as discussed above, to address concerns related to smaller ATSs, including those that trade OTC Equity Securities, the Operating Committee proposes to amend paragraph (a)(1) of the proposed fee schedule to add two additional tiers for Equity Execution Venues, to establish the percentages and fees for Tiers 3 and 4 as described, and to revise the percentages and fees for Tiers 1 and 2 as described.
In the Original Proposal, the Operating Committee proposed to include both Options Market Maker quotes and equities market maker quotes in the calculation of total message traffic for such market makers for purposes of tiering for Industry Members (other than Execution Venue ATSs). The Commission and commenters raised questions as to whether the proposed treatment of Options Market Maker quotes may result in an undue or inappropriate burden on competition or may lead to a reduction in market quality.
In the Original Proposal, market maker quotes were treated the same as other message traffic for purposes of tiering for Industry Members (other than Execution Venue ATSs). Commenters noted, however, that charging Industry Members on the basis of message traffic will impact market makers disproportionately because of their continuous quoting obligations. Moreover, in the context of options market makers, message traffic would include bids and offers for every listed options strikes and series, which are not an issue for equities.
The practical effect of applying such discounts for quoting activity is to shift market makers' calculated message traffic lower, leading to the potential shift to tiers for lower message traffic and reduced fees. Such an approach would move sixteen Industry Member CAT Reporters that are market makers to a lower tier than in the Original Proposal. For example, under the Original Proposal, Broker-Dealer Firm ABC was placed in the first CAT Fee tier, which had a quarterly fee of $101,004. With the imposition of the proposed tier changes and the discount, Broker-Dealer Firm ABC, an options market maker, would be ranked in Tier 3 and would owe a quarterly fee of $40,899.
In developing the proposed market maker discounts, the Operating Committee considered various discounts for Options Market Makers and equity market makers, including discounts of 50%, 25%, 0.00002%, as well as the 5.43% for option market makers and 0.01% for equity market makers. Each of these options were considered in the context of the full model, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. The Operating Committee determined to adopt the proposed discount because it directly relates to the concern regarding the quoting requirement, is an objective discounting method, and has the desired potential to shift market makers to lower fee tiers.
By imposing a discount on Options Market Makers and equities market makers' quoting traffic for the calculation of message traffic, the Operating Committee believes that the proposed fees for market makers would not impose an undue or inappropriate burden on competition under Section 6 or Section 15A of the Exchange Act. Moreover, the Operating Committee believes that the proposed fees appropriately take into account the distinctions in the securities trading operations of different Industry Members, and avoid disincentives, such as a reduction in market quality, as required under the funding principles of the CAT NMS Plan.
Under the Original Proposal, 75% of CAT costs were allocated to Industry Members (other than Execution Venue ATSs) and 25% of CAT costs were allocated to Execution Venues. This cost allocation sought to maintain the greatest level of comparability across the funding model, where comparability considered affiliations among or between CAT Reporters. The Commission and commenters expressed concerns regarding whether the proposed 75%/25% allocation of CAT costs is consistent with the Plan's funding principles and the Exchange Act, including whether the allocation places a burden on competition or reduces market quality. The Commission and commenters also questioned whether the approach of accounting for affiliations among CAT Reporters in setting CAT Fees disadvantages non-affiliated CAT Reporters or otherwise burdens competition in the market for trading services.
In response to these concerns, the Operating Committee determined to revise the proposed funding model to focus the comparability of CAT Fees on the individual entity level, rather than primarily on the comparability of affiliated entities. In light of the interconnected nature of the various aspects of the funding model, the Operating Committee determined to revise various aspects of the model to enhance comparability at the individual entity level. Specifically, to achieve such comparability, the Operating Committee determined to (1) decrease the number of tiers for Industry Members (other than Execution Venue ATSs) from nine to seven; (2) change the allocation of CAT costs between Equity Execution Venues and Options Execution Venues from 75%/25% to 67%/33%; and (3) adjust tier percentages and recovery allocations for Equity Execution Venues, Options Execution Venues and Industry Members (other than Execution Venue ATSs). With these changes, the proposed funding model provides fee comparability for the largest individual entities, with the largest Industry Members (other than Execution Venue ATSs), Equity Execution Venues and Options Execution Venues each paying a CAT Fee of approximately $81,000 each quarter.
In the Original Proposal, the proposed funding model had nine tiers for Industry Members (other than Execution Venue ATSs). The Operating Committee determined that reducing the number of tiers from nine tiers to seven tiers (and adjusting the predefined Industry Member Percentages as well) continues to provide a fair allocation of fees among Industry Members and appropriately distinguishes between Industry Members with differing levels of message traffic. In reaching this conclusion, the Operating Committee considered historical message traffic generated by Industry Members across all exchanges and as submitted to FINRA's OATS, and considered the distribution of firms with similar levels of message traffic, grouping together firms with similar levels of message traffic. Based on this, the Operating Committee determined that seven tiers would group firms with similar levels of
In developing the proposed seven tier structure, the Operating Committee considered remaining at nine tiers, as well as reducing the number of tiers down to seven when considering how to address the concerns raised regarding comparability. For each of the alternatives, the Operating Committee considered the assignment of various percentages of Industry Members to each tier as well as various percentages of Industry Member recovery allocations for each alternative. Each of these options was considered in the context of its effects on the full funding model, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. The Operating Committee determined that the seven tier alternative provided the most fee comparability at the individual entity level for the largest CAT Reporters, while both providing logical breaks in tiering for Industry Members with different levels of message traffic and a sufficient number of tiers to provide for the full spectrum of different levels of message traffic for all Industry Members.
The Operating Committee also determined to adjust the allocation of CAT costs between Equity Execution Venues and Options Execution Venues to enhance comparability at the individual entity level. In the Original Proposal, 75% of Execution Venue CAT costs were allocated to Equity Execution Venues, and 25% of Execution Venue CAT costs were allocated to Options Execution Venues. To achieve the goal of increased comparability at the individual entity level, the Operating Committee analyzed a range of alternative splits for revenue recovery between Equity and Options Execution Venues, along with other changes in the proposed funding model. Based on this analysis, the Operating Committee determined to allocate 67 percent of Execution Venue costs recovered to Equity Execution Venues and 33 percent to Options Execution Venues. The Operating Committee determined that a 67/33 allocation between Equity and Options Execution Venues enhances the level of fee comparability for the largest CAT Reporters. Specifically, the largest Equity and Options Execution Venues would pay a quarterly CAT Fee of approximately $81,000.
In developing the proposed allocation of CAT costs between Equity and Options Execution Venues, the Operating Committee considered various different options for such allocation, including keeping the original 75%/25% allocation, as well as shifting to a 70%/30%, 67%/33%, or 57.75%/42.25% allocation. For each of the alternatives, the Operating Committee considered the effect each allocation would have on the assignment of various percentages of Equity Execution Venues to each tier as well as various percentages of Equity Execution Venue recovery allocations for each alternative. Moreover, each of these options was considered in the context of the full model, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. The Operating Committee determined that the 67%/33% allocation between Equity and Options Execution Venues provided the greatest level of fee comparability at the individual entity level for the largest CAT Reporters, while still providing for appropriate fee levels across all tiers for all CAT Reporters.
The Operating Committee determined to allocate 25% of CAT costs to Execution Venues and 75% to Industry Members (other than Execution Venue ATSs), as it had in the Original Proposal. The Operating Committee determined that this 75%/25% allocation, along with the other changes proposed above, led to the most comparable fees for the largest Equity Execution Venues, Options Execution Venues and Industry Members (other than Execution Venue ATSs). The largest Equity Execution Venues, Options Execution Venues and Industry Members (other than Execution Venue ATSs) would each pay a quarterly CAT Fee of approximately $81,000.
As a preliminary matter, the Operating Committee determined that it is appropriate to allocate most of the costs to create, implement and maintain the CAT to Industry Members for several reasons. First, there are many more broker-dealers expected to report to the CAT than Participants (
In developing the proposed allocation of CAT costs between Execution Venues and Industry Members (other than Execution Venue ATSs), the Operating Committee considered various different options for such allocation, including keeping the original 75%/25% allocation, as well as shifting to an 80%/20%, 70%/30%, or 65%/35% allocation. Each of these options was considered in the context of the full model, including the effect on each of the changes discussed above, as changes in each variable in the model affect other variables in the model when allocating the total CAT costs among CAT Reporters. In particular, for each of the alternatives, the Operating Committee considered the effect each allocation had on the assignment of various percentages of Equity Execution Venues, Options Execution Venues and Industry Members (other than Execution Venue ATSs) to each relevant tier as well as various percentages of recovery allocations for each tier. The Operating Committee determined that the 75%/25% allocation between Execution Venues and Industry Members (other than Execution Venue ATSs) provided the greatest level of fee comparability at the individual entity level for the largest CAT Reporters, while still providing for appropriate fee levels across all tiers for all CAT Reporters.
The funding principles set forth in Section 11.2 of the Plan require that the fees charged to CAT Reporters with the most CAT-related activity (measured by market share and/or message traffic, as applicable) are generally comparable (where, for these comparability purposes, the tiered fee structure takes into consideration affiliations between or among CAT Reporters, whether Execution Venue and/or Industry Members). The proposed funding model satisfies this requirement. As discussed
Accordingly, Amendment No. 4 amends paragraphs (a)(1) and (2) of the proposed fee schedule as set forth in the Original Proposal to reflect the changes discussed in this section. Specifically, the Operating Committee proposes to amend paragraph (a)(1) and (2) of the proposed fee schedule to update the number of tiers, and the fees and percentages assigned to each tier to reflect the described changes.
In the Original Proposal, the Operating Committee proposed to charge Execution Venues based on market share and Industry Members (other than Execution Venue ATSs) based on message traffic. Commenters questioned the use of the two different metrics for calculating CAT Fees.
In drafting the Plan and the Original Proposal, the Operating Committee expressed the view that the correlation between message traffic and size does not apply to Execution Venues, which they described as producing similar amounts of message traffic regardless of size. The Operating Committee believed that charging Execution Venues based on message traffic would result in both large and small Execution Venues paying comparable fees, which would be inequitable, so the Operating Committee determined that it would be more appropriate to treat Execution Venues differently from Industry Members in the funding model. Upon a more detailed analysis of available data, however, the Operating Committee noted that Execution Venues have varying levels of message traffic. Nevertheless, the Operating Committee continues to believe that a bifurcated funding model—where Industry Members (other than Execution Venue ATSs) are charged fees based on message traffic and Execution Venues are charged based on market share—complies with the Plan and meets the standards of the Exchange Act for the reasons set forth below.
Charging Industry Members based on message traffic is the most equitable means for establishing fees for Industry Members (other than Execution Venue ATSs). This approach will assess fees to Industry Members that create larger volumes of message traffic that are relatively higher than those fees charged to Industry Members that create smaller volumes of message traffic. Since message traffic, along with fixed costs of the Plan Processor, is a key component of the costs of operating the CAT, message traffic is an appropriate criterion for placing Industry Members in a particular fee tier.
