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Food and Nutrition Service, USDA.
Final rule.
The Food and Nutrition Service (FNS) is amending Supplemental Nutrition Assistance Program (SNAP) regulations that secure civil rights protections for SNAP households and applicants. The nondiscretionary change complies with an amendment made to the Food, Conservation, and Energy Act of 2008 which specifically enumerates four statutory protections that must be complied with by State agencies in administering SNAP. This nondiscretionary change to the regulations is not expected to have an implementation impact on SNAP State agencies, as they have been subject to such statutes for several years.
Jane Duffield, Chief, State Administration Branch, Supplemental Nutrition Assistance Program, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 818, Alexandria, VA 22302, 703-605-4385, and
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
This final rule has been designated non-significant under section 3(f) of Executive Order 12866.
This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601-612). Pursuant to that review, it has been certified that this rule would not have a significant impact on a substantial number of small entities.
This final rule does not impose any additional or unnecessary and disproportionately burdensome demands upon small governmental jurisdictions with limited resources.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local or tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.
This final rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local and tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
The Supplemental Nutrition Assistance Program (SNAP) is listed in the Catalog of Federal Domestic Assistance under 10.551. For the reasons set forth in the final rule at 7 CFR Part 3015, Subpart V and related Notice (48 FR 29115, June 24, 1983), SNAP is excluded from the scope of Executive Order 12372 which requires intergovernmental consultation with State and local officials.
Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13121.
This rulemaking is not expected to have an impact on State agencies. State agencies have had to comply with the Americans with Disabilities Act (ADA) (42 U.S.C. 12101) provisions ever since enactment in 1990, over 20 years ago. Current provisions in 7 CFR 272.6 prohibiting discrimination on the basis of handicap has been in effect for over 10 years. Further, State agencies have long had to comply with SNAP regulations that prohibit discrimination on the basis of disability. Accordingly, we anticipate that this rulemaking will not require new State agency implementation action. Therefore, there are no additional requirements on State and local agencies requiring prior consultation with State officials. State agencies will need to continue to consider any accessibility issues that may arise regarding disabled participants or applicants before making changes to SNAP administration or launching any new initiative. State agencies should continue to self-evaluate their administration of SNAP to ensure service to all eligible people with disabilities.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, all applicable administrative procedures must be exhausted.
This rule will not in any way limit or reduce the ability of protected classes of individuals. Executive Order 12250 delegates the approval of rules based on the Civil Rights Act to the Attorney General. This rule has been reviewed by the Department of Justice (DOJ). There is no pertinent information as to the result of the DOJ review.
Section 4117 of the Food, Conservation, and Energy Act of 2008 (FCEA) amended Section 11(c) of the Food and Nutrition Act of 2008, 7 U.S.C. 202(c), to provide that the administration of SNAP by a State agency shall be consistent with the rights of households under the Age Discrimination Act of 1975, 42 U.S.C. 6101,
The SNAP administration by State agencies is already subject to all four of these civil rights laws. SNAP regulations at 7 CFR 272.6(a) specify three of the four civil rights laws. However, 7 CFR 272.6(a) does not currently include the Americans with Disabilities Act of 1990. Current rules at 7 CFR 272.6(a) do prohibit discrimination in the certification of households, the issuance of benefits, the conduct of fair hearings, or the conduct of any program service for reasons of age, race, color, sex, handicap, religious creed, national origin, or political beliefs. USDA has also promulgated general, department-wide civil rights regulations at 7 CFR 15b, which also protect the civil rights of persons with disabilities.
The Americans with Disabilities Act (ADA) of 1990 (42 U.S.C. 12101) was signed into law on July 26, 1990. Title II of the ADA prohibits discrimination on the basis of disability in all services, programs, and activities provided to the public by public entities including State and local governments. It applies to all State and local governments, their departments and agencies, and any other instrumentalities or special purpose districts of State and local governments.
The ADA requires a public entity to make reasonable accommodations to allow participants with disabilities to participate in the program. If the public entity can demonstrate that a particular modification would fundamentally alter the nature of its service, program, or activity, it is not required to make that modification. Public entities do not necessarily have to make each of their existing facilities accessible. They may provide program accessibility by a number of methods including alteration of existing facilities, acquisition or construction of additional facilities, relocation of a service or program to an accessible facility, or provision of services at alternate accessible sites. An example of reasonable accommodations may include access ramps for people who use wheelchairs to access buildings.
Since the inception of the program, SNAP State agencies have always served the disabled. In FY 2007, SNAP served a monthly average of 2.8 million households containing disabled nonelderly people. Households with disabled nonelderly people represented 24 percent of all SNAP households and received an average monthly SNAP benefit of $148. About 57 percent of SNAP households with disabled nonelderly people were single-person households.
Households may file SNAP applications by submitting the form to the SNAP office in person, through an authorized representative, by fax or other electronic transmission, by mail, or by completing an on-line electronic application in States where available. As of September 2010, a total of 26 States allow applicants to apply online and additional States are working on systems that will allow applicants to apply by computer.
Communication between the caseworker and the applicant is an important part of the SNAP application process. The State agency shall provide each household at the time of application for certification and recertification with a notice that informs the household of the verification requirements the household must meet as part of the application process. The notice shall also inform the household of the State agency's responsibility to assist the household in obtaining required verification provided that the household is cooperating with the State agency. As part of the application process, the household completes and signs the application form, the household or its authorized representative is interviewed by the State agency, and certain information on the application must be verified to determine eligibility.
Examples of reasonable accommodation in the application process may include qualified sign language interpreters and written materials for individuals with hearing impairments. Other examples may include qualified readers and Brailed or large print materials for individuals with vision impairments.
SNAP requires an interview for every initial certification and for recertification, at least once every 12 months. The interview would be face-to-face unless FNS waives the requirement to document the hardship to the household, or the State agency determines individually that the face-to-face aspect would be a hardship under 7 CFR 273.2(e)(2). FNS has not established strict guidelines about what this hardship would be, preferring to allow State agencies a degree of flexibility in determining household hardship situations. As provided in the regulations, these situations include, but are not limited to, illness, transportation difficulties, care of a household member, hardships due to residency in a rural area, prolonged severe weather, or work or training hours which prevent the household from participating in the in-office interview. The State agency must document the case file to show when a waiver was granted because of hardship. The State agency may opt to waive the face-to-face interview in favor of a telephone interview to all households which have no earned income and all members of the household are elderly or disabled. Regardless of any approved waivers, the State agency must grant a face-to-face interview to any household that requests one. The State agency has the option of conducting a telephone interview or a home visit that is scheduled in advance with the household if the office interview is waived.
SNAP benefits are issued in the form of electronic benefit transfer (EBT), which is essentially a system that uses a SNAP debit card for use in authorized
As the first step, FNS encourages clients with disabilities to share any accessibility concerns on applying for and receiving SNAP benefits they may have with the State agencies. The State agency is in the best position to consider the client's concern and make timely and reasonable accommodations to serve the household. For example while the face-to-face interview may be conducted at the local SNAP office, it may also be conducted at another mutually acceptable location, including a household's residence. If the household's accessibility concerns are not promptly addressed, individuals may file a written complaint with the Secretary or the Administrator, FNS, Washington, DC 20250. FNS is committed to ensuring that all eligible persons can participate in SNAP.
FNS wishes to note that there are differences in the definitions for disability and disabled between the ADA and SNAP regulations and that they are used for different purposes. Under the ADA, a
However, under SNAP regulations,
The eligibility and benefit rules for SNAP also contain other provisions that benefit the disabled but do not apply to other households. These include but are not limited to allowing disabled recipients who receive SSI to be categorically eligible for SNAP, imposing no cap on the shelter deduction for the disabled, and imposing no gross income limit for the disabled. The disabled who cannot prepare their own meals can, under certain circumstances, be a separate household, along with a spouse.
For purposes of making reasonable accommodations to allow participants with disabilities to apply for the program and receive program services, State agencies are to use the ADA
FNS wishes to point out that in directing State agencies to use the ADA disability definition for purposes of making reasonable accommodation, it is not our intent to diminish other State agency procedures and initiatives to serve applicants, including the disabled. For example, the State agency is not limited to the ADA disability definition when considering hardship for waiving the face-to-face interview. A State agency may continue to waive the face-to-face interview for a reason that is not included in the ADA disability definition. Thus, the use of the ADA definition of disability for purposes of making a decision on reasonable accommodation is not intended to reduce in any way the services to disabled or other households that the State agencies now routinely provide under current FNS regulations, including services in hardship situations determined under 7 CFR 273.2(e)(2).
State agencies receiving financial assistance under the SNAP program must provide to FNS a written assurance that SNAP will be operated in compliance with USDA and FNS nondiscrimination laws, regulations, instructions, policies, and guidelines. The FNS Regional Offices (RO) obtain written assurance of nondiscrimination compliance from each State agency and ensure that State agencies are obtaining assurance from local agencies or other sub-recipients that receive Federal financial assistance for compliance. Civil rights assurance is governed by SNAP regulations at 7 CFR 272.6(a).
Under FNS Instruction 113-1, Part XI, civil rights training is required so that all involved in all levels of administration of programs that received Federal financial assistance understand civil rights related laws, regulations, procedures and directives. This training is part of the technical assistance to the State agencies, and the FNS ROs are responsible for providing such training. Specific training includes: Collection and use of data; effective public notification systems; complaint procedures; compliance review techniques; resolution of noncompliance; requirements for reasonable accommodation of persons with disabilities; requirements for language assistance; conflict resolution; and customer service.
FNS also requires each RO Office of Civil Rights to conduct on-going civil rights compliance reviews in its respective States. Under 7 CFR part 275, the State agencies are also required to conduct a civil rights review annually for large project areas, every 2 years for medium project areas, and 3 years for small project areas. There are no additional outreach efforts regarding this final rule. Removing the word “handicap” and adding in its place the word “disability” will not have a disadvantageous effect on the protected groups.
FNS has reviewed this final rule in accordance with the Department Regulation 4300-4, “Civil Rights Impact Analysis,” to identify and address any major civil rights impacts the rule might have on minorities, women, and persons with disabilities. After a careful review of the rule's intent and provisions, FNS has determined that there is no way to
E.O. 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. In late 2010 and early 2011, USDA engaged in a series of consultative sessions to obtain input by Tribal officials or their designees concerning the impact of this rule on the tribe or Indian Tribal governments, or whether this rule may preempt Tribal law. Reports from these consultations will be made part of the USDA annual reporting on Tribal Consultation and Collaboration. USDA will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule and will provide additional venues, such as webinars and teleconferences, to periodically host collaborative conversations with Tribal officials or their designees concerning ways to improve this rule in Indian country.
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 1320) requires the Office of Management and Budget (OMB) approve all collections of information by a Federal agency before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. This rule does not contain information collection requirements subject to approval by OMB under the Paperwork Reduction Act of 1995.
The Food and Nutrition Service is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
In accordance with Section 11(c) of the Food and Nutrition Act of 2008, as amended by Section 4117 of the FCEA, the Department is amending 7 CFR 272.6(a) specifically to provide that State agency administration of the program must be consistent with the Americans with Disabilities Act (42 U.S.C. 12101). The Department is also making a change in terminology to update a section of SNAP regulations. The current provision in 7 CFR 272.6 prohibits discrimination on the basis of “handicap.” The prohibition of discrimination on the basis of handicap originated in the Rehabilitation Act of 1973, which preceded enactment of the ADA. However, the ADA uses the term “disability” and most SNAP regulations use the term “disabled.” Accordingly, FNS is amending 7 CFR 272.6 to replace the term “handicap” as a prohibited basis for discrimination with the term “disability” to conform to the terminology in the ADA. We are making a similar change in terminology in 7 CFR 271.6(a), which provides that civil rights complaints under all the listed bases are to be handled in accordance with 7 CFR 272.6.
Finally, the Department is making one additional change in terminology in this section of the regulations. The current 7 CFR 272.6 refers to the issuance of “coupons” as one program activity. Section 825 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 amended Section 7(i) of what is now the Food and Nutrition Act of 2008, 7 U.S.C. 2016(i), to mandate that all States must convert from paper coupon systems to an EBT system. By fiscal year 2004, all State agencies had converted to EBT. Accordingly, the Department is using this opportunity to amend 7 CFR 272.6(a) where it refers to the issuance of coupons to replace the term “coupons” with the term “benefits.”
This rule is effective June 13, 2011. The ADA requirements were effective by law on January 26, 1992. The current provision in 7 CFR 272.6 prohibiting discrimination on the basis of handicap has been in effect for over 10 years. Accordingly, this rule reflects the statutory provision and the terminology change consistent with the ADA.
Grant programs—social programs, Reporting and recordkeeping requirements.
Alaska, Civil rights, Claims, Grant programs—social programs, Reporting and recordkeeping requirements, Unemployment compensation, Wages.
For the reasons set forth in the preamble, 7 CFR parts 271 and 272 are amended as follows:
7 U.S.C. 2011-2036.
7 U.S.C. 2011-2036.
Customs and Border Protection, Department of Homeland Security.
Final rule.
This document amends the U.S. Customs and Border Protection (CBP) regulations concerning the
George McCray, Chief, Cargo Security, Carriers, and Immigration Branch, Regulations & Rulings, Office of International Trade: (202) 325-0082; Leslie Bianchi, Commercial Vessel Program Manager, Manifest and Conveyance Branch, Office of Field Operations: (202) 344-2575.
Under 19 U.S.C. 1431, vessel carriers are required to submit to CBP information concerning cargo they are transporting to the United States. Under 19 U.S.C. 1431(d), CBP is authorized to specify the form for, and the information required in, the vessel manifest, as well as the manner of production for, and the delivery of or electronic transmittal of, the vessel manifest. In the aftermath of the terrorist attacks of September 11, 2001, Congress passed the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933, enacted on August 6, 2002; 19 U.S.C. 2071 note), which, as amended by section 108 of the Maritime Transportation Security Act of 2002 (Pub. L. 107-295, 116 Stat. 2064, enacted on November 25, 2002), requires, in section 343(a), that CBP (then, the U.S. Customs Service) promulgate regulations to collect cargo information from any mode of commercial carrier (sea, air, rail, or truck) through a CBP-approved electronic data interchange system. The CBP-approved electronic data interchange (transmission) system is the Automated Manifest System (AMS). The information required is that which is determined to be reasonably necessary to enable CBP to identify high-risk shipments so as to ensure cargo safety and security and prevent smuggling pursuant to the laws that are enforced and administered by CBP.
On October 31, 2002, CBP (then, the U.S. Customs Service) published a final rule (2002 final rule) in the
On December 5, 2003, CBP published a final rule (2003 final rule) in the
When CBP amended its regulations in 2003 to implement section 343(a) of the Trade Act of 2002, CBP intended to require all carriers to transmit cargo information to CBP electronically. However, CBP neglected to remove language in 19 CFR 4.7(b)(4) referring to non-automated bulk and break bulk vessel carriers. Thus, contrary to the Trade Act of 2002 and the intent of the 2003 final rule, the current regulation still provides that these bulk and break bulk carriers may be non-automated.
In order to conform the regulation to the statute's mandatory electronic transmission requirement for all carriers, this technical correction removes the obsolete reference to non-automated carriers from 19 CFR 4.7(b)(4). This change will have no practical effect since there are no longer any non-automated carriers. All carriers, including bulk and break bulk carriers, have been filing cargo information electronically since at least 2004.
This technical correction document also makes several other changes to the regulations related to the electronic transmission of vessel cargo information to clarify the process and to update terminology. First, various changes reflecting that “Customs” is now known as “CBP” are made throughout the affected provisions. Second, CBP is
Fourth, several provisions in 19 CFR part 4 improperly use the term “cargo manifest,” “manifest,” or something similar to refer to the “cargo declaration.” The cargo declaration is only one of several documents that comprise the manifest (see 19 CFR 4.7a). To alleviate confusion, and because “cargo declaration” (CBP Form 1302) is the correct term, CBP is substituting “cargo declaration” or something similar where appropriate. These changes are made in 19 CFR 4.7(b)(3)(i), (b)(4)(ii)(A), 4.7(e), 4.7a(c)(2)(iii), 4.7a(c)(4), 4.7a(f), and 4.30(n) (as further explained below).
Fifth, a few provisions in 19 CFR part 4 reference the general cargo declaration transmission time requirement of 19 CFR 4.7(b)(2) without also referencing the alternative transmission time requirement for exempted bulk and CBP-approved break bulk carriers in 19 CFR 4.7(b)(4). This is corrected in 19 CFR 4.7a(c)(4)(xv) and 4.8(b).
Sixth, in 19 CFR 4.7(b)(4)(i), CBP is removing the first sentence as it is redundant text. The sentence generally repeats what is stated in the first sentence of current 19 CFR 4.7(b)(4)—that carriers of bulk cargo are exempted with respect to that cargo from the 24 hours before lading filing requirement of 19 CFR 4.7(b)(2).
Seventh, CBP is revising 19 CFR 4.30(n), pertaining to CBP's withholding or delaying the issuance of a permit to unlade due to the failure to transmit required cargo information. This provision is outdated because it provides the option of presenting the cargo information in paper form. In the revised paragraph (n), CBP also is adding references to 19 CFR 4.7(b)(4) to make it clear that CBP may withhold or delay the issuance of a permit to unlade, or deny preliminary entry, for failure to transmit required cargo information, whether the information is due within the time frame specified in 19 CFR 4.7(b)(2) or (b)(4).
Because the technical corrections set forth in this document merely conform the regulatory text to existing law, clarify the text of existing regulations, and update terminology, CBP finds that good cause exists for dispensing with notice and public procedure as unnecessary under 5 U.S.C. 553(b)(B). For this same reason, pursuant to 5 U.S.C. 553(d)(3), CBP finds that good cause exists for dispensing with the requirement for a delayed effective date.
Because this document is not subject to the notice and public procedure requirements of 5 U.S.C. 553, it is not subject to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601
The amendments made in this document do not meet the criteria for a “significant regulatory action” as specified in Executive Order 12866.
The signing authority for the amendments of this final rule falls under 19 CFR 0.2(a). Accordingly, this document is signed by the Secretary of Homeland Security (or his/her delegate).
Customs duties and inspection, Freight, Maritime carriers, Reporting and recordkeeping requirements, Vessels.
For the reasons set forth in the preamble, part 4 of title 19, Code of Federal Regulations (19 CFR part 4) is amended as follows:
5 U.S.C. 301; 19 U.S.C. 66, 1431,1433,1434,1624, 2071 note; 46 U.S.C. 501, 60105.
Section 4.7 also issued under 19 U.S.C. 1581(a);
Section 4.8 also issued under 19 U.S.C. 1448, 1486;
Section 4.30 also issued under 19 U.S.C. 288, 1446, 1448, 1450-1454, 1490;
The revisions read as follows:
(b) * * *
(2) * * * The electronic cargo declaration information must be transmitted through the CBP Automated Manifest System (AMS) or any electronic data interchange system approved by CBP to replace the AMS system for this purpose. Any such system change will be announced by notice in the Federal Register.
(3)(i) Where a non-vessel operating common carrier (NVOCC), as defined in
(4) Carriers of bulk cargo as specified in paragraph (b)(4)(i) of this section and carriers of break bulk cargo to the extent provided in paragraph (b)(4)(ii) of this section are exempt, with respect only to the bulk or break bulk cargo being transported, from the requirement set forth in paragraph (b)(2) of this section that an electronic cargo declaration be received by CBP 24 hours before such cargo is laden aboard the vessel at the foreign port. With respect to exempted carriers of bulk or break bulk cargo operating voyages to the United States, CBP must receive the electronic cargo declaration covering the bulk or break bulk cargo they are transporting 24 hours prior to the vessel's arrival in the United States (
(n) CBP will not issue a permit to unlade before it has received the cargo declaration information pursuant to § 4.7(b)(2) or (4) of this part. In cases in which CBP does not receive complete cargo declaration information from the carrier or a NVOCC in the manner, format, and time frame required by § 4.7(b)(2) or (4), as appropriate, CBP may delay issuance of the permit to unlade the entire vessel until all required information is received. CBP may also decline to issue a permit to unlade the specific cargo for which a cargo declaration is not received in a timely manner under § 4.7(b)(2) or (4). Further, where a carrier does not transmit a cargo declaration in the manner required by § 4.7(b)(2) or (4), preliminary entry pursuant to § 4.8(b) will be denied.
Internal Revenue Service (IRS), Treasury.
Correction to final regulations.
This document describes corrections to final regulations (TD 9521) that were published in the Federal Register on Thursday, April 7, 2011, providing guidance relating to the reduction of the number of separate foreign tax credit limitation categories under section 904(d) of the Internal Revenue Code.
This correction is effective on May 12, 2011, and is applicable on April 7, 2011.
Jeffrey L. Parry, (202) 622-3850 (not a toll-free number).
The final regulations that are the subject of this correction are under section 904 of the Internal Revenue Code.
As published on Thursday, April 7, 2011 (76 FR 19268), final regulations (TD 9521) contain errors that may prove to be misleading and are in need of clarification.
Accordingly, the publication of the final regulations (TD 9521) which were the subject of FR Doc. 2011-8229 is corrected as follows:
1. On page 19268, column 2, in the preamble, under the paragraph heading “
2. On page 19269, column 1, in the preamble, under the paragraph heading “
Environmental Protection Agency (EPA).
Direct final rule.
EPA is taking direct final action to approve a State Implementation Plan (SIP) revision submitted by the Maryland Department of the Environment (MDE). This SIP revision includes amendments to Maryland's regulation for Volatile Organic Compounds from Specific Processes and meets the requirement to adopt Reasonably Available Control Technology (RACT) for sources covered by EPA's Control Techniques Guidelines (CTG) standards for large appliance coatings. These amendments will reduce emissions of volatile organic compound (VOC) emissions from large appliance coating facilities. Therefore, this revision will help Maryland attain and maintain the national ambient air quality standard (NAAQS) for ozone. This action is being taken under the Clean Air Act (CAA).
This rule is effective on July 11, 2011 without further notice, unless EPA receives adverse written comment by June 13, 2011. If EPA receives such comments, it will publish a timely withdrawal of the direct final rule in the
Submit your comments, identified by Docket ID Number EPA-R03-OAR-2011-0142, by one of the following methods:
A.
B. E-mail:
C. Mail: EPA-R03-OAR-2011-0142, Cristina Fernandez, Associate Director, Office of Air Program Planning, Mailcode 3AP30, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103.
D. Hand Delivery: At the previously-listed EPA Region III address. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.
Gregory Becoat, (215) 814-2036, or by e-mail at
On December 15, 2010, MDE submitted to EPA SIP revision concerning the adoption of the EPA CTG for large appliance coatings.
Section 172(c)(1) of the CAA provides that SIPs for nonattainment areas must include reasonably available control measures (RACM), including RACT, for sources of emissions. Section 182(b)(2)(A) provides that for certain nonattainment areas, States must revise their SIPs to include RACT for sources of VOC emissions covered by a CTG document issued after November 15, 1990 and prior to the area's date of attainment.
EPA defines RACT as “the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility.” (44 FR 53761, Sept. 17, 1979). In subsequent
The CTG for large appliance coatings is intended to provide State and local air pollution control authorities information that should assist them in determining RACT for VOC from large appliance coatings. In developing this CTG, EPA evaluated the sources of VOC emissions from the large appliance coating industry and the available control approaches for addressing these emissions, including the costs of such approaches. Based on available information and data, EPA provides recommendations for RACT for large appliance coating.
In December 1977, EPA published a final CTG for large appliance coatings, entitled “Control of Volatile Organic Emissions from Existing Stationary Sources, Volume V, Surface Coating of Large Appliances,” EPA-450/2-77-034 (December 1977). In October 1982, EPA promulgated national standards of performance for new stationary sources (NSPS) for large appliances (40 CFR part 60, subpart SS). The 1982 NSPS requires VOC emissions limits based on VOC content of low VOC coating materials. In July 2002, EPA promulgated a national emission standard for hazardous air pollutants (NESHAP) for these industries large appliances (40 CFR part 63, subpart NNNN). The 2002 NESHAP establishes national emission standards for hazardous air pollutants (HAP) for large appliance surface coating facilities and emissions limits based on the organic HAP content of low organic HAP coating materials.
In 2006 and 2007, after conducting a review of currently existing state and local VOC emission reduction approaches for these industries, reviewing the 1977/1978 CTGs and the NESHAPs for these industries, and taking into account the information that has become available since then, EPA developed new CTGs for: Surface coating of large appliances, entitled “Control Techniques Guidelines for Large Appliance Coatings,” EPA 453/R-07-004 (September 2007).
Large appliance coatings include, but are not limited to, materials referred to as paint, topcoats, basecoats, primers, enamels, and adhesives used in the manufacture of large appliance parts or products. A large appliance part is defined as any organic surface-coated metal lid, door, casing, panel, or other interior or exterior part or accessory that is assembled to form a large appliance product. A large appliance product is also defined as any organic surface-coated metal range, oven, microwave, refrigerator, freezer, washer, dryer, dishwasher, water heater, or trash compactor manufactured for household, commercial, or recreational use. There are several approaches to reducing VOC emissions from large appliance coatings: (1) Emission limits that can be achieved through the use of low-VOC coatings, (2) equivalent emission limits that can be achieved through the use of low-VOC coatings or a combination of coatings and add-on controls, (3) an overall control efficiency of 90 percent for add-on controls, and (4) the implementation of work practice standards.
On December 15, 2010, MDE submitted to EPA a SIP revision (#10-09) concerning the adoption of the EPA CTG for large appliance coatings. EPA develops CTGs as guidance on control requirements for source categories. States can follow the CTGs or adopt more restrictive standards. MDE is adopting the more restrictive 2.3 pounds/gallon (lbs/gal) standard for large appliance coatings (see EPA-450/2-78-034, June 1978). This SIP revision amends Regulation .06—Large Appliance Coatings under COMAR 26.11.19—Volatile Organic Compounds from Specific Processes. This action affects sources that coat doors, cases, lids, panels, or other interior or exterior part or accessory of residential and commercial washers, dryers, ranges, refrigerators, freezers, water heaters, dishwashers, trash compactors, air conditioners, ovens, microwave ovens, and other similar products.
Regulation COMAR 26.11.19.06—Control of Volatile Organic Compounds Emissions from Large Appliance Coatings includes under section .06A the definition for large appliance coatings. Under section .06B, it also includes the coating standard requirements for large appliance coatings. These standards require that any person who uses a large appliance coating installation may not cause or permit the discharge into the atmosphere of any VOC from a large appliance coating installation in excess of 2.3 lbs/gal of coating applied (excluding water) (0.275 kg/l of coating applied (excluding water)); shall use control equipment to achieve an overall VOC emissions reduction of 90 percent or greater from the large appliance coating installation at the affected facility; and use one or more of the following application methods: (a) Electrostatic application; (b) high volume/low pressure (HVLP) spray; (c) Flow coat; (d) Roller coat; (e) Dip coat including electrodeposition; (f) Brush coat; or (g) other coating application method that has a transfer efficiency equivalent to or better than that achieved by HVLP spraying.
EPA is approving the Maryland SIP revision that adopts the CTG standards for large appliance coatings. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. However, in the Proposed Rules section of today's
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 11, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's
This action pertaining to Maryland's adoption of the CTG standards for large appliance coatings may not be challenged later in proceedings to enforce its requirements. (See CAA section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(c) * * *
Environmental Protection Agency (EPA).
Final rule.
EPA is finalizing approval of revisions to the California Air Resources Board portion of the California State Implementation Plan (SIP). These revisions were proposed in the
EPA has established docket number EPA-R09-OAR-2010-0906 for this action. The index to the docket is available electronically at
Stanley Tong, EPA Region IX, (415) 947-4122,
Throughout this document, “we,” “us” and “our” refer to EPA.
On November 16, 2010 (75 FR 69910), EPA proposed to approve the following rule into the California SIP.
We proposed to approve this rule because we determined that it complies with the relevant CAA requirements. Our proposed action contains more information on the rule and our evaluation.
EPA's proposed action provided a 30-day public comment period. During this period, we received one comment from the general public regarding cap and trade regulations. The submitted comment is not germane to this action as amendments to California's Consumer Products regulation deal with limiting the VOC content of products and does not deal with cap and trade programs.
No comments were submitted that change our assessment that the submitted rule complies with the relevant CAA requirements. Therefore, as authorized in section 110(k)(3) of the Act, EPA is fully approving this rule into the California SIP.
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not interfere with Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) because EPA lacks the discretionary authority to address environmental justice in this rulemaking.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 11, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(383) New and amended regulations were submitted on February 16, 2010, by the Governor's designee.
(i) Incorporation by Reference.
(A) California Air Resources Board.