The Operating Committee also believes that it is appropriate to charge Execution Venues CAT Fees based on their market share. In contrast to Industry Members (other than Execution Venue ATSs), which determine the degree to which they produce the message traffic that constitutes CAT Reportable Events, the CAT Reportable Events of Execution Venues are largely derivative of quotations and orders received from Industry Members that the Execution Venues are required to display. The business model for Execution Venues, however, is focused on executions in their markets. As a result, the Operating Committee believes that it is more equitable to charge Execution Venues based on their market share rather than their message traffic.
Similarly, focusing on message traffic would make it more difficult to draw distinctions between large and small exchanges, including options exchanges in particular. For instance, the Operating Committee analyzed the message traffic of Execution Venues and Industry Members for the period of April 2017 to June 2017 and placed all CAT Reporters into a nine-tier framework (
In addition, the Operating Committee also believes that it is appropriate to treat ATSs as Execution Venues under the proposed funding model since ATSs have business models that are similar to those of exchanges, and ATSs also compete with exchanges. For these reasons, the Operating Committee believes that charging Execution Venues based on market share is more appropriate and equitable than charging Execution Venues based on message traffic.
In the Original Proposal, the Operating Committee did not impose any time limit on the application of the proposed CAT Fees. As discussed above, the Operating Committee developed the proposed funding model by analyzing currently available historical data. Such historical data, however, is not as comprehensive as data that will be submitted to the CAT. Accordingly, the Operating Committee believes that it will be appropriate to revisit the funding model once CAT Reporters have actual experience with the funding model. Accordingly, the Operating Committee proposes to include a sunsetting provision in the proposed fee model. The proposed CAT Fees will sunset two years after the operative date for the CAT Fees. Such a provision will provide the Operating Committee and other market participants with the opportunity to reevaluate the performance of the proposed funding model.
In the Original Proposal, the Operating Committee determined to use a tiered fee structure. The Commission and commenters questioned whether the decreasing cost per additional unit (of message traffic in the case of Industry Members, or of share volume in the case of Execution Venues) in the proposed fee schedules burdens competition by disadvantaging small
The Operating Committee does not believe that decreasing cost per additional unit in the proposed fee schedules places an unfair competitive burden on Small Industry Members and Execution Venues. While the cost per unit of message traffic or share volume necessarily will decrease as volume increases in any tiered fee model using fixed fee percentages and, as a result, Small Industry Members and small Execution Venues may pay a larger fee per message or share, this comment fails to take account of the substantial differences in the absolute fees paid by Small Industry Members and small Execution Venues as opposed to large Industry Members and large Execution Venues. For example, under the fee proposals, Tier 7 Industry Members would pay a quarterly fee of $105, while Tier 1 Industry Members would pay a quarterly fee of $81,483. Similarly, a Tier 4 Equity Execution Venue would pay a quarterly fee of $129, while a Tier 1 Equity Execution Venue would pay a quarterly fee of $81,048. Thus, Small Industry Members and small Execution Venues are not disadvantaged in terms of the total fees that they actually pay. In contrast to a tiered model using fixed fee percentages, the Operating Committee believes that strictly variable or metered funding models based on message traffic or share volume would be more likely to affect market behavior and may present administrative challenges (
In addition to the various funding model alternatives discussed above regarding discounts, number of tiers and allocation percentages, the Operating Committee also discussed other possible funding models. For example, the Operating Committee considered allocating the total CAT costs equally among each of the Participants, and then permitting each Participant to charge its own members as it deems appropriate.
Commenters expressed concern regarding the level of Industry Member input into the development of the proposed funding model, and certain commenters have recommended a greater role in the governance of the CAT.
Commenters also raised concerns regarding Participant conflicts of interest in setting the CAT Fees.
Commenters also argued that they could not adequately assess whether the CAT Fees were fair and equitable because the Operating Committee has not provided details as to what the Participants are receiving in return for the CAT Fees.
Commenters also questioned the authority of the Operating Committee to impose CAT Fees on Industry Members.
Not applicable.
The terms of the proposed amendment will become effective upon filing pursuant to Rule 608(b)(3)(i) of the Exchange Act because it establishes a fee or other charge collected on behalf of all of the Participants in connection with access to, or use of, any facility contemplated by the plan (including changes in any provision with respect to distribution of any net proceeds from such fees or other charges to the sponsors and/or participants).
Not applicable.
The Operating Committee does not believe that the proposed amendment will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The Operating Committee notes that the proposed amendment implements provisions of the CAT NMS Plan approved by the Commission, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. Because all national securities exchanges and FINRA are subject to the proposed CAT Fees set forth in the proposed amendment, this is not a competitive filing that raises competition issues between and among the exchanges and FINRA.
Moreover, as previously described, the Operating Committee believes that the proposed fee schedule fairly and equitably allocates costs among CAT Reporters. In particular, the proposed fee schedule is structured to impose comparable fees on similarly situated CAT Reporters, and lessen the impact on smaller CAT Reporters. CAT Reporters with similar levels of CAT activity will pay similar fees. For example, Industry Members (other than Execution Venue ATSs) with higher levels of message traffic will pay higher fees, and those with lower levels of message traffic will pay lower fees. Similarly, Execution Venue ATSs and other Execution Venues with larger market share will pay higher fees, and those with lower levels of market share will pay lower fees. Therefore, given that there is generally a relationship between message traffic and/or market share to the CAT Reporter's size, smaller CAT Reporters generally pay less than larger CAT Reporters. Accordingly, the Operating Committee does not believe that the CAT Fees would have a disproportionate effect on smaller or larger CAT Reporters. In addition, ATSs and exchanges will pay the same fees based on market share. Therefore, the Operating Committee does not believe that the fees will impose any burden on the competition between ATSs and exchanges. Accordingly, the Operating Committee believes that the proposed fees will minimize the potential for adverse effects on competition between CAT Reporters in the market.
Furthermore, the tiered, fixed fee funding model limits the disincentives to providing liquidity to the market. Therefore, the proposed fees are structured to limit burdens on competitive quoting and other liquidity provision in the market.
In addition, the Operating Committee believes that the proposed changes to the Original Proposal, as discussed above in detail, address certain competitive concerns raised by commenters, including concerns related to, among other things, smaller ATSs, ATSs trading OTC Equity Securities, market making quoting and fee comparability. As discussed above, the Operating Committee believes that the proposals address the competitive concerns raised by commenters.
Not applicable.
Section 12.3 of the Plan states that, subject to certain exceptions, the Plan may be amended from time to time only by a written amendment, authorized by the affirmative vote of not less than two-thirds of all of the Participants, that has been approved by the SEC pursuant to Rule 608 or has otherwise become effective under Rule 608. In addition, Section 4.3(a)(vi) of the Plan requires the Operating Committee, by Majority Vote, to authorize action to determine the appropriate funding-related policies, procedures and practices-consistent with Article XI. The Operating Committee has satisfied both of these requirements.
Not applicable.
Not applicable.
Section A of this letter describes in detail how the Operating Committee developed the proposed CAT Fees, including a detailed discussion of the proposed funding model for the CAT.
Not applicable.
Section 11.5 of the CAT NMS Plan addresses the resolution of disputes regarding Participants' CAT Fees charged to Participants and Industry Members. Specifically, Section 11.5 states that disputes with respect to fees the Company charges Participants pursuant to Article XI of the CAT NMS Plan shall be determined by the Operating Committee or a Subcommittee designated by the Operating Committee. Decisions by the Operating Committee or such designated Subcommittee on such matters shall be binding on Participants, without prejudice to the rights of any Participant to seek redress from the SEC pursuant to Rule 608 or in any other appropriate forum. In addition, the Participants adopted rules to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members.
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. In particular, the Commission seeks comment on the following:
(1) Commenters' views as to whether the allocation of CAT costs is consistent with the funding principle expressed in the CAT NMS Plan that requires the Operating Committee to “avoid any disincentives such as placing an inappropriate burden on competition and a reduction in market quality.”
(2) Commenters' views as to whether the allocation of 25% of CAT costs to the Execution Venues (including all the Participants) and 75% to Industry Members, will incentivize or disincentivize the Participants to effectively and efficiently manage the CAT costs incurred by the Participants since they will only bear 25% of such costs.
(3) Commenters' views on the determination to allocate 75% of all costs incurred by the Participants from November 21, 2016 to November 21, 2017 to Industry Members (other than Execution Venue ATSs), when such costs are development and build costs and when Industry Member reporting is scheduled to commence a year later, including views on whether such “fees, costs and expenses . . . [are] fairly and reasonably shared among the Participants and Industry Members” in accordance with the CAT NMS Plan.
(4) Commenters' views on whether an analysis of the ratio of the expected Industry Member-reported CAT messages to the expected SRO-reported CAT messages should be the basis for determining the allocation of costs between Industry Members and Execution Venues.
(5) Any additional data analysis on the allocation of CAT costs, including any existing supporting evidence.
(6) Commenters' views on the shift in the standard used to assess the comparability of CAT Fees, with the emphasis now on comparability of individual entities instead of affiliated entities, including views as to whether this shift is consistent with the funding principle expressed in the CAT NMS Plan that requires the Operating Committee to establish a fee structure in which the fees charged to “CAT Reporters with the most CAT-related activity (measured by market share and/or message traffic, as applicable) are generally comparable (where, for these comparability purposes, the tiered fee structure takes into consideration affiliations between or among CAT Reporters, whether Execution Venues and/or Industry Members).”
(7) Commenters' views as to whether the reduction in the number of tiers for Industry Members (other than Execution Venue ATSs) from nine to seven, the revised allocation of CAT costs between Equity Execution Venues and Options Execution Venues from a 75%/25% split to a 67%/33% split, and the adjustment of all tier percentages and recovery allocations achieves comparability across individual entities, and whether these changes should have resulted in a change to the allocation of 75% of total CAT costs to Industry Members (other than Execution Venue ATSs) and 25% of such costs to Execution Venues.
(8) Commenters' views as to whether the discounts for options market-makers, equities market-makers, and Equity ATSs trading OTC Equity Securities are clear, reasonable, and consistent with the funding principle expressed in the CAT NMS Plan that requires the Operating Committee to “avoid any disincentives such as placing an inappropriate burden on competition and a reduction in market quality,”
(9) Commenters' views as to whether the amendment provides sufficient information regarding the amount of costs incurred from November 21, 2016 to November 21, 2017, particularly, how those costs were calculated, how those costs relate to the proposed CAT Fees, and how costs incurred after November 21, 2017 will be assessed upon Industry Members and Execution Venues;
(10) Commenters' views as to whether the timing of the imposition and collection of CAT Fees on Execution Venues and Industry Members is reasonably related to the timing of when the Company expects to incur such development and implementation costs.
(11) Commenters' views on dividing CAT costs equally among each of the Participants, and then each Participant charging its own members as it deems appropriate, taking into consideration the possibility of inconsistency in charges, the potential for lack of transparency, and the impracticality of multiple SROs submitting invoices for CAT charges.
(12) Commenters' views as to whether the allocation of 75% of CAT costs to Industry Members (other than Execution Venue ATSs) imposes any burdens on competition to Industry Members, including views on what baseline competitive landscape the Commission should consider when analyzing the proposed allocation of CAT costs.
(13) Commenters' views on the burdens on competition, including the relevant markets and services and the impact of such burdens on the baseline competitive landscape in those relevant markets and services.