(
(
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for the products listed above. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as:
One in-service incident has been reported on [a] DHC-8 Series 400 aeroplane in which the right hand main landing gear (MLG) failed to extend using the alternate gear extension system. * * * Failure of [the] MLG to extend and lock could adversely affect the safe landing of the aeroplane.
We must receive comments on this proposed AD by June 27, 2011.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; e-mail
You may examine the AD docket on the Internet at
Fabio Buttitta, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone (516) 228-7303; fax (516) 794-5531.
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
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2010-23, dated July 21, 2010 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
One in-service incident has been reported on [a] DHC-8 Series 400 aeroplane in which the right hand main landing gear (MLG) failed to extend using the alternate gear extension system. Investigation determined that the tread on the outboard tire was catching on the bumper plate located on the outboard MLG door that prevented the MLG door to open following an extension attempt via the alternate extension system. Failure of [the] MLG to extend and lock could adversely affect the safe landing of the aeroplane.
To prevent the potential jam condition between the bumper plate and the MLG tires, Bombardier Aerospace has developed a modification to trim the edge of the bumper plate to eliminate the possibility of interference [Bombardier Modsum 4-113645].
Bombardier has issued Service Bulletin 84-32-74, Revision A, dated May 17, 2010. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this
We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.
We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD.
Based on the service information, we estimate that this proposed AD would affect about 65 products of U.S. registry. We also estimate that it would take about 8 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $479 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $75,335, or $1,159 per product.
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 above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
3. 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 a regulatory 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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new AD:
(a) We must receive comments by June 27, 2011.
(b) None.
(c) This AD applies to Bombardier, Inc. Model DHC-8-400, -401, and -402 airplanes, certificated in any category, having serial numbers 4001 through 4247 inclusive.
(d) Air Transport Association (ATA) of America Code 32: Landing Gear.
(e) The mandatory continuing airworthiness information (MCAI) states:
One in-service incident has been reported on [a] DHC-8 Series 400 aeroplane in which the right hand main landing gear (MLG) failed to extend using the alternate gear extension system. * * * Failure of [the] MLG to extend and lock could adversely affect the safe landing of the aeroplane.
(f) You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done.
(g) Within 2,000 flight hours after the effective date of this AD: Incorporate Bombardier Modsum 4-113645, including performing a detailed visual inspection for damage or cracks of the bumper plate and base fitting and replacing any damaged or cracked part, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-32-74, Revision A, dated May 17, 2010. Do all applicable replacements before further flight.
(h) For airplanes on which a bumper plate having part number 85424082-101 or 85424082-103 is installed that has been reworked in accordance with Bombardier Repair Drawing 8/4-54-553: Within 1,000 flight hours after the effective date of this AD, reidentify the bumper plate, in accordance with paragraph 3.B., step (8) of the Accomplishment Instructions of Bombardier Service Bulletin 84-32-74, Revision A, dated May 17, 2010.
Bombardier Service Bulletin 84-32-74, Revision A, dated May 17, 2010, includes an operational check of the alternate extension system of the MLG. If the check fails, guidance on doing corrective actions can be found in the Bombardier Q400 Dash 8 Aircraft Maintenance Manual.
(i) Incorporation of Bombardier Modsum 4-113645 before the effective date of this AD in accordance with Bombardier Service Bulletin 84-32-74, dated December 23, 2009, is considered acceptable for compliance with the modification in paragraph (h) of this AD, provided the action in paragraph (h) of this AD is done within the compliance time specified in paragraph (h) of this AD.
This AD differs from the MCAI and/or service information as follows: No differences.
(j) The following provisions also apply to this AD:
(1)
(2)
(k) Refer to MCAI Canadian Airworthiness Directive CF-2010-23, dated July 21, 2010; Bombardier Service Bulletin 84-32-74, Revision A, dated May 17, 2010; for related information.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for the products listed above. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as:
Several operators have reported pitch oscillations and/or elevator asymmetry caution lights illumination when flying with the autopilot engaged. Investigations revealed that loose rivets in the torque tube assemblies caused relative motion between the crank arms and torque tubes.
Loose rivets could result in excessive wear and subsequent significant backlash in the driving crank arms. This condition, if left uncorrected, will progressively get worse and degrade the controllability of the aeroplane.
We must receive comments on this proposed AD by June 27, 2011.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; e-mail
You may examine the AD docket on the Internet at
Cathy Nguyen-Quoc, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone (516) 228-7323; fax (516) 794-5531.
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
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2010-27, dated August 20, 2010 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
Several operators have reported pitch oscillations and/or elevator asymmetry caution lights illumination when flying with the autopilot engaged. Investigations revealed that loose rivets in the torque tube assemblies caused relative motion between the crank arms and torque tubes.
Loose rivets could result in excessive wear and subsequent significant backlash in the driving crank arms. This condition, if left uncorrected, will progressively get worse and degrade the controllability of the aeroplane.
Bombardier Inc., has issued Service Bulletin 84-27-50, Revision C, dated July 26, 2010. The actions described in this service information are intended to
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.
We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.
We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD.
Based on the service information, we estimate that this proposed AD would affect about 66 products of U.S. registry. We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these replacements:
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 above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
3. 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 a regulatory 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:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new AD:
(a) We must receive comments by June 27, 2011.
(b) None.
(c) This AD applies to Bombardier, Inc. Model DHC-8-400, -401, and -402 airplanes; certificated in any category; serial numbers 4001 through 4305 inclusive.
(d) Air Transport Association (ATA) of America Code 27: Flight controls.
(e) The mandatory continuing airworthiness information (MCAI) states:
Several operators have reported pitch oscillations and/or elevator asymmetry
Loose rivets could result in excessive wear and subsequent significant backlash in the driving crank arms. This condition, if left uncorrected, will progressively get worse and degrade the controllability of the aeroplane.
(f) You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done.
(g) At the applicable times identified in paragraphs (g)(1) and (g)(2) of this AD, do an inspection to determine the part numbers of the left and right elevator torque tubes, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010. A review of airplane maintenance records is acceptable in lieu of this inspection if the part numbers of the left and right elevator torque tubes can be conclusively determined from that review.
(1) For airplanes that have accumulated 8,000 or more total flight hours as of the effective date of this AD: Within 2,000 flight hours after the effective date of this AD.
(2) For airplanes that have accumulated less than 8,000 total flight hours as of the effective date of this AD: Within 6,000 flight hours after the effective date of this AD, but before the accumulation of 10,000 total flight hours.
(h) If, as a result of the inspection required by paragraph (g) of this AD, any left elevator torque tube has part number (P/N) 82760709-009, at the applicable time in paragraph (g)(1) or (g)(2) of this AD, do the actions in paragraph (h)(1) or (h)(2) of this AD.
(1) Replace the elevator torque tube with a new elevator torque tube having P/N 82760709-011, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010.
(2) Replace the rivets in each elevator torque tube assembly with Hi Lite pins having P/N B0206001AG8 and collars having P/N HST1070CY, and re-identify the elevator torque tube assembly having P/N 82760709-009, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010.
(i) If, as a result of the inspection required by paragraph (g) of this AD, any right elevator torque tube has P/N 82760757-009, at the applicable time in paragraph (g)(1) or (g)(2) of this AD, do the actions in paragraph (i)(1) or (i)(2) of this AD.
(1) Replace the elevator torque tube with a new elevator torque tube having P/N 82760757-011, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010.
(2) Replace the rivets in each elevator torque tube assembly with Hi Lite pins having P/N B0206001AG8 and collars having P/N HST1070CY, and re-identify the elevator torque tube assembly having P/N 82760757-009, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010.
(j) Actions done before the effective date of this AD, in accordance with the service bulletins listed in table 1 of this AD, are considered acceptable for compliance with the corresponding action specified in this AD.
(k) As of the effective date of this AD, no person may install on any airplane an elevator torque tube assembly having P/N 82760709-009 or 82760757-009.
This AD differs from the MCAI and/or service information as follows: No differences.
(l) The following provisions also apply to this AD:
(1)
(2)
(m) Refer to MCAI Canadian Airworthiness Directive CF-2010-27, dated August 20, 2010; and Bombardier Service Bulletin 84-27-50, Revision C, dated July 26, 2010; for related information.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to revise Class E airspace at Talkeetna, AK. The revision of four Standard Instrument Approach Procedures (SIAPs) and the Obstacle Departure Procedure (ODP) at the Talkeetna Airport has made this action necessary to enhance safety and management of Instrument Flight Rules (IFR) operations.
Comments must be received on or before June 27, 2011.
Send comments on the proposal to the Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey
An informal docket may also be examined during normal business hours at the office of the Manager, Safety, Alaska Flight Service Operations, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587.
Martha Dunn, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number (907) 271-5898; fax: (907) 271-2850; e-mail:
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 and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2011-0444/Airspace Docket No. 11-AAL-07.” 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 notice 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 closing date for comments. 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
Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling (202) 267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This action proposes to amend Title 14 Code of Federal Regulations (14 CFR) part 71 by revising Class E2 and E5 airspace at the Talkeetna Airport in Talkeetna, AK, to accommodate the revision of four SIAPs and the ODP at the Talkeetna Airport. This Class E airspace would provide adequate controlled airspace upward from the surface (E2) to 700 feet and 1,200 feet (E5) above the surface, for the safety and management of IFR operations at the Talkeetna Airport.
The Class E2 airspace designated as surface areas and the Class E5 airspace designated as 700/1200 foot transition areas are published in paragraphs 6002 and 6005, respectively, in FAA Order 7400.9U, Airspace Designations and Reporting Points, signed August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR 71.1. The airspaces listed in this document would be subsequently published in that Order.
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 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. Because this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this 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.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, 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 1, section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it proposes to revise Class E airspace at the Talkeetna Airport, Talkeetna, AK, and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
1. The authority citation for 14 CFR part 71 continues to read as follows:
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9U,
Within a 5-mile radius of the Talkeetna Airport and within 2.5 miles each side of the Talkeetna VOR/DME 191° radial and 1 mile each side of the Talkeetna VOR/DME 207° radial extending from the 5-mile radius to 8.4 miles southwest of the airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Supplement Alaska (Airport/Facility Directory).
That airspace extending upward from 700 feet above the surface within a 7.5-mile radius of the Talkeetna Airport and within 3.2 miles each side of the Talkeetna VOR/DME 191° radial and 2.5 miles each side of the Talkeetna VOR/DME 207° radial extending from the 7.5-mile radius to 12.4 miles southwest of the airport and that airspace extending upward from 1,200 feet above the surface within a 72-mile radius of the Talkeetna Airport.
Commodity Futures Trading Commission.
Extension of comment period.
On April 28, 2011, the Commodity Futures Trading Commission (“Commission” or “CFTC”) published in the
Comments must be received on or before July 11, 2011.
You may submit comments, identified by RIN 3038-AC97, and Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants by any of the following methods:
• Agency Web site, via its Comments Online process at
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Please submit your comments using only one method. Additionally, to ease the burden to commenters, you may submit comments that address both the capital and the margin rulemakings to only one of the respective public comment files and they will be considered by the Commission in both rulemakings, if appropriate to both.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
John C. Lawton, Deputy Director, Thomas Smith, Deputy Director, or Thelma Diaz, Associate Director, Division of Clearing and Intermediary Oversight, 1155 21st Street, NW., Washington, DC 20581. Telephone number: 202-418-5480 and electronic mail:
On April 28, 2011 the Commission published in the
Because the proposed capital and margin rulemakings are interrelated, the Commission now is extending the comment period for the proposed margin regulations so that the comment periods of each proposed rulemaking will run concurrently. The extension period will provide commenters with a full opportunity to review each of the proposed rulemakings together before commenting on either. As noted above, the Commission additionally has determined to give full consideration to all comments on each of the proposed rulemakings, whether comment letters that address both rulemakings are submitted to the comment file of the capital or the margin rulemaking.
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Gensler and Commissioners Dunn, Sommers, Chilton and O'Malia voted in the affirmative; no Commissioner voted in the negative.
Environmental Protection Agency (EPA).
Proposed rule.
EPA proposes to approve the State Implementation Plan (SIP) revision submitted by the State of Maryland. This SIP revision includes amendments to Maryland's regulation for Volatile Organic Compounds from Specific Processes and meets the requirement to adopt Reasonably Available Control Technology (RACT) for sources covered by EPA's Control Techniques Guidelines (CTG) standards for large appliance coatings. These amendments will reduce emissions of volatile organic compound (VOC) emissions from large appliance coating facilities. In the Final Rules section of this
Comments must be received in writing by June 13, 2011.
Submit your comments, identified by Docket ID Number EPA-R03-OAR-2011-0142, by one of the following methods:
A.
B.
C.
D.
Gregory Becoat, (215) 814-2036, or by e-mail at
For further information, please see the information provided in the direct final action, with the same title, “Approval and Promulgation of Air Quality Implementation Plans; Maryland; Adoption of Control Techniques Guidelines for Large Appliance Coatings,” that is located in the “Rules and Regulations” section of this
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve the State Implementation Plan (SIP) submission from the State of South Dakota to demonstrate that the SIP meets the requirements of section 110(a)(1) and (2) of the Clean Air Act (CAA) for the National Ambient Air Quality Standards (NAAQS) promulgated for ozone on July 18, 1997. Section 110(a)(1) of the CAA requires that each state, after a new or revised NAAQS is promulgated, review their
Written comments must be received on or before June 13, 2011.
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2010-0301, by one of the following methods:
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Kathy Dolan, Air Program, U.S. Environmental Protection Agency (EPA), Region 8, Mail Code 8P-AR, 1595 Wynkoop Street, Denver, Colorado 80202-1129. 303-312-6142,
For the purpose of this document, we are giving meaning to certain words or initials as follows:
(i) The words or initials
(ii) The words
(iii) The initials
1.
2.
Identify the rulemaking by docket number and other identifying information (subject heading,
Follow directions and organize your comments;
Explain why you agree or disagree;
Suggest alternatives and substitute language for your requested changes;
Describe any assumptions and provide any technical information and/or data that you used;
If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced;
Provide specific examples to illustrate your concerns, and suggest alternatives;
Explain your views as clearly as possible, avoiding the use of profanity or personal threats; and,
Make sure to submit your comments by the comment period deadline identified.
On July 18, 1997, EPA promulgated a new NAAQS for ozone based on 8-hour average concentrations. The 8-hour averaging period replaced the previous 1-hour averaging period, and the level of the NAAQS was changed from 0.12 parts per million (ppm) to 0.08 ppm (62 FR 38856). By statute, SIPs meeting the requirements of sections 110(a)(1) and (2) are to be submitted by states within three years after promulgation of a new or revised standard. Section 110(a)(2) provides basic requirements for SIPs, including emissions inventories, monitoring, and modeling, to assure attainment and maintenance of the standards. These requirements are set out in several “infrastructure elements,” listed in section 110(a)(2).
Section 110(a) imposes the obligation upon states to make a SIP submission to EPA for a new or revised NAAQS, and the contents of that submission may vary depending upon the facts and circumstances. In particular, the data and analytical tools available at the time the state develops and submits the SIP for a new or revised NAAQS affects the content of the submission. The contents of such SIP submission may also vary depending upon what provisions the state's existing SIP already contains. In the case of the 1997 ozone NAAQS, states typically have met the basic program elements required in section 110(a)(2) through earlier SIP submissions in connection with previous NAAQS.
In a guidance issued on October 2, 2007, EPA noted that, to the extent an existing SIP already meets the section 110(a)(2) requirements, states need only certify that fact via a letter to EPA.
On 3/27/08, EPA published a final rulemaking entitled, “Completeness Findings for section 110(a) State Implementation Plans; 8-hour Ozone NAAQS” (73 FR 16205). In the rule, EPA made a finding for each state that it had submitted or failed to submit a complete SIP that provided the basic program elements of section 110(a)(2) necessary to implement the 1997 8-hour ozone NAAQS. In particular, EPA found that the State of South Dakota had submitted a complete SIP to meet these requirements.
Section 110(a)(1) provides the procedural and timing requirements for SIP submissions after a new or revised NAAQS is promulgated. Section 110(a)(2) lists specific elements the SIP must contain or satisfy. These infrastructure elements include requirements such as modeling, monitoring, and emissions inventories, which are designed to assure attainment and maintenance of the NAAQS. The elements that are the subject of this action are listed below.
• 110(a)(2)(A): Emission limits and other control measures.
• 110(a)(2)(B): Ambient air quality monitoring/data system.
• 110(a)(2)(C): Program for enforcement of control measures.
• 110(a)(2)(D)(ii): Interstate and international pollution.
• 110(a)(2)(E): Adequate resources and authority.
• 110(a)(2)(F): Stationary source monitoring and reporting.
• 110(a)(2)(G): Emergency powers.
• 110(a)(2)(H): Future SIP revisions.
• 110(a)(2)(J): Consultation with government officials; public notification; and prevention of significant deterioration (PSD) and visibility protection.
• 110(a)(2)(K): Air quality modeling/data.
• 110(a)(2)(L): Permitting fees.
• 110(a)(2)(M): Consultation/participation by affected local entities.
A detailed discussion of each of these elements is contained in the next section.
Two elements identified in section 110(a)(2) are not governed by the three- year submission deadline of section 110(a)(1) and are therefore not addressed in this action. These elements relate to part D of Title I of the CAA, and submissions to satisfy them are not due within three years after promulgation of a new or revised NAAQS, but rather are due at the same time nonattainment area plan requirements are due under section 172. The two elements are: (i) Section 110(a)(2)(C) to the extent it refers to permit programs (known as “nonattainment new source review (NSR)”) required under part D, and (ii) section 110(a)(2)(I) pertaining to the nonattainment planning requirements of part D. As a result, this action does not address infrastructure elements related to the nonattainment NSR portion of section 110(a)(2)(C) or related to 110(a)(2)(I).
This action also does not address the “interstate transport” requirements of element 110(a)(2)(D)(i). In a separate action, EPA approved the State's submission to meet the requirements of 110 (a)(2)(D)(i) for the 1997 ozone NAAQS (73 FR 26019).
1. Emission limits and other control measures: Section 110(a)(2)(A) requires SIPs to include enforceable emission limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this Act.
a. South Dakota's response to this requirement: The rules in the Administrative Rules of South Dakota (ARSD) Chapter 74:36:04 (Operating permits for minor sources), 74:36:05 (Operating permits for part 70 sources), 74:35:06 (Regulated air pollutant emissions), 74:36:07 (New source performance standards), 74:36:08 (National emission standards for hazardous air pollutants), 74:36:09 (Prevention of significant deterioration), and 74:36:10 (New source review) provide enforceable emission limits and other control measures, means or techniques, schedules for compliance and other related matters necessary to maintain South Dakota in attainment with the federal NAAQS. Authority to promulgate these rules is contained in South Dakota Codified Laws (SDCL) 34A-1-1, 34A-1-6, 34A-1-18, 34A-1-19.
b. EPA analysis: South Dakota's SIP meets the requirements of CAA section 110(a)(2)(A) for the 1997 ozone NAAQS, subject to the following clarifications. First, this infrastructure element does not require the submittal of regulations or emission limitations developed specifically for attaining the 1997 ozone NAAQS. Furthermore, South Dakota has no areas designated as nonattainment for the 1997 ozone NAAQS. As a result, the South Dakota SIP contains no emissions limitations specific to ozone and/or its precursors. Instead, South Dakota regulates emissions of ozone and its precursors through its SIP-approved major and minor source permitting programs.
Second, in this action, EPA is not proposing to approve or disapprove any existing state rules with regard to director's discretion or variance provisions. A number of states have such provisions which are contrary to the CAA and existing EPA guidance (52 FR 45109, Nov. 24, 1987), and the Agency plans to take action in the future to address such state regulations. In the meantime, EPA encourages any state having a director's discretion or variance provision which is contrary to the CAA and EPA guidance to take steps to correct the deficiency as soon as possible.
Finally, in this action, EPA is also not proposing to approve or disapprove any existing SIP provisions with regard to excess emissions during startup, shutdown, or malfunction (SSM) of operations at a facility. A number of states have SSM provisions which are contrary to the CAA and existing EPA guidance
2. Ambient air quality monitoring/data system: Section 110(a)(2)(B) requires SIPs to provide for establishment and operation of appropriate devices, methods, systems, and procedures necessary to (i) monitor, compile, and analyze data on ambient air quality, and (ii) upon request, make such data available to the Administrator.
a. South Dakota's response to this requirement: The rules in ARSD 74:36:02 define the goals, NAAQS, air monitoring methods and monitoring requirements provided for establishment and operation of ambient air quality monitors, collecting and analyzing ambient air quality data and making these data available to EPA. Authority used to promulgate these rules is contained in SDCL 34A-1-6 and 34A-1-15.
b. EPA analysis: South Dakota's air monitoring programs and data systems meet the requirements of CAA section 110(a)(2)(B) for the 1997 ozone NAAQS. The South Dakota Department of Environment and Natural Resources (DENR) 2008 Ambient Air Monitoring Annual Network Plan was approved by EPA Region 8 on March 23, 2009.
3. Program for enforcement of control measures: Section 110(a)(2)(C) requires SIPs to include a program to provide for the enforcement of the measures described in subparagraph (A), and regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that NAAQS are achieved, including a permit program as required in parts C and D.
a. South Dakota's response to this requirement: SDCL 34A-1-39 through 34A-1-54 and 34A-1-62 provides DENR with the authority to provide enforcement of all South Dakota SIP measures and the regulations under ARSD Chapter 74:36:09 (Prevention of significant deterioration) and 74:36:10 (New source review).
b. EPA analysis: As explained above, in this action EPA is not evaluating non-attainment related provisions, such as the nonattainment New Source Review (NSR) program required by part D of the Act. In addition, South Dakota has no nonattainment areas for the 1997 ozone NAAQS and is therefore not required at this point to have a corresponding nonattainment NSR program. In this action, EPA is evaluating the State's PSD program as required by part C of the Act, and the State's minor NSR program as required by 110(a)(2)(C).
South Dakota's SIP-approved PSD program incorporates by reference (with certain exceptions) the federal PSD program in 40 CFR 52.21 as of July 1, 2005 (72 FR 72617). As described in our notice of approval of the program (72 FR 72617), South Dakota's PSD program met the general requirements of CAA section 110(a)(2)(C) as of that date.
EPA notes a potential inconsistency between South Dakota's February 1, 2008 infrastructure SIP certification and EPA's recently promulgated rule, “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans” (“PSD SIP Narrowing Rule”), 75 FR 82536 (Dec. 30, 2010). In the PSD SIP Narrowing Rule, EPA withdrew its previous approval of South Dakota's PSD program to the extent that it applied PSD permitting to greenhouse gas (GHG) emissions increases from GHG-emitting sources below thresholds set in EPA's June 3, 2010 “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule” (“Tailoring Rule”), 75 FR 31514. EPA withdrew its approval on the basis that the State lacked sufficient resources to issue PSD permits to such sources at the statutory thresholds in effect in the previously-approved PSD program. After the PSD SIP Narrowing Rule, the portion of South Dakota's PSD SIP from which EPA withdrew its approval had the status of having been submitted to EPA but not yet acted upon. In its February 1, 2008 certification, South Dakota relied on its PSD program as approved at that date—which was before December 30, 2010, the effective date of the PSD SIP Narrowing Rule—to satisfy the requirements of infrastructure element 110(a)(2)(C). Given EPA's basis for the PSD SIP Narrowing Rule, EPA proposes approval of the South Dakota infrastructure SIP for infrastructure element (C) if either the State clarifies (or modifies) its certification to make clear that the State relies only on the portion of the PSD program that remains approved after the PSD SIP Narrowing Rule issued on December 30, 2010, and for which the State has sufficient resources to implement, or the State acts to withdraw from EPA consideration the remaining portion of its PSD program submission that would have applied PSD permitting to GHG sources below the Tailoring Rule thresholds. In the alternative, if South Dakota does not take either action, EPA proposes to disapprove the infrastructure SIP to the extent it incorporates that portion of the previously-approved PSD program from which EPA withdrew its approval in the PSD SIP Narrowing Rule, which is the portion which would have applied PSD permitting requirements to GHG emissions increases from GHG-emitting sources below the Tailoring Rule thresholds. Such disapproval, if finalized, would not result in a need for South Dakota to resubmit a SIP revision, sanctions, or a federal implementation plan (FIP).
In order for South Dakota's SIP-approved PSD program to satisfy the requirements of section 110(a)(2)(C) for the 1997 ozone NAAQS, the program must also properly regulate ozone precursors. On November 29, 2005, EPA promulgated the phase 2 implementation rule for the 1997 ozone NAAQS, which includes requirements for PSD programs to treat nitrogen oxides as a precursor for ozone (72 FR 71612). The phase 2 implementation rule accordingly updated the federal program at 40 CFR 52.21 to meet these requirements, effective January 30, 2006. This effective date is after the July 1, 2005 date of incorporation of 40 CFR 52.21 by the currently approved South
On June 14, 2010, the State submitted to EPA a SIP revision that (among other things) revises ARSD 74:36:09 (Prevention of significant deterioration) to incorporate by reference the federal PSD program in 40 CFR 52.21 as of July 1, 2009. As a result of the revised incorporation date, the submitted PSD program meets the requirements of the phase 2 ozone implementation rule. EPA therefore proposes to concurrently approve the portion of the June 14, 2010 submission revising ARSD 74:36:09, with the following exception.
Consistent with the Tailoring Rule, the SIP PSD Narrowing Rule, and the discussion above, EPA proposes to disapprove the revision of ARSD 74:36:09 in the June 14, 2010 submission to the extent that the revision applies PSD permitting to GHG emissions increases from GHG-emitting sources below Tailoring Rule thresholds. The Tailoring Rule modified the federal PSD program at 40 CFR 52.21, effective August 2, 2010, to incorporate the Tailoring Rule thresholds.
The State has a SIP-approved minor NSR program, adopted under section 110(a)(2)(C) of the Act, which regulates emissions of ozone and its precursors. On September 6, 1995, EPA approved extensive changes to the State's minor NSR program for incorporation into the SIP, and there was at the time no objection to the provisions of this program (60 FR 46222). Since then, the State and EPA have relied on the existing State minor NSR program to assure that new and modified sources not captured by the major NSR permitting programs do not interfere with attainment and maintenance of the NAAQS.
In this action, EPA is proposing to approve South Dakota's infrastructure SIP for the 1997 ozone NAAQS with respect to the general requirement in section 110(a)(2)(C) to include a program in the SIP that regulates the modification and construction of any stationary source as necessary to assure that the NAAQS are achieved. EPA is not proposing to approve or disapprove the State's existing minor NSR program itself to the extent that it is inconsistent with EPA's regulations governing this program. A number of states may have minor NSR provisions that are contrary to the existing EPA regulations for this program. EPA intends to work with states to reconcile state minor NSR programs with EPA's regulatory provisions for the program. The statutory requirements of section 110(a)(2)(C) provide for considerable flexibility in designing minor NSR programs, and it may be time to revisit the regulatory requirements for this program to give the states an appropriate level of flexibility to design a program that meets their particular air quality concerns, while assuring reasonable consistency across the country in protecting the NAAQS with respect to new and modified minor sources.
4. Interstate transport: Section 110(a)(2)(D)(i) requires SIPs to contain adequate provisions prohibiting, consistent with the provisions of this title, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will (I) contribute significantly to nonattainment in, or interfere with maintenance by, any other state, with respect to any such national primary or secondary ambient air quality standard, or (II) interfere with measures required to be included in the applicable implementation plan for any other state under part C to prevent significant deterioration of air quality or to protect visibility.
a. South Dakota's response to this requirement: South Dakota submitted its Interstate Transport SIP to EPA on May 25, 2007.
b. EPA Analysis: EPA approved the State's Interstate Transport provisions for the 1997 ozone NAAQS on May 8, 2008 (73 FR 26019). EPA is taking no action relevant to section 110(a)(2)(D)(i) in this proposal.
5. Interstate and International transport provisions: Section 110(a)(2)(D)(ii) requires that each SIP shall contain adequate provisions insuring compliance with applicable requirements of sections 126 and 115 (relating to interstate and international pollution abatement).
a. South Dakota's response to this requirement: South Dakota submitted its Interstate Transport SIP to EPA on May 25, 2007.
b. EPA Analysis: Section 126(a) of the CAA requires notification to affected, nearby states of major proposed new (or modified) sources. Sections 126(b) and (c) pertain to petitions by affected states to the Administrator regarding sources violating the “interstate transport” provisions of section 110(a)(2)(D)(i). Section 115 of the CAA similarly pertains to international transport of air pollution.
South Dakota's SIP-approved PSD program incorporates by reference the Federal PSD program at 40 CFR 52.21. However, South Dakota separately implements public notice requirements by incorporating by reference (with certain modifications) 40 CFR 51.166(q). In particular, the SIP's incorporation of 51.166(q)(2)(iii), which requires notice to states whose lands may be affected by the emissions of sources subject to PSD, satisfies the notice requirement of section 126(a).
South Dakota has no pending obligations under sections 126(c) or 115(b); therefore, its SIP currently meets the requirements of those sections. The SIP therefore meets the requirements of 110(a)(2)(D)(ii) for the 1997 ozone NAAQS.
6. Adequate resources and authority
a. South Dakota's response to this requirement: SDCL 34A-1-4, 34A-1-7 through 34A-1-10 provides DENR with adequate personnel to carry out South Dakota's SIP and related issues. SDCL 34A-1-57 through 34A-1-60, and DENR's agreement with EPA for 103 and 105 grants and associated matching state funds provides DENR with the funding necessary to carry out South Dakota's SIP and related issues. SDCL 34A-1 provides DENR with the legal authority
b. EPA Analysis: South Dakota's SIP meets the requirements of section 110(a)(2)(E) for the 1997 ozone NAAQS. SDCL 34A-1-57 through 34A-1-60 provides adequate authority for the State of South Dakota and the DENR to carry out its SIP obligations with respect to the 1997 ozone NAAQS. The State receives sections 103 and 105 grant funds through its Performance Partnership Grant along with required state matching funds to provide funding necessary to carry out South Dakota's SIP requirements. South Dakota's resources meet the requirements of CAA section 110(a)(2)(E). Finally, SDCL 1-40-25.1 requires the Board of Minerals and Environment to be composed in accordance with section 128 of the CAA.
7. Stationary source monitoring and reporting
a. South Dakota's response to this requirement: The rules in ARSD Chapter 74:36:04 (Operating permits for minor sources), 74:35:05 (Operating permits for part 70 sources), 74:37:11 (Performance testing) and 74:36:13 (Continuous emission monitoring systems) establish a system to monitor emissions from stationary sources and periodic emissions reports. Authority to promulgate these rules is contained in SDCL 34A-a-6 and SDCL 34A-1-12.
b. EPA Analysis: South Dakota's SIP provides for monitoring, recordkeeping, and reporting requirements for sources subject to minor and major source permitting. As mentioned above, the SIP contains no other, specific emissions limitations on ozone or its precursors. South Dakota's SIP therefore meets the requirements of section 110(a)(2)(F) for the 1997 ozone NAAQS.
8. Emergency powers: Section 110(a)(2)(G) requires states to provide for authority to address activities causing imminent and substantial endangerment to public health, including contingency plans to implement the emergency episode provisions in their SIPs.
a. South Dakota's response to this requirement: The rules in ARSD Chapter 74:36:03 (Air quality episodes) adopt by reference the criteria in 40 CFR 51.151 as the air quality episode plan to address activities causing imminent and substantial endangerment to public health, including contingency plans to implement the emergency episode provisions of the South Dakota SIP. Authority to promulgate these rules is contained in SDCL 34A-1-6, 34A-1-15, and 34A-1-45. The episode criteria specified in this chapter for ozone are based on an 8-hour average ozone level at a monitoring site. These criteria have previously been approved by EPA as adequate to address ozone emergency episodes.
b. EPA analysis: SDCL 34A-1-45 provides DENR with general emergency authority comparable to that in section 303 of the Act. The SIP also requires DENR to follow criteria in 40 CFR 51.151 in proclaiming an emergency episode and to develop a contingency plan. The contingency plan, though, has not itself been incorporated into the SIP. However, South Dakota has not monitored any values above the priority cut point for ozone. See 40 CFR 51.150(b)(5). The SIP therefore meets the requirements of 110(a)(2)(G) for the 1997 ozone NAAQS.
9. Future SIP revisions
a. South Dakota's response to this requirement: SDCL 34A-1-6 provides DENR with the authority to revise South Dakota's SIP in response to changes to the federal NAAQS, availability of improved methods for attaining the federal standards, or in response to an EPA finding that the SIP is substantially inadequate.
b. EPA analysis: South Dakota's statutory provision at SDCL 34A-1-6 gives DENR sufficient authority to meet the requirements of 110(a)(2)(H).
10. Nonattainment Area Plan or Plan Revision under Part D: Section 110(a)(2)(I) requires that a SIP or SIP revision for an area designated as a nonattainment area must meet the applicable requirements of part D of this subchapter (relating to nonattainment areas).
a. EPA analysis for Section 110(a)(2)(I): As noted above, the specific nonattainment area plan requirements of section 110(a)(2)(I) are subject to the timing requirement of section 172, not the timing requirement of section 110(a)(1). This element is therefore not applicable to this action. EPA will take action on part D attainment plans through a separate process.
11. Consultation with government officials, public notification, PSD and visibility protection: Section 110(a)(2)(J) requires that each SIP meet the applicable requirements of section 121 of this title (relating to consultation), section 127 of this title (relating to public notification), and part C of this subchapter (relating to prevention of significant deterioration of air quality and visibility protection).
a. South Dakota's response to this requirement: SDCL 34A-1-1 and 34-1-10 provide DENR with the authority to consult with local governments, other states, federal government, etc. SDCL 1-40-31 and 34A-1-9 provide DENR with the authority to collect and disseminate information and provide full public inspection and disclosure of all non-confidential public records related to DENR and those activities within its jurisdiction. The public is notified of any concentrations that exceed the NAAQS through DENR's Air Quality program website that contains the daily concentrations updated hourly from five sites covering 17 parameters from continuous analyzers and monitors located throughout the state. Four of these sites report hourly ozone levels to the website and to the
b. EPA Analysis: The State has demonstrated that it has the authority and rules in place to provide a process of consultation with general purpose local governments, designated organizations of elected officials of local governments and any Federal Land Manager having authority over federal land to which the SIP applies,
As discussed above, the State has a SIP-approved PSD program that incorporates by reference the federal program at 40 CFR 52.21. EPA has further evaluated South Dakota's SIP-approved PSD program in this proposed action under IV.3, element 110(a)(2)(C).
Finally, with regard to the applicable requirements for visibility protection, EPA recognizes that states are subject to visibility and regional haze program requirements under part C of the act. In the event of the establishment of a new NAAQS, however, the visibility and regional haze program requirements under part C do not change. Thus we find that there are no applicable visibility requirements under section 110(a)(2)(J) when a new NAAQS becomes effective. In conclusion, the South Dakota SIP meets the requirements of section 110(a)(2)(J) for the 1997 ozone NAAQS.
12. Air quality and modeling/data: Section 110(a)(2)(K) requires that each SIP provide for (i) the performance of such air quality modeling as the Administrator may prescribe for the purpose of predicting the effect on ambient air quality of any emissions of any air pollutant for which the Administrator has established a NAAQS, and (ii) the submission, upon request, of data related to such air quality modeling to the Administrator.
a. South Dakota's response to this requirement: The rules in ARSD Chapter 74:36:04 (Operating permit for minor sources), 74:36:05 (Operating permit for part 70 sources), 74:36:09 (Prevention of significant deterioration), and 74:36:10 (New source review) provide DENR with the authority to perform air quality modeling for predicting effects on air quality of emissions of any NAAQS pollutant and submission of such data to EPA upon request. Authority to promulgate these rules is contained in SDCL 34A-1-6 and 34A-1-9.
b. EPA Analysis: South Dakota's SIP meets the requirements of CAA section 110(a)(2)(K) for the 1997 ozone NAAQS. In particular, South Dakota's PSD program incorporates by reference the federal program at 40 CFR 52.21, including the provision at 40 CFR 52.21(l)(1) requiring that estimates of ambient air concentrations be based on applicable air quality models specified in Appendix W of 40 CFR part 51, and the provision at 40 CFR 52.21(l)(2) requiring that modification or substitution of a model specified in Appendix W must be approved by the Administrator. As a result, the SIP provides for such air quality modeling as the Administrator has prescribed.
13. Permitting fees: Section 110(a)(2)(L) requires SIPs to require the owner or operator of each major stationary source to pay to the permitting authority, as a condition of any permit required under this act, a fee sufficient to cover (i) the reasonable costs of reviewing and acting upon any application for such a permit, and (ii) if the owner or operator receives a permit for such source, the reasonable costs of implementing and enforcing the terms and conditions of any such permit (not including any court costs or other costs associated with any enforcement action), until such fee requirement is superseded with respect to such sources by the Administrator's approval of a fee program under title V.
a. South Dakota's response to this requirement: The DENR has an approved title V operating permit program (61 FR 2720, Jan. 29, 1996) that requires major stationary sources to pay permitting fees to cover the cost of reviewing, approving, implementing and enforcing the title V permit.
b. EPA Analysis: South Dakota's approved title V operating permit program meets the requirements of CAA section 110(a)(2)(L) for the 1997 ozone NAAQS. Final approval of the title V operating permit program became effective February 28, 1996. (See 61 FR 2720, Jan. 29, 1996.) As discussed in the notice proposing approval of the title V program (60 FR 2917, Jan. 12, 1995), the State demonstrated that the fees collected were sufficient to administer the program.
14. Consultation/participation by affected local entities: Section 110(a)(2)(M) requires states to provide for consultation and participation in SIP development by local political subdivisions affected by the SIP.
a. South Dakota's response to this requirement: SDCL 34A-1-1, 34A-1-10 provides DENR with the authority to provide for consultation and participation in South Dakota's SIP development by local political subdivision affected by the SIP. Cooperation by DENR with other agencies provides for the consultation, advise, and cooperation with other state, local, industries, other states, interstate or inter local agencies, and the federal government, and with interested persons or groups on air pollution control issues.
b. EPA Analysis: South Dakota's submittal meets the requirements of CAA section 110(a)(2)(M) for the 1997 ozone NAAQS.
In this action, EPA is proposing to approve in full the following section 110(a)(2) infrastructure elements for South Dakota for the 1997 ozone NAAQS: (A), (B), (D)(ii), (E), (F), (G), (H), (J), (K), (L), (M). EPA proposes to approve the section 110(a)(2)(C) infrastructure element in full in the event that South Dakota takes one of the actions described in the discussion of that element; in the alternative, EPA proposes to disapprove the section 110(a)(2)(C) element to the extent described and to otherwise approve this element. EPA is taking no action on infrastructure elements (D)(i) and (I) for the 1997 ozone NAAQS. EPA also proposes to approve the portion of South Dakota's June 14, 2010 SIP submission that revises South Dakota's PSD program to incorporate by reference the federal program at 40 CFR 52.21 as of July 1, 2009, except to the extent that revision applies PSD permitting to GHG emissions increases from GHG-emitting sources below the thresholds set out in the Tailoring Rule, 75 FR 31514.
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations (42 U.S.C. 7410(k), 40 CFR 52.02(a)). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves some state law as meeting Federal requirements and disapproves other state law because it does not meet Federal requirements; this proposed action does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and,
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
Environmental protection, Air pollution control, Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Fish and Wildlife Service, Interior.
Proposed rule; reopening of comment period, notice of availability of draft economic analysis, and amended required determinations.
We, the U.S. Fish and Wildlife Service, announce the reopening of the public comment period on the October 6, 2010, proposed designation of critical habitat for the Altamaha spinymussel
We will consider comments received on or before June 13, 2011. Comments must be received by 11:59 p.m. Eastern Time on the closing date. Any comments that we receive after the closing date may not be considered in the final decision on this action.
You may submit comments by one of the following methods:
•
•
We will post all comments on
Sandra Tucker, Field Supervisor, U.S. Fish and Wildlife Service, Georgia Ecological Services Office, 105 Westpark Dr., Suite D, Athens, GA 30606; telephone 706-613-9493; facsimile 706-613-6059. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 800-877-8339.
We will accept written comments and information during this reopened comment period on our proposed listing and designation of critical habitat for the Altamaha spinymussel that was published in the
(1) The reasons why we should or should not designate habitat as “critical habitat” under section 4 of the Act (16 U.S.C. 1531
(2) Specific information on:
(a) The distribution of the Altamaha spinymussel;
(b) The amount and distribution of Altamaha spinymussel habitat; and
(c) What areas occupied by the species at the time of listing that contain features essential for the conservation of the species we should include in the designation and why; and
(d) What areas not occupied at the time of listing are essential to the conservation of the species and why.
(3) Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat.
(4) Any foreseeable economic, national security, or other relevant impacts that may result from designating any area that may be included in the final designation. We are particularly interested in any impacts on small entities, and the benefits of including or excluding areas from the proposed designation that are subject to these impacts.
(5) Whether our approach to designating critical habitat could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concerns and comments.
(6) Information on the extent to which the description of economic impacts in the DEA is complete and accurate.
(7) The likelihood of adverse social reactions to the designation of critical habitat, as discussed in the DEA, and how the consequences of such reactions, if likely to occur, would relate to the conservation and regulatory benefits of the proposed critical habitat designation.
(8) Which areas would be appropriate as critical habitat for the species.
(9) Comments or information that may assist us in identifying or clarifying the primary constituent elements.
(10) Whether any specific areas we are proposing as critical habitat should be considered for exclusion under section 4(b)(2) of the Act, and whether benefits of potentially excluding any specific area outweigh the benefits of including that area under section 4(b)(2) of the Act.
(11) Information on the projected and reasonably likely impacts of climate change on the Altamaha spinymussel, and any special management needs or protections that may be needed in critical habitat areas we are proposing.
If you submitted comments or information on the proposed rule (75 FR 61664) during the initial comment period from October 6, 2010, to December 6, 2010, please do not resubmit them. Our final determination concerning revised critical habitat will take into consideration all written comments and any additional information we receive during both comment periods. On the basis of public comments, we may, during the development of our final determination, find that areas proposed are not essential to the conservation of the species, are appropriate for exclusion under section 4(b)(2) of the Act, or are not appropriate for exclusion.
You may submit your comments and materials concerning the proposed rule or DEA by one of the methods listed in
If you submit a comment via
Comments and materials we receive, as well as supporting documentation we used in preparing the proposed rule and DEA, will be available for public inspection on
It is our intent to discuss only those topics directly relevant to the designation of critical habitat for the Altamaha spinymussel in this document. For more information on previous Federal actions concerning the Altamaha spinymussel or its habitat, refer to the proposed listing and critical habitat rule published in the
On October 6, 2010, we published a proposed rule to designate critical habitat for the Altamaha spinymussel (75 FR 61664). We proposed to designate approximately 240 kilometers (149 miles) of mainstem river channel in four units as critical habitat in Appling, Ben Hill, Coffee, Jeff Davis, Long, Montgomery, Tattnall, Telfair, Toombs, Wayne, and Wheeler Counties, Georgia. That proposal had a 60-day comment period, ending December 6, 2010.
Section 3 of the Act defines critical habitat as the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographical area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. If the proposed rule is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting critical habitat must consult with us on the effects of their proposed actions, under section 7(a)(2) of the Act.
Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific data available, after taking into consideration the economic impact, impact on national security, or any other relevant impact of specifying any particular area as critical habitat. We may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area as critical habitat, provided such exclusion will not result in the extinction of the species.
When considering the benefits of inclusion for an area, we consider the additional regulatory benefits that area would receive from the protection from adverse modification or destruction as a result of actions with a Federal nexus (activities conducted, funded, permitted, or authorized by Federal agencies), the educational benefits of mapping areas containing essential features that aid in the recovery of the listed species, and any benefits that may result from designation due to State or Federal laws that may apply to critical habitat.
When considering the benefits of exclusion, we consider, among other things, whether exclusion of a specific area is likely to result in conservation; the continuation, strengthening, or encouragement of partnerships; or implementation of a management plan. In the case of the Altamaha spinymussel, the potential benefits of critical habitat include public awareness of the presence of the Altamaha spinymussel and the importance of habitat protection, and, where a Federal nexus exists, increased habitat protection for the Altamaha spinymussel due to protection from adverse modification or destruction of critical habitat. In practice, situations with a Federal nexus exist primarily on Federal lands or for projects undertaken, funded, or authorized by Federal agencies.
The final decision on whether to exclude any areas will be based on the best scientific data available at the time of the final designation, including information obtained during the comment period and information about the economic impact of designation. Accordingly, we have prepared a draft economic analysis concerning the proposed critical habitat designation (DEA), which is available for review and comment (see
The purpose of the DEA is to identify and analyze the potential economic impacts associated with the proposed critical habitat designation for the Altamaha spinymussel. The DEA describes the economic impacts of all potential conservation efforts for the Altamaha spinymussel; some of these costs will likely be incurred regardless of whether we designate critical habitat.
The DEA provides estimated costs of the foreseeable potential economic impacts of the proposed critical habitat designation for the Altamaha spinymussel over the next 30 years, which was determined to be the appropriate period for analysis because limited planning information is available for most activities to forecast activity levels for projects beyond a 30-year timeframe. It identifies potential incremental costs as a result of the proposed critical habitat designation; these are those costs attributed to critical habitat over and above those baseline costs attributed to listing. The DEA quantifies economic impacts of Altamaha spinymussel conservation efforts associated with the following categories of activity: Electric power generation and transmission, transportation, and recreation. Applying a seven percent discount rate, electric power generation and transmission is estimated to incur the largest impact at $26,700 over the next 30 years (2011-2040); overall incremental impacts associated with the designation are estimated at $37,100 over the same time period.
As we stated earlier, we are soliciting data and comments from the public on the DEA, as well as all aspects of the proposed rule and our amended required determinations. We may revise the proposed rule or supporting documents to incorporate or address information we receive during the public comment period. In particular, we may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area, provided the exclusion will not result in the extinction of this species.
In our October 6, 2010, proposed rule (75 FR 61664), we indicated that we would defer our determination of compliance with several statutes and executive orders until the information concerning potential economic impacts of the designation and potential effects on landowners and stakeholders became available in the DEA. We have now made use of the DEA data to make these determinations. In this document, we affirm the information in our proposed rule concerning Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 12630 (Takings), E.O. 13132 (Federalism), E.O. 12988 (Civil Justice Reform), E.O. 13211 (Energy, Supply, Distribution, and Use), the Unfunded Mandates Reform Act (2 U.S.C. 1501
Under the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 802(2)), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. Based on our DEA of the proposed designation, we provide our analysis for determining whether the proposed rule would result in a significant economic impact on a substantial number of small entities. Based on comments we receive, we may revise this determination as part of our final rulemaking.
According to the Small Business Administration, small entities include small organizations, such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
To determine if the proposed designation of critical habitat for the Altamaha spinymussel would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities, such as transportation, electric power generation and transmission, and recreation. In order to determine whether it is appropriate for our agency to certify that this rule would not have a significant economic impact on a substantial number of small entities, we considered each industry or category individually. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement. Critical habitat designation will not affect activities that do not have any Federal involvement; designation of critical habitat only affects activities conducted, funded, permitted, or authorized by Federal agencies. In areas where the Altamaha spinymussel is present, Federal agencies already are required to consult with us under section 7 of the Act on activities they fund, permit, or implement that may affect the species.
In the DEA, we evaluated the potential economic effects on small entities resulting from implementation of conservation actions related to the proposed designation of critical habitat for the Altamaha spinymussel. Only the transportation industry included small entities likely to incur incremental costs associated with the designation and these costs, which are largely associated with formal consultation under section 7 of the Act, are expected to result in less than 0.01 percent of the annual revenue threshold that small transportation entities must meet. Please refer to the DEA of the proposed critical habitat designation for a more detailed discussion of potential economic impacts.
In summary, we have considered whether the proposed designation would result in a significant economic impact on a substantial number of small entities. Information for this analysis was gathered from the Small Business Administration, stakeholders, and the Service. We have identified one category of small entity that may be impacted by the proposed critical habitat designation. For the above reasons and based on currently available information, we certify that, if promulgated, the proposed critical habitat designation would not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required.
The primary authors of this notice are the staff members of the U.S. Fish and Wildlife Service, Athens, Georgia Ecological Services Office.
The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531
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 regarding (a) 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; (b) the accuracy of the agency's estimate of burden 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 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 should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Commodity Credit Corporation.
Notice; extension of application due date.
Catalog of Federal Domestic Assistance (CFDA) Numbers: 10.601 (MAP), 10.600 (FMD), 10.603 (EMP), 10.604 (TASC), 10.605 (QSP).
The Commodity Credit Corporation (CCC) published five notices in the
Program Operations Division, Office of Trade Programs, Foreign Agricultural Service, Portals Office Building, Suite 400, 1250 Maryland Avenue, SW., Washington, DC 20024, or
CCC published five notices in the
Forest Service, USDA.
Notice of meetings.
The West Virginia Resource Advisory Committee will meet in Elkins, West Virginia. The committee is meeting as authorized under the Secure Rural Schools and Community Self-Determination Act (Pub. L. 110-343) and in compliance with the Federal Advisory Committee Act. The purpose is for the committee to consider new project proposals .
The meetings will be held on May 26, June 28, and July 19, 2011, and will all begin at 1 p.m.
The meetings will be held at the Monongahela National Forest Supervisor's Office, 200 Sycamore Street, Elkins, WV 26241. Written comments should be sent to Kate Goodrich-Arling at the same address. Comments may also be sent via e-mail to
All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at Monongahela National Forest, 200 Sycamore Street, Elkins, WV 26241.
Kate Goodrich-Arling, RAC coordinator, USDA, Monongahela National Forest, 200 Sycamore Street, Elkins, WV 26241; (304) 636-1800; e-mail
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Standard Time, Monday through Friday.
The meetings are open to the public.
Import Administration, International Trade Administration, Department of Commerce.
On December 15, 2010, the Department of Commerce (“the Department”) published its preliminary results of changed circumstances review and intent to revoke, in part, the countervailing duty (“CVD”) order on certain pasta from Italy.
Mahnaz Khan or Jessica Forton, AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington DC 20230; telephone (202) 482-0914 and (202) 482-0509, respectively.
On July 24, 1996, the Department published in the
The merchandise covered by this changed circumstances review is gluten-free pasta.
Imports covered by the order are shipments of certain non-egg dry pasta in packages of five pounds four ounces or less, whether or not enriched or fortified or containing milk or other optional ingredients such as chopped vegetables, vegetable purees, milk, gluten, diastasis, vitamins, coloring and flavorings, and up to two percent egg white. The pasta covered by the scope of the order is typically sold in the retail market, in fiberboard or cardboard cartons, or polyethylene or polypropylene bags of varying dimensions.
Excluded from the scope of the order are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. Also excluded are imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by the Instituto Mediterraneo Di Certificazione, Bioagricoop S.r.l., QC&I International Services, Ecocert Italia, Consorzio per il Controllo dei Prodotti Biologici, Associazione Italiana per l'Agricoltura Biologica, or Codex S.r.l. In addition, based on publicly available information, the Department has determined that, as of August 4, 2004, imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by Bioagricert S.r.l. are also excluded from the order.
The merchandise subject to the order is currently classifiable under items 1901.90.90.95 and 1902.19.20 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to the order is dispositive.
On December 27, 2010, Maplegrove, a domestic producer of gluten-free pasta, expressed an objection to the changed circumstances review and intent to revoke, in part, with respect to gluten-free pasta.
In the
Therefore, consistent with
Accordingly, we will instruct CBP to liquidate without regard to CVDs all unliquidated entries of gluten-free pasta, entered, or withdrawn from warehouse, for consumption on or after January 1, 2009. The Department will also instruct CBP to refund with interest any estimated CVDs collected with respect to unliquidated entries of gluten-free pasta entered, or withdrawn from warehouse for consumption on or after January 1, 2009, in accordance with section 778 of the Act and 19 CFR 351.222(g)(4). Further, the Department will instruct CBP to no longer suspend liquidation on entries with respect to gluten-free pasta.
This notice serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.306. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested.
This changed circumstances review, partial revocation of the CVD order and notice are in accordance with sections 751(b) and (d), 777(i), and 782(h) of the Act and 19 CFR 351.216(e) and 351.222(g).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of receipt of a permit application for transshipment by foreign vessels; request for comments.
NMFS publishes for public review and comment information regarding a permit application for transshipment of Atlantic herring by Canadian vessels, submitted under provisions of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
Written comments must be received by May 26, 2011.
Written comments on this action, identified by RIN 0648-XZ423, may be submitted by any of the following methods:
• Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal at
• Mail: Mi Ae Kim, Trade and Marine Stewardship Division, Office of International Affairs, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.
Mi Ae Kim at (301) 713-9090 or by e-mail at
Section 204(d) of the Magnuson-Stevens Act (16 U.S.C. 1824(d)) authorizes the Secretary of Commerce (Secretary) to issue a transshipment permit authorizing a vessel other than a vessel of the United States to engage in fishing consisting solely of transporting fish or fish products at sea from a point within the United States Exclusive Economic Zone (EEZ) or, with the concurrence of a state, within the boundaries of that state to a point outside the United States. In addition, Public Law 104-297, section 105(e) directs the Secretary to issue section 204(d) permits for up to 14 Canadian transport vessels to receive Atlantic herring harvested by United States fishermen and to be used in sardine processing. Transshipment must occur from within the boundaries of the State of Maine or within the portion of the EEZ east of the line 69 degrees 30 minutes west and within 12 nautical miles from Maine's seaward boundary.
Section 204(d)(3)(D) of the Magnuson-Stevens Act provides that an application may not be approved until the Secretary determines that “no owner or operator of a vessel of the United States which has adequate capacity to perform the transportation for which the application is submitted has indicated * * * an interest in performing the transportation at fair and reasonable rates.” NMFS is publishing this notice as part of its effort to make such a determination with respect to the application described below.
NMFS received an application requesting authorization for five Canadian transport vessels to receive transfers of herring from United States purse seine vessels, stop seines, and weirs for the purpose of transporting the herring to Canada for processing. The transshipment operations will occur within the boundaries of the State of Maine or within the portion of the EEZ east of the line 69°30′ W longitude and within 12 nautical miles from Maine's seaward boundary.
National Telecommunications and Information Administration, U.S. Department of Commerce.
Notice of open meeting, room location change.
This notice announces a change in the room location of a public meeting of the Commerce Spectrum Management Advisory Committee (Committee).
The meeting will be held on May 25, 2011 from 9 a.m. to 12 p.m., Eastern Daylight Time.
The meeting will be held at the U.S. Department of Commerce, 1401 Constitution Avenue, NW., Room 6059, Washington, DC.
Bruce M. Washington, Designated Federal Officer, at (202) 482-6415, or BWashington@ntia.doc.gov; and/or visit NTIA's Web site at
On April 28, 2011, the National Telecommunications and Information Administration published in the
Department of the Army, U.S. Army Corps of Engineers, DOD.
Notice of Intent.
In accordance with 37 CFR 404.7(a)(1)(i), announcement is made of a prospective partially exclusive license of the following U.S. Patent Application 12/243,708 Filed October 01, 2008 to Nereus Environmental LLC for use in
Written objections must be filed not later than 15 days following publication of this announcement.
United States Army Engineer Research and Development Center, ATTN: CEERD-OT (Ms. Bea Shahin), 2902 Newmark Drive, Champaign, IL 6182-1076.
Ms. Bea Shahin (217) 373-7234, FAX (217) 373-7210, e-mail:
This patent application claims a method of manufacturing a remediation material by providing a biogentic material as a substrate, preparing the surface of the substrate for a chemical reaction, and performing template-driven surface derivitization on the surface of the substrate to provide a reactive surface of the substrate for sorption of chemical species or sorption and degradation of chemical species. The remediation material may be placed into contact with surface water, ground water, soil, or sediment by at least one permeable reactive barrier, direct introduction of the material into soil or sediment, to remove contaminants from the surface water, ground water, soil, or sediment.
Department of Education.
Notice of final supplemental priorities and definitions for discretionary grant programs; correction.
On December 15, 2010, the Department of Education published in the
Margo Anderson, U.S. Department of Education, 400 Maryland Avenue, SW., room 4W311, Washington, DC 20202-5910.
If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document in an accessible format (
The Supplemental Priorities NFP included several technical errors that we are correcting in this notice. In addition, for ease of reference, we are including the full text of all of the priorities and definitions (as corrected) in Appendix A to this notice.
In FR Doc. 2010-31189, published in the
1. On page 78496, in the first column, under the heading
2. On page 78497, in the first column, under the heading
3. On page 78503, in the first column, in paragraph (d), a comma is inserted after the word “programs” in the fifth line of paragraph (d).
4. On page 78507, in the first column, under the heading
(2) Data that include, in significant part, student achievement (as defined in this notice) or student growth (as defined in this notice) data and may include multiple measures in States or local educational agencies that do not have the teacher or principal evaluation systems described in paragraph (1).
5. On page 78507, in the second column, under the heading
6. On page 78507, in the third column, under the heading
7. On page 78508, in the second column under the heading
8. On page 78508, in the second column, under the heading
9. On page 78510, in the first column, in the definition of
10. On page 78510, in the first column, in the definition of
You may view this document, as well as all other Department of Education documents published in the
The official version of this document is the document published in the
Projects that are designed to improve school readiness and success for high-need children (as defined in this notice) from birth through third grade (or for any age group of high-need children within this range) through a focus on one or more of the following priority areas:
(a) Physical well-being and motor development.