(14) Commenters' views on any potential burdens imposed by the fees on competition between and among CAT Reporters, including views on which baseline markets and services the fees could have competitive effects on and whether the fees are designed to minimize such effects.
(15) Commenters' general views on the impact of the proposed fees on economies of scale and barriers to entry.
(16) Commenters' views on the baseline economies of scale and barriers to entry for Industry Members and Execution Venues and the relevant markets and services over which these economies of scale and barriers to entry exist.
(17) Commenters' views as to whether a tiered fee structure necessarily results in less active tiers paying more per unit than those in more active tiers, thus creating economies of scale, with supporting information if possible.
(18) Commenters' views as to how the level of the fees for the least active tiers would or would not affect barriers to entry.
(19) Commenters' views on whether the difference between the cost per unit (messages or market share) in less active tiers compared to the cost per unit in more active tiers creates regulatory economies of scale that favor larger competitors and, if so:
(a) How those economies of scale compare to operational economies of scale; and
(b) Whether those economies of scale reduce or increase the current advantages enjoyed by larger competitors or otherwise alter the competitive landscape.
(20) Commenters' views on whether the fees could affect competition between and among national securities exchanges and FINRA, in light of the fact that implementation of the fees does not require the unanimous consent of all such entities, and, specifically:
(a) Whether any of the national securities exchanges or FINRA are disadvantaged by the fees; and
(b) If so, whether any such disadvantages would be of a magnitude that would alter the competitive landscape.
(21) Commenters' views on any potential burden imposed by the fees on competitive quoting and other liquidity provision in the market, including, specifically:
(a) Commenters' views on the kinds of disincentives that discourage liquidity provision and/or disincentives that the Commission should consider in its analysis;
(b) Commenters' views as to whether the fees could disincentivize the provision of liquidity; and
(c) Commenters' views as to whether the fees limit any disincentives to provide liquidity.
(22) Commenters' views as to whether the amendment adequately responds to and/or addresses comments received on related filings.
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
A. All submissions should refer to File Number 4-698.This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (
By the Commission.
On November 9, 2017, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
Under NYSE Arca Rule 8.201-E(a), the Exchange may propose to list and/or trade pursuant to unlisted trading privileges (“UTP”), “Commodity-Based Trust Shares.”
Sprott Asset Management LP will be the sponsor and manager of the Trust (“Manager”).
The Commission has previously approved listing on the Exchange under NYSE Arca Rules 5.2-E(j)(5) and 8.201-E of other precious metals and gold-based commodity trusts, including: Merk Gold Trust;
The Exchange represents that the Units satisfy the requirements of NYSE
CFCL is a passive, non-operating, specialized investment holding company organized under the laws of the Province of Alberta, which buys and holds almost entirely pure refined gold and silver bullion, primarily in international bar form. The issued and outstanding share capital of CFCL consists of common shares (“CFCL Common Shares”) and Class A non-voting shares (“CFCL Class A Shares”). The CFCL Class A Shares are listed for trading on the Toronto Stock Exchange (“TSX”) under the symbols “CEF.A” (Cdn.$) and “CEF.U” (U.S.$), and on the NYSE American under the symbol “CEF.” CFCL is a “foreign private issuer,” as defined in Rule 3b-4 under the Exchange Act.
According to the Manager, under the Arrangement, the Trust will acquire all the assets and assume all the liabilities of CFCL (other than CFCL's administration agreement), in exchange for that number of fully paid and non-assessable Units as is equal to the aggregate number of CFCL Class A Shares and CFCL Common Shares issued and outstanding immediately prior to the effective time of the Arrangement. The CFCL Common Shares and the common shares of 2070140 will be acquired by Sprott in exchange for, among other things, cash consideration of $105 million Canadian dollars and 6,997,379 common shares of Sprott. CFCL will then promptly redeem and cancel the outstanding CFCL Class A Shares and the CFCL Common Shares and distribute to the former holders thereof one Unit for each such share held.
Approval of holders of two-thirds of the issued and outstanding CFCL Class A Shares and of the issued and outstanding CFCL Common Shares each voting as a separate class, as well as a majority of uninterested (in the transaction) holders of the issued and outstanding CFCL Class A Shares and of the issued and outstanding CFCL Common Shares, each voting as a separate class, is required to effect the Arrangement.
The CFCL Class A Shares are registered under Section 12(b) of the Exchange Act, based upon a listing of the CFCL Class A Shares on the NYSE American. Pursuant to Rule 12g-3(a) under the Exchange Act, the Units will “succeed” to the Section 12(b) Exchange Act registration of the CFCL Class A Shares upon completion of the Arrangement. In order to change the Section 12(b) registration of the Units from one based upon a listing on the NYSE American to one based upon a listing on the NYSE Arca, the Trust will file a separate initial registration statement on Form 8-A under the Exchange Act to register the Units under the Exchange Act based upon a listing of the Units on the NYSE Arca.
After completion of the Arrangement, the Trust will furnish current reports to the Commission on Form 6-K in accordance with Rules 13a-1 and/or 13a-3 under the Exchange Act. The Trust will also file with the Commission annual reports on Form 40-F under the Canada/U.S. Multijurisdictional Disclosure System. Information included in such filings (and which will be made available to Unitholders) will include (i) annual information form, (ii) annual financial statements, (iii) annual management report on fund performance (“MRFP”), (iv) quarterly financial statements, (v) quarterly MRFP and (vi) report of independent review committee.
According to the Proxy Circular, the investment objective of the Trust is to participate in the Arrangement and to subsequently invest and hold substantially all of its assets in physical gold and silver bullion.
The Trust seeks to provide a secure, convenient and exchange-traded investment alternative for investors interested in holding physical gold and silver bullion without the inconvenience that is typical of a direct investment in physical gold and silver bullion. The Trust will invest primarily in long-term holdings of unencumbered, fully allocated, physical gold and silver bullion and will not speculate with regard to short-term changes in gold and silver prices. Pursuant to the trust agreement, the Manager has full authority and exclusive power to manage and direct the business and affairs of the Trust, subject to the Trust's investment and operating restrictions.
According to the Proxy Circular, the Trust is neither an investment company registered or required to be registered under the Investment Company Act of 1940, as amended,
According to the Proxy Circular, the global trade in gold and silver consists of over-the-counter (“OTC”), transactions in spot, forwards and options and other derivatives, together with exchange-traded futures and options. The participants in the world gold market may be classified in the following sectors: The mining and producer sector; the banking sector; the official sector; the investment sector; and the manufacturing sector. The participants in the world silver industry may be classified by the following sectors: The mining and producer sector; the banking sector; the investment sector; the fabrication and manufacturing sector; and the official sector.
According to the Proxy Circular, the OTC gold market and OTC silver market include spot, forward and option and other derivative transactions conducted on a principal-to-principal basis. While the OTC gold market and the OTC silver market are global, nearly 24-hour per day markets, the main centers for both OTC markets are London, New York and Zurich. Thirteen members of the London Bullion Market Association (“LBMA”), the London-based trade association that acts as the coordinator for activities conducted on behalf of its members and other participants in the London bullion market, act as OTC market makers for both the OTC gold market and the OTC silver market, and most OTC market trades for both markets are cleared through London.
According to the Proxy Circular, in the OTC gold market and the OTC silver market, gold and silver that meet the specifications for weight, dimensions, fineness (or purity), identifying marks (including the assay stamp of an LBMA-acceptable refiner) and appearance set forth in “The Good Delivery Rules for Gold and Silver Bars” published by the LBMA are “London Good Delivery” bars. A gold London Good Delivery bar must contain between 350 and 430 fine troy ounces of gold with a minimum fineness of 995 parts per 1,000. A silver London Good Delivery bar must contain between 750 ounces and 1,100 ounces of silver with a minimum fineness of 999 parts per 1,000.
According to the Proxy Circular, the most significant gold and silver futures exchanges are the COMEX, operated by Commodities Exchange, Inc. (“COMEX”), a subsidiary of New York Mercantile Exchange, Inc. (“NYMEX”), and a subsidiary of CME Group Inc. (“CME Group”),
According to the Proxy Circular, 252,156,003 Units are expected to be issued in connection with the Arrangement. Each outstanding Unit represents an equal, fractional, undivided ownership interest in the net assets of the Trust attributable to the Units. The Trust will not issue additional Units of the class offered in the Arrangement following the completion of the Arrangement except: (i) If the net proceeds per Unit to be received by the Trust are not less than 100% of the most recently calculated net asset value (“NAV”) per Unit immediately prior to, or upon, the determination of the pricing of such issuance; or (ii) by way of distribution of Units in connection with an income distribution. According to the Manager, the Trust does not intend to issue new Units, or redeem existing Units, on a day-to-day basis.
Units may be redeemed at the option of the Unitholder on a monthly basis for physical gold and silver bullion or cash, as described below.
According to the Manager, subject to the terms of the trust agreement, a Unitholder may redeem Units for physical gold and silver bullion, provided the redemption request is for the Minimum Bullion Redemption Amount. “Minimum Bullion Redemption Amount” means 100,000 Units, provided that if 100,000 Units is not at least equivalent to the aggregate
The amount of physical gold and silver bullion a redeeming Unitholder is entitled to receive will be determined by the Manager, who will allocate the Redemption Amount to physical gold and silver bullion in direct proportion to the value of physical gold and silver bullion held by the Trust at the time of redemption (“Bullion Redemption Amount”). The quantity of each particular metal delivered to a redeeming Unitholder will be dependent on the applicable Bullion Redemption Amount and the number and individual weight of London Good Delivery bars of that metal that are held by the Trust on the redemption date. A redeeming Unitholder may not receive physical gold and silver bullion in the proportions then held by the Trust and, if the Trust does not have a London Good Delivery bar of a particular metal in inventory of a value equal to or less than the applicable Bullion Redemption Amount, the redeeming Unitholder will not receive any of that metal. The ability of a Unitholder to redeem Units for physical gold and silver bullion may be limited by the number of London Good Delivery bars held by the Trust at the time of redemption. Any Bullion Redemption Amount in excess of the value of the London Good Delivery bar or an integral multiple thereof of the particular metal to be delivered to the redeeming Unitholder will be paid in cash, as such excess amount will not be combined with any excess amounts in respect of the other metal for the purpose of delivering additional physical gold and silver bullion.
A Unitholder that owns a sufficient number of Units who desires to exercise redemption privileges for physical gold and silver bullion must do so by instructing his, her or its broker, who must be a direct or indirect participant of CDS Clearing and Depository Services Inc. or The Depository Trust Company, to deliver to the Transfer Agent on behalf of the Unitholder a written notice (“Bullion Redemption Notice”) of the Unitholder's intention to redeem Units for physical gold and silver bullion. Pursuant to the Exemptive Relief, the Transfer Agent is permitted to directly accept redemption requests. A Bullion Redemption Notice must be received by the Transfer Agent no later than 4:00 p.m., Eastern Time (“E.T.”), on the 15th day of the month in which the Bullion Redemption Notice will be processed or, if such day is not a business day, then on the immediately following day that is a business day. Any Bullion Redemption Notice received after such time will be processed in the next month.