(b) Social-emotional development.
(c) Language and literacy development.
(d) Cognition and general knowledge, including early numeracy and early scientific development.
(e) Approaches toward learning.
Projects that are designed to support the implementation of internationally benchmarked, college- and career-ready academic standards held in common by multiple States and to improve instruction and learning, including projects in one or more of the following priority areas:
(a) The development or implementation of assessments (
(b) The development or implementation of curriculum or instructional materials aligned with those standards.
(c) The development or implementation of professional development or preparation programs aligned with those standards.
(d) Strategies that translate the standards into classroom practice.
Projects that are designed to address one or more of the following priority areas:
(a) Increasing the number or percentage of teachers or principals who are effective or reducing the number or percentage of teachers or principals who are ineffective, particularly in high-poverty schools (as defined in this notice) including through such activities as improving the preparation, recruitment, development, and evaluation of teachers and principals; implementing performance-based certification and retention systems; and reforming compensation and advancement systems.
(b) Increasing the retention, particularly in high-poverty schools (as defined in this notice), and equitable distribution of teachers or principals who are effective.
For the purposes of this priority, teacher and principal effectiveness should be measured using:
(1) Teacher or principal evaluation data, in States or local educational agencies that have in place a high-quality teacher or principal evaluation system that takes into account student growth (as defined in this notice) in significant part and uses multiple measures, that, in the case of teachers, may include observations for determining teacher effectiveness (such as systems that meet the criteria for evaluation systems under the Race to the Top program as described in criterion (D)(2)(ii) of the Race to the Top notice inviting applications (74 FR 59803)); or
(2) Data that include, in significant part, student achievement (as defined in this notice) or student growth (as defined in this notice) data and may include multiple measures in States or local educational agencies that do not have the teacher or principal evaluation systems described in paragraph (1).
Projects that are designed to address one or more of the following priority areas:
(a) Improving student achievement (as defined in this notice) in persistently lowest-achieving schools (as defined in this notice).
(b) Increasing graduation rates (as defined in this notice) and college enrollment rates for students in persistently lowest-achieving schools (as defined in this notice).
(c) Providing services to students enrolled in persistently lowest-achieving schools (as defined in this notice).
Projects that are designed to improve student outcomes through one or more of the following priority areas:
(a) Improving school engagement, which may include increasing the quality of relationships between and among administrators, teachers, families, and students and increasing participation in school-related activities.
(b) Improving the school environment, which may include improving the school setting related to student learning, safety, and health.
(c) Improving school safety, which may include decreasing the incidence of harassment, bullying, violence, and substance use.
(d) Improving parent and family engagement (as defined in this notice).
(e) Improving community engagement (as defined in this notice) by supporting partnerships between local educational agencies, school staff, and one or more of the following:
(i) Faith- or community-based organizations.
(ii) Institutions of higher education.
(iii) Minority-serving institutions or historically black colleges or universities.
(iv) Business or industry.
(v) Other Federal, State, or local government entities.
Projects that are designed to improve student achievement (as defined in this notice) or teacher effectiveness through the use of high-quality digital tools or materials, which may include preparing teachers to use the technology to improve instruction, as well as developing, implementing, or evaluating digital tools or materials.
Projects conducted in States, local educational agencies, or schools where core reforms are being implemented. Such a project is one that is conducted—
(a) In a State that has adopted K-12 State academic standards in English language arts and mathematics that build towards college- and career-readiness;
(b) In a State that has implemented a statewide longitudinal data system that meets all the requirements of the America Competes Act; and
(c) In a local educational agency or school in which teachers receive student growth (as defined in this notice) data on their current students and the students they taught in the previous year and these data are provided, at a minimum, to teachers of reading/language arts and mathematics in grades in which the State administers assessments in those subjects.
Projects that are designed to address one or more of the following priority areas:
(a) Increasing the number and proportion of high-need students (as defined in this notice) who are academically prepared for and enroll in college or other postsecondary education and training.
(b) Increasing the number and proportion of high-need students (as defined in this notice) who persist in and complete college or other postsecondary education and training.
(c) Increasing the number and proportion of high-need students (as defined in this notice) who enroll in and complete high-quality programs of study (as defined in this notice) designed to lead to a postsecondary degree, credential, or certificate.
(d) Increasing the number of individuals who return to the educational system to obtain a regular high school diploma; to enroll in college or other postsecondary education or training; to obtain needed basic skills leading to success in college or other postsecondary education or the workforce; or to enter, persist in, and
(e) Increasing the number and proportion of high-need students (as defined in this notice) who enroll in and complete graduate programs.
(f) Increasing the number and proportion of postsecondary students who complete college or other postsecondary education and training and who are demonstrably prepared for successful employment, active participation in civic life, and lifelong learning.
Projects that are designed to address one or more of the following priority areas:
(a) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates for students in rural local educational agencies (as defined in this notice).
(b) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates for students with disabilities.
(c) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates for English learners.
(d) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates for high-need students (as defined in this notice).
(e) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates in high-poverty schools (as defined in this notice).
(f) Accelerating learning and helping to improve high school graduation rates (as defined in this notice) and college enrollment rates for all students in an inclusive manner that ensures that the specific needs of high-need students (as defined in this notice) participating in the project are addressed.
Projects that are designed to address one or more of the following priority areas:
(a) Providing students with increased access to rigorous and engaging coursework in STEM.
(b) Increasing the number and proportion of students prepared for postsecondary or graduate study and careers in STEM.
(c) Increasing the opportunities for high-quality preparation of, or professional development for, teachers or other educators of STEM subjects.
(d) Increasing the number of individuals from groups traditionally underrepresented in STEM, including minorities, individuals with disabilities, and women, who are provided with access to rigorous and engaging coursework in STEM or who are prepared for postsecondary or graduate study and careers in STEM.
(e) Increasing the number of individuals from groups traditionally underrepresented in STEM, including minorities, individuals with disabilities, and women, who are teachers or educators of STEM subjects and have increased opportunities for high-quality preparation or professional development.
Projects that are designed to promote student diversity, including racial and ethnic diversity, or avoid racial isolation.
Projects that are designed to address the needs of military-connected students (as defined in this notice).
Projects that are designed to collect (or obtain), analyze, and use high-quality and timely data, including data on program participant outcomes, in accordance with privacy requirements (as defined in this notice), in one or more of the following priority areas:
(a) Improving instructional practices, policies, and child outcomes in early learning settings.
(b) Improving instructional practices, policies, and student outcomes in elementary or secondary schools.
(c) Improving postsecondary student outcomes relating to enrollment, persistence, and completion and leading to career success.
(d) Providing reliable and comprehensive information on the implementation of Department of Education programs, and participant outcomes in these programs, by using data from State longitudinal data systems or by obtaining data from reliable third-party sources.
Projects that propose evaluation plans that are likely to produce valid and reliable evidence in one or more of the following priority areas:
(a) Improving project design and implementation or designing more effective future projects to improve outcomes.
(b) Identifying and improving practices, strategies, and policies that may contribute to improving outcomes. Under this priority, at a minimum, the outcome of interest is to be measured multiple times before and after the treatment for project participants and, where feasible, for a comparison group of non-participants.
Projects that are supported by strong or moderate evidence. A project that is supported by strong evidence (as defined in this notice) will receive more points than a project that is supported by moderate evidence (as defined in this notice).
Projects that are designed to significantly increase efficiency in the use of time, staff, money, or other resources while improving student learning or other educational outcomes (
(1) Prior test scores and other measures of academic achievement (preferably, the same measures that the study will use to evaluate outcomes for the two groups);
(2) Demographic characteristics, such as age, disability, gender, English proficiency, ethnicity, poverty level, parents' educational attainment, and single- or two-parent family background;
(3) The time period in which the two groups are studied (
(4) Methods used to collect outcome data (
(1) At least one well-designed and well-implemented (as defined in this notice) experimental or quasi-experimental study (as defined in this notice) supporting the effectiveness of the practice, strategy, or program, with small sample sizes or other conditions of implementation or analysis that limit generalizability;
(2) At least one well-designed and well-implemented (as defined in this notice) experimental or quasi-experimental study (as defined in this notice) that does not demonstrate equivalence between the intervention and comparison groups at program entry but that has no other major flaws related to internal validity; or
(3) Correlational research with strong statistical controls for selection bias and for discerning the influence of internal factors.
To identify the persistently lowest-achieving schools, a State must take into account both: (i) The academic achievement of the “all students” group in a school in terms of proficiency on the State's assessments under section 1111(b)(3) of the ESEA in reading/language arts and mathematics combined; and (ii) the school's lack of progress on those assessments over a
(a) Incorporate secondary education and postsecondary education elements;
(b) Include coherent and rigorous content aligned with challenging academic standards and relevant career and technical content in a coordinated, non-duplicative progression of courses that align secondary education with postsecondary education to adequately prepare students to succeed in postsecondary education;
(c) May include the opportunity for secondary education students to participate in dual or concurrent enrollment programs or other ways to acquire postsecondary education credits; and
(d) Lead to an industry-recognized credential or certificate at the postsecondary level, or an associate or baccalaureate degree.
(1) More than one well-designed and well-implemented (as defined in this notice) experimental study (as defined in this notice) or well-designed and well-implemented (as defined in this notice) quasi-experimental study (as defined in this notice) that supports the effectiveness of the practice, strategy, or program; or
(2) One large, well-designed and well-implemented (as defined in this notice) randomized controlled, multisite trial that supports the effectiveness of the practice, strategy, or program.
(a) For tested grades and subjects: (1) A student's score on the State's assessments under the ESEA; and, as appropriate, (2) other measures of student learning, such as those described in paragraph (b) of this definition, provided they are rigorous and comparable across schools.
(b) For non-tested grades and subjects: alternative measures of student learning and performance, such as student scores on pre-tests and end-of-course tests; student performance on English language proficiency assessments; and other measures of student achievement that are rigorous and comparable across schools.
U.S. Election Assistance Commission.
Notice of Virtual Public Forum for EAC Standards Board.
Tuesday, May 31, 2011, 10 a.m. EDT through Tuesday, June 14, 2011, 10 a.m. EDT.
EAC Standards Board Virtual Public Forum at
The EAC Standards Board will review and provide comment on the TGDC's resolutions from the January 2011 TGDC meeting, with a focus on Software Independence, to provide election official feedback to NIST and the TGDC.
The EAC Standards Board Virtual Public Forum was established to enable the Standards Board to provide comment in an efficient manner in a public forum, including being able to review and discuss draft documents when it is not feasible for an in-person board meeting. The Standards Board will not take any votes or propose any resolutions during the 14-day forum of May 31-June 14, 2011. Members will post comments about TGDC's work related to Software Independence to provide election official feedback to the TGDC and NIST.
This activity is open for public observation. The public may view the Proceedings of this special forum by visiting the EAC Standards Board Virtual Public Forum at
Bryan Whitener,
Take notice that the Commission received the following electric rate filings:
Any person desiring to intervene or to protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) on or before 5 p.m. Eastern time on the specified comment date. It is not necessary to separately intervene again in a subdocket related to a compliance filing if you have previously intervened in the same docket. 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. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. In reference to filings initiating a new proceeding, interventions or protests submitted on or before the comment deadline need not be served on persons other than the Applicant.
As it relates to any qualifying facility filings, the notices of self-certification [or self-recertification] listed above, do not institute a proceeding regarding qualifying facility status. A notice of self-certification [or self-recertification] simply provides notification that the entity making the filing has determined the facility named in the notice meets the applicable criteria to be a qualifying facility. Intervention and/or protest do not lie in dockets that are qualifying facility self-certifications or self-recertifications. Any person seeking to challenge such qualifying facility status may do so by filing a motion pursuant to 18 CFR 292.207(d)(iii). Intervention and protests may be filed in response to notices of qualifying facility dockets other than self-certifications and self-recertifications.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 14 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First St., NE., Washington, DC 20426.
The filings in the above proceedings are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please e-mail
Environmental Protection Agency (EPA).
Notice.
This notice announces that pesticide related information submitted to EPA's Office of Pesticide Programs (OPP) pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug, and Cosmetic Act (FFDCA), including information that may have been claimed as Confidential Business Information (CBI) by the submitter, will be transferred to the Department of Homeland Security. The Department of Homeland Security will work with OPP pursuant to the
The Department of Homeland Security will be given access to this information on or after May 22, 2011.
Mario Steadman, Information Technology and Resources Management Division (7502P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (703) 305-8338; e-mail address:
This action applies to the public in general. As such, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
EPA has established a docket for this action under docket identification (ID) number EPA-HQ-OPP-2011-0336. Publicly available docket materials are available either in the electronic docket at
EPA is announcing that some pesticide related information submitted to EPA's Office of Pesticide Programs (OPP), pursuant to FIFRA and FFDCA, including information that may have been claimed as Confidential Business Information (CBI) by the submitter, will be transferred to the Department of Homeland Security in accordance with 40 CFR 2.209(c). Access to this information is needed as part of ongoing work between the Department of Homeland Security and OPP under the authority of the Homeland Security Presidential Directives (
Environmental protection, Business and industry, Government property, Security measures.
Pursuant to the provisions of the “Government in the Sunshine Act” (5 U.S.C. 552b), notice is hereby given that at 9:32 a.m. on Tuesday, May 10, 2011, the Board of Directors of the Federal Deposit Insurance Corporation met in closed session to consider matters related to the Corporation's supervision, corporate and resolution activities.
In calling the meeting, the Board determined, on motion of Director John E. Bowman (Acting Director, Office of Thrift Supervision), seconded by Director Thomas J. Curry (Appointive), concurred in by Director John G. Walsh (Acting Comptroller of the Currency), Vice Chairman Martin J. Gruenberg, and Chairman Sheila C. Bair, that Corporation business required its consideration of the matters which were to be the subject of this meeting on less than seven days' notice to the public; that no earlier notice of the meeting was practicable; that the public interest did not require consideration of the matters in a meeting open to public observation; and that the matters could be considered in a closed meeting by authority of subsections (c)(2), (c)(4), (c)(6), (c)(8), (c)(9)(A)(ii), (c)(9)(B), and (c)(10) of the “Government in the Sunshine Act” (5 U.S.C. 552b(c)(2), (c)(4), (c)(6), (c)(8), (c)(9)(A)(ii), (c)(9)(B), and (c)(10)).
The meeting was held in the Board Room of the FDIC Building located at 550 17th Street, NW., Washington, DC.
Notice is hereby given that the following applicants have filed with the Federal Maritime Commission an application for a license as a Non-Vessel-Operating Common Carrier (NVO) and/or Ocean Freight Forwarder (OFF)—Ocean Transportation Intermediary (OTI) pursuant to section 19 of the Shipping Act of 1984 as amended (46 U.S.C. Chapter 409 and 46 CFR part 515). Notice is also hereby given of the filing of applications to amend an existing OTI license or the Qualifying Individual (QI) for a license.
Interested persons may contact the Office of Transportation Intermediaries, Federal Maritime Commission, Washington, DC 20573, by telephone at (202) 523-5843 or by e-mail at
Notice is hereby given that the following Ocean Transportation Intermediary licenses have been reissued by the Federal Maritime Commission pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. chapter 409) and the regulations of the Commission pertaining to the licensing of Ocean Transportation Intermediaries, 46 CFR part 515.
Notice is hereby given that the Order revoking the following licenses are being rescinded by the Federal Maritime Commission pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. chapter 409) and the regulations of the Commission pertaining to the licensing of Ocean Transportation Intermediaries, 46 CFR part 515.
The Federal Maritime Commission hereby gives notice that the following Ocean Transportation Intermediary licenses have been revoked pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. chapter 409) and the regulations of the Commission pertaining to the licensing of Ocean Transportation Intermediaries, 46 CFR part 515, effective on the corresponding date shown below:
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 application also will 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 June 6, 2011.
A. Federal Reserve Bank of Minneapolis (Jacqueline G. King, Community Affairs Officer) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
1.
Federal Trade Commission (“Commission” or “FTC”).
Notice.
The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as required by the Paperwork Reduction Act (“PRA”). The FTC is seeking public comments on its proposal to extend through October 31, 2014, the current PRA clearance for information collection requirements contained in the Commission's Gramm-Leach-Bliley Financial Privacy Rule (“GLB Privacy Rule” or “Rule”). The current clearance expires on October 31, 2011.
Comments must be submitted on or before July 11, 2011.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the
Katherine White, Attorney, Division of Privacy and Identity Protection, Bureau of Consumer Protection, (202) 326-2252, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. “Collection of information” means agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 1320.3(c). As required by section 3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for public comment before requesting that OMB extend the existing clearance for the GLB Privacy Rule, 16 CFR Part 313 (OMB Control Number 3084-0121).
The GLB Privacy Rule is designed to ensure that customers and consumers, subject to certain exceptions, will have access to the privacy policies of the financial institutions with which they conduct business. As mandated by the Gramm-Leach-Bliley Act, 15 U.S.C. 6801-6809, the Rule requires financial institutions to disclose to consumers: (1) Initial notice of the financial institution's privacy policy when establishing a customer relationship with a consumer and/or before sharing a consumer's non-public personal information with certain nonaffiliated third parties; (2) notice of the consumer's right to opt out of information sharing with such parties; (3) annual notice of the institution's privacy policy to any continuing customer; and (4) notice of changes in the institution's practices on information sharing. These requirements are subject to the PRA. The Rule does not require recordkeeping.
The FTC, together with the Federal financial agencies,
In order to ease the burden on entities that wanted to adopt the new model privacy form, the agencies developed an “Online Form Builder” that an entity can download and use to develop and print customized versions of a model
The burden estimates represent the FTC staff's best assessment, based on its knowledge and expertise relating to the financial institutions subject to the Commission's jurisdiction under this law. To derive these estimates, staff considered the wide variations in covered entities. In some instances, covered entities may make the required disclosures in the ordinary course of business, apart from the GLB Privacy Rule. In addition, some entities may use highly automated means to provide the required disclosures, while others may rely on methods requiring more manual effort. The burden estimates shown below include the time that may be necessary to train staff to comply with the regulations. These figures are averages based on staff's best estimate of the burden incurred over the broad spectrum of covered entities.
Staff retains its prior estimate of the number of entities each year that will address the GLB Privacy Rule for the first time (5,000) and its estimate of established entities already familiar with the Rule (100,000). While the number of established entities familiar with the Rule would theoretically increase each year with the addition of new entrants, staff retains its previous estimate of established entities given that a number of the established entities will close in any given year, and also given the difficulty of establishing a more precise estimate.
The combined effect of the availability of the model privacy form and the Online Form Builder has caused the FTC to revise its previous hourly burden estimates. Staff believes that the model form and form builder reduces the hours per new entrant respondent required for “Creating disclosure document or electronic disclosure (including initial, annual, and opt out disclosures).” In the FTC's 2008 clearance request, staff estimated 5 hours of clerical time and 10 hours of professional/technical time for this category. Staff now believes that the adoption of the model privacy form and the availability of the form builder simplify and automate much of this work, reducing the time needed to create the disclosure documents to 1 hour of clerical time and 2 hours of professional/technical time, a total savings of 12 burden hours per new entrant. If all 5,000 new entrants were to use the model privacy form and form builder, an estimated 60,000 hours would be saved.
Similarly, the FTC is adjusting its previous estimates of the burden hours for established entities. The 2008 PRA clearance for the privacy rule estimated 15 hours of clerical time and 5 hours of professional/technical time associated with “Changes to privacy policies and related disclosures” for approximately 1,000 established entity respondents, based on staff's assumption that no more than 1% of the estimated 100,000 established entity respondents would make additional changes to privacy policies at any time other than the occasion of the annual notice; thus, 1,000 entities. Staff believes the adoption of the model privacy form and the availability of the Online Form Builder reduces the time associated with the modification of the notices to 7 hours of clerical time and 3 hours of professional/technical time, a reduction of 10 hours per respondent. If all 1,000 established entities were to use the model form and the Online Form Builder, 10,000 hours would be saved.
The complete burden estimates for new entrants and established entities are detailed in the charts below.
Burden for established entities already familiar with the Rule predictably would be less than for start-up entities because start-up costs, such as crafting a privacy policy, are generally one-time costs and have already been incurred. Staff's best estimate of the average burden for these entities is as follows:
As calculated above, the total annual PRA burden hours and labor costs for all affected entities in a given year would be 1,930,000 hours and $45,922,820, respectively.
Because your comment will be made public, you are solely responsible for making sure that your comment doesn't include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment doesn't include any sensitive health information, like medical records or other individually identifiable health information. In addition, don't include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential. * * *,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, don't include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online, or to send them to the Commission by courier or overnight service. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “Paperwork Comment: FTC File No. P085405” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue, NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice of request for public comments regarding a new OMB information clearance.
Under the provisions of the Paperwork Reduction Act (44 U.S.C. chapter 35), the Regulatory Secretariat (MVCB) will be submitting to the Office of Management and Budget (OMB) a request to review and approve a new information collection requirement regarding Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions.
Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the FAR, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology.
Submit comments on or before June 13, 2011.
Submit comments identified by Information Collection 9000-00XX, Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions by any of the following methods:
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•
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Mr. Anthony Robinson, Procurement Analyst, Acquisition Policy Division, at telephone (202) 501-2658 or via e-mail to
This is a request for a new information collection requirement concerning the Office of Management and Budget (OMB) Control Number 9000-00XX, FAR Case 2008-025, Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions, (Final Rule). Section 841(a) requires the Administrator for Federal Procurement Policy to develop and issue a standard policy to prevent personal conflicts of interest by contractor employees performing acquisition functions closely associated with inherently governmental functions, and an associated personal conflicts-of-interest clause or set of clauses.
Under the final rule, contractors are required to notify contracting officers whenever they become aware of any personal conflict-of-interest violations by a covered employee. The objective of the notification requirement is to emphasize the critical importance of integrity in contracting and reduce the occurrence of personal conflict-of-interest violations by contractor employees performing acquisition-related functions.
In addition, contractors have the opportunity, in exceptional circumstances, to request mitigation or waiver of the personal conflict-of-interest standards. The information is used by the Government to evaluate the requested mitigation/waiver.
Pursuant to Public Law 111-347 (The James Zadroga 9/11 Health and Compensation Act of 2010) and the Federal Advisory Committee Act, as amended (5 U.S.C. App), the Director,
The WTC Health Program shall provide, beginning on July 1, 2011: (1) Medical monitoring and treatment benefits to eligible emergency responders and recovery and cleanup workers (including those who are Federal employees) who responded to the September 11, 2001, terrorist attacks; and (2) initial health evaluation, monitoring, and treatment benefits to residents and other building occupants and area workers in New York City, who were directly impacted and adversely affected by such attacks. This advisory committee will review scientific and medical evidence and make recommendations to the WTC Program Administrator on additional WTC Health Program eligibility criteria and additional WTC-related health conditions. The committee may be consulted on other matters as related to and outlined in the Act at the discretion of the WTC Program Administrator.
For information, contact Larry Elliott, Designated Federal Officer, World Trade Center Health Program Scientific/Technical Advisory Committee, National Institute for Occupational Safety and Health, HHS, CINC Building, ROBER Room 141, M/S C46, Cincinnati, Ohio 45226, telephone (513) 533-6891, or fax (513) 533-6826.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The meeting announced below concerns “Using Behavioral Economics to Promote Colorectal Cancer Screening in Disadvantaged Communities, SIP11-041, Feasibility Study to Link Data from the National Breast and Cervical Cancer Early Detection Program (NBCCEDP), the National Program of Cancer Registries (NPCR), and Medicare to Evaluate Screening Practice and Treatment Outcomes of Former NBCCEDP Clients, SIP11-043, Potential for Cancer Screening Interventions for Cancer Survivors Delivered Through Central Cancer Registries, SIP11-044, Panel B,” initial review.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the aforementioned meeting:
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Health Resources and Services Administration (HRSA), HHS.
Final Notice.
The Health Resources and Services Administration, HIV/AIDS Bureau (HAB) Policy Notice 99-02 established policies for the use of Ryan White HIV/AIDS Program funds authorized under Title XXVI of the Public Health Service (PHS) Act, for housing referral services and short-term or emergency housing needs. Amendment #1 to Policy Notice 99-02, effective March 27, 2008, modified Policy Notice 99-02 by imposing a 24-month cumulative cap on short-term and emergency housing assistance. The limit on benefits would have taken effect on March 27, 2010, and would have impacted individuals who were users of the funds for housing assistance. HRSA received comments from the public concerning the potential impact of the cap and the threat to the ability of clients receiving Ryan White HIV/AIDS Program funded services to receive housing services. In response, HRSA's Administrator directed that Policy Notice 99-02 Amendment #1 be rescinded, as published in the February 10, 2010,
On February 10, 2010, HRSA rescinded Amendment #1 to Policy Notice 99-02 effective immediately, as published in the
HRSA received numerous letters from consumer and housing advocates expressing their concerns regarding the potential effect on individuals reaching the 24-month cap to receive funding used for housing services. HRSA's Administrator responded to these concerns by conducting face-to-face meetings with housing advocates, consumers, and HIV/AIDS stakeholders/organizations. In addition, Ryan White HIV/AIDS Program Grantees were asked to submit their views on the Housing Policy's lifetime 24-month cap per household. Consequently, HAB collaborated with other federal agencies and discussed mutual concerns with the Assistant Secretary of the U.S. Department of Housing and Urban Development and the Director of Housing Opportunities for Persons with AIDS.
HAB's Associate Administrator solicited comments from all Part A, B and D Grantees asking them to review five principles that were under consideration for the revised Housing Policy and to provide comments, concerns, and additional considerations by May 21, 2010. The five principles were as follows:
1. Strengthen linkages to the U.S. Department of Housing and Urban Development's (HUD) programs, as well as state and local housing resources to provide longer-term assistance;
2. Minimize housing disruptions for people living with HIV/AIDS;
3. Integrate housing with a broader range of supports that collectively support individuals in maintaining their health;
4. Provide flexibility to respond to exceptional circumstances; and
5. Minimize the burden on Ryan White providers who are responsible for assisting HAB to implement any housing policy.
There were four responses—two from Ryan White HIV/AIDS Program Part A Grantees, one from a Part B Grantee and one letter from the National AIDS Housing Coalition's Executive Director. These responses supported the extension of funding for housing services beyond the 24-month cap due to exceptions,
The following policy establishes guidelines for allowable housing-related expenditures under the Ryan White HIV/AIDS Program. The purpose of all Ryan White HIV/AIDS Program funds is to ensure that eligible HIV-infected persons and families gain or maintain access to medical care.
A. Funds received under the Ryan White HIV/AIDS Program (Title XXVI of the Public Health Service Act) may be used for the following housing expenditures:
i. Housing referral services defined as assessment, search, placement, and advocacy services must be provided by case managers or other professional(s) who possess a comprehensive knowledge of local, state, and federal housing programs and how these programs can be accessed; or
ii. Short-term or emergency housing defined as necessary to gain or maintain access to medical care and must be related to either:
a. Housing services that include some type of medical or supportive service: including, but not limited to, residential substance treatment or mental health services (not including facilities classified as an Institution for Mental Diseases under Medicaid), residential foster care, and assisted living residential services; or
b. Housing services that do not provide direct medical or supportive services, but are essential for an individual or family to gain or maintain access and compliance with HIV-related medical care and treatment; necessity of housing services for purposes of medical care must be certified or documented.
B. Short-term or emergency assistance is understood as transitional in nature and for the purposes of moving or maintaining an individual or family in a long-term, stable living situation. Thus, such assistance cannot be permanent and must be accompanied by a strategy to identify, relocate, and/or ensure the individual or family is moved to, or capable of maintaining, a long-term, stable living situation.
C. Housing funds cannot be in the form of direct cash payments to recipients or services and cannot be used for mortgage payments.
D. The Ryan White HIV/AIDS Program must be the payer of last resort. In addition, funds received under the Ryan White HIV/AIDS Program must be used to supplement, but not supplant funds currently being used from local, state, and federal agency programs. Ryan White HIV/AIDS Program Grantees must be capable of providing HAB with documentation related to the use of funds as the payer of last resort and the coordination of such funds with other local, state, and federal funds.
E. Ryan White HIV/AIDS Program Grantees and local decision making planning bodies,
F. Grantees must develop mechanisms to allow newly identified clients access to housing services.
G. Upon request, Ryan White HIV/AIDS Program Grantees must provide HAB with an individualized written housing plan, consistent with this Housing Policy, covering each client receiving short term, transitional and emergency housing services.