A Unitholder redeeming Units for physical gold and silver bullion will receive the physical gold and silver bullion from the Gold and Silver Custodian. Physical gold and silver bullion received by a Unitholder as a result of a redemption of Units will be delivered by armored transportation service carrier pursuant to delivery instructions provided by the Unitholder to the Manager, provided that the delivery instructions are acceptable to the armored transportation service carrier. The armored transportation service carrier will be engaged by or on behalf of, and the costs in connection therewith, will be borne by the redeeming Unitholder. Such physical gold and silver bullion can be delivered: (i) To an account established by the Unitholder at an institution located in North America authorized to accept and hold London Good Delivery bars; (ii) in the United States, to any physical address (subject to approval by the armored transportation service carrier); (iii) in Canada, to any business address (subject to approval by the armored transportation service carrier); and (iv) outside of the United States and Canada, to any address approved by the armored transportation service carrier. Physical gold and silver bullion delivered to an institution located in North America authorized to accept and hold London Good Delivery bars will likely retain its London Good Delivery status while in the custody of such institution; physical gold and silver bullion delivered pursuant to a Unitholder's delivery instruction to a destination other than an institution located in North America authorized to accept and hold London Good Delivery bars will no longer be deemed London Good Delivery once received by the Unitholder. Costs associated with the redemption of Units and the delivery of physical gold and silver bullion will be borne by the redeeming Unitholder.
The armored transportation service carrier will receive physical gold and silver bullion in connection with a redemption of Units approximately 10 business days after the end of the month in which the Bullion Redemption Notice is processed. Once the physical gold and silver bullion representing the redeemed Units has been placed with the armored transportation service carrier, the Gold and Silver Custodian will no longer bear the risk of loss of, and damage to, such physical gold and silver bullion. In the event of a loss after the physical gold and silver bullion has been placed with the armored transportation service carrier, the Unitholder will not have recourse against the Trust or the Gold and Silver Custodian.
According to the Proxy Circular, Unitholders whose Units are redeemed for cash will be entitled to receive a redemption price per Unit equal to 95% of the lesser of: (i) The volume-weighted average trading price of the Units traded on the Exchange or, if trading has been suspended on the Exchange, the trading price of the shares traded on the TSX,
To redeem Units for cash, a Unitholder must instruct the
According to the Proxy Circular, the Valuation Agent will calculate the NAV for each class of Units as of 4:00 p.m., ET, on each business day. The NAV as of the valuation time on each business day will be the amount obtained by deducting from the aggregate fair market value of the assets of the Trust as of such date an amount equal to the fair value of the liabilities of the Trust (excluding all liabilities represented by outstanding Units, if any) as of such date.
(i) The value of physical gold and silver bullion will be its market value based on the price provided by a widely recognized pricing service as directed by the Manager and, if such service is not available, such physical gold and silver bullion will be valued at prices provided by another pricing service as determined by the Manager, in consultation with the Valuation Agent;
(ii) the value of any cash on hand or on deposit (including interest-bearing accounts), accounts receivable, prepaid expenses, prepaid assets and interest accrued and not yet received, will be deemed to be the full amount thereof unless the Manager determines that any such deposit, account receivable, prepaid expense, prepaid asset or interest is not worth the full amount thereof, in which event the value thereof will be deemed to be such value as the Manager determines to be the fair value thereof;
(iii) the value of any cash equivalents will be at their cost plus accrued interest;
(iv) the value of any debt instruments (including obligations of or guaranteed by a Government) for which active markets exist (other than cash equivalents), and money market mutual funds, will be at the quoted value thereof;
(v) the value of any assets for which no price quotations are available or, in the opinion of the Manager (which may delegate such responsibility to the Valuation Agent under the valuation services agreement), to which the above valuation principles cannot or should not be applied, will be the fair value thereof determined from time to time in such manner as the Manager (or the Valuation Agent, as the case may be) will from time to time provide; and
(vi) the value of all assets and liabilities of the Trust valued in terms of a currency other than the currency used to calculate the NAV will be converted to the currency used to calculate the NAV by applying the rate of exchange obtained from the best available sources to the Valuation Agent as agreed upon by the Manager including, but not limited to, the Trustee or any of its affiliates.
According to the Proxy Circular, Units may trade in the market at a premium or discount to the NAV per Unit. The amount of the discount or premium in the trading price relative to the NAV may be influenced by non-concurrent trading hours between the COMEX and the Exchange and the TSX. According to the Proxy Circular, while the Units will trade on the Exchange during the Early, Core and Late Trading Sessions as specified in NYSE Arca Rule 7.34-E(a), liquidity in the global gold and silver markets will be reduced after the close of the COMEX at 1:30 p.m., ET. As a result, during this time, trading spreads, and the resulting premium or discount to the NAV, may widen.
Currently, the Consolidated Tape Plan does not provide for dissemination of the spot price of a commodity, such as gold or silver, over the Consolidated Tape. However, there will be disseminated over the Consolidated Tape the quotation and last sale price for the Units, as is the case for all equity securities traded on the Exchange. In addition, there is a considerable amount of gold and silver price and gold and silver market information available on public websites and through professional and subscription services.
Investors may obtain on a 24-hour basis gold or silver pricing information based on the spot price for an ounce of gold or silver from various financial information service providers, such as Reuters and Bloomberg. Reuters and Bloomberg provide at no charge on their websites delayed information regarding the spot price of gold and silver and last sale prices of gold and silver futures, as well as information about news and developments in the gold and silver market. Reuters and Bloomberg also offer a professional service to subscribers for a fee that provides information on gold and silver prices directly from market participants. ICAP plc provides an electronic trading platform called EBS for the trading of spot gold and silver, as well as a feed of real-time streaming prices, delivered as record-based digital data from the EBS platform to its customer's market data platform via Bloomberg or Reuters.
Complete real-time data for gold and silver futures and options prices traded on the COMEX are available by subscription from Reuters and Bloomberg. The NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its website. There are a variety of other public websites providing information on gold and silver, ranging from those specializing in precious metals to sites maintained by major newspapers. In addition, the LBMA Gold Price and the LBMA Silver Price are publicly available at no charge at
The intra-day indicative value (“IIV”) per Unit will be disseminated by one or more major market data vendors. The IIV will be calculated based on the amount of gold and silver held by the Trust and a price of gold and silver derived from updated bids and offers indicative of the spot prices of gold and silver.
The IIV will be widely disseminated on a per Unit basis every 15 seconds
The website for the Trust, which will be publicly accessible at no charge, will contain the following information: (a) The mid-point of the bid/ask price
The Trust's daily (or as determined by the Manager in accordance with the trust agreement) NAV will be posted on the Trust's website as soon as practicable. In addition, the Exchange will make available over the Consolidated Tape quotation information, trading volume, closing prices and NAV per Unit from the previous day.
The Trust will be subject to the criteria in NYSE Arca Rule 8.201-E, including 8.201-E(e), for initial and continued listing of the Units.
A minimum of 100,000 Units will be required to be outstanding at the start of trading. The Exchange believes that the anticipated minimum number of Units outstanding at the start of trading is sufficient to provide adequate market liquidity. The Trust represents that the NAV will be calculated daily and made available to all market participants at the same time. The Trust also represents that the IIV will be calculated at least every fifteen seconds and made available to all market participants at the same time.
The Exchange deems the Units to be equity securities, thus rendering trading in the Units subject to the Exchange's existing rules governing the trading of equity securities. Trading in the Units on the Exchange will occur during the Early, Core and Late Trading Sessions as specified in NYSE Arca Rule 7.34-E(a). The Exchange has appropriate rules to facilitate transactions in the Units during all trading sessions. As provided in NYSE Arca Rule 7.6-E, the minimum price variation (“MPV”) for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001.
Further, NYSE Arca Rule 8.201-E sets forth certain restrictions on Equity Trading Permit Holders (“ETP Holders”) acting as registered Market Makers in the Units to facilitate surveillance. Pursuant to NYSE Arca Rule 8.201-E(g), an ETP Holder acting as a registered Market Maker in the Units is required to provide the Exchange with information relating to its trading in the underlying gold and silver and related futures or options on futures or any other related derivatives. Commentary .04 of NYSE Arca Rule 11.3 requires an ETP Holder acting as a registered Market Maker, and its affiliates, in the Units to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of any material, nonpublic information with respect to such products, any components of the related products, any physical asset or commodity underlying the product, applicable currencies, underlying indexes, related futures or options on futures and any related derivative instruments (including the Units).
As a general matter, the Exchange has regulatory jurisdiction over its ETP Holders and their associated persons, which include any person or entity controlling an ETP Holder. A subsidiary or affiliate of an ETP Holder that does business only in commodities or futures contracts would not be subject to Exchange jurisdiction, but the Exchange could obtain information regarding the activities of such subsidiary or affiliate through surveillance sharing agreements with regulatory organizations of which such subsidiary or affiliate is a member.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Units. Trading on the Exchange in the Units may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Units inadvisable. These may include: (1) The extent to which conditions in the underlying gold or silver market have caused disruptions and/or lack of trading; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in Units will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule.
The Exchange will halt trading in the Units if the NAV of the Trust is not calculated or disseminated daily. The Exchange may halt trading during the day in which an interruption occurs to the dissemination of the IIV. If the interruption to the dissemination of the IIV persists past the trading day in which it occurs, the Exchange will halt trading no later than the beginning of the trading day following the interruption. In addition, if the Exchange becomes aware that the NAV with respect to the Units is not disseminated to all market participants at the same time, it will halt trading in the Units until such time as the NAV is available to all market participants.
The Exchange represents that trading in the Units will be subject to the existing trading surveillances administered by the Exchange, as well as cross-market surveillances administered by the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations.
The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Units with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may
Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able to obtain information regarding trading in the Units and the underlying gold and silver and related futures or options on futures or any other related derivatives through ETP Holders acting as registered Market Makers, in connection with such ETP Holders' proprietary or customer trades through ETP Holders which they effect on any relevant market.
The Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
All statements and representations made in this filing regarding (a) the description of the portfolio holdings or reference assets, (b) limitations on portfolio holdings or reference assets and (c) the applicability of Exchange listing rules specified in this rule filing shall constitute continued listing requirements for listing the Units on the Exchange.
The Manager has represented to the Exchange that it will advise the Exchange of any failure by the Trust to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will monitor for compliance with the continued listing requirements. If the Trust is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5-E(m).
Prior to the commencement of trading, the Exchange will inform its ETP Holders in an “Information Bulletin” of the special characteristics and risks associated with trading the Units. Specifically, the Information Bulletin will discuss the following: (1) Redemptions of Units; (2) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Units; (3) how information regarding the IIV is disseminated; (4) the possibility that trading spreads and the resulting premium or discount on the Units may widen as a result of reduced liquidity of gold or silver trading during the Core and Late Trading Sessions after the close of the major world gold and silver markets; and (5) trading information.
In addition, the Information Bulletin will reference that the Trust is subject to various fees and expenses as described in the Proxy Circular. The Information Bulletin will disclose that information about the Units of the Trust is publicly available on the Trust's website.
The Information Bulletin will also discuss any relief, if granted, by the Commission or the staff from any rules under the Exchange Act.