H. Housing-related expenses are limited to Part A, Part B, and Part D of the Ryan White HIV/AIDS Program and are not allowable expenses under Part C. Part A and Part B Grantees must adhere to the Core Medical Services requirement; only 25 percent of Ryan White HIV/AIDS Program funding may be used for support services without a waiver.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), notice is hereby given of the following meeting:
The ACCV will meet on Thursday, June 9 from 1 p.m. to 5 p.m. (EDT) and on Friday, June 10 from 9 a.m. to 12 p.m. (EDT). The public can join the meeting via audio conference call by dialing 1-800-369-3104 on June 9 and 10 and providing the following information:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), 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 (5 U.S.C. App.), 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.
Notice is hereby given of a change in the meeting of the Risk, Prevention and Intervention for Addictions Study Section, June 2, 2011, 8 a.m. to June 3, 2011, 5 p.m., Mayflower Park Hotel, 405 Olive Way, Seattle, WA, 98101 which was published in the
The meeting will be held at the Renaissance Seattle Hotel, 515 Madison Street, Seattle, WA 98104. The meeting dates and time remain the same. The meeting is closed to the public.
Notice is hereby given of a change in the meeting of the Fogarty International Advisory Board, May 25, 20011, 2 p.m. to May 26, 2011, 3 p.m., National Institutes of Health, Lawton Chiles International House, Bethesda, MD 20892 which was published in the
This notice is being amended to one day now being May 26, 2011 with a closed session from 8:30 a.m. until 9:30 a.m. and the open session for the remainder of the day. The meeting will be held at the Lawton Chiles International House. The meeting is partially closed to the public.
Notice is hereby given of a change in the meeting of the Biostatistical Methods and Research Design Study Section, June 9, 2011, 8 a.m. to June 10, 2011, 5 p.m., Sheraton Delfina Santa Monica Hotel, 530 West Pico Boulevard, Santa Monica, CA 90405 which was published in the
The meeting will be one day only June 9, 2011. The meeting time and location remain the same. The meeting is closed to the public.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), 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 (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health (NIH), PHS, DHHS.
Notice of final actions under the
A proposal to certify
Moreover, it has been determined that certain research with this host-vector system does not present a significant risk to health and the environment and therefore will be exempt from the
In addition, the Office of Biotechnology Activities is updating Appendix D of the
The final action regarding certification of a new host-vector 1 system is effective April 14, 2011.
Background documentation and additional information can be obtained from the Office of Biotechnology Activities, National Institutes of Health, 6705 Rockledge Drive, Suite 750, MSC 7985, Bethesda, Maryland 20892; e-mail at
Under the
In making a determination regarding whether a host-vector combination provides moderate biological containment and therefore can appropriately be certified as a host-vector 1 system, the following information is considered: the host's natural habitat and growth requirements; its physiologic properties, particularly reproduction, survival, and mechanisms for exchange of genetic information; and the history of the particular strains and vectors to be used, including mutations that render this organism less able to survive or transmit genetic information.
The Office of Biotechnology Activities received a request from New England BioLabs (NEB) to certify
NEB noted that
On November 15, 2010, background information on these actions and instructions for submitting public comment were published in the
In its assessment of the request, the RAC considered a number of factors, including that: (1)
The RAC recommended that laboratory-adapted strains of
The following new appendix (C-IV) will be added to Appendix C of the
Experiments involving
The following categories are not exempt from the
In accordance with Section III-A of the
Appendix D-118. Dr. Harlan Caldwell at the Rocky Mountain Laboratories may conduct experiments to deliberately introduce a gene encoding tetracycline resistance into
Transportation Security Administration, DHS.
60-day Notice.
The Transportation Security Administration (TSA) invites public comment on one currently approved Information Collection Request (ICR), Office of Management and Budget (OMB) control number 1652-0001, abstracted below that we will submit to OMB for renewal in compliance with the Paperwork Reduction Act. The ICR describes the nature of the information collection and its expected burden. The collection involves air carriers maintaining an accounting system to account for the passenger civil aviation security service fees collected and reporting this information to TSA on a quarterly basis, as well as retaining the data used for these reports for a six-year rolling period.
Send your comments by July 11, 2011.
Comments may be e-mailed to
Joanna Johnson at the above address, or by telephone (571) 227-3651.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The September 11th Security Fee is used to help defray the costs of providing Federal civil aviation security services. This information collection requires air carriers to submit to TSA the amount of September 11th Security Fees they have imposed, collected, remitted, and refunded. The retention of this data is necessary for TSA to impose, collect, and regulate the Security Fee.
TSA rules require air carriers to impose and collect the fee on passengers, and to submit the fee to TSA by the final day of the calendar month following the month in which the fee was collected. 49 CFR 1510.13. Air carriers are further required to submit quarterly reports to TSA, which provide an accounting of the fees imposed, collected, and refunded to passengers and remitted to TSA. 49 CFR 1510.17. The fee amount collected from each passenger is $2.50 per enplanement originating in the United States. Passengers may not be charged for more than two enplanements per one-way trip or four enplanements per round trip. 49 CFR 1510.5.
Each air carrier that collects security service fees from more than 50,000 passengers annually is also required under 49 CFR 1510.15 to submit to TSA an annual independent audit, performed by an independent certified public accountant, of its security service fee activities and accounts. Although the annual independent audit requirements were suspended on January 23, 2003 (68 FR 3192), TSA conducts its own audits of the air carriers. 49 CFR 1510.11. Notwithstanding the suspension of the audit requirements, air carriers must establish and maintain an accounting system to account for the security service fees imposed, collected, refunded and remitted. 49 CFR 1510.15(a).
TSA is seeking renewal of this collection to require air carriers to continue submitting the quarterly reports to TSA, and to require air carriers to retain the information for a six-year rolling period. This requirement includes retaining the source information for the quarterly reports remitted to TSA, and the calculations and allocations performed to remit reports to TSA. Should the auditing requirement be reinstated, the requirement would include information and documents reviewed and prepared for the independent audit; the accountant's working papers, notes, worksheets, and other relevant documentation used in the audit; and, if applicable, the specific information leading to the accountant's opinion, including any determination that the accountant could not provide an audit opinion. Although TSA suspended the independent audits, TSA conducts audits of the air carriers, and therefore, requires air carriers to retain and provide the same information as required for the quarterly reports and independent audits.
TSA estimates that 196 total respondent air carriers will spend approximately 1 hour per quarterly report, for a total of 784 hours per year. Should TSA reinstate the audit requirement, TSA estimates that 105 air carriers would be required to submit annual audits, on which they would spend approximately 20 hours for preparation, for a total of 2,100 hours annually. TSA estimates the total for quarterly reports and annual audits is 2,884 hours.
For the quarterly reports and TSA's audits, TSA estimates that the 196 air carriers will each incur an average cost of $462.88 annually. This estimate includes $100 in staff time for preparation of the reports (at $25 per hour, each quarterly report is estimated to take 1 hour to prepare), $361.20 in annual records storage related costs, and $1.68 for postage for the report (4 stamps at 42 cents each). TSA estimates an aggregate annual cost of $90,724.48 for the airlines to prepare, submit, and store quarterly reports, and an aggregate cost of $272,173.44 for the three years of the renewal period.
Should TSA reinstate the annual audit requirement, TSA estimates total annual cost for this collection at $315,000 (105 air carriers, at an estimated rate of $150 per hour, at 20 hours per report). For the three-year period of the renewal, TSA estimates the total aggregate cost of the annual audit requirement to be $945,000, and $1,217,173.44 for the three-year extension of both quarterly reports and annual audits.
Transportation Security Administration, DHS.
60 day Notice.
The Transportation Security Administration (TSA) invites public comment on one currently approved Information Collection Request (ICR), Office of Management and Budget (OMB) control number 1652-0028, abstracted below that TSA will submit to OMB for renewal in compliance with the Paperwork Reduction Act (PRA). The ICR describes the nature of the information collection and its expected burden. The collection involves requesting, name, contact information, airline employee number, and Social Security number (last four digits) from flight and cabin crew members of air carriers to verify employment status to confirm eligibility to participate in voluntary advanced self-defense training provided by TSA. Eligible training participants are flight and cabin crew members of an airline conducting scheduled passenger operations. See 49 U.S.C. 44918. Additionally, each participant is asked to complete a voluntary course evaluation form after the training concludes.
Send your comments by July 11, 2011.
Comments may be e-mailed to
Joanna Johnson at the above address, or by telephone (571) 227-3651.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who
TSA requests this renewal so that TSA may continue confirming participants' eligibility and attendance for the training program, as well as to continue assessing training quality. TSA collects limited biographical information from flight and cabin crew members to confirm their eligibility to participate in this training; the information requested is the participant's name, contact information, airline employee number, and the last four digits of his or her Social Security number. TSA confirms the eligibility of the participant by contacting the participant's employer. Attendance is confirmed by comparing registration information against a sign-in sheet provided in the classroom. TSA also asks participants to complete an anonymous and voluntary evaluation form after participation in the training to assess the quality of the training. The estimated number of annual respondents is 3,000 and estimated annual burden is 750 hours. There is no estimated annual cost burden to respondents.
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of petitioner's desire to contest classification determination.
On February 18, 2009, the National Candle Association (“petitioner”) filed a domestic interested party petition pursuant to section 516, Tariff Act of 1930, as amended, and 19 CFR part 175 regarding the tariff classification of imported wickless wax objects identified in entry documents as “wax cylinders”, “wax pillars”, “wax blocks”, “wax forms”, “candle jars”, “candle holders”, “religious candle holders”, or “religious candle jars.” The petition challenged Customs and Border Protection's (“CBP's”) classification of wickless wax objects under heading 9602, of the Harmonized Tariff Schedule of the United States (“HTSUS”), as molded or carved articles of wax, and requested that all wickless wax objects be classified under subheading 3406.00.00, HTSUS, as candles, tapers, and the like.
On December 7, 2010, CBP denied the petition and affirmed its decision that wickless wax objects are classified under subheading 9602.00.40, HTSUS, as molded or carved articles of wax. Pursuant to 19 CFR 175.24, CBP is now providing notice of this decision and also providing notice of the receipt of petitioner's desire to contest this decision in court.
May 12, 2011.
Jean-Rene Broussard, Tariff Classification and Marking Branch, Regulations and Rulings, Office of International Trade, (202) 325-0284.
This document concerns the tariff classification of imported wickless wax objects by CBP and the desire of a domestic interested party to contest CBP's classification decision.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRIs taken in order. The Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.
The wickless wax objects that are the subject of the petition are petroleum based wax products that are in small molded shapes such as blocks, cylinders, columns, triangles, or bowls. The majority of these wickless wax objects are imported with a hole drilled into the center of them. These objects can be used as decorative items or for further production as candles.
CBP has issued numerous rulings on the classification of wickless wax objects.
On February 18, 2009, the National Candle Association, in accordance with section 516, Tariff Act of 1930, as amended (19 U.S.C. 1516), filed a domestic interested party petition requesting that CBP reclassify imported wickless wax objects under subheading 3406.00.00, HTSUS, which provides for candles, tapers, and the like. The 2011 column one, general rate of duty, under this provision is duty free. Subheading 9602.00.40 provides for molded or carved articles of wax. The 2011 column one, general rate of duty, for this provision is 1.8 percent
On January 5, 2010, in accordance with 19 CFR 175.21, CBP published a Notice of Receipt of a Domestic Interested Party Petition filed by petitioner in the
On December 7, 2010, CBP issued HQ H105015 which denied the domestic interested party petition and affirmed the tariff classification determination of the imported wickless wax objects as set forth in CBP's previously issued rulings. (A copy of this ruling and the comments submitted by the public can be found at
On January 5, 2011, the National Candle Association timely provided CBP with notice of its desire to contest HQ H105015 in the United States Court of International Trade. The petitioner has identified, in accordance with 19 U.S.C. 1516(c) and 19 CFR 175.23, five ports of entry where it intends to challenge CBP's classification of wickless wax objects identified in entry documentation as “wax cylinders”, “wax pillars”, “wax blocks”, “wax forms”, “candle jars”, “candle holders”, “religious candles holders”, or “religious candle jars” classified in heading 9602, HTSUS. The ports of entry are as follows: Los Angeles/Long Beach, California; New York, New York; Savannah, Georgia; Laredo, Texas; and Chicago, Illinois.
Upon application by the petitioner to any of the Port Directors of the ports listed above, the Port Director(s) must make available to the petitioner information on merchandise entered that meets the description in this notice so that the petitioner may determine whether the entry presented frames the issue that it wishes to present to the court.
As required by both the applicable statute and regulations, CBP is in receipt of the National Candle Association's letter, dated January 5, 2011, establishing the timely notice of its desire to contest in the Court of International Trade CBP's decision letter of HQ H105015 which held that the classification of imported wickless wax objects is under subheading 9602.00.40, HTSUS, as molded or carved articles of wax.
This notice is published in accordance with 19 U.S.C. 1516 and sections 175.23 and 175.24 of the CBP regulations (19 CFR 175.23-24).
U.S. Customs and Border Protection, Department of Homeland Security.
Announcement of the quota quantity of tuna in airtight containers for Calendar Year 2011.
Each year the tariff-rate quota for tuna described in subheading 1604.14.22, HTSUS, is based on the apparent United States consumption of tuna in airtight containers during the preceding Calendar Year. This document sets forth the tariff-rate quota for Calendar Year 2011.
Headquarters Quota Branch, Textile/Apparel Policy and Programs Division, Trade Policy and Programs, Office of International Trade, U.S. Customs and Border Protection, Washington, DC 20229, (202) 863-6560.
It has been determined that 18,148,537 kilograms of tuna in air-tight containers may be entered and withdrawn from warehouse for consumption during the Calendar Year 2011, at the rate of 6 percent
Office of the Assistant Secretary for Public Development and Research, HUD.
Notice.
The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Comment Due Date July 11, 2011.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Susan Brunson, Office of University Partnerships, Department of Housing and Urban Development, 451 7th Street, SW., Room 8226, Washington, DC 20410-6000.
The Department of Housing and Urban Development will submit the proposed
This Notice is soliciting comments from members of the public and affected agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (3) enhance the quality, utility, and clarity of the information to be collected; and (4) minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
This Notice also lists the following information:
Pub. L. 105-244.
Office of Fair Housing and Equal Opportunity, HUD.
Notice of Technical Correction to the Notice of Funding Availability (NOFA) for HUD's Fiscal Year (FY) 2010 Fair Housing Initiatives Program (FHIP) Enforcement Testing Technical Assistance (TA) Program.
On April 14, 2011, HUD posted the Notice of Funding Availability (NOFA) for the Fiscal Year (FY) 2010 Fair Housing Initiatives Program (FHIP) Enforcement Testing Technical Assistance (TA) Program to Grants.gov. The NOFA announced the availability of information on applicant eligibility, submission deadlines, funding criteria, and other program and application requirements.
The purpose of the program is to provide technical assistance to one or more entities to develop a course on Fair Housing Testing, and to conduct technical assistance to promote a greater and more consistent use of Testing Methodologies among FHIP organizations. Testing represents the most effective investigative tool in uncovering and corroborating claims of unlawful discrimination. Improving the quality and consistency of testing used by FHIP organizations will increase the persuasiveness and acceptance of tests in litigation. This is designed to provide FHIP organizations with the necessary tools to conduct, understand, and analyze testing with the stated goal of contributing to the Department's enforcement efforts.
The notice providing information regarding the application process, funding criteria and eligibility requirements, application and instructions can be found using the Department of Housing and Urban Development agency link on the Grants.gov/Find Web site at
The Catalogue of Federal Domestic Assistance (CFDA) number for the Lead Hazard Reduction Demonstration program is 14.900. The Catalogue of Federal Domestic Assistance (CFDA) number for the Lead Hazard Reduction Demonstration program is 14.905. Applications must be submitted electronically through
Questions regarding specific program requirements should be directed to the agency contact identified in the program NOFA. Program staff will not be available to provide guidance on how to prepare the application. Questions regarding the 2011 General Section should be directed to the Office of Grants Management and Oversight at (202) 708-0667 or the NOFA Information Center at 800-HUD-8929 (toll free). Persons with hearing or speech impairments may access these numbers via TTY by calling the Federal Information Relay Service at 800-877-8339.
Fish and Wildlife Service, Interior.
Notice of issuance of permits.
We, the U.S. Fish and Wildlife Service (Service), have issued the following permits to conduct certain activities with endangered species, marine mammals, or both. We issue these permits under the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA).
Brenda Tapia, Division of Management Authority, U.S. Fish and Wildlife Service, 4401 North Fairfax Drive, Room 212, Arlington, VA 22203; fax (703) 358-2280; or e-mail
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2280 (fax);
On the dates below, as authorized by the provisions of the ESA (16 U.S.C. 1531
Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents to:
Fish and Wildlife Service, Interior.
Notice of receipt of applications for permit.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications to conduct certain activities with endangered species. With some exceptions, the Endangered Species Act (ESA) prohibits activities with listed species unless a Federal permit is issued that allows such activities. The ESA requires that we invite public comment before issuing these permits.
We must receive comments or requests for documents on or before June 13, 2011. We must receive requests for marine mammal permit public hearings, in writing, at the address shown in the
Brenda Tapia, Division of Management Authority, U.S. Fish and Wildlife Service, 4401 North Fairfax Drive, Room 212, Arlington, VA 22203; fax (703) 358-2280; or e-mail
Brenda Tapia, (703) 358-2104 (telephone); (703) 358-2280 (fax);
Send your request for copies of applications or comments and materials concerning any of the applications to the contact listed under
Please make your requests or comments as specific as possible. Please confine your comments to issues for
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 (see
Comments, including names and street addresses of respondents, will be available for public review at the address listed under
To help us carry out our conservation responsibilities for affected species, the Endangered Species Act of 1973, section 10(a)(1)(A), as amended (16 U.S.C. 1531
The applicant requests a permit to export one captive-born aye-aye (
The applicant requests a permit to import 2 captive bred female snow leopards (
The applicant requests a permit to import a sport-hunted trophy of one male bontebok (
Bureau of Land Management, Interior.
Notice of filing of plats of survey.
The Bureau of Land Management (BLM) will file the plat of survey of the lands described below in the BLM Montana State Office, Billings, Montana, on June 13, 2011.
Protests of the survey must be filed before June 13, 2011 to be considered.
Protests of the survey should be sent to the Branch of Cadastral Survey, Bureau of Land Management, 5001 Southgate Drive, Billings, Montana 59101-4669.
Randy Thomas, Cadastral Surveyor,Branch of Cadastral Survey, Bureau of Land Management, 5001 Southgate Drive, Billings, Montana 59101-4669, telephone (406) 896-5134 or (406) 896-5009. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 to contact the above individual during normal business hours. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
This survey was executed at the request of the Superintendent, Fort Peck Agency, through the Rocky Mountain Regional Director, Bureau of Indian Affairs, and was necessary to determine boundaries of trust or tribal interest lands.
The plat, in two sheets, representing the corrective dependent resurvey of the west half of the line between sections 8 and 17, the line between sections 7 and 18, the south half of the line between sections 7 and 8, the adjusted original meanders of the former left bank of the Missouri River, downstream, through section 18, the meanders of the 2002-2005 left bank of the Missouri River, downstream, through section 18, the limits of erosion, downstream, through section 18, and a certain division of accretion line in section 18, the dependent resurvey of a portion of the subdivision of section 8, the subdivision of section 8, and the survey of the meanders of the present left bank of the Missouri River and informative traverse, downstream, through section 8, Township 27 North, Range 51 East, Principal Meridian, Montana, was accepted April 1, 2011.
We will place a copy of the plat, in two sheets, and related field notes we described in the open files. They will be available to the public as a matter of information. If the BLM receives a protest against this survey, as shown on this plat, in two sheets, prior to the date of the official filing, we will stay the filing pending our consideration of the protest. We will not officially file this plat, in two sheets, until the day after we have accepted or dismissed all protests and they have become final, including decisions or appeals.
43 U.S.C. Chap. 3.
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management
The meeting will be held June 1, 2011, beginning at 9 a.m. with a 30-minute public comment period and will adjourn at 3 p.m.
The meeting will be in the Bureau of Land Management Butte Field Office (106 North Parkmont) in Butte, Montana.
This 15-member council advises the Secretary of the Interior on a variety of management issues associated with public land management in Montana. During these meetings the council will participate in/discuss/act upon several topics, including reports from the Bureau of Land Management's Butte, Missoula and Dillon field offices.
All RAC meetings are open to the public. The public may present written comments to the RAC. Each formal RAC meeting will also have time allocated for hearing public comments. Depending on the number of persons wishing to comment and time available, the time for individual oral comments may be limited.
David Abrams, Western Montana Resource Advisory Council Coordinator, Butte Field Office, 106 North Parkmont, Butte, Montana 59701, telephone 406-533-7617. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 to contact the above individual during normal business hours. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
James R. Holbein, Acting Secretary to the Commission, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's electronic docket (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server (
The Commission has received a complaint filed on Linex Technologies, Inc. on May 6, 2011. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain wireless communication devices and systems, components thereof, and products containing same. The complaint names as respondents Hewlett-Packard Company of Palo Alto, CA; Apple Inc. of Cupertino, CA; Aruba Networks, Inc. of Sunnyvale, CA; Meru Networks of Sunnyvale, CA and Ruckus Wireless of Sunnyvale, CA.
The complainant, proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five pages in length, on any public interest issues raised by the complaint. Comments should address whether issuance of an exclusion order and/or a cease and desist order in this investigation would negatively affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the orders are used in the United States;
(ii) Identify any public health, safety, or welfare concerns in the United States relating to the potential orders;
(iii) Indicate the extent to which like or directly competitive articles are produced in the United States or are otherwise available in the United States, with respect to the articles potentially subject to the orders; and
(iv) Indicate whether Complainant, Complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to an exclusion order and a cease and desist order within a commercially reasonable time.
Written submissions must be filed no later than by close of business, five business days after the date of publication of this notice in the
Persons filing written submissions must file the original document and 12 true copies thereof on or before the deadlines stated above with the Office of the Secretary. Submissions should refer to the docket number (“Docket No. 2802”) in a prominent place on the cover page and/or the first page. The Commission's rules authorize filing submissions with the Secretary by facsimile or electronic means only to the extent permitted by section 201.8 of the rules (see Handbook for Electronic Filing Procedures,
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of an expedited review pursuant to section 751(c)(3) of the Tariff Act of 1930 (19 U.S.C. 1675(c)(3)) (the Act) to determine whether revocation of the antidumping duty order on granular polytetrafluoroethylene resin from Italy would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
Stefania Pozzi Porter (202-205-3177;
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
This review is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.62 of the Commission's rules.
By order of the Commission.
On the basis of the record
The Commission instituted these reviews on June 1, 2010 (75 FR 30431) and determined on September 7, 2010 that it would conduct full reviews (75 FR 57815, September 22, 2010). Notice of the scheduling of the Commission's reviews and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission transmitted its determinations in these reviews to the Secretary of Commerce on May 6, 2011. The views of the Commission are contained in USITC Publication 4225 (May 2011), entitled
By order of the Commission.
Office on Violence Against Women, United States Department of Justice.
Notice of meeting.
This notice sets forth the schedule and proposed agenda of the forthcoming public meeting of the National Advisory Committee on Violence Against Women (hereinafter “NAC”).
The meeting will take place on Thursday, June 2 and Friday, June 3, 2011.
The meeting will take place at the Fairfax at Embassy Row Hotel, 2100 Massachusetts Avenue, NW., Washington, DC 20008. The public is asked to pre-register by May 27, 2011 for the meeting due to security considerations (see below for information on pre-registration).
Catherine Poston, Attorney Advisor, Office on Violence Against Women, United States Department of Justice, 145 N Street, NE., Suite 10W 121, Washington, DC 20530; by telephone at: (202) 514-5430; e-mail:
Notice of this meeting is required under section 10(a)(2) of the Federal Advisory Committee Act. The National Advisory Committee on Violence Against Women (NAC) was re-chartered on March 3, 2010 by the Attorney General. The purpose of this federal advisory committee is to provide advice and recommendations to the Department of Justice and the Department of Health and Human Services on how to improve the Nation's response to violence against women, with a specific focus on successful interventions with children and teens who witness and/or are victimized by domestic violence, dating violence, and sexual assault. The NAC will bring together experts, advocates, researchers, and criminal justice professionals for the exchange of innovative ideas and the development of practical solutions to help the federal government address and prevent these serious problems. This federal advisory committee will develop recommendations for successful interventions with children and teens who witness and/or are victimized by domestic violence, dating violence, and sexual assault. The NAC members will also examine the relationship between children and teens who are witnesses to or victims of such violence and the overall public safety of communities across the country.
This is the second meeting of the NAC and will include presentations by Department of Justice staff on federal efforts to address these problems, facilitated discussions on the experiences of youth victims (with a panel from the National Crittenton Foundation), research on children and youth exposed to violence (with a presentation from Dr. David Wolfe), and stalking and technology (with presentations from the National Network to End Domestic Violence and the Stalking Resource Center) and a discussion of the goals for the NAC. The Director of the Office on Violence Against Women, the Honorable Susan B. Carbon, serves as the Designated Federal Official of the NAC. Lori Crowder will serve as a facilitator at this meeting.
The NAC is also welcoming public oral comment at this meeting and has reserved an estimated 30 minutes for this purpose. Time will be reserved for public comment on June 2 and 3, 2011. See the section below for information on reserving time for public comment.
The meeting site is accessible to individuals with disabilities. Individuals who require special accommodation in order to attend the meeting should notify Catherine Poston no later than May 27, 2011.
Given the expected number of individuals interested in presenting comments at the meeting, reservations should be made as soon as possible. Persons unable to obtain reservations to speak during the meeting are encouraged to submit written comments, which will be accepted at the meeting location or may be mailed to the NAC, to the attention of Catherine Poston, Attorney Advisor, Office on Violence Against Women, United States Department of Justice, 145 N Street, NE., Suite 10W 121, Washington, DC 20530; by telephone at: (202) 514-5430; e-mail:
Notice.
The Department of Labor (DOL) is submitting a revision of the Bureau of Labor Statistics (BLS) sponsored information collection request (ICR) titled, “Consumer Price Index Commodities and Services Survey,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35).
Submit comments on or before June 13, 2011.
A copy of this ICR, with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained from the RegInfo.gov Web site,
Submit comments about this request to the Office of Information and Regulatory Affairs,
Contact Michel Smyth by telephone at 202-693-4129 (this is not a toll-free number) or by e-mail at
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. Each month, BLS data collectors called economic assistants visit or call thousands of retail stores, service establishments, rental units, and doctors' offices all over the United States to obtain information on the prices of the thousands of items used to track and measure price changes in the CPI. The collection of price data from retail establishments is essential for the timely and accurate calculation of the commodities and services component of the CPI. The CPI is then widely used as a measure of inflation, indicator of the effectiveness of government economic policy, deflator for other economic series, and as a means of adjusting dollar values.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information if the collection of information does not display a valid OMB control number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
On January 21, 2011, the Department of Labor issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of AT&T Services, Inc., Reynoldsburg, Ohio (subject firm). The Notice of determination was published in the
Pursuant to 29 CFR 90.18(c), reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The negative determination was based on the findings that the worker separations are not attributable to increased imports of services by the subject firm or a shift in the supply of services by the subject firm to a foreign country. Rather, the investigation established that the worker separations are attributable to the subject firm shifting customer care call services to other facilities within the United States. The investigation also revealed the firm is not a supplier or downstream producer to a firm that employed a worker group eligible to apply for Trade Adjustment Assistance (TAA).
In the request for reconsideration, the petitioners alleged that the subject firm has shifted services to a foreign country.
During the reconsideration, the Department received information that shows that AT&T Services, Inc. (and not AT&T) is the appropriate name of the firm, and the heading has been changed to properly reflect the firm's name.
Information obtained during the reconsideration investigation confirmed that all of the workers who worked at the subject firm are referred to as “Legacy T workers” and “Customer Sales and Service Specialists (CSSS)”; that none of the services previously supplied by the subject firm (or like or directly competitive services) was outsourced to a foreign country; and that AT&T managers did not train any call center managers in India. Rather, work previously performed at the subject firm was consolidated into three other AT&T call centers within the United States.
After reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of AT&T Services, Inc., Reynoldsburg, Ohio.
On October 7, 2010, the Department of Labor issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of the subject facilities. The workers are engaged in activities related to the supply of warehousing and distribution services related to automotive parts.
Pursuant to 29 CFR 90.18(c), reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified
The negative determination was based on the findings that there was no increase in imports of services like or directly competitive with those supplied by the subject workers and no shift to/acquisition from a foreign country by the workers' firm in the supply of services like or directly competitive with those supplied by the subject workers.
The request for reconsideration asserts that the workers are eligible to apply for Trade Adjustment Assistance (TAA) as adversely-affected secondary workers because they “provide replacement and accessory parts for new vehicles” and identified firms that employed worker groups eligible to apply for TAA.
Section 222(d) of the Act, 19 U.S.C. 2272(d), defines the term “Supplier” as “a firm that produces and supplies directly to another firm component parts for articles, or services used in the production of articles or in the supply of services, as the case may be, that were the basis for a certification of eligibility under subsection (a) [of Section 222 of the Act] of a group of workers employed by such other firm.”
Section 222(d) of the Act, 19 U.S.C. 2272(d), defines the term “Downstream Producer” as “a firm that performs additional, value-added production processes or services directly for another firm for articles or services with respect to which a group of workers in such other firm has been certified under subsection (a) [of Section 222 of the Act]” and defines the term “value-added production processes or services” to “include final assembly, finishing, testing, packaging, or maintenance or transportation services.”
During the reconsideration investigation, the Department received information that confirmed that the subject facilities are not a “supplier” or a “downstream producer” within the meaning of the Trade Act of 1974, as amended.
The subject facilities do not produce and directly supply component parts (or services) to a firm that both employed a worker group eligible to apply for TAA and directly used the component parts (or services) in the production of the article or in the supply of the service that was the basis for the TAA certification, and do not perform downstream producer services for a firm that both employed a worker group eligible to apply for TAA and directly used the service in the production of the article or in the supply of the service that was the basis for the TAA certification.
Rather, the subject facilities separate, consolidate and package finished parts that are produced by others, and ship the packages to Chrysler points of contacts, who then forward the packages to car dealerships who ordered the parts on behalf of the dealership's customers.
After reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Chrysler LLC, Mopar Parts Distribution Center in Center Line, Michigan (TA-W-70,949); Naperville, Illinois (TA-W-70,949A); New Boston, Michigan (TA-W-70,949B); Beaverton, Oregon (TA-W-70,949C0; Carrollton, Texas (TA-W-70,949D); Fontana, California (TA-W-70,949E); Lathrop, California (TA-W-70,949F); Denver, Colorado (TA-W-70,949G); Ontario, California ((TA-W-70,949H); Hazelwood, Missouri (TA-W-70,949I); Morrow, Georgia (TA-W-70,949J); Memphis, Tennessee (TA-W-70,949K); Tappan, New York (TA-W-70,949L); Mansfield, Massachusetts (TA-W-70,949M); Plymouth, Minnesota (TA-W-70,949N); Streetsboro, Ohio (TA-W-70,949O); Orlando, Florida (TA-W-70,949P); Milwaukee, Wisconsin (TA-W-70,949Q); Warren, Michigan (TA-W-70,949R); and Marysville, Michigan (TA-W-70,949S).
On October 18, 2010, the Department of Labor issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of Enesco, LLC, Gund Division, Distribution Center, Edison, New Jersey (Enesco-Edison). The Department's Notice was published in the
The initial investigation was initiated in response to a petition filed on February 17, 2010 by a State of Illinois Workforce Office on behalf of workers of Enesco, LLC, Itasca, Illinois. The petition alleges that “Enesco LLC production of giftware products is currently in China; the company has transferred Quality/Regulatory Compliance Department overseas as well in order to keep production and quality assurance testing in one location.”
Because the petitioner did not provide additional information regarding the worker group, the Department relied on publicly-available materials and the company official identified on the petition for information.
Although the company's headquarters are in Itasca, Illinois, the company official provided information that revealed that the separated workers worked in the distribution center that was part of the Gund Division in Edison, New Jersey (TA-W-73,479). Based on this information, the Department determined that the subject worker group was not Enesco LLC, Itasca, Illinois but Enesco-Edison.
In the request for reconsideration, the State Workforce Office stated that a worker who was in the “Regulatory Compliance/Quality Assurance Department of Enseco, LLC, located in Itasca, Illinois” had “spent over 6 hours on the conference call with China, training someone to perform her duties.” The State Workforce Office further alleges that “all of the Regulatory Compliance/Quality Assurance Department of Enseco LLC was transferred to Hong Kong.” In support of the allegations, the State Workforce Office provided a document titled “Letter to supplier regarding QA & QC” that states “We have expanded our team both in China as well as in our Hong Kong office” (dated March 6, 2009).
Pursuant to 29 CFR 90.18(c), reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The initial negative determination was based on the findings that Enesco-Edison did not shift to/acquire from a foreign country the supply of services like or directly competitive with the services supplied by the workers; that the workers' separation, or threat of separation, was not related to an increase in imports of like or directly competitive services; and that the workers are not adversely affected secondary workers.
During the reconsideration investigation, the Department contacted Enesco, LLC and obtained information regarding Enesco, LLC, Itasca, Illinois (Enesco-Itasca) and the worker on whose behalf the petition and request for reconsideration were filed.
New information provided by the subject firm revealed that there is no Regulatory Compliance/Quality Assurance Department; that workers at Enesco-Itasca are separately identifiable by division and separately identifiable within each division by service supplied; and that the worker on whose behalf the petition and the request for reconsideration were filed worked in the logistics division of Enesco-Itasca and supplied quality control services related to the production of toys. Further, Enesco-Itasca does not produce toys; rather, Enesco-Itasca supplies services related to the sales, marketing and development of toys.
Additional information obtained during the reconsideration investigation revealed that the group eligibility
Although the Department was able to confirm separations at the Itasca, Illinois facility, the number or proportion of workers totally or partially separated, or threatened with such separation, at Enesco, LLC, Itasca, Illinois, does not meet the regulatory definition.
After reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Enesco, LLC, Itasca, Illinois (TA-W-73,479A).
On October 7, 2010, the Department of Labor issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of ASC Machine Tools, Inc., Spokane Valley, Washington (the subject firm). The Department's Notice was published in the
Pursuant to 29 CFR 90.18(c), reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The initial investigation resulted in a negative determination based on the finding that the subject firm sales decline was due to loss of export sales of foreign customers' bids to competitors outside the United States. The initial investigation also revealed decreased aggregate imports of metal cutting equipment during the relevant period, and that the subject firm is not a supplier or downstream producer for any firm that employed a worker group eligible to apply for Trade Adjustment Assistance (TAA).
The International Association of Machinists and Aerospace Workers, District Lodge 751, in the request for reconsideration, alleges increased imports from Sen Fung Rollform Machinery Corporation in Taiwan and Metform International in Canada. The request for reconsideration also articulates the concern that “the affected workers are being penalized due to the inconsistent customer base of the company” and requests that aggregate import data during 2007 and 2008 be considered.
During the reconsideration investigation, the Department received information that confirmed that Sen Fung Rollform Machinery Corporation in Taiwan and Metform International in Canada are competitors of the subject firm and not customers, as inferred in the request for reconsideration. As such, the Department did not conduct a bid survey in regard to the aforementioned companies.
In regard to the request that aggregate import data be considered for 2007 and 2008, the Department can not consider data for this period because it is outside of the relevant period under investigation.
29 CFR 90.2 states that increased imports means that imports have increased either absolutely or relative to domestic production compared to a representative base period. The representative base period shall be one year consisting of the four quarters immediately preceding the date which is twelve months prior to the date of the petition.
After reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of ASC Machine Tools, Inc., Spokane Valley, Washington.
On November 10, 2010, the Department issued a Notice of Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of Algonac Cast Products, Inc., Algonac, Michigan (subject firm) to apply for Trade Adjustment Assistance (TAA). The Department's Notice was published in the
During the reconsideration investigation, the Department received additional and new information from the subject firm, conducted an expanded customer survey, and analyzed import data of like or directly competitive articles.
Section 222(a)(1) has been met because a significant number or proportion of workers at the subject firm became totally or partially separated, or threatened with such separation.
Section 222(a)(2)(A)(i) has been met because subject firm sales and production decreased during 2009 from 2008 levels.
Section 222(a)(2)(A)(ii) has been met because there were increased imports of articles like or directly competitive with marine hardware produced by the subject firm.
Finally, Section 222(a)(2)(A)(iii) has been met because the increased imports contributed importantly to the worker group separations and sales/production declines at Algonac Cast Products, Inc., Algonac, Michigan.
After careful review of the additional facts obtained on reconsideration, I determine that workers and former workers of Algonac Cast Products, Inc.,
All workers of Algonac Cast Products, Inc., Algonac, Michigan, who became totally or partially separated from employment on or after August 18, 2009, through two years from the date of this revised certification, and all workers in the group threatened with total or partial separation from employment on date of certification through two years from the date of certification, are eligible to apply for adjustment assistance under Chapter 2 of Title II of the Trade Act of 1974, as amended.
On October 7, 2010, the Department issued a Notice of Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of Automotive Components Holdings, LLC, a Subsidiary of Ford Motor Company, Saline Plant Division, Saline, Michigan (subject firm) to apply for Trade Adjustment Assistance (TAA). The Department's Notice was published in the
New information provided by subject firm officials, the United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), Local 1124, and the State of Michigan workforce officials, revealed that workers and former workers of the subject firm, including workers whose wages were reported under Ford Company, Visteon, MSX International, W.J. O'Neil Company, and Unibar, meet the certification criteria.
During the reconsideration investigation, the Department received additional information regarding the subject firm's staffing arrangements with Ford Company and Visteon and how the Saline, Michigan facility operated in conjunction with affiliated production facilities, including those that have employed worker groups eligible to apply for TAA.
Criterion I has been met because a significant number or proportion of workers at the subject firm were totally separated.
Criterion II has been met because sales and production of interior automotive component parts at the subject firm decreased absolutely during the relevant period.
Criterion III has been met because imports of articles like or directly competitive with the interior automotive component parts produced by Automotive Components Holdings, LLC, a Subsidiary of Ford Motor Company, Saline Plant Division, Saline, Michigan, increased during the relevant period and contributed importantly to worker separations at the Saline, Michigan facility.
After careful review of the additional facts obtained on reconsideration, I determine that workers and former workers of Automotive Components Holdings, LLC, a Subsidiary of Ford Motor Company, Saline Plant Division, Saline, Michigan, who are engaged in employment related to the production of interior automotive component parts, meet the worker group certification criteria under Section 222(a) of the Act, 19 U.S.C. 2272(a).
In accordance with Section 223 of the Act, 19 U.S.C. 2273, I make the following certification:
All workers of Automotive Components Holdings, LLC, a Subsidiary of Ford Motor Company, Saline Plant Division, including workers whose wages were reported under Ford Company, Visteon, MSX International, W.J. O'Neil Company, and Unibar, Saline, Michigan, who became totally or partially separated from employment on or after August 13, 2008, through two years from the date of this revised certification, and all workers in the group threatened with total or partial separation from employment on date of certification through two years from the date of certification, are eligible to apply for adjustment assistance under Chapter 2 of Title II of the Trade Act of 1974, as amended.
On March 18, 2011, the Department issued a Notice of Affirmative Determination Regarding Application for Reconsideration applicable to workers and former workers of Penske Logistics LLC, a subsidiary of General Electric/Penske Corporation, El Paso, Texas (subject firm). The Department's Notice was published in the
The negative determination was based on the findings that the subject firm did not shift to/acquire from a foreign country services like or directly competitive with the customer services supplied; that the workers' separation, or threat of separation, was not due to an increase in imports of like or directly competitive services; and that the workers were not eligible to apply for Trade Adjustment Assistance (TAA) as adversely-affected secondary workers.
On January 31, 2011, the three workers who filed the request for reconsideration filed a petition for TAA on behalf of the same worker group (TA-W-75,158). A certification applicable to the worker group covered by TA-W-75,158 (including on-site leased workers of Kelly Temporary Services and Manpower) was issued on February 23, 2011. The Department's Notice of Determination (TA-W-75,158) was published in the
Further investigation on administrative reconsideration would serve no purpose; therefore, the immediate investigation is terminated.
By application dated August 17, 2010, a company official requested administrative reconsideration of the affirmative determination regarding workers' eligibility to apply for Trade Adjustment Assistance (TAA) applicable to workers and former workers of the subject firm. The certification of eligibility was issued on July 30, 2010. The Department's Notice of determination was published in the
The initial investigation resulted in an affirmative determination based on the findings that a significant proportion or number of the workers at the subject firm were totally or partially separated, or threatened with such separation, that the subject firm shifted to a foreign country the production of articles like or directly competitive with those produced by the workers, and that the shift in production contributed importantly to worker group separations at the subject firm.
On August 18, 2010, the Department issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of the subject firm. The Department's Notice of determination was published in the
In the request for reconsideration, the company official requested that the Department rescind the affirmative determination regarding worker eligibility to apply for TAA. The company official stated that the shift in production abroad did not contribute importantly to worker separations because the production of the article that shifted employed a negligible number of workers and, when production shifted abroad, those workers were reassigned to other product lines.
Under 29 CFR 90.18(a), “Any worker, group of workers, certified or recognized union, or authorized representative of such worker group, aggrieved by a determination issued pursuant to the Act * * * may file an application for reconsideration of the determination * * *.”
Upon further review of the request for reconsideration, the Department determines that an employer's request for reconsideration of an affirmative determination is not in the best interest of the worker group and, therefore, the Department cannot infer that the employer is acting as an “authorized representative” of the worker group.
Further investigation on administrative reconsideration would serve no purpose; therefore, the investigation is terminated.
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95). 44 U.S.C. 3506(c)(2)(A). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Federal Contract Compliance Programs is soliciting comments concerning its proposal to extend the Office of Management and Budget (OMB) approval of the Non-construction Supply and Service Information Collection. A copy of the proposed information collection request can be obtained by contacting the office listed below in the addresses section of this Notice.
Written comments must be submitted to the office listed in the addresses section below on or before July 11, 2011.
You may submit comments, identified by Control Number 1250-0003, by either one of the following methods:
Debra A. Carr, Director, Division of Policy, Planning and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, NW., Washington, DC 20210. Telephone: (202) 693-0103 (voice) or (202) 693-1337 (TTY) (these are not toll-free numbers). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape or Disc), upon request, by calling (202) 693-0103 (not a toll-free number). TTY/TDD callers may call (202) 693-1337 (not a toll-free number) to obtain information or request materials in alternative formats.
I.
• Executive Order 11246, as amended (EO 11246);
• Section 503 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 793; and
• The affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212.
E.O. 11246 prohibits Federal contractors from discriminating against applicants and employees on the basis of race, color, religion, sex, or national origin. The E.O. 11246 applies to Federal contractors and subcontractors and to federally assisted construction contractors holding a Government contract of $10,000 or more, or Government contracts which have, or can reasonably be expected to have, an aggregate total value exceeding $10,000 in a 12-month period. The E.O. 11246 also applies to government bills of lading, depositories of Federal funds in any amount, and to financial institutions that are issuing and paying agents for U.S. Savings Bonds.
The ICR discussed below will address EO 11246, non-construction Supply and Service program, that is subject to the Paperwork Reduction Act of 1995 (PRA).
II. Review Focus: The Department of Labor is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the compliance and enforcement functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
III.
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.
The National Endowment for the Humanities.
Notice of additional meeting.
Pursuant to the provisions of the Federal Advisory Committee Act (Pub. L 92-463, as amended), notice is hereby given that the following meeting of the Humanities Panel will be held via telephone conference call from the Old Post Office, 1100 Pennsylvania Avenue, NW., Washington, DC 20506.
Michael P. McDonald, Advisory Committee Management Officer, National Endowment for the Humanities, Washington, DC 20506; telephone (202) 606-8322. Hearing-impaired individuals are advised that information on this matter may be obtained by contacting the Endowment's TDD terminal on (202) 606-8282.
The proposed meeting is for the purpose of advising the agency, under the National Foundation on the Arts and the Humanities Act of 1965, as amended, on the development of humanities programming and content for an upcoming
1.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 17a-13(b) (17 CFR 17a-13(b)) generally requires that, at least once each calendar quarter, all registered brokers and dealers physically examine and count all securities held, and that they account for all other securities not in their possession, but subject to the broker-dealer's control or direction. Any discrepancies between the broker-dealer's securities count and the firm's records must be noted and, within seven days, the unaccounted for difference must be recorded in the firm's records. Rule 17a-13(c) (17 CFR 240.17a-13(c)) provides that under specified conditions, the securities counts, examination, and verification of the broker-dealer's entire list of securities may be conducted on a cyclical basis rather than on a certain date. Although Rule 17a-13 does not require filing a report with the Commission, discrepancies between a broker-dealer's records and the securities counts may be required to be reported, for example, as a loss on Form X-17a-5 (17 CFR 248.617), which must be filed with the Commission under Rule 17a-5 (17 CFR 17a-5). Rule 17a-13 exempts broker-dealers that limit their business to the sale and redemption of securities of registered investment companies and interests or participation in an insurance company separate account and those who solicit accounts for federally insured savings and loan associations, provided that such persons promptly transmit all funds and securities and hold no customer funds and securities. The Rule also does not apply to certain broker-dealers required to register only because they effect transactions in securities futures products.
The information obtained from Rule 17a-13 is used as an inventory control device to monitor a broker-dealer's ability to account for all securities held, in transfer, in transit, pledged, loaned, borrowed, deposited, or otherwise subject to the firm's control or direction. Discrepancies between the securities counts and the broker-dealer's records alert the Commission and the Self Regulatory Organizations (“SROs”) to those firms having problems in their back offices.
Currently, there are approximately 5,030 broker-dealers registered with the Commission. However, given the variability in their businesses, it is difficult to quantify how many hours per year each broker-dealer spends complying with the Rule. As noted, the Rule requires a broker-dealer to account for all securities in its possession. Many broker-dealers hold few, if any, securities; while others hold large quantities. Therefore, the time burden of complying with the Rule will depend on respondent-specific factors, including size, number of customers, and proprietary trading activity. The staff estimates that the average time spent per respondent is 100 hours per year on an ongoing basis to maintain the records required under the Rule. This estimate takes into account the fact that more than half the 5,030 respondents—according to financial reports filed with the Commission—may spend little or no time in complying with the Rule, given that they do not do a public securities business or do not hold inventories of securities. For these reasons, the staff estimates that the total compliance burden per year is 503,000 hours (5,030 respondents × 100 hours/respondent).
The records required to be made by Rule 17a-13 are available only to Commission examination staff, state securities authorities, and the SROs. Subject to the provisions of the Freedom of Information Act, 5 U.S.C. 522, and the Commission's rules thereunder (17 CFR 200.80(b)(4)(iii)), the Commission does not generally publish or make available information contained in any reports, summaries, analyses, letters, or memoranda arising out of, in anticipation of, or in connection with an examination or inspection of the books and records of any person or any other investigation.
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Background documentation for this information collection may be viewed at the following link,
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 17a-2 requires underwriters to maintain information regarding stabilizing activities conducted in accordance with Rule 104. The collections of information under Regulation M and Rule 17a-2 are necessary for covered persons to obtain certain benefits or to comply with certain requirements. The collections of information are necessary to provide the Commission with information regarding syndicate covering transactions and penalty bids. The Commission may review this information during periodic examinations or with respect to investigations. Except for the information required to be kept under Rule 104(i) (17 CFR 242.104(i)) and Rule 17a-2(c), none of the information required to be collected or disclosed for PRA purposes will be kept confidential. The recordkeeping requirement of Rule 17a-2 requires the information be
There are approximately 745 respondents per year that require an aggregate total of 3,725 hours to comply with this rule. Each respondent makes an estimated 1 annual response. Each response takes approximately 5 hours to complete. Thus, the total compliance burden per year is 3,725 burden hours. The total compliance cost for the respondents is approximately $212,213.25, resulting in a cost of compliance for the respondent per response of approximately $284.85 (
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Background documentation for this information collection may be viewed at the following link,
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Exchange Act provides a framework for self-regulation under which various entities involved in the securities business, including national securities exchanges and national securities associations (collectively, self-regulatory organizations or “SROs”), have primary responsibility for regulating their members or participants. The role of the Commission in this framework is primarily one of oversight: The Exchange Act charges the Commission with supervising the SROs and assuring that each complies with and advances the policies of the Exchange Act.
The Exchange Act was amended by the Commodity Futures Modernization Act of 2000 (“CFMA”). Prior to the CFMA, federal law did not allow the trading of futures on individual stocks or on narrow-based stock indexes (collectively, “security futures products”). The CFMA removed this restriction and provides that trading in security futures products would be regulated jointly by the Commission and the Commodity Futures Trading Commission (“CFTC”).
The Exchange Act requires all SROs to submit to the SEC any proposals to amend, add, or delete any of their rules. Certain entities (Security Futures Product Exchanges) would be national securities exchanges only because they trade security futures products. Similarly, certain entities (Limited Purpose National Securities Associations) would be national securities associations only because their members trade security futures products. The Exchange Act, as amended by the CFMA, established a procedure for Security Futures Product Exchanges and Limited Purpose National Securities Associations to provide notice of proposed rule changes relating to certain matters.
The collection of information is designed to provide the Commission with the information necessary to determine, as required by the Act, whether the proposed rule change is consistent with the Act and the rules thereunder. The information is used to determine if the proposed rule change should remain in affect or abrogated.
The respondents to the collection of information are SROs. Five respondents file an average total of 12 responses per year. Each response takes approximately 13.25 hours to complete, which corresponds to an estimated annual response burden of 159 (12 responses × 13.25 hours) hours.
Compliance with Rule 19b-7 is mandatory. Information received in response to Rule 19b-7 shall not be kept confidential; the information collected is public information.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
The public may view the background documentation for this information collection at the following Web site,
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 18(a) and 61(a) of the Act.
PennantPark Investment Corporation (the “Company”), PennantPark SBIC GP, LLC (the “General Partner”), PennantPark SBIC LP (“PennantPark SBIC”) and PennantPark Investment Advisers, LLC (the “Investment Adviser”)
The Company requests an order to permit it to adhere to a modified asset coverage requirement.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on May 31, 2011 and should be accompanied by proof of service on the Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, 590 Madison Avenue, 15th Floor, New York, New York 10022.
Laura J. Riegel, Senior Counsel, at (202) 551-6873, or Dalia Osman Blass, Branch Chief, at (202) 551-6874 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The Company, a Maryland corporation, is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Act.
2. PennantPark SBIC, a Delaware limited liability company, is a small business investment company (“SBIC”) licensed by the Small Business Administration (“SBA”) to operate under the Small Investment Act of 1958 (“SBIA”). PennantPark SBIC is excluded from the definition of investment company by section 3(c)(7) of the Act. The Company directly owns 99% of PennantPark SBIC in the form of limited partnership interests. The General Partner, which is a wholly-owned subsidiary of the Company, owns 1% of PennantPark SBIC in the form of a general partnership interest. The Company is the sole member of the General Partner.
1. The Company requests an exemption pursuant to section 6(c) of the Act from the provisions of sections 18(a) and 61(a) of the Act to permit it to adhere to a modified asset coverage requirement with respect to any direct or indirect wholly owned subsidiary of the Company that is licensed by the SBA to operate under the SBIA as a SBIC and relies on Section 3(c)(7) for an exemption from the definition of “investment company” under the 1940 Act (each, a “SBIC Subsidiary”).
2. Section 18(a) of the Act prohibits a registered closed-end investment company from issuing any class of senior security or selling any such security of which it is the issuer unless the company complies with the asset coverage requirements set forth in that section. Section 61(a) of the Act makes section 18 applicable to BDCs, with certain modifications. Section 18(k) exempts an investment company operating as an SBIC from the asset coverage requirements for senior securities representing indebtedness that are contained in section 18(a)(1)(A) and (B).
3. Applicants state that the Company may be required to comply with the asset coverage requirements of section 18(a) (as modified by section 61(a)) on a consolidated basis because the Company may be deemed to be an indirect issuer of any class of senior security issued by PennantPark SBIC or another SBIC Subsidiary. Applicants state that applying section 18(a) (as modified by section 61(a)) on a consolidated basis generally would require that the Company treat as its own all assets and any liabilities held directly either by itself, by PennantPark SBIC, or by another SBIC Subsidiary. Accordingly, the Company requests an order under section 6(c) of the Act exempting the Company from the provisions of section 18(a) (as modified by section 61(a)), such that senior securities issued by each SBIC Subsidiary that would be excluded from the SBIC Subsidiary's asset coverage ratio by section 18(k) if it were itself a BDC would also be excluded from the Company's consolidated asset coverage ratio.
4. Section 6(c) of the Act, in relevant part, permits the Commission to exempt any transaction or class of transactions from any provision of the Act if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state
Applicants agree that any order granting the requested relief will be subject to the following condition:
The Company shall not issue or sell any senior security, and the Company shall not cause or permit PennantPark SBIC or any other SBIC Subsidiary to issue or sell any senior security of which the Company, PennantPark SBIC or any other SBIC Subsidiary is the issuer except to the extent permitted by section 18 (as modified for BDCs by section 61) of the Act; provided that, immediately after the issuance or sale by any of the Company, PennantPark SBIC or any other SBIC Subsidiary of any such senior security, the Company, individually and on a consolidated basis, shall have the asset coverage required by section 18(a) of the Act (as modified by section 61(a)). In determining whether the Company has the asset coverage on a consolidated basis required by section 18(a) of the Act (as modified by section 61(a)), any senior securities representing indebtedness of PennantPark SBIC or another SBIC Subsidiary shall not be considered senior securities and, for purposes of the definition of “asset coverage” in section 18(h), shall be treated as indebtedness not represented by senior securities.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend Rule 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and
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 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C.
The Commission approved Rule 80C on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 80C need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider Threshold Move percentage to the newly added securities. Accordingly, the Exchange proposes to delete Supplementary Material .10 to Rule 80C, as the text therein would no longer be necessary.
The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.
The Exchange proposes to include new subsections 80C(a)(i), (ii) and (iii) to reflect the distinction between the applicable Threshold Move percentages for current Pilot securities and the proposed new securities to be included within the Pilot.
The proposed changes to the Pilot, if approved, would require that the text of Rule 104(a)(1)(B)(iii) and (iv), which pertains to the pricing obligations that Designated Market Makers (“DMMs”) are required to adhere to, be amended to correct the cross-references therein to Rule 80C and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from Rule 104(a)(1)(B)(iii) and (iv) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 104(a)(1)(B)(iii) and (iv) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 80C is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 104(a)(1)(B)(iii) and (iv) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on DMM pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 104(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 2102 (Hours of Business) to expand the applicability of Trading Pauses to cover all NMS Stocks.
The text of the proposed rule change is available on the Exchange's Internet Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange proposes to amend ISE Rule 2102 to expand the applicability of Trading Pauses to cover all NMS Stocks.
The Exchange has continued to assess whether additional securities need to be added to the pilot and whether the parameters of Rule 2102 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange now proposes to include all NMS Stocks within the pilot that are not already included therein and to apply a wider Threshold Move percentage to the newly added securities. In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. Accordingly, the Exchange believes that broader Threshold Move percentages would be appropriate. Similarly, because leveraged ETPs trade at a ratio against the associated index, a broader Threshold Move percentage would also be appropriate for leveraged ETPs. The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more
Accordingly, with respect to expanding the applicability of Trading Pauses to include all NMS Stocks, the Exchange is proposing to amend Section (f)(4) of ISE Rule 2102 to reflect this change. With respect to widening the Threshold Move percentage for the newly added securities, the Exchange is not proposing a change to its rule text because the ISE is not a primary listing market for equity securities and is therefore not responsible for calculating the Threshold Moves to trigger a Trading Pause. The current rule text provides that the Exchange shall immediately institute a Trading Pause anytime an exchange-listed security moves by 10% or more within a five-minute period, as calculated by the primary listing market, therefore the widening of the Threshold Move percentages need not be reflected in the ISE's rule text as the newly proposed process conforms with the current rule text.
The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend NASDAQ Rule 4120(a)(11) to include additional securities in the pilot by which such rule operates and amend Rule 4613(a) to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 4120(a)(11).
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 4120(a)(11) to include additional securities in the pilot by which such rule operates and amend Rule 4613(a) to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 4120(a)(11).
The Commission approved Rule 4120(a)(11) on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 4120(a)(11) need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider price move percentage to the newly added securities. Accordingly, the Exchange proposes to delete language concerning the limited application of Rule 4120(a)(11) from the rule's text, as the text therein would no longer be necessary. The Exchange proposes that the price move required to trigger a trading pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.
The proposed changes to the Pilot, if approved, would require that the text of Rule 4613(a), which pertains to the pricing obligations that Market Makers are required to adhere to, be amended to correct the cross-references therein to Rule 4120(a)(11) and the price move thereunder. Specifically, the Exchange proposes to remove any text from Rule 4613(a) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 4613(a) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 4120(a)(11) is not in effect. The Exchange notes that part of this proposed change would be
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Commission a proposal to extend a pilot program previously approved by the Commission related to Rule 11.18, entitled “Trading Halts Due to Extraordinary Market Volatility,” to include additional securities in the pilot by which such rule operates. The Exchange also proposes to amend Rule 11.8, entitled “Obligations of Market Makers,” to conform certain of the
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to extend a pilot program previously approved by the Commission related to Rule 11.18, entitled “Trading Halts Due to Extraordinary Market Volatility,” to include additional securities in the pilot by which such rule operates. The Exchange also proposes to amend Rule 11.8, entitled “Obligations of Market Makers,” to conform certain of the percentages thereunder consistent with the proposed changes to the pilot.