The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(5)
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Units will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Rule 8.201-E. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Units in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Units with other markets that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Units from such markets. In addition, the Exchange may obtain information regarding trading in the Units from markets that are members of ISG or with which the Exchange has in place a CSSA. The Exchange may obtain information regarding trading in gold and silver futures from markets trading such futures that are members of ISG or with which the Exchange has in place a CSSA, including COMEX. Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able to obtain information regarding trading in the Units and the underlying gold and silver through ETP Holders acting as registered Market Makers, in connection with such ETP Holders' proprietary or customer trades through ETP Holders which they effect on any relevant market.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest. There is a considerable amount of gold and silver price and gold and silver market information available on public websites and through professional and subscription services. Investors may obtain on a 24-hour basis gold or silver pricing information based on the spot price for an ounce of gold or silver from various financial information service providers, such as Reuters and Bloomberg. Reuters and Bloomberg provide at no charge on their websites delayed information regarding the spot price of gold and silver and last sale prices of gold and silver futures, as well as information about news and developments in the gold and silver market. Reuters and Bloomberg also offer a professional service to subscribers for a fee that provides information on gold and silver prices directly from market participants. ICAP plc provides an electronic trading platform called EBS for the trading of spot gold and silver, as well as a feed of real-time streaming prices, delivered as record-based digital data from the EBS platform to its customer's market data platform via Bloomberg or Reuters.
Complete real-time data for gold and silver futures and options prices traded on the COMEX are available by subscription from Reuters and Bloomberg. The NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its website. There are a variety of other public websites providing information on gold and silver, ranging from those specializing in precious metals to sites maintained by major newspapers. In addition, the LBMA Gold Price and LBMA Silver Price are publicly available at no charge at
The Trust's daily (or as determined by the Manager in accordance with the trust agreement) NAV will be posted on the Trust's website as soon as practicable. The Trust's website will provide an IIV per Unit, as calculated by a third party financial data provider
Quotation and last-sale information regarding the Units will be disseminated through the facilities of the Consolidated Tape Association. The IIV will be widely disseminated on a per Unit basis every 15 seconds during the NYSE Arca Core Trading Session by one or more major market data vendors. In addition, the IIV will be available through on-line information services. The Exchange represents that the Exchange may halt trading during the day in which an interruption to the dissemination of the IIV occurs. If the interruption to the dissemination of the IIV persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption. In addition, if the Exchange becomes aware that the NAV with respect to the Units is not disseminated to all market participants at the same time, it will halt trading in the Units until such time as the NAV is available to all market participants. The NAV per Unit will be calculated daily and made available to all market participants at the same time. One or more major market data vendors will disseminate for the Trust on a daily basis information with respect to the recent NAV per Unit and Units outstanding.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Units and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a CSSA. The Exchange may obtain information regarding trading in gold and silver futures from markets trading such futures that are members of ISG or with which the Exchange has in place a CSSA, including COMEX. In addition, as noted above, investors will have ready access to information regarding gold and silver pricing and gold and silver futures information.
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 Exchange Act. The Exchange believes the proposed rule change will enhance competition by accommodating Exchange trading of an additional exchange-traded product relating to physical gold and silver.
No written comments were solicited or received with respect to the proposed rule change.
After careful review, the Commission finds that the Exchange's proposed rule change, as modified by Amendment No. 2, to list and trade the Units is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission notes that the Exchange has represented that gold and silver futures trade on markets that are regulated by the Commodities Futures Trading Commission and that the Exchange will be able to share surveillance information with one of the “most significant” markets for gold and silver futures.
The Commission also finds that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,
The Commission believes that the proposed rule change is reasonably designed to promote fair disclosure of information that may be necessary to price the Units appropriately. NYSE Arca Rule 8.201-E(e)(2)(v) requires that an IIV (which is referred to in the rule as the “Indicative Trust Value”) be calculated and disseminated at least every 15 seconds. The IIV per Unit will be calculated based on the amount of gold and silver held by the Trust and a price of gold and silver derived from updated bids and offers indicative of the spot prices of gold and silver. The IIV will be widely disseminated on a per Unit basis every 15 seconds during the NYSE Arca Core Trading Session by one or more major market data vendors. In addition, the IIV will be available through on-line information services.
Additionally, the Valuation Agent will calculate the NAV for each class of Units as of 4:00 p.m., E.T., on each business day.
According to the Exchange, investors may obtain on a 24-hour basis gold or silver pricing information based on the spot price for an ounce of gold or silver from various financial information service providers, such as Reuters and Bloomberg. Reuters and Bloomberg provide at no charge on their websites delayed information regarding the spot price of gold and silver and last sale prices of gold and silver futures, as well as information about news and developments in the gold and silver market. Reuters and Bloomberg also offer a professional service to subscribers for a fee that provides information on gold and silver prices directly from market participants. ICAP plc provides an electronic trading platform called EBS for the trading of spot gold and silver, as well as a feed of real-time streaming prices, delivered as record-based digital data from the EBS platform to its customer's market data platform via Bloomberg or Reuters.
In addition, the Exchange notes that complete real-time data for gold and silver futures and options prices traded on the COMEX are available by subscription from Reuters and Bloomberg. NYMEX also provides delayed futures and options information on current and past trading sessions and market news free of charge on its website. There are a variety of other public websites providing information on gold and silver, ranging from those specializing in precious metals to sites maintained by major newspapers. In addition, the Exchange represents that the LBMA Gold Price and the LBMA Silver Price are publicly available at no charge at
The Commission also believes that the proposal is reasonably designed to prevent trading when a reasonable degree of transparency cannot be assured. With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Units. Trading on the Exchange in the Units may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Units inadvisable. These may include: (1) The extent to which conditions in the underlying gold or silver market have caused disruptions or lack of trading, or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. In addition, trading in Units will be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange's “circuit breaker” rule.
Additionally, the Commission notes that market makers in the Units would be subject to the requirements of NYSE Arca Rule 8.201-E(g), which allow the Exchange to ensure that they do not use their positions to violate the requirements of Exchange rules or applicable federal securities laws.
In support of this proposal, the Exchange has made the following additional representations:
(1) The Trust will be subject to the criteria in NYSE Arca Rule 8.201-E, including 8.201-E(e), for initial and continued listing of the Units.
(2) The Exchange has appropriate rules to facilitate transactions in the Units during all trading sessions.
(3) The Exchange deems the Units to be equity securities.
(4) The Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
(5) Trading in the Units will be subject to the existing trading surveillances administered by the Exchange, as well as cross-market surveillances administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws, and that these procedures are adequate to properly monitor Exchange trading of the Units in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.
(6) The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Units with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Units from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Units from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.
(7) Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Units. Specifically, the Information Bulletin will discuss the following: (a) Redemptions of Units; (b) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Units; (c) how information regarding the IIV is disseminated; (e) the possibility that trading spreads and the resulting premium or discount on the Units may widen as a result of reduced liquidity of gold or silver trading during the Core and Late Trading Sessions after the close of the major world gold and silver markets; and (e) trading information.
(8) The Trust's investment and operating restrictions provide that the Trust will invest in and hold a minimum of 90% of its total net assets in physical gold and silver bullion in “London Good Delivery” bar form, and hold no more than 10% of the total net assets of the Trust, at the discretion of the Manager, in: (i) Physical gold and silver bullion (in London Good Delivery bar form or otherwise); (ii) gold or silver coins; (iii) debt obligations of or guaranteed by a Government; (iv) money market mutual funds; (v) interest-bearing accounts; (vi) cash; and (vii) cash equivalents, except during the 60-day period following the closing of additional offerings or prior to the distribution of the assets of the Trust.
(9) According to the Manager, the value of gold bullion is currently approximately
(10) According to the Manager, the Trust will not invest in gold or silver certificates (other than legacy gold and silver certificates previously held by CFCL which historically represent less than 1% of CFCL's assets, and which will be sold for cash as soon as practicable following the completion of the Arrangement) or other financial instruments that represent gold or silver or that may be exchanged for gold or silver, and will not purchase, sell, or hold derivatives.
(11) All statements and representations made in this filing regarding (a) The description of the portfolio holdings or reference assets, (b) limitations on portfolio holdings or reference assets, and (c) the applicability of Exchange listing rules specified in this rule filing shall constitute continued listing requirements for listing the Units on the Exchange.
(12) The Manager has represented to the Exchange that it will advise the Exchange of any failure by the Trust to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Trust is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5-E(m).
(13) A minimum of 100,000 Units will be required to be outstanding at the start of trading.
For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with Section 6(b)(5) of the Act
Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 2 to the proposed rule change. 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.
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 2, prior to the 30th day after the date of publication of notice of Amendment No. 2 in the
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
The Exchange filed a proposal to list and trade shares of the iShares Gold Exposure ETF (the “Fund”), a series of the iShares U.S. ETF Trust (the “Trust”), under Exchange Rule 14.11(i) (“Managed Fund Shares”). The shares of the Fund are referred to herein as the “Shares.”
The text of the proposed rule change is available at the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to list and trade the Shares under Exchange Rule 14.11(i), which governs the listing and trading of Managed Fund Shares on the Exchange.
As a result of the instruments that will be indirectly held by the Fund, the Adviser, which is a member of the National Futures Association (“NFA”), will register as a commodity pool operator
Exchange Rule 14.11(i)(7) provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
The Exchange submits this proposal in order to allow the Fund to hold listed derivatives (
The Fund will seek to provide exposure, on a total return basis, to the price performance of gold. The Fund will seek to achieve its investment objective by investing primarily in a combination of (i) exchange-traded gold futures contracts (“Gold Futures”)
The Fund's investment strategy related to the Gold Investments will seek to maximize correlation with the Bloomberg Composite Gold Index (the “Bloomberg Benchmark”), which is comprised of exchange-traded gold futures contracts and one or more ETPs backed by or linked to physical gold. The Bloomberg Benchmark is designed to track the price performance of gold. Although the Fund generally holds, among other instruments, the same futures contracts under the same futures rolling schedule, and the same ETPs backed by or linked to physical gold, as those included in the Bloomberg Benchmark, the Fund is not obligated to invest in any such futures contracts or ETPs included in, and does not seek to track the performance of, the Bloomberg Benchmark.
The Fund expects to seek to gain exposure to Gold Investments by investing through a wholly-owned subsidiary organized in the Cayman Islands (the “Subsidiary”). The Subsidiary is advised by the Adviser. Unlike the Fund, the Subsidiary is not an investment company registered under the Investment Company Act of 1940. The Subsidiary has the same investment objective as the Fund. References below to the holdings of the Fund are inclusive of the direct holdings of the Fund as well as the indirect holdings of the Fund through the Subsidiary.
In order to achieve its investment objective, under Normal Market Conditions,
Under Normal Market Conditions, the Fund generally will primarily hold Listed Gold Derivatives, including Gold Futures, OTC Gold Derivatives,
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change rather will facilitate the listing and trading of an additional actively-managed exchange-traded fund that will enhance competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 7.31E relating to Mid-Point Liquidity Orders and the MTS Modifier and Rule 7.36E to add a definition of “Aggressing Order.” The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 7.31E (Orders and Modifiers) relating to Mid-Point Liquidity (“MPL”) Orders and the MTS Modifier and Rule 7.36E (Order Ranking and Display) to add a definition of “Aggressing Order.” For MPL Orders, the Exchange proposes to amend the price at which a marketable MPL Order would trade when there are resting orders priced better than the midpoint. The Exchange also proposes to amend how resting orders with an MTS Modifier would trade in specified circumstances.