The Commission approved Rule 11.18(d) on a pilot basis on June 10, 2010 to allow other national securities exchanges and FINRA to pause trading in an individual stock when the primary listing market for such stock issues a trading pause due to extraordinary market volatility (“Trading Pause”) in a security included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 11.18 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein. Accordingly, the Exchange proposes to modify the definition of “Circuit Breaker Securities” in Interpretation and Policy .05 to Rule 11.18 to include all NMS stocks. The Exchange is not proposing any other changes to the text of Rule 11.18 or the operation of the Pilot, and will continue to assess whether the parameters for invoking a Trading Pause continue to be appropriate and whether the parameters should be modified.
The proposed changes to the Pilot, if approved, would require that the text of Rule 11.8(d)(2)(D) and (E), which pertain to the pricing obligations that Market Makers
As set forth in the Exchange's current Rule, the pricing obligations applicable to quotations of Market Makers are based on the “Designated Percentage” and the “Defined Limit,” which are determined based on the applicable Trigger Percentage. Currently, the Exchange's formula for calculating the Designated Percentage is the Trigger Percentage minus 2%. The current formula for calculating the Defined Limit is the Trigger Percentage minus 0.5%. The Exchange proposes to apply the existing formulas for calculating the Designated Percentage and Defined Limit to all NMS stocks other than Low Priced securities. Thus, there will be no change to the existing Designated Percentage of 8% and Defined Limit of 9.5% for securities included in the S&P 500, the Russell 1000 or the specified list of ETPs (or 20% and 21.5% when trading pauses are not in effect). For newly added NMS stocks priced $1 or above, this formula will mean a Designated Percentage of 28% and a Defined Limit of 29.5%.
The Exchange proposes to add language stating that for Low Priced Securities the Designated Percentage
Similarly, and consistent with the rules of the primary listing markets, the Exchange proposes to state that with respect to securities included in S&P 500, the Russell 1000 or the specified list of ETPs, such products have different quotation requirements at the open and close of trading each day. Specifically, the Exchange proposes to state that with respect to such products, the quotation requirements apply with a Designated Percentage of 20% and a Defined Limit of 21.5% for times during Regular Trading Hours when stock pause triggers are not in effect under the rules of the primary listing market. For all other NMS stocks, the Designated Percentage and Defined Limit will not change for the open or the close of trading.
The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 11.8(d)(2)(D) and (E) would decrease slightly for the proposed new NMS stocks priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in 11.18 are within a narrower range than the percentages necessary to trigger a Trading Pause.
The Exchange also proposes to modify Rule 11.8(e), which describes an optional functionality that the Exchange offers to Exchange Market Makers to assist such Market Makers with maintenance of their quotations under Rule 11.8. Specifically, for Market Makers that utilize the functionality, the Exchange enters bids and offers at the Designated Percentage and cancels and replaces the bid or offer if it drifts away from the NBBO to the Defined Limit or away from the Designated Percentage towards the NBBO by a number of percentage points determined by the Exchange. If a bid or offer entered pursuant to proposed paragraph (e) is executed, the Exchange will re-enter a new bid or offer on behalf of a Market Maker. In order to reduce the operational burden on the Exchange, the Exchange proposes to use the same Designated Percentage and Defined Limit for all NMS stocks that are being added to the Pilot regardless of the price per share of such stocks. Accordingly, for purposes of its optional quotation functionality, the Exchange will use a consistent Designated Percentage of 28% and a consistent Defined Limit of 29.5% for all NMS stocks not included in S&P 500, the Russell 1000 or the specified list of ETPs. Market Makers managing their own quoting on the Exchange may still quote in accordance with the rule based on the Designated Percentage and Defined Limit established for Low Priced Securities (30% and 31.5%, respectively).
Finally, the Exchange proposes to simplify Rule 11.18 by adopting Interpretation and Policy .01, which will, in chart form, explicitly state the percentages that are applicable under the Rule for different types of securities and at different times.
The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
The Exchange does not believe that the proposed rule change imposes any burden on competition.
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
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
CHX proposes to amend CHX Article 20, Rule 2 to add all NMS stocks to the pilot program relating to individual securities circuit breakers and amend CHX Article 16, Rule 8 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to CHX Article 20, Rule 2. The text of this proposed rule change is available on the Exchange's Web site at (
In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange proposes to amend CHX Article 20, Rule 2 to include additional securities in the pilot by which such rule operates, to specify the thresholds used by the primary listing markets in determining when to pause trading and to amend CHX Article 16, Rule 8 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to CHX Article 20, Rule 2.
The Commission approved amendments to CHX Article 20, Rule 2 on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of CHX Article 20, Rule 2 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein. The Exchange is also proposing to amend the text of CHX Article 20, Rule 2 to specify the thresholds used by the primary listing markets in determining when to pause trading.
In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. Accordingly, the Exchange believes that broader Threshold Move percentages would be appropriate. Similarly, because leveraged ETPs trade at a ratio against the associated index, a broader Threshold Move percentage would also be appropriate for leveraged ETPs. Additionally, in those instances where such securities are priced below $1 and price movements equate to a higher percentage move, the Exchange believes
The proposed changes to the Pilot, if approved, would also require that the text of Article 16, Rule 8, which pertains to the pricing obligations that Market Makers are required to adhere to, be amended to adopt cross-references therein to CHX Article 20, Rule 2 and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from CHX Article 16, Rule 8 addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify CHX Article 16, Rule 8 by explicitly stating the percentages that are applicable thereunder and the times during the trading day when stock pause triggers are not in effect under CHX Article 20, Rule 2 (or comparable rule of another exchange). The Exchange notes that part of this proposed change would be substantive, in that the percentages under CHX Article 16, Rule 8 would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in CHX Article 16, Rule 8 are within a narrower range than the percentages necessary to trigger a Trading Pause.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were either solicited or received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Commission a proposal to extend a pilot program previously approved by the Commission related to Rule 11.18, entitled “Trading Halts Due to Extraordinary Market Volatility,” to include additional securities in the pilot by which such rule operates. The Exchange also proposes to amend Rule 11.8, entitled “Obligations of Market Makers,” to conform certain of the percentages thereunder consistent with the proposed changes to the pilot.
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to extend a pilot program previously approved by the Commission related to Rule 11.18, entitled “Trading Halts Due to Extraordinary Market Volatility,” to include additional securities in the pilot by which such rule operates. The Exchange also proposes to amend Rule 11.8, entitled “Obligations of Market Makers,” to conform certain of the percentages thereunder consistent with the proposed changes to the pilot.
The Commission approved Rule 11.18(d) on a pilot basis on June 10, 2010 to allow the Exchange to pause trading in an individual stock when the primary listing market for such stock issues a trading pause due to extraordinary market volatility (“Trading Pause”) in a security included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 11.18 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein. Accordingly, the Exchange proposes to modify the definition of “Circuit Breaker Securities” in Interpretation and Policy .05 to Rule 11.18 to include all NMS stocks. The Exchange is not proposing any other changes to the text of Rule 11.18 or the operation of the Pilot, and will continue to assess whether the parameters for invoking a Trading Pause continue to be appropriate and whether the parameters should be modified.
The proposed changes to the Pilot, if approved, would require that the text of Rule 11.8(d)(2)(D) and (E), which pertain to the pricing obligations that Market Makers
As set forth in the Exchange's current Rule, the pricing obligations applicable to quotations of Market Makers are based on the “Designated Percentage” and the “Defined Limit,” which are determined based on the applicable Trigger Percentage. Currently, the Exchange's formula for calculating the Designated Percentage is the Trigger Percentage minus 2%. The current formula for calculating the Defined
The Exchange proposes to add language stating that for Low Priced Securities the Designated Percentage will be 20 percentage points less than the Trigger Percentage and the Defined Limit will be 18.5 percentage points less than the Trigger Percentage. Accordingly, the Designated Percentage and Defined Limit would be 30% and 31.5%, respectively, for Low Priced Securities.
Similarly, and consistent with the rules of the primary listing markets, the Exchange proposes to state that with respect to securities included in S&P 500, the Russell 1000 or the specified list of ETPs, such products have different quotation requirements at the open and close of trading each day. Specifically, the Exchange proposes to state that with respect to such products, the quotation requirements apply with a Designated Percentage of 20% and a Defined Limit of 21.5% for times during Regular Trading Hours when stock pause triggers are not in effect under the rules of the primary listing market. For all other NMS stocks, the Designated Percentage and Defined Limit will not change for the open or the close of trading.
The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 11.8(d)(2)(D) and (E) would decrease slightly for the proposed new NMS stocks priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in 11.18 are within a narrower range than the percentages necessary to trigger a Trading Pause.
The Exchange also proposes to modify Rule 11.8(e), which describes an optional functionality that the Exchange offers to Exchange Market Makers to assist such Market Makers with maintenance of their quotations under Rule 11.8. Specifically, for Market Makers that utilize the functionality, the Exchange enters bids and offers at the Designated Percentage and cancels and replaces the bid or offer if it drifts away from the NBBO to the Defined Limit or away from the Designated Percentage towards the NBBO by a number of percentage points determined by the Exchange. If a bid or offer entered pursuant to proposed paragraph (e) is executed, the Exchange will re-enter a new bid or offer on behalf of a Market Maker. In order to reduce the operational burden on the Exchange, the Exchange proposes to use the same Designated Percentage and Defined Limit for all NMS stocks that are being added to the Pilot regardless of the price per share of such stocks. Accordingly, for purposes of its optional quotation functionality, the Exchange will use a consistent Designated Percentage of 28% and a consistent Defined Limit of 29.5% for all NMS stocks not included in S&P 500, the Russell 1000 or the specified list of ETPs. Market Makers managing their own quoting on the Exchange may still quote in accordance with the rule based on the Designated Percentage and Defined Limit established for Low Priced Securities (30% and 31.5%, respectively).
Finally, the Exchange proposes to simplify Rule 11.18 by adopting Interpretation and Policy .01, which will, in chart form, explicitly state the percentages that are applicable under the Rule for different types of securities and at different times.
The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
The Exchange does not believe that the proposed rule change imposes any burden on competition.
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
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange is proposing to amend CBOE Stock Exchange, LLC's (“CBSX”, the CBOE's stock trading facility) rules to include additional stocks in the individual stock trading pause pilot and to include certain conforming amendments to the CBSX Market-Maker quoting obligation provisions. The Exchange is also proposing certain other conforming and non-substantive amendments to CBSX's individual stock trading pause provisions and CBOE's options trading halt provisions. The text of the rule proposal is available on the Exchange's Web site (
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.
With respect to CBSX, the Exchange proposes to amend Rule 6.3C to include additional stocks in the pilot by which such rule operates and to amend Rules 53.23 and 53.56 to simplify certain aspects of the text while also conforming certain percentages thereunder to the proposed changes to Rule 6.3C. With respect to both CBSX and CBOE, the Exchange proposes to make certain other conforming and non-substantive changes to the text of Rules 6.3C and 6.3.06.
The Commission approved Rule 6.3C on a pilot basis on June 10, 2010 to provide for trading pauses in individual stocks due to extraordinary market volatility (“Trading Pause”) in all stocks included in the S&P 500 Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider Threshold Move percentage to the newly added stocks. Accordingly, the Exchange proposes to amend the text of Rule 6.3C to provide that the Threshold Move required to trigger an individual stock trading pause for the proposed new stocks, as calculated by the primary listing market, to be 30% or more for such stocks priced at $1 or higher and 50% or more for such stocks priced less than $1.
The Exchange proposes to include new subsections 6.3C.03(a), (b) and (c) to reflect the distinction between the applicable Threshold Move percentages for current Pilot stocks and the proposed new stocks to be included within the Pilot.
The proposed changes to the Pilot, if approved, would require that the text of Rules 53.23.01 and 53.56.01, which pertains to the pricing obligations that CBSX Market-Makers are required to adhere to, be amended to update the cross-references therein to Rule 6.3C and the Threshold Moves thereunder. Specifically, the Exchange proposes to remove any text from the two rules addressing NMS stocks that are not subject to the Pilot because no such stocks would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify the two rules by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 6.3C is not in effect.
The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,
CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange neither solicited nor received comments on the proposal.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
National Stock Exchange, Inc. (“NSX®” or “Exchange”) is proposing to amend Rule 11.20B to include additional securities in the pilot by which such rule operates and amend Rule 11.8 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 11.20B.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
With this rule change, the Exchange is proposing to amend Rule 11.20B to include additional securities in the pilot by which such rule operates and amend Rule 11.8 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 11.20B.
NSX Rule 11.20B (Trading Pauses in Individual Securities Due to Extraordinary Market Volatility) was approved by the Securities and Exchange Commission (the “Commission”) on June 10, 2010 on a pilot basis (“Pilot”) to end on December 10, 2010.
As the Exchange noted in its filing to adopt NSX Rule 11.20B, during the Pilot period, the Exchange, in conjunction with other markets in the national market system, would continue to assess whether additional securities need to be added and whether the parameters of the rule would need to be modified to accommodate trading characteristics of different securities. When initially adopted on June 10, 2010, the pilot included all securities included within the S&P 500® Index. On September 10, 2010 NSX Rule 11.20B was expanded to securities included in the Russell 1000® Index (“Russell 1000”) and specified Exchange Traded Products (“ETPs”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 11.20B need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein. In addition, a wider Threshold Move percentage would apply to the newly added securities. Because the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volume, the Exchange believes that broader Threshold Move percentages would be appropriate. Similarly, because leveraged ETPs trade at a ratio against the associated index, a broader Threshold Move percentage would also be appropriate for leveraged ETPs. Securities priced below $1 are proposed to have a higher Threshold Move than higher priced securities because lower-priced securities may tend to be more volatile, and price movements of lower-priced securities equate to a higher percentage move than a similar price change for a higher-priced security.
Accordingly, the Exchange proposes to expand the definition of the term “Circuit Breaker Securities” set forth in Commentary .05 to Rule 11.20 to include all NMS stocks. The Exchange
The proposed changes to the Pilot, if approved, would require that the text of Rule 11.8(a)(1)(B)(iv) and (v), which pertains to the pricing obligations that Market Makers are required to adhere to, be amended to correct the cross-references therein to Rule 11.20B and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from Rule 11.8(a)(1)(B)(iv) and (v) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 11.8(a)(1)(B)(iv) and (v) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 11.20B is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 11.8(a)(1)(B)(iv) and (v) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 11.8(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition.
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
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend NYSE Arca Equities Rule 7.11 to include additional securities in the pilot by which such rule operates and amend NYSE Arca Equities Rule 7.23 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 7.11. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and
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 7.11 to include additional securities in the pilot by which such rule operates and amend Rule 7.23 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 7.11.
The Commission approved Rule 7.11 on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 7.11 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider Threshold Move percentage to the newly added securities. Accordingly, the Exchange proposes to delete Commentary .01 to Rule 7.11, as the text therein would no longer be necessary.
The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.
The Exchange proposes to include new subsections 7.11(a)(i), (ii) and (iii) to reflect the distinction between the applicable Threshold Move percentages for current Pilot securities and the proposed new securities to be included within the Pilot.
The proposed changes to the Pilot, if approved, would require that the text of Rule 7.23(a)(1)(B)(iii) and (iv), which pertains to the pricing obligations that Market Makers are required to adhere to, be amended to correct the cross-references therein to Rule 7.11 and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from Rule 7.23(a)(1)(B)(iii) and (iv) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 7.23(a)(1)(B)(iii) and (iv) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 7.11 is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 7.23(a)(1)(B)(iii) and (iv) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 7.23(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2011-26. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Rule 3100(a)(4) to include additional securities in the pilot by which such rule operates.
The text of the proposed rule change is below. Proposed new language is italicized; proposed deletions are in brackets.
In circumstances in which the Exchange deems it necessary to protect investors and the public interest, and pursuant to the procedures set forth in paragraph (c):
(1)-(3) No change.
(4) If a primary listing market issues an individual stock trading pause in any of the Circuit Breaker Securities, as defined herein, the Exchange will pause trading in that security until trading has resumed on the primary listing market. If, however, trading has not resumed on the primary listing market and ten minutes have passed since the individual stock trading pause message has been received from the responsible single plan processor, the Exchange may resume trading in such stock. The provisions of this paragraph (a)(4) shall be in effect during a pilot set to end on the earlier of August 11, 2011 or the date on which a limit up/limit down mechanism to address extraordinary market volatility, if adopted, applies. During the pilot, the term “Circuit Breaker Securities” shall mean
(b)-(c) No change.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 3100(a)(4) to include additional securities in the pilot by which such rule operates.
On June 10, 2010, the Commission granted accelerated approval, for a pilot period to end December 10, 2010, of proposed rule changes submitted by the BATS Exchange, Inc., NASDAQ OMX BX, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., International Securities Exchange LLC, The NASDAQ Stock Market LLC (“NASDAQ”), New York Stock Exchange LLC (“NYSE”), NYSE Amex LLC (“NYSE Amex”), NYSE Arca, Inc. (“NYSE Arca”), and National Stock Exchange, Inc. (collectively, the “Exchanges”), to pause trading during periods of extraordinary market volatility in S&P 500 stocks.
In connection with its resumption of trading of NMS Stocks through the NASDAQ OMX PSX system, the Exchange adopted Rule 3100(a)(4) so that it could participate in the pilot program.
The Exchanges have continued to assess whether additional securities need to be added to the Pilot and whether the parameters of the Circuit Breaker Pilot needs to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchanges are proposing to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider price move percentage to the newly
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to modify its fee schedule applicable to use of the Exchange effective May 2, 2011, in order to amend its pricing to add displayed liquidity. The Exchange currently maintains a tiered pricing structure applicable to added displayed liquidity in securities priced $1.00 and above, under which any Member adding a daily average of 10 million shares or more of liquidity (including displayed and non-displayed liquidity) during a month is able to add displayed liquidity without charge, while any Member adding a daily average of less than 10 million shares of liquidity during a month is charged $0.0002 per share. The Exchange proposes to replace its existing tiered pricing structure with a structure that allows Members to add liquidity free of charge to the extent such liquidity sets the national best bid or offer (the “NBBO Setter Program”) so long as the Member submitting the order achieves the applicable average daily volume (“ADV”) requirement, as described below.
An order that is entered at the most aggressive price both on the BYX order book and according to then-current consolidated data from the applicable securities industry processor (“SIP”) will be determined to have set the national best bid or offer for purposes of the NBBO Setter Program without regard to whether a more aggressive order is entered prior to the original order being executed. The Exchange's affiliate, BATS Exchange, Inc., has adopted similar pricing for its options platform (“BATS Options”).
In conjunction with the adoption of the NBBO Setter Program, the Exchange proposes to modify the volume requirement of the tiered pricing structure from an ADV requirement of at least 10 million shares added per day in a given month to an ADV requirement of at least 0.1% of the total consolidated volume (“TCV”) during the month. Accordingly, rather than basing its pricing structure on a static number of shares, the Exchange proposes to modify its tiered pricing structure such that it is based on TCV, and is thus variable based on overall volumes in the securities industry. To illustrate the Exchange's application of TCV, if the overall volume of securities traded as reported by all exchanges and trade reporting facilities is 100 billion shares in a given month, this amount will be used as the TCV against which the Exchange's tiered pricing will be measured for all trading activity during the month. The amount of overall TCV in the month will be divided by the number of trading days to determine average TCV; for instance, 100 billion shares divided by 20 trading days is an average TCV of 5 billion shares per day. Using these volumes as an example, to reach the Exchange's proposed tier of 0.10% of average TCV, and thus qualify for the NBBO Setter Program, a Member would need to have an ADV of at least 5 million shares traded on BYX per day. If, in the next month, volumes doubled, and the TCV for the month was 200 billion shares, then a Member would need to have an ADV of at least 10 million shares traded on BYX per day to have an ADV equal to 0.10% of average TCV. The Exchange believes that basing its tiered pricing on TCV rather than a specific number of shares is a preferable measure of overall activity given the fluctuation of volumes in the securities industry. Further, subject to increased volumes in the securities industry, a volume requirement of 0.10% of average TCV is likely less than 10 million shares per day, and is thus a reduction from the Exchange's current volume requirement for tiered pricing.
In addition, the Exchange proposes to adopt definitions for both ADV and TCV. For purposes of the fee schedule, the proposed definition of ADV is average daily volume calculated as the number of shares added or removed, combined, per day on a monthly basis. The Exchange currently applies its tiered pricing structure based on added shares only. Accordingly, in addition to 0.10% of TCV likely being a lower requirement than 10 million shares per day (absent a significant increase in volumes) the proposed tiered rates will also be easier to achieve because all shares traded, added and removed, will be included in the calculation of ADV. The Exchange proposes to make clear in the definition of ADV that routed contracts are not included in the Exchange's calculation of ADV, but rather, only volume executed on the Exchange counts towards a Member's ADV. The Exchange also proposes to allow affiliated entities to aggregate their order flow for purposes of the Exchange's determination of ADV with respect to pricing tiers if such entities provide prior notice to the Exchange. Specifically, to the extent two or more affiliated companies maintain separate memberships with the Exchange and can demonstrate their affiliation by showing they control, are controlled by, or are under common control with each other, the Exchange will permit such Members to count overall volume of the affiliates in calculating ADV. The Exchange will verify such affiliate using a Member's Form BD, which lists control affiliates.
As proposed, TCV is defined as total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply.
The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.
The establishment of the NBBO Setter Program may result in a small increase in fees for Members currently reaching the Exchange's 10 million share ADV tier who are able to add displayed liquidity without a fee. Although such Members (and likely several Members not currently reaching such tier) will likely meet the volume requirement of the NBBO Setter Program, as proposed, only those executions that were the result of such a Member adding liquidity and that set the NBBO will be added without fee. Nonetheless, the Exchange's standard displayed liquidity adding fee of $0.0002 per share still remains lower than other markets that impose a fee to add liquidity, such as EDGA Exchange ($0.00025 charge per share) and NASDAQ OMX BX ($0.0014 charge per share). Additionally, the Exchange believes that the NBBO Setter Program will incentivize the entry of more aggressive orders that will create tighter spreads, benefitting both Members and public investors. Also, to the extent the proposed changes will result in increased fees charged to Members, the Exchange believes that any additional revenue it receives will allow the Exchange to devote additional capital to its operations and to continue to offer competitive pricing, which, in turn, will benefit Members of the Exchange.
The Exchange believes that the new tier rate based on TCV represents a fair and equitable allocation of reasonable dues, fees, and other charges as it is aimed at incentivizing liquidity for high volume providers, which results in increased volume on BYX. By combining this volume tier with the NBBO Setter program, the Exchange is incentivizing aggressively priced liquidity from such liquidity providers. The increased, aggressively priced liquidity benefits all investors by deepening BYX's liquidity pool, supporting the quality of price discovery, promoting market transparency and improving investor protection. Volume-based discounts such as the liquidity adding fee tier maintained by the Exchange have been widely adopted by numerous exchanges, and are equitable and not unreasonably discriminatory because they are open to all members on an equal basis and provide discounts that are reasonably related to the value to an exchange's market quality associated with higher levels of market activity, such as higher levels of liquidity provision and introduction of higher volumes of orders into the price and volume discovery process. Accordingly, the Exchange believes that the proposal is not unreasonably discriminatory because it is consistent with the overall goals of enhancing market quality. Additionally, the Exchange believes that the adoption of a definition for TCV will help to avoid potential confusion regarding the Exchange's fee schedule.
The proposed language permitting aggregation of volume amongst corporate affiliates for purposes of the ADV calculation is intended to avoid disparate treatment of firms that have divided their various business activities between separate corporate entities as compared to firms that operate those business activities within a single corporate entity. By way of example, many firms that are Members of the Exchange operate both a market making desk and a public customer business within the same corporate entity. In contrast, other firms may be part of a corporate structure that separates those business lines into different corporate affiliates, either for business, compliance or historical reasons. Those corporate affiliates, in turn, are required to maintain separate memberships with the Exchange in order to access the Exchange. Absent the proposed policy, such corporate affiliates would not receive the same treatment as firms operating similar business lines within a single entity that is a Member of the Exchange. Accordingly, the Exchange believes that its proposed policy is fair and equitable, and not unreasonably discriminatory. In addition to ensuring fair and equal treatment of its Members, the Exchange does not want to create incentives for its Members to restructure their business operations or compliance functions simply due to the Exchange's pricing structure.
The Exchange does not believe that the proposed rule change imposes any burden on competition.
No written comments were solicited or received.
Pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the 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 e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The purpose of the proposed rule change is to provide flexibility to OCC with respect to its obligations to pay settlement amounts to clearing members generally as well as in emergency situations.
In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
The purpose of this rule change is to revise OCC's By-Laws and Rules to provide flexibility to OCC with respect to its obligations to pay settlement amounts to clearing members generally as well as in emergency situations. The proposed rule amendments would change the current daily deadline for OCC to pay settlement amounts to clearing members from 10 a.m. to 1 p.m. (All times referred to in this filing are Central Time). In addition, in the event that an emergency condition exists, the Board of Directors (“Board”) or an authorized executive officer of OCC would be authorized to extend OCC's obligation to pay settlement amounts to clearing members beyond the 1 p.m. deadline.
Currently, each business day morning, OCC is obligated to collect cash owed by its clearing members for the prior day's settlement activity by 9 a.m. OCC, in turn, is obligated to pay cash owed to its clearing members for the prior day's settlement activity by 10 a.m. This one-hour window is designed to ensure that OCC has collected all required settlement funds before having to disburse any settlement funds to its clearing members. Daily settlement activity includes obligations relating to: (1) The net premium payments arising from the prior day's option purchases and sales, (2) the mark-to-market of futures contracts and stock loan positions, and (3) exercises and assignments of cash-settled option contracts.
OCC's settlement banks routinely approve and are required to honor the associated settlements made by OCC and OCC's clearing members within these time frames. On most business days, the entire bank approval process, which irrevocably obligates each settlement bank to make settlement, is completed by 8:30 a.m.
Under OCC's rules, a failure by OCC to pay its daily settlement obligations to clearing members by 10 a.m. constitutes a default. During discussions amongst OCC's senior management of various potential extreme default and liquidity squeeze scenarios, including the possible default of one of OCC's largest clearing members, OCC analyzed the risk associated with not being able to immediately access liquidity resources in time to meet the 10 a.m. deadline for OCC to pay settlement amounts to clearing members. The deadline may be difficult to meet if, for example, OCC learned of a default near the 9 a.m. deadline. In such a circumstance, OCC would have only one hour or less (considering the time needed to process and communicate information) to access the funds necessary to meet the 10 a.m. deadline.
OCC's immediate liquidity resources rely heavily upon its $2.0 billion revolving credit facility (backed by Treasuries held in the clearing fund). A one-hour advance notice is required prior to OCC drawing funds from the credit facility. Beyond the credit facility, it would likely take more than one hour to raise cash by borrowing against the remaining clearing fund Treasuries (
The main benefit of moving the deadline to 1 p.m. for OCC to pay clearing members settlement amounts is that it allows up to four hours (rather than one) within which OCC can meet its daily settlement requirement without being required to declare an emergency in order to do so. In addition, based on discussions with its settlement banks,
OCC also has incorporated in its rules the authority to extend the deadline for it to pay settlement amounts to clearing members to the close of the Federal Reserve Banks' Fedwire Funds Service on a settlement day, if necessary, during an emergency situation.
For drafting clarity and economy, the specific settlement times have been removed from the applicable rules, a new definition of “settlement day” has been created, and a revised definition of “settlement time” has been inserted in Article I of the By-Laws.
OCC believes the proposed rule changes are consistent with the requirements of Section 17A of the Act
OCC does not believe that the proposed rule change would impose any burden on competition.
Written comments relating to the proposed rule change have not been solicited or received. OCC will notify the Commission of any written comments received by OCC.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change; or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commissions Internet comment form (
Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-OCC-2011-05 and should be submitted on or before June 2, 2011.
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 is filing this proposed rule change to establish the Midpoint Peg Post-Only Order as a new order type. NASDAQ proposes to implement the rule change on May 9, 2011 or as soon thereafter as practicable. The text of the proposed rule change is available 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.
In order to provide enhanced functionality, NASDAQ proposes to adopt an additional order type known as the Midpoint Peg Post-Only Order. Like a regular Midpoint Peg Order, a Midpoint Peg Post-Only Order is a non-displayed order that is priced at the midpoint between the national best bid and best offer (“NBBO”) (as determined using the consolidated tape). However, like a Post-Only Order, the Midpoint Peg Post-Only Order does not remove liquidity from the System upon entry if it would lock a non-displayed order on the NASDAQ Market Center system (the “System”). Rather, the Midpoint Peg Post-Only Order will post and lock the pre-existing order, but will remain undisplayed.