As provided for in current Rule 7.31E(d)(3)(C), on arrival, an MPL Order to buy (sell) that is eligible to trade will trade with resting orders to sell (buy) with a working price at or below (above) the midpoint of the PBBO (
Current Rule 7.31E(i)(3) describes the MTS Modifier, including how a resting order with an MTS Modifier will trade. Current Rule 7.31E(i)(3)(E)(i) provides that if a sell (buy) order does not meet the MTS of the resting order to buy (sell) with an MTS Modifier, that sell (buy) order will not trade with and may trade through such order with an MTS Modifier. Current Rule 7.31E(i)(3)(E)(ii) provides that if a resting sell (buy) order did not meet the MTS of a same-priced resting order to buy (sell) with an MTS Modifier, a subsequently arriving sell (buy) order that meets the MTS will trade ahead of the resting sell (buy) order. Finally, current Rule 7.31E(i)(3)(E)(iii) provides that a resting order to buy (sell) with an MTS Modifier will not be eligible to trade if sell (buy) order(s) ranked Priority 2—Display Orders are displayed on the Exchange Book at a price lower (higher) than the working price of such MTS Order. Similarly, Rule 7.46E(f)(5)(I) (Tick Size Pilot Plan) provides that for Pilot Securities in Test Group Three, a resting order to buy (sell) with an MTS Modifier will not be eligible to trade if sell (buy) order(s) ranked Priority 2—Display Orders are displayed on the Exchange Book at a price equal to or lower (higher) than the working price of such MTS Order.
The Exchange proposes to amend Rule 7.36E to add a definition that would be used for purposes of Rule 7E. Proposed Rule 7.36E(a)(5) would define the term “Aggressing Order” to mean a buy (sell) order that is or becomes marketable against sell (buy) interest on the Exchange Book.
This term would also be applicable to resting orders that become marketable due to one or more events. For the most part, resting orders will have already traded with contra-side orders against
The order that becomes the Aggressing Order is the liquidity-taking order. Generally, if resting orders on both sides are determined to be an Aggressing Order,
The Exchange proposes to amend the first sentence of current Rule 7.31E(d)(3)(C) to make this text applicable to any marketable MPL Order, and not just an arriving MPL Order. To effect this change, the Exchange proposes to use the term “Aggressing Order” and replace the phrase “[o]n arrival, an MPL Order to buy (sell) that is eligible to trade” with the phrase, “[a]n Aggressing MPL Order to buy (sell).”
The Exchange also proposes to amend the first sentence of current Rule 7.31E(d)(3)(C) to describe at what price an Aggressing MPL Order would trade with contra-side resting orders that are priced better than the midpoint. The rule currently provides that an arriving MPL Order to buy (sell) would trade with resting orders to sell (buy) with a working price at or below (above) the midpoint of the PBBO. The Exchange proposes to specify that when an Aggressing MPL Order trades with resting orders priced better than the midpoint, it will trade at the working price of the resting orders, which is current functionality. For example, if the PBB is 10.10 and the midpoint is 10.13, and there are non-displayed sell orders of 100 shares with working prices of 10.11 and 10.12, an Aggressing MPL Order to buy with a limit of 10.13 for 200 shares would trade with such non-displayed sell orders at 10.11 and 10.12, respectively. The Exchange believes that this proposed amendment would promote transparency in Exchange rules regarding at what price an Aggressing MPL Order would trade.
By using the term “Aggressing Order,” this rule would be applicable to a resting MPL Order that becomes marketable, such as after a PBBO unlocks or uncrosses. In the above example, if the MPL Order to buy is ineligible to trade because of a crossed PBBO, and while the PBBO is crossed, the Exchange receives the two non-displayed sell orders, when the PBBO uncrosses and the new midpoint is 10.13, the resting MPL Order would become an Aggressing Order and would trade with the non-displayed sell orders at 10.11 and 10.12, respectively.
The Exchange also proposes to amend the second sentence of Rule 7.31E(d)(3)(C) to replace the term “incoming orders” with the term “Aggressing Orders.” This proposed rule change would provide greater specificity that any contra-side order that is an Aggressing Order, as defined in proposed Rule 7.36E(a)(5), would trade with a resting MPL Order at the midpoint of the PBBO.
The Exchange proposes to amend Rules 7.31E(i)(3)(C) and (E) to specify circumstances when a resting order with an MTS Modifier would not be eligible to trade.
Current Rule 7.31E(i)(3)(C) provides that an order with an MTS Modifier that is designated Day and cannot be satisfied on arrival would not trade and would be ranked in the Exchange Book. The Exchange proposes to describe new functionality relating to when an order with an MTS Modifier that is designated Day would not be eligible to trade. In short, if a later-arriving contra-side order can meet the MTS of a resting order with an MTS Modifier, the two orders would trade unless the execution would be inconsistent with either intra-market price priority or would result in a non-displayed order trading ahead of a same-side, same-priced displayed order.
To reflect these changes, the second sentence of Rule 7.31E(i)(3)(C) would provide that when a buy (sell) order with an MTS Modifier that is designated Day is ranked in the Exchange Book, it would not be eligible to trade:
(i) At a price equal to or above (below) any sell (buy) orders that are displayed and that have a working price equal to or below (above) the working price of such order with an MTS Modifier, or
(ii) at a price above (below) any sell (buy) orders that are not displayed and that have a working price below (above) the working price of such order with an MTS Modifier.
For example,
• if the PBBO is 10.10 x 10.16, on the Exchange Book there is a sell order (“Order A”) ranked Priority 3—Non-Display Orders for 50 shares at 10.12 and a sell order (“Order B”) ranked Priority 2—Display Orders for 25 shares at 10.11, and the Exchange receives a buy MPL Order (“Order C”) with an MTS Modifier for 100 shares with a 10.16 limit, because the MTS cannot be met, Order C will not trade and will be ranked in the Exchange Book at the midpoint of 10.13. At this point, the Exchange would have a non-displayed buy order crossing both non-displayed
• If next, the Exchange receives a buy order (“Order E”) to buy 25 shares at 10.11, it would trade with Order B. As discussed above, this execution would trigger the Exchange to evaluate whether Order C becomes marketable against contra-side orders.
Because proposed Rule 7.31E(i)(3)(C)(i) would be applicable to all securities that trade on the exchange, including Pilot Securities in the Tick Pilot Plan, the Exchange proposes to delete Rule 7.46E(f)(5)(I) as duplicative of the proposed new rule text.
The Exchange also proposes to amend Rules 7.31E(i)(3)(E)(i), (ii), and (iii) relating to the behavior of resting orders with an MTS Modifier.
First, the Exchange proposes to amend Rule 7.31E(i)(3)(E)(i) to use the term “Aggressing Order.” Use of this proposed new definition would not change the functionality associated with this rule. Accordingly, as proposed, the rule would provide that if
Second, the Exchange proposes to amend Rule 7.31E(i)(3)(E)(ii) to provide that if a resting sell (buy)
Finally, the Exchange proposes to delete current Rule 7.31E(i)(3)(iii) as superseded by proposed Rule 7.31E(i)(3)(C)(i) and (ii) and the amendments to Rule 7.31E(i)(3)(E)(i) and (ii).
Because of the technology changes associated with these proposed rule change, the Exchange will announce the implementation date of this proposed rule change by Trader Update. The Exchange anticipates that the implementation date will be in the first quarter of 2018.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange believes that the proposed definition of “Aggressing Order” in Rule 7.36E would remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, protect investors and the public interest because it would provide for a definition in Exchange rules that describes orders that are or become marketable. The Exchange believes that the proposed definition would promote transparency in Exchange rules by providing detail regarding circumstances when a resting order may become marketable, and thus would be an Aggressing Order. The Exchange further believes that use of such definition would promote clarity in Exchange rules, particularly in the context of the amendments to MPL Orders and orders with an MTS Modifier.
The Exchange believes that the proposed amendments to Rule 7.31E(d)(3)(C) to use the term “Aggressing Order” and to describe the prices at which an Aggressing MPL Order would trade would remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, protect investors and the public interest because it would promote clarity and transparency in Exchange rules regarding the behavior of marketable MPL Orders. In particular, the rule would provide greater specificity regarding how a resting MPL Order that becomes an Aggressing Order would trade.
Finally, the Exchange believes that the proposed amendments relating to when a resting order with an MTS Modifier would be eligible to trade would remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, protect investors and the public interest, because the proposed rule change would ensure that there would not be an execution of a resting order with an MTS Modifier that either would be inconsistent with intra-market price priority or would result in a non-displayed order trading ahead of a same-side, same-priced displayed order. This proposed rule change would therefore promote just and equitable principles of trade by ensuring that displayed interest does not get traded through by a non-displayed order.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change is not designed to address any competitive issues, but rather to add further clarity to Exchange rules by defining the term “Aggressing Order” and using that term in connection with MPL Orders. In addition, the rule is
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On November 29, 2017, Nasdaq PHLX LLC (the “Exchange” or “Phlx”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Prior to 2010, Phlx Rule 1059 (Accommodation Transactions) allowed cabinet trade transactions at a price of $1 per option contract to occur in open outcry trading for certain options classes.
The Exchange permits sub-dollar cabinet trade transactions to be traded
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act
In the Notice, the Exchange explains that it initially adopted the sub-dollar cabinet trade rule on a pilot basis to “evaluate the efficacy of the change and to address any operational issues that might arise in processing [c]abinet trades.”
In support of making the pilot program permanent, the Exchange represents that “there are no operational issues in processing and clearing [c]abinet [t]rades in penny and sub-penny increments.”
Based on the representations of the Exchange, the Commission believes that permanent approval of the sub-dollar cabinet trade pilot is consistent with the Act. In particular, the Commission notes that the Exchange's system allows it to process cabinet trades in the normal course. Further, the Exchange has not observed any issues or concerns with sub-dollar cabinet trades at the Exchange level, with and among its members, or in processing the trades through OCC. Accordingly, the Exchange's rule appears reasonably designed to remove impediments, prevent fraudulent and manipulative acts and practices, and foster cooperation and coordination with persons engaged in facilitating transactions in securities. Further, permanent approval will continue to provide investors with choice when considering a cabinet trade, including the ability to price such trades below $1 per contract.
The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend certain non-transaction fees in the Exchange's Schedule of Fees.
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 purpose of the proposed rule change is to amend certain non-transaction fees in the Exchange's Schedule of Fees. ISE currently charges its members various non-transaction fees to trade on the Exchange and use its facilities, including a monthly access fee and an annual regulatory fee. Such fees are designed to help defray the technical, regulatory, and administrative costs associated with a member's use of the Exchange. Specifically, the Exchange currently assesses a monthly access fee to all its members that is $500 per month per Electronic Access Member (“EAM”) membership, $4,000 per month per Primary Market Maker (“PMM”) membership, and $2,000 per month per Competitive Market Maker (“CMM”) membership.
In order to keep pace with rising overhead, the Exchange now proposes to increase the monthly access fee for Market Makers (
As noted above, members are required to pay a variety of non-transaction fees, including the monthly access fee and annual regulatory fee, to be able to trade on the Exchange and use its facilities. By increasing the monthly access fee and eliminating the annual regulatory fee in the manner discussed above, the Exchange is essentially consolidating these fees rather than having members pay two separate charges for their use of the Exchange. With the proposed changes, Market Makers may be assessed at a higher rate overall to use the Exchange, while EAMs may be assessed at a lower rate because the Exchange is increasing the monthly access fee for Market Makers only, but eliminating the annual regulatory fee for all members.
The access fee and regulatory fee were adopted in 2000 to help recover the costs of operating a trading market,
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed increase in the monthly Market Maker access fees to $5,000 per PMM membership and $2,500 per CMM membership is reasonable and equitable. The proposed access fees will help the Exchange keep pace with rising overhead, and are within the range of similar fees charged by other options exchanges, including for example, C2 Options Exchange (“C2”), which charges its market makers a monthly access fee of $5,000 per permit.
Furthermore, while the Exchange is increasing the monthly access fees for Market Makers, the Exchange believes that this is partially offset by the elimination of the annual regulatory fees for all members. As noted above, members are required to pay a variety of non-transaction fees, including the monthly access fee and annual regulatory fee, to be able to trade on the Exchange and use its facilities. By consolidating the annual regulatory fee with the access fee in the manner discussed above rather than having members pay two separate charges for their use of the Exchange, ISE is simplifying the Schedule of Fees to the benefit of its members. The Exchange also believes that the proposed changes are reasonable and equitable because the
As noted above, some members will be impacted more than others with this proposal because the Exchange is increasing the monthly access fee for Market Makers only, but eliminating the annual regulatory fee for all members. The Exchange does not believe that this is unfairly discriminatory because the resources dedicated to the supporting and regulating a member vary on the type of membership. Generally, PMMs are subject to greater obligations than CMMs are and CMMs are subject to greater obligations than EAMs are. Furthermore, the technical, regulatory, and administrative costs associated with an EAM's use of the Exchange are not as high as those associated with Market Makers.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the proposed fee changes are designed to more accurately reflect the technical, regulatory, and administrative costs associated with a member's use of the Exchange, and the fees remain competitive with similar fees offered on other options exchanges. The Exchange operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the presidential declaration of a major disaster for public assistance only for the state of Mississippi (FEMA-4350-DR), dated 11/22/2017.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Mississippi, dated 11/22/2017, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Notice.
This is a notice of an administrative declaration of a disaster for the state of New York dated 01/04/2018.
Issued on 01/04/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15423 5 and for economic injury is 15424 0.
The State which received an EIDL Declaration # is New York.
U.S. Small Business Administration.
Notice.
This is a notice of the presidential declaration of a major disaster for public assistance only for the state of New Hampshire (FEMA-4355-DR), dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 01/02/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 154296 and for economic injury is 154300.
U.S. Small Business Administration.
Notice.
This is a notice of an administrative declaration of a disaster for the state of Connecticut dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A.E. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15416 5 and for economic injury is 15417 0.
The States which received an EIDL Declaration # are Connecticut, New York.
U.S. Small Business Administration.
Notice.
This is a notice of the presidential declaration of a major disaster for public assistance only for the state of Vermont (FEMA-4356-DR), dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 01/02/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 154316 and for economic injury is 154320.
U.S. Small Business Administration.
Notice.
This is a notice of the presidential declaration of a major disaster for public assistance only for the state of Maine (FEMA-4354-DR), dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 01/02/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 154276 and for economic injury is 154280.
U.S. Small Business Administration.
Notice.
This is a notice of the presidential declaration of a major disaster for public assistance only for the state of California (FEMA-4353-DR), dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 01/02/2018, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 154255 and for economic injury is 154260.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Louisiana dated 01/02/2018.
Issued on 01/02/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 15418 B and for economic injury is 15419 0.
The States which received an EIDL Declaration # are Louisiana, Texas.
The Secretary of State's designation of “countries of particular concern” for religious freedom violations. Pursuant to Section 408(a) of the International Religious Freedom Act of 1998 (Pub. L. 105-292), as amended (the Act), notice is hereby given that, on December 22, 2017, the Secretary of State, under authority delegated by the President, has designated each of the following as a “country of particular concern” (CPC) under section 402(b) of the Act, for having engaged in or tolerated particularly severe violations of religious freedom: Burma, China, Eritrea, Iran, the Democratic People's Republic of Korea, Saudi Arabia, Sudan, Tajikistan, Turkmenistan, and Uzbekistan. The Secretary simultaneously designated the following Presidential Actions for these CPCs:
For Burma, the existing ongoing restrictions referenced in 22 CFR 126.1, pursuant to section 402(c)(5) of the Act;
For China, the existing ongoing restriction on exports to China of crime control and detection instruments and equipment, under the Foreign Relations Authorization Act of 1990 and 1991 (Pub. L. 101-246), pursuant to section 402(c)(5) of the Act;
For Eritrea, the existing ongoing restrictions referenced in 22 CFR 126.1, pursuant to section 402(c)(5) of the Act;
For Iran, the existing ongoing travel restrictions in section 221(c) of the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA) for individuals identified under section 221(a)(1)(C) of the TRA in connection with the commission of serious human rights abuses, pursuant to section 402(c)(5) of the Act;
For the Democratic People's Republic of Korea, the existing ongoing restrictions to which the Democratic People's Republic of Korea is subject, pursuant to sections 402 and 409 of the Trade Act of 1974 (the Jackson-Vanik Amendment), pursuant to section 402(c)(5) of the Act;
For Saudi Arabia, a waiver as required in the “important national interest of the United States,” pursuant to section 407 of the Act;
For Sudan, the restriction in the annual Department of State, Foreign Operations, and Related Programs Appropriations Act on making certain appropriated funds available for assistance to the Government of Sudan, currently set forth in section 7042(j) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2015 (Div. K, Pub. L. 114-113), and any provision of law that is the same or substantially the same as this provision, pursuant to section 402(c)(5) of the Act;
For Tajikistan, a waiver as required in the “important national interest of the United States,” pursuant to section 407 of the Act;
For Turkmenistan, a waiver as required in the “important national interest of the United States,” pursuant to section 407 of the Act;
For Uzbekistan, a waiver as required in the “important national interest of the United States,” pursuant to section 407 of the Act.
In addition, the Secretary of State has designated the following country as a “special watch list” country for severe violations of religious freedom: Pakistan.
Benjamin W. Medina, Office of International Religious Freedom, Bureau of Democracy, Human Rights, and Labor, U.S. Department of State, (Phone: (202) 647 3865 or Email:
Office of the United States Trade Representative.
Notice and request for applications.
The Office of the United States Trade Representative (USTR) is establishing a new four-year charter term and accepting applications from qualified individuals interested in serving as a member of the Trade Advisory Committee on Africa (TACA). The TACA is a trade advisory committee that provides general policy advice and guidance to the United States Trade Representative on trade policy and development matters that have a significant impact on the countries of sub-Saharan Africa.
USTR will accept nominations on a rolling basis for membership on the TACA for the four-year charter term beginning in March 2018. To ensure consideration before the new charter term, you should submit you application by February 2, 2018.
Stewart Young, Deputy Assistant U.S. Trade Representative for Intergovernmental Affairs and Public Engagement,
Section 135(c)(1) of the Trade Act of 1974, as amended (19 U.S.C. 2155(c)(1)), authorizes the President to establish individual general trade policy advisory committees for industry, labor, agriculture, services, investment, defense, small business, and other interests, as appropriate, to provide general policy advice. The President delegated that authority to the United States Trade Representative in Executive Order 11846, section 4(d), issued on March 27, 1975. In addition, section 14 of the AGOA Acceleration Act of 2004, Public Law 108-274, 118 Stat. 829-830 (
Pursuant to these authorities, the United States Trade Representative intends to establish a new four-year charter term for the TACA, which will begin on March 19, 2018 and end on March 18, 2022.
The TACA is a discretionary trade advisory committee established to provide general policy advice to the United States Trade Representative on trade policy and development matters that have a significant impact on the countries of sub-Saharan Africa. More specifically, the TACA provides general policy advice on issues that may affect the countries of sub-Saharan Africa including: (1) Negotiating objectives and bargaining positions before entering into trade agreements; (2) the impact of the implementation of trade agreements; (3) matters concerning the operation of any trade agreement once entered into; and (4) other matters arising in connection with the development, implementation, and administration of the trade policy of the United States. The TACA also facilitates the goals and objectives of the African Growth and Opportunity Act (AGOA) and assists in maintaining ongoing discussions with sub-Saharan African trade and agriculture ministries and private sector organizations on issues of mutual concern, including regional and international trade concerns and World Trade Organization issues.
The TACA meets as needed, at the call of the United States Trade Representative or his/her designee, or two-thirds of the TACA members, depending on various factors such as the level of activity of trade negotiations and the needs of the United States Trade Representative.
The TACA is composed of not more than 30 members who have expertise in general trade, investment and development issues and specific knowledge of United States-Africa trade and investment trends including trade under the AGOA; constraints to trade and investment (including infrastructure, energy and financing); trade facilitation measures; sanitary and phyto-sanitary measures and technical
The United States Trade Representative appoints all TACA members for a term of four-years or until the TACA charter expires, and they serve at his/her discretion. Individuals can be reappointed for any number of terms. The United States Trade Representative makes appointments without regard to political affiliation and with an interest in ensuring balance in terms of sectors, demographics, and other factors relevant to the USTR's needs. Insofar as practicable, TACA membership will reflect regional diversity and be broadly representative of key sectors and groups of the economy with an interest in trade and sub-Saharan Africa issues, including U.S. citizens who are diaspora African and U.S. citizens of African descent with requisite knowledge and experience.
TACA members serve without either compensation or reimbursement of expenses. Members are responsible for all expenses they incur to attend meetings or otherwise participate in TACA activities.
The United States Trade Representative appoints TACA members to represent their sponsoring U.S. entity's interests on sub-Saharan Africa trade, and thus USTR's foremost consideration for applicants is their ability to carry out the goals of section 135(c) of the Trade Act of 1974, as amended. Other criteria include the applicant's knowledge of and expertise in international trade issues as relevant to the work of the TACA and USTR. USTR anticipates that almost all TACA members will serve in a representative capacity with a very limited number serving in an individual capacity as subject matter experts. These members, known as special government employees or SGEs, are subject to conflict of interest rules and will have to complete a financial disclosure report.
USTR is soliciting nominations for membership on the TACA. To apply for membership, an applicant must meet the following eligibility criteria:
1. The applicant must be a U.S. citizen.
2. The applicant cannot be a full-time employee of a U.S. governmental entity.
3. If serving in an individual capacity as an SGE, the applicant cannot be a federally registered lobbyist.
4. The applicant cannot be registered with the U.S. Department of Justice under the Foreign Agents Registration Act.
5. The applicant must be able to obtain and maintain a security clearance.
6. For representative members, who will comprise the overwhelming majority of the TACA, the applicant must represent a U.S. organization whose members (or funders) have a demonstrated interest in issues relevant to U.S. African trade and investment or have personal experience or expertise in United States-sub-Saharan African trade.
For eligibility purposes, a “U.S. organization” is an organization established under the laws of the United States, that is controlled by U.S. citizens, by another U.S. organization (or organizations), or by a U.S. entity (or entities), determined based on its board of directors (or comparable governing body), membership, and funding sources, as applicable. To qualify as a U.S. organization, more than 50 percent of the board of directors (or comparable governing body) and more than 50 percent of the membership of the organization to be represented must be U.S. citizens, U.S. organizations, or U.S. entities. Additionally, at least 50 percent of the organization's annual revenue must be attributable to nongovernmental U.S. sources.
7. For members who will serve in an individual capacity, the applicant must possess subject matter expertise regarding sub-Saharan Africa trade issues.
In order to be considered for TACA membership, interested persons should submit the following to Stewart Young at
• Name, title, affiliation, and contact information of the individual requesting consideration.
• If applicable, a sponsor letter on the organization's letterhead containing a brief description of the manner in which international trade affects the organization and why USTR should consider the applicant for membership.
• The applicant's personal resume or comprehensive biography.
• An affirmative statement that the applicant and the organization he or she represents meet all eligibility requirements.
USTR will consider applicants who meet the eligibility criteria based on the following factors: Ability to represent the sponsoring U.S. entity's or U.S. organization's and its subsector's interests on sub-Saharan Africa trade matters; knowledge of and experience in trade matters relevant to the work of the TACA and USTR; and ensuring that the TACA is balanced in terms of points of view, demographics, geography, and entity or organization size.
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
Fifty Fifth RTCA SC-224 Standards for Airport Security Access Control Systems Plenary.
The FAA is issuing this notice to advise the public of a meeting of Fifty Fifth RTCA SC-224 Standards for Airport Security Access Control Systems Plenary.
The meeting will be held February 22, 2018 10:00 a.m.-1:00 p.m.
The meeting will be held at: RTCA Headquarters, 1150 18th Street NW, Suite 910, Washington, DC 20036.
Karan Hofmann at
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the Fifty Fifth RTCA SC-224 Standards for Airport Security Access Control Systems Plenary. The agenda will include the following:
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
Twenty Eighth RTCA SC-222 AMS(R)S Systems Plenary.
The FAA is issuing this notice to advise the public of a meeting of Twenty Eighth RTCA SC-222 AMS(R)S Systems Plenary.
The meeting will be held February 06-07, 2018 8:00 a.m.-12:00 p.m.
The meeting will be held Virtually:
Karan Hofmann at
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the Twenty Eighth RTCA SC-222 AMS(R)S Systems Plenary. The agenda will include the following:
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
Sixty Eighth RTCA SC-186 Plenary Session.
The FAA is issuing this notice to advise the public of a meeting of Sixty Eighth RTCA SC-186 Plenary Session.
The meeting will be held March 23, 2018 9:00 a.m.-4:30 p.m.
The meeting will be held at: RTCA Headquarters, 1150 18th Street NW, Suite 910, Washington, DC 20036.
Al Secen at
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the Sixty Eighth RTCA SC-186 Plenary Session. The agenda will include the following:
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Office of Foreign Assets Control, Department of the Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of persons that have been placed on
See
OFAC: Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; or the Department of the Treasury's Office of the General Counsel: Office of the Chief Counsel (Foreign Assets Control), tel.: 202-622-2410.
The list of Specially Designated Nationals and Blocked Persons (SDN List) and additional information concerning OFAC sanctions programs are available on OFAC's website (
On January 5, 2018, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
1. IZQUIERDO TORRES, Gerardo Jose (Latin: IZQUIERDO TORRES, Gerardo José), Caracas, Capital District, Venezuela; DOB 29 Mar 1961; citizen Venezuela; Gender Male; Cedula No. 6030540 (Venezuela); State Minister for the New Border of Peace (individual) [VENEZUELA]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13692 for being a current or former official of the Government of Venezuela.
2. MARCO TORRES, Rodolfo Clemente, Aragua, Venezuela; DOB 10 Sep 1966; citizen Venezuela; Gender Male; Cedula No. 8812571 (Venezuela); Passport D0222624 (Venezuela); Governor of Aragua State (individual) [VENEZUELA]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13692 for being a current or former official of the Government of Venezuela.
3. RANGEL GOMEZ, Francisco Jose (Latin: RANGEL GOMEZ, Francisco José), Bolivar, Venezuela; DOB 04 Apr 1953; POB Caracas, Venezuela; citizen Venezuela; Gender Male; Cedula No. 2520281 (Venezuela); Former Governor of Bolivar State (individual) [VENEZUELA]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13692 for being a current or former official of the Government of Venezuela.
4. ZAVARSE PABON, Fabio Enrique (Latin: ZAVARSE PABÓN, Fabio Enrique), Caracas, Capital District, Venezuela; DOB 04 Oct 1967; citizen Venezuela; Gender Male; Cedula No. 6967914 (Venezuela); Passport 032131710 (Venezuela); Commander of the Capital Integral Defense Operational Zone of the National Armed Forces (individual) [VENEZUELA]. Designated pursuant to section 1(a)(ii)(C) of E.O. 13692 for being a current or former official of the Government of Venezuela.
Bureau of Indian Affairs, Interior.
Notice.
This notice publishes comprehensive amendments to the Rincon Band of Luiseño Mission Indians of the Rincon Reservation's Tribal Code § 7.400, Rincon Alcohol Control Ordinance. This Ordinance amends and supersedes the existing Rincon Alcohol Control Ordinance, Ordinance No. 99-01, enacted by the Rincon Band of Luiseño Mission Indians on June 13, 2000.
This Ordinance shall become effective February 12, 2018.
Mr. Harley Long, Tribal Government Officer, Pacific Regional Office, Bureau of Indian Affairs, 2800 Cottage Way, Room W-2820, Sacramento, California 95825, Telephone: (916) 978-6000, Fax: (916) 978-6099.
Pursuant to the Act of August 15, 1953, Public Law 82-277, 67 Stat. 586, 18 U.S.C. 1161, as interpreted by the Supreme Court in
This notice is published in accordance with the authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs. I certify that the Rincon Band of Luiseño Mission Indians of the Rincon Reservation, California, duly adopted these amendments to the Tribe's Tribal Code § 7.400, Rincon Alcohol Control Ordinance on April 18, 2017.
The amended Rincon Band of Luiseño Mission Indian's Tribal Code § 7.400, Rincon Alcohol Control Ordinance, shall read as follows:
This Ordinance shall be known as the Rincon Ordinance Regulating and Controlling the Manufacture, Introduction, Sale or Possession of Alcoholic Beverages within the boundaries of the Rincon Indian Reservation. The short title of this Ordinance shall be “Rincon Alcohol Control Ordinance.”
This Ordinance is enacted pursuant to federal law, specifically the Act of August 15, 1953, Public Law 83-277, 67 Stat. 588, 18 U.S.C. 1161, and the Articles of Association, Governing Procedures for Administering the Affairs of The Rincon, San Luiseno Band of Mission Indians, California. This Rincon Alcohol Control Ordinance is in conformity with the laws of the State of California as required by 18 U.S.C. 1161, and with all applicable federal laws.
The purpose of this Ordinance is to regulate and control the possession and sale of alcohol within the exterior boundaries of the Rincon Reservation, and to permit alcohol sales by tribally owned, controlled or operated enterprises, and at tribally approved special events, for the purpose of the economic development of the Rincon Band. The enactment of a tribal ordinance governing alcohol possession and sales within the exterior boundaries of the Rincon Reservation increases the ability of the Tribal Government to control Rincon Reservation alcohol distribution and possession, and will provide an important source of revenue for the continued operation and strengthening of the Tribal Government and the economic viability of Tribal Government services.
The manufacture of alcoholic beverages by business enterprises owned by or subject to the control of the Rincon Band shall be lawful within the exterior boundaries of the Rincon Reservation provided that such manufacture is in conformity with the laws of the State of California as required by federal law.
The introduction or possession of alcoholic beverages shall be lawful within the exterior boundaries of the Rincon Reservation provided that such introduction or possession is in conformity with the laws of the State of California as required by federal law.
The Rincon Band, through its Tribal Council and duly authorized security personnel, shall have the authority to enforce this Ordinance by confiscating any alcohol manufactured, introduced, sold or possessed in violation hereof. The Tribal Council shall be empowered to sell such confiscated alcohol for the benefit of the Rincon Band, and to develop and approve such regulations as may become necessary for enforcement of this Ordinance.
If any provision of this Ordinance or the application thereof to any person or circumstance is held unconstitutional or invalid by the Tribal Council, only the invalid provision shall be severed and the remaining provisions and language of this Ordinance shall remain in full force and effect.
All inherent sovereign rights of the Band as a federally recognized Indian tribe with respect to provisions authorized in this Ordinance are hereby expressly reserved, including sovereign immunity from unconsented suit. Nothing in the Ordinance shall be deemed or construed to be a waiver of the Band's sovereign immunity from unconsented suit.
The Department of State submits the following comprehensive listing of the statements which, as required by law, federal employees filed with their employing agencies during calendar year 2016 concerning gifts received from foreign government sources. The compilation includes reports of both tangible gifts and gifts of travel or travel expenses of more than minimal value, as defined by the statute. Also included are gifts received in previous years including one gift in 1977, one gift in 2004, one gift in 2008, two gifts in 2010, two gifts in 2011, one gift in 2012, one gift in 2014, twenty-three gifts in 2015, and seven gifts with unknown dates. These latter gifts are being reported in 2016 as the Office of the Chief of Protocol, Department of State, did not receive the relevant information to include them in earlier reports. Any agency not listed in this report either did not receive any gifts during the calendar year or did not respond to the Office of the Chief of Protocol's call for data.
Publication of this listing in the
(b) As part of this evaluation, the Administrator shall determine whether any revisions to the GSA Common Form Application are appropriate and, to the extent consistent with law, shall begin implementation of any such revisions.
(c) In furtherance of section 6409, all applicants and Federal property managing agencies shall use the GSA Common Form Application for wireless service antenna structure siting developed by the Administrator for requests to locate broadband facilities on Federal property. Federal property managing agencies shall expeditiously review and approve such requests unless an
(d) Within 180 days of the date of this order, and on a quarterly basis thereafter, all Federal property managing agencies shall report to the GSA regarding their required use of the Common Form Application, the number of Common Form Applications received, the percentage approved, the percentage rejected, the basis for any rejection, and the number of working days each application was pending before being approved or rejected. Each report shall include the number of applications received, approved, and rejected within the preceding quarter.
(e) Ninety days after the date of this order, and on a quarterly basis thereafter, the Administrator shall prepare and provide to the Director of the Office of Management and Budget (Director) an aggregated summary report detailing results from the reports submitted under subsection (d) of this section. Not later than 1 year from the date of this order, the Administrator shall recommend to the Director improvements to the Common Form Application needed to further the purposes of this order.
(a) The term “Federal property managing agencies” means agencies that have custody and control of, or responsibility for managing, Federal lands, buildings, and rights of way, federally assisted highways, and tribal lands.
(b) The term “Federal real property” has the same meaning as that term has in Executive Order 13327 of February 4, 2004 (Federal Real Property Asset Management).
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
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