Midpoint Peg Post-Only Orders that post to the book and lock a pre-existing non-displayed order will execute against an incoming order only if the price of the incoming buy (sell) order is higher (lower) than the price of the pre-existing order. This restriction ensures that the non-displayed Midpoint Peg Post-Only Order will not execute before an order already on the book unless the incoming order against which it executes has price priority over the already posted order. For example, if the NBBO is $1.10 bid and $1.11 offer, and there is a non-displayed Midpoint Peg Order to buy on the book at $1.105, an incoming Midpoint Peg Post-Only Order to sell will also post to the book at $1.105 and will not execute. If another Midpoint Peg Order to buy is entered, it would also post to the book, rather than executing against the Midpoint Peg Post-Only Order. On the other hand, an order to buy at $1.11 would execute against the Midpoint Peg Post-Only Order, receiving $0.005 price improvement. Thus, the order provides a means by which a market participant may offer price improvement in exchange for receiving greater certainty with respect to its trading costs.
If, on the other hand, a Midpoint Peg Order and a Midpoint Peg Post-Only Order are locked, and a Midpoint Peg Order is entered on the same side of the market as the Midpoint Peg Post-Only Order, the new order will execute against the original Midpoint Peg Order. Thus, in the above example, if a Midpoint Peg Order to buy at $1.105 is locked by a Midpoint Peg Post-Only Order to sell at $1.105, a subsequent Midpoint Peg Order to sell at $1.105 would execute against the original buy order. This is the case because the market participant entering the Midpoint Peg Post-Only Order has expressed its intention not to execute against posted liquidity, and therefore cedes execution priority to the new order.
A Midpoint Peg Post-Only Order will only be posted to the book at a price of more than $1. Accordingly, if the midpoint between the NBBO for a particular stock is $1 or less, all Midpoint Peg Post-Only Orders for that stock will be rejected or cancelled, as applicable. This limitation reflects the fact that the difference between the inside market and the midpoint for stocks at this price level is likely to be extremely small, and therefore the price improvement opportunities associated with the order in such stock are unlikely to justify making the order available. NASDAQ's opening cross (Rule 4752), halt and imbalance cross (Rule 4753), and closing cross (Rule 4754) require various ongoing calculations of the best bid and offer within NASDAQ. For purposes of these calculations, a Midpoint Peg Post-Only Order to buy (sell) that is locking another non-displayed order shall be deemed to have a price equal to the price of the highest sell order (lowest buy order) that would be eligible to execute against the Midpoint Peg Post-Only Order in such circumstances.
The proposed order is virtually identical to functionality previously introduced by the National Stock Exchange (“NSX”).
NASDAQ believes that such orders serve a valid purpose in the current market environment. Although Rule 610 limits access fees, market participants remain focused on their trading costs, and in a pricing environment characterized by fees on one side of a trade being used to fund rebates on the other side,
NASDAQ believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
NASDAQ 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 Midpoint Peg Post-Only Order will enhance the functionality offered by NASDAQ to its members, thereby promoting its competitiveness with other exchanges and non-exchange trading venues.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend EDGA Rules 11.13 and 11.14 to include additional securities in the pilot by which such rule operates. The text of the proposed rule change is attached as Exhibit 5 and is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements.
The Exchange proposes to amend EDGA Rules 11.13 and 11.14 to include additional securities in the pilot by which such rule operates.
EDGA Rule 11.14 allows the Exchange to provide for uniform market-wide trading pause standards for individual securities in the S&P 500 Index, securities included in the Russell 1000® Index (“Russell 1000”), and specified Exchange Traded Products (“ETP”) that experience rapid price movement (collectively known as “Circuit Breaker Securities”). Pursuant to Rule 11.14, the Exchange is allowed to pause trading in any Circuit Breaker Securities when the primary listing market for such stock issues a trading pause in any Circuit Breaker Securities.
EDGA Rule 11.14 was approved by the Commission on June 10, 2010 on a pilot basis to end on December 10, 2010.
As the Exchange noted in its filing to adopt EDGA Rule 11.14, during the pilot period, the Exchange would continue to assess whether additional securities need to be added and whether the parameters of the rule would need to be modified to accommodate trading characteristics of different securities. The original pilot list of securities was all securities included in the S&P 500® Index (“S&P 500”). As noted in comment letters to the original filing to adopt EDGA Rule 11.14, concerns were raised that including only securities in the S&P 500 in the pilot rule was too narrow. In particular, commenters noted that securities that experienced volatility on May 6, 2010, including ETFs, should be included in the pilot.
In response to these concerns, various exchanges and national securities associations collectively determined to expand the list of pilot securities to include securities in the Russell 1000 (“Russell 1000”) and specified ETPs to the pilot beginning in September 2010.
As noted above, during the pilot, the Exchange continued to re-assess, in consultation with other markets whether: (i) Specific ETPs should be added or removed from the pilot list; (ii) the parameters for invoking a trading pause continue to be the appropriate standard; and (iii) the parameters should be modified.
The Exchange has continued to assess whether additional securities need to be added to the pilot and whether the parameters of Rule 11.14 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the pilot that are not already included therein. In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. As a result, the Exchange notes that the primary listing markets will also apply a wider Trading Pause Trigger Price, as defined in Rule 11.13(c)(4), to the newly added
The Exchange is not proposing any other changes to the text of Rules 11.13, 11.14, or the operation of the pilot, and will continue to assess whether the parameters for invoking a Trading Pause continue to be appropriate and whether the parameters should be modified.
The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend EDGX Rules 11.13 and 11.14 to include additional securities in the pilot by
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 self-regulatory organization has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements.
The Exchange proposes to amend EDGX Rules 11.13 and 11.14 to include additional securities in the pilot by which such rule operates.
EDGX Rule 11.14 allows the Exchange to provide for uniform market-wide trading pause standards for individual securities in the S&P 500 Index, securities included in the Russell 1000® Index (“Russell 1000”), and specified Exchange Traded Products (“ETP”) that experience rapid price movement (collectively known as “Circuit Breaker Securities”). Pursuant to Rule 11.14, the Exchange is allowed to pause trading in any Circuit Breaker Securities when the primary listing market for such stock issues a trading pause in any Circuit Breaker Securities.
EDGX Rule 11.14 was approved by the Commission on June 10, 2010 on a pilot basis to end on December 10, 2010.
As the Exchange noted in its filing to adopt EDGX Rule 11.14, during the pilot period, the Exchange would continue to assess whether additional securities need to be added and whether the parameters of the rule would need to be modified to accommodate trading characteristics of different securities. The original pilot list of securities was all securities included in the S&P 500® Index (“S&P 500”). As noted in comment letters to the original filing to adopt EDGX Rule 11.14, concerns were raised that including only securities in the S&P 500 in the pilot rule was too narrow. In particular, commenters noted that securities that experienced volatility on May 6, 2010, including ETFs, should be included in the pilot.
In response to these concerns, various exchanges and national securities associations collectively determined to expand the list of pilot securities to include securities in the Russell 1000 (“Russell 1000”) and specified ETPs to the pilot beginning in September 2010.
As noted above, during the pilot, the Exchange continued to re-assess, in consultation with other markets whether: (i) Specific ETPs should be added or removed from the pilot list; (ii) the parameters for invoking a trading pause continue to be the appropriate standard; and (iii) the parameters should be modified.
The Exchange has continued to assess whether additional securities need to be added to the pilot and whether the parameters of Rule 11.14 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the pilot that are not already included therein. In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. As a result, the Exchange notes that the primary listing markets will also apply a wider Trading Pause Trigger Price, as defined in Rule 11.13(c)(4), to the newly added securities.
The Exchange is not proposing any other changes to the text of Rules 11.13, 11.14, or the operation of the pilot, and will continue to assess whether the parameters for invoking a Trading Pause continue to be appropriate and whether the parameters should be modified.
The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend IM-4120-3 to include additional securities in the pilot by which such rule operates and amend Rule 4613(a) to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to price move percentages that trigger a circuit breaker pilot pause.
The text of the proposed rule change is below. Proposed new language is italicized; proposed deletions are in brackets.
The provisions of paragraph (a)(11) of this Rule shall be in effect during a pilot set to end on the earlier of August 11, 2011 or the date on which a limit up/limit down mechanism to address extraordinary market volatility, if adopted, applies. During the pilot, the term “Circuit Breaker Securities” shall mean
A member registered as an Equities Market Maker shall engage in a course of dealings for its own account to assist in the maintenance, insofar as reasonably practicable, of fair and orderly markets in accordance with this Rule.
(1) No change.
(2) Pricing Obligations. For NMS stocks (as defined in Rule 600 under Regulation NMS) a Market Maker shall adhere to the pricing obligations established by this Rule during Regular Trading Hours; provided, however, that such pricing obligations (i) shall not commence during any trading day until after the first regular way transaction on the primary listing market in the security, as reported by the responsible single plan processor, and (ii) shall be suspended during a trading halt, suspension, or pause, and shall not re-commence until after the first regular way transaction on the primary listing market in the security following such halt, suspension, or pause, as reported by the responsible single plan processor.
(A)-(C) No change.
(D) For purposes of this Rule, the [term] “Designated Percentage” shall
(E) For purposes of this Rule, the [term] “Defined Limit” shall
(F)-(K) No change.
(b)-(e) No change.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend IM-4120-3 to include additional securities in the pilot by which such rule operates and amend Rule 4613(a) to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to price move percentage triggers of the trading pause recognized under Rule 4120(a)(11).
The Commission approved Rule 4120(a)(11) on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchanges have continued to assess whether additional securities need to be added to the Pilot and whether the parameters of the Pilot needs to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchanges are proposing to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider price move percentage to the newly added securities.
The NYSE, NYSE Amex, NYSE Arca, and NASDAQ, as the listing markets, are proposing to set the price move required to trigger a trading pause for the proposed new securities to be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.
The proposed changes to the Pilot, if approved, would require that the text of Rule 4613(a), which pertains to the pricing obligations that Market Makers are required to adhere to, be amended to correct the cross-references therein to Rule 4120(a)(11) and the price move thereunder. Specifically, the Exchange proposes to remove any text from Rule 4613(a) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 4613(a) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 4120(a)(11) is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 4613(a) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on Market Maker pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 4613(a) are within a narrower range than the percentages necessary to trigger a Trading Pause.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend FINRA Rule 6121 (Trading Halts Due to Extraordinary Market Volatility) to expand the scope of the trading pause pilot to include all NMS stocks covered by the trading pause pilot rules of a primary listing market and FINRA Rule 6272 (Character of Quotations) to conform the quotation requirements on the Alternative Display Facility (“ADF”) to those in place on the national securities exchanges.
The text of the proposed rule changes is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
FINRA proposes to amend FINRA Rule 6121.01 to expand the scope of the trading pause pilot to include all NMS stocks covered by the trading pause pilot rules of a primary listing market.
FINRA Rule 6121.01 provides that if a primary listing market has issued an individual stock trading pause under its rules, FINRA will halt trading otherwise than on an exchange in that security until trading has resumed on the primary listing market. The pilot was developed and implemented as a market-wide initiative by FINRA and other self-regulatory organizations (“SROs”) in consultation with Commission staff, and is currently only applicable to the S&P 500® Index,
FINRA, in coordination with other SROs, now is expanding the scope of the trading pause pilot to include all NMS stocks that are not already included therein. In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or the pilot list of ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. Accordingly, consistent with the approach of the primary listing markets, broader threshold move percentages would be appropriate for these securities.
FINRA and the other SROs continue to assess the effect of the trading pause pilot on the marketplace, whether other initiatives should be adopted in lieu of the current pilot,
In 2010, the SEC also approved amendments to FINRA Rule 6272 to ensure consistency in quotation requirements across markets by imposing the same limitations on a Registered Reporting ADF Market Maker's quotations on the ADF that apply to market makers on national securities exchanges.
FINRA has requested that the Commission approve the proposed rule change on an accelerated basis, so that it may become operative on a pilot basis as soon as possible.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend Rule 80C—NYSE Amex Equities to include additional securities in the pilot by which such rule operates and amend Rule 104—NYSE Amex Equities to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and
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 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C.
The Commission approved Rule 80C on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (“Trading Pause”) in all securities included within the S&P 500® Index (“S&P 500”) (“Trading Pause Pilot” or “Pilot”).
The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 80C need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider Threshold Move percentage to the newly added securities. Accordingly, the Exchange proposes to delete Supplementary Material .10 to Rule 80C, as the text therein would no longer be necessary.
The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.
The Exchange proposes to include new subsections 80C(a)(i), (ii) and (iii) to reflect the distinction between the applicable Threshold Move percentages for current Pilot securities and the proposed new securities to be included within the Pilot.
The proposed changes to the Pilot, if approved, would require that the text of Rule 104(a)(1)(B)(iii) and (iv), which pertains to the pricing obligations that Designated Market Makers (“DMMs”) are required to adhere to, be amended to correct the cross-references therein to Rule 80C and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from Rule 104(a)(1)(B)(iii) and (iv) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 104(a)(1)(B)(iii) and (iv) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 80C is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 104(a)(1)(B)(iii) and (iv) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on DMM pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 104(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On August 20, 2010, NASDAQ OMX BX, Inc. (the “Exchange” or “BX”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
On December 6, 2010, the Exchange submitted Amendment No. 1 to the proposed rule change.
The Exchange proposes to create a listing market, which will be called “the BX Venture Market.” Following Commission approval, the Exchange will announce the operational date of the new market in an Equity Trader Alert and press release. The proposed rules will become effective on the operational date.
The text of the proposed rule change is available 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.
In connection with the acquisition of the former Boston Stock Exchange by The NASDAQ OMX Group, Inc., the Exchange discontinued its listing marketplace and delisted all securities previously listed on the Exchange.
As discussed in more detail below, the Exchange will operate and regulate the BX Venture Market through regulatory contracts with FINRA and the NASDAQ Stock Market LLC, which will be in place prior to the Market becoming operational. While the Exchange will retain all legal responsibility for and control of the functions performed by these entities, it will leverage FINRA's expertise overseeing the over-the-counter markets, surveillance enhancements provided by the SMARTS Group,
Listing Requirements
The BX Venture Market would list Common Stock, Preferred Stock, Ordinary Shares, Shares or Certificates of Beneficial Interest of Trust, Limited Partnership Interests, American Depositary Receipts (ADR), American Depositary Shares (ADS), Units, Rights and Warrants. To be listed on the BX Venture Market, companies will need to meet the following qualitative listing standards, each of which is equivalent to the comparable listing standard of NASDAQ or is derived from the Federal securities laws:
(a) The company must be registered under Section 12(b) of the Act
(b) The company must have a fully independent Audit Committee comprised of at least three members and comply with the requirements of SEC Rule 10A-3, promulgated under the Act
(c) The company must have independent directors make compensation decisions for executive officers (proposed Rule 5605(d));
(d) The company will be prohibited from taking any corporate action with the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of an outstanding class of the company's common stock registered pursuant to Section 12 of the Act (proposed Rule 5640);
(e) The company's auditor will be required to be registered with the Public Company Accounting Oversight
(f) The company will be required to hold an annual shareholders' meeting and solicit proxies for each shareholders' meeting (proposed Rule 5620);
(g) The company will be required to obtain shareholder approval for the use of equity compensation (proposed Rule 5635);
(h) The company will be required to adopt a code of conduct, applicable to all directors, officers and employees (proposed Rule 5610);
(i) The company will be required to conduct an appropriate review and oversight of all related party transactions, to address potential conflict of interest situations (proposed Rule 5630);
(j) The company will be required to disclose material information through any Regulation FD compliant method (or combination of methods) (proposed Rule 5250(b) and IM-5250-1);
(k) The listed securities must be eligible for a Direct Registration Program operated by a clearing agency registered under Section 17A of the Act
(l) Public “shells” would not be allowed to list (proposed Rule 5103(b)); and
(m) The Exchange will conduct a public interest review of the company and significant persons associated with it (proposed Rules 5205(c) and 5104 and IM-5104-1). A company would not be eligible for listing if any executive officer, director, promoter, or control person was involved in any event described in Item 401(f)(2)-(8) of Regulation S-K that occurred during the prior five years (proposed Rule 5103(a)).
In addition, the BX Venture Market would apply the following quantitative listing standards, set out in proposed Rules 5505 and 5506 (initial listing) and 5550 (continued listing), which are designed to assure a minimum level of trading consistent with a public market for the securities:
(a) 200,000 publicly held shares;
(b) 200 public shareholders, at least 100 of which must be round lot holders for initial listing, and 200 public shareholders for continued listing;
(c) A market value of listed securities of at least $2 million for initial listing and $1 million for continued listing;
(d) Two market makers; and
(e) A minimum initial listing price of $0.25 per share for securities previously listed on a national securities exchange and $1.00 per share for securities not previously listed on a national securities exchange. For continued listing, securities will be required to maintain a minimum $0.25 per share bid price.
Further, with respect to companies not previously listed on a national securities exchange, the BX Venture Market will also require for initial listing that the company have either $1 million stockholders' equity or $5 million total assets, a one year operating history, and a plan to maintain sufficient working capital for the company's planned business for at least twelve months after the first day of listing.
The Exchange would also require that rights and warrants will only be eligible for initial and continued listing if the underlying security is listed on the BX Venture Market or is a covered security, as described in Section 18(b) of the Securities Act of 1933.
The proposed listing standards are designed to allow companies that are being delisted from another national securities exchange for failure to meet that exchange's quantitative listing requirements the opportunity to provide their investors with a better regulated, more transparent trading environment than may otherwise be available in the over-the-counter markets. The Exchange believes that allowing these companies to continue trading on a national securities exchange may enable some institutional investors to continue their ownership stake in the company, which could provide greater stability to the company's shareholder base and possibly avoid forced sales by such investors.
The Exchange recognizes that the listing requirements for the BX Venture Market will be lower than those of the NASDAQ Stock Market and other national securities exchanges, and that the market will, therefore, attract smaller, less liquid companies, which may create higher risks for investors. Mindful of these risks and the Exchange's objective to preserve the quality of and public confidence in its market, the Exchange has adopted rules to preclude investor confusion about BX Venture Market listings. The Exchange will also subject companies and associated individuals to a rigorous review process before approving a listing, and apply heightened regulatory scrutiny to listed Companies.
Similarly, in describing this listing venue, the Exchange will refer to it as the BX Venture Market and not as NASDAQ OMX BX. The Exchange will also prominently include information on its Web site describing the
To enforce these automatic bars, and to identify other public interest concerns that, while not triggering an automatic bar, may call for the use of the Exchange's discretionary authority to disapprove a listing, the Exchange will engage in a rigorous review of listing applications, which will include background checks of individuals associated with the company and the assistance of independent qualified third-party investigators.
Staff will also review the company's proxy disclosures to screen for events described pursuant to Item 401(f) of Regulation S-K under the Act. Moreover, it will conduct background checks of the company and affiliated individuals. This background investigation will be conducted by Staff members experienced in such reviews and will make use of public databases and other resources, such as Lexis-Nexis, the Web-CRD regulatory database, and web-based search engines, such as Google.
If the Exchange identifies a regulatory issue that triggers an automatic bar the application will be disapproved. If the Exchange identifies a regulatory event described pursuant to Item 401(f)(2)-(8) of Regulation S-K about an officer, director, promoter, or control person that occurred more than five years prior; or a history of regulatory misconduct by a person that is not an officer, director, promoter, or control person of the company but who has significant influence on or importance to the company, it will ordinarily exercise its discretionary authority to deny listing. However, if the Exchange determines that the information identified may not rise to the level requiring denial of the listing, or if it identifies any issue that raises potential public interest concerns about which it seeks additional information (such as, for example, media accounts of criminal allegations or improper business practices, or any indication of financial improprieties) it will refer the company to an independent qualified third party investigative firm for review. Any decision to list a company that has been referred to an independent investigative review based on the regulatory history of an associated individual that does not trigger an automatic bar, must be approved in writing by the Chief Regulatory Officer (“CRO”) of the Exchange. The CRO must also approve the listing of any company with an officer, director, promoter, or control person who has described a bankruptcy under Item 401(f)(1) of Regulation S-K. Finally, whenever Staff has identified a past violation or evasion of a corporate governance standard pursuant to its review of a formerly exchange-listed company's past corporate governance activities, but decides not to exercise its discretionary authority to deny listing, the listing must be approved in writing by the CRO. Documentation of the CRO's approvals will be maintained with the Exchange's listing file for the company.
These procedures and determinations shall be followed, as applicable, whenever a listed company names a new officer, director, promoter, or control person or describes an event pursuant to Item 401(f) of Regulation S-K under the Act, and whenever Staff, in the course of its on-going monitoring of listed Companies, identifies a potential public interest concern. These background procedures would also apply when a listed company combines or reverse-merges with a non-listed entity, resulting in a “change of control” transaction pursuant to Listing Rule 5110.
Pursuant to an intercompany regulatory services agreement that will be in place before the BX Venture Market is operational, Staff in NASDAQ's Listing Qualifications Department will be responsible for processing listings, conducting on-going compliance monitoring of listed companies, and implementing delistings. Notwithstanding the contractual arrangement, the Exchange retains ultimate legal responsibility for, and control of, these functions. The NASDAQ Listing Qualifications Department is presently comprised of 33 individuals, which include 13 continued listing analysts, four initial listing analysts, and an investigations group. This Staff is extremely experienced in regulatory analysis: the average person has over ten years of experience at NASDAQ and several have extensive backgrounds outside NASDAQ in investigating alleged violations of the Federal securities laws. The sophisticated technology used by this Department enables Staff to efficiently review public filings and identify and prioritize issues that may raise concerns under the listing standards, including public interest concerns. Among other things, this system is programmed to identify any quantitative deficiencies arising from the filings or from trading data, immediately notify the appropriate Staff, and keep an auditable record of how Staff treated the deficiency.
The proposed rules require, moreover, that the listing process will at all times be supervised by at least one person with substantial prior experience supervising such a program at a national securities exchange with a currently active listing program. The head of the Exchange's Listing Department, who will have no marketing responsibilities and will report to NASDAQ OMX's Chief Regulatory Officer, will be involved in all decisions concerning whether to permit or deny listing to a company based on a public interest concern. In addition, the investigations group must be supervised by at least one person with substantial prior regulatory experience at another national securities exchange or with an organization, such as the SEC's Enforcement Division or FINRA, which has securities-related enforcement responsibilities. Finally, the Exchange's Chief Regulatory Officer will be required to have had substantial prior regulatory experience with a national securities exchange or equivalent experience.
Should the workload resulting from the new BX Venture Market prove sufficiently high, the Exchange and NASDAQ have each committed to hiring additional staff, as necessary. In that regard, the staffing within Listing Qualifications is now, and will continue to be, reviewed regularly by NASDAQ's Chief Regulatory Officer and Regulatory Oversight Committee and will also be reviewed by the Exchange's Regulatory Oversight Committee.
The Exchange proposes that any company that meets the quantitative (e.g., financial) requirements for listing on NASDAQ will not be approved for listing on the BX Venture Market. This will assure that such companies only become listed on the exchange with higher listing standards.
Given that the Exchange expects to list companies that do not meet the quantitative listing requirements of the primary existing national securities exchanges, it is expected that BX Venture Market-listed companies will include smaller companies and companies facing business or other challenges. Thus, the proposed quantitative standards for the BX Venture Market were deliberately structured to be lower than those of the other primary exchanges. In that regard, the minimum price requirement for listing on the BX Venture Market will be $0.25 per share for a security previously listed on another national securities exchange and $1.00 per share for a security previously quoted in the over-the-counter market or listing in connection with its initial public offering. Until September 30, 2011, the Exchange would consider any company that was listed on another national securities exchange at any time since January 1, 2010, to be eligible to list with a $0.25 per share price. The Exchange believes it appropriate to consider a company delisted since January 1, 2010, as previously listed on another national securities exchange because the BX Venture Market would not have been available to such companies when they were delisted. A number of companies were delisted during 2010 as a result of difficulties arising from the financial crisis and this look-back will also allow these companies, which may have recovered but not yet meet the initial listing requirements of another exchange, to list on the BX Venture Market. Furthermore, the Exchange believes it is appropriate to continue this treatment until September 30, 2011, to assure that such companies have an adequate opportunity to learn about the BX
For continued listing, a security will be required to maintain a minimum $0.25 per share bid price.
To be eligible for initial listing, a company not previously listed on a national securities exchange must have at least a one year operating history, a minimum of either $1 million in stockholders' equity or $5 million in total assets, and demonstrate that it has a plan to maintain sufficient working capital for its business for at least twelve months after the first day of listing. The Exchange believes that these requirements will help assure that a company that was not previously subject to exchange regulation nonetheless has a credible and sustainable business.
The Exchange believes that the proposed public float, holder and market maker requirements, together with the minimum market value of listed securities requirement, will assure sufficient liquidity in listed securities. In that regard, the Exchange notes that the shareholder and publicly held shares requirements are comparable to, or higher than, requirements for listing a preferred stock or secondary class of common stock on the NASDAQ Capital Market, which require 100 round lot shareholders and 200,000 publicly held shares. The Exchange is not aware of any difficulties in the trading in securities meeting these requirements. Further, requiring two market makers will assure competing quotations for potential buyers and sellers of the securities listed on the BX Venture Market. Finally, the Exchange believes that the minimum market value of listed securities requirement will help assure that the company issuing the securities is of a sufficient size to generate interest from investors and market participants. While these proposed standards may be lower than those of other exchanges, investors will be protected by the fact that securities listed on the BX Venture Market would be considered penny stocks under Exchange Act Rule 3a51-1, unless they qualify for an exemption from the definition of a penny stock.
The BX Venture Market corporate governance requirements are generally comparable to those of the other exchanges. The Exchange would require that a listed company have an audit committee comprised of at least three independent directors that also meet the requirements of SEC Rule 10A-3.
The audit committee would be required to have a charter setting out its responsibilities, including the committee's purpose of overseeing the accounting and financial reporting processes of the company and the audits of the company's financial statements and the responsibilities and authority necessary to comply with SEC Rule 10A-3.
The Exchange would also require that independent directors make compensation decisions concerning the chief executive officer and other executive officers.
While the Exchange would require that a listed company have at least three independent directors to satisfy the audit committee requirement described above, it would not require that a majority of the company's board of directors be independent or an independent nomination committee because the Exchange believes those requirements could impose significant additional costs on these smaller companies and therefore discourage companies from pursuing an otherwise beneficial listing. In that regard, given the significant responsibilities imposed on audit and compensation committee members, directors who serve on these committees are sometimes reluctant to serve on other committees. As such, if the BX Venture Market were to also require an independent nominations committee, companies may have to increase the size of their boards and add additional independent directors. Similarly, requiring that independent directors comprise a majority of a company's board could also require companies to add additional independent directors. In each case, the need to add independent directors would impose additional costs on the company.
Companies listing on the BX Venture Market will be permitted to phase in compliance with the audit committee and compensation committee requirements following their listing. With respect to the audit committee requirements, a company listing in connection with its initial public offering would be required to have one independent director on the committee at the time of listing; a majority of independent members within 90 days of the date of effectiveness of the company's registration statement; and all independent members within one year of the date of effectiveness of the company's registration statement. For this purpose, a company will be considered to be listing in conjunction with an initial public offering only if it meets the conditions in SEC Rule 10A-3(b)(1)(iv)(A), namely that the company was not, immediately prior to the effective date of its registration statement, required to file reports with the Commission pursuant to Section 13(a) or 15(d) of the Act.
With respect to the compensation committee requirement, a company listing in connection with its initial public offering, upon emerging from bankruptcy, or that otherwise was not subject to a substantially similar requirement prior to listing (such as a company only traded in the over-the-counter market) would be required to have one independent director on the committee at the time of listing; a majority of independent members within 90 days of listing; and all independent members within one year of listing. For this purpose, a company will be considered to be listing in conjunction with an initial public offering if immediately prior to listing it does not have a class of common stock registered under the Act.
A company that transfers to the BX Venture Market from another national securities exchange with a substantially similar requirement will be immediately subject to the audit and compensation committee requirements, provided that the company will be afforded the balance of any grace period afforded by the other market.
The Exchange will require companies to adopt a code of conduct applicable to all directors, officers and employees.
In addition, the Exchange will require shareholder approval when a company adopts or materially amends a stock option or purchase plan or other equity compensation arrangement pursuant to which stock may be acquired by officers, directors, employees, or consultants.
Companies denied initial listing or delisted by the Exchange would be afforded an appeal process similar to that contained in the existing Rule 4800 Series of the Exchange's rules, which was modeled on the process available to companies listed on NASDAQ.
The Exchange represents that it will have in place before the BX Venture Market is operational a contractual arrangement with FINRA to regulate market activity on the BX Venture Market, as it does today for NASDAQ. FINRA's oversight will include review of trading that takes place on the over-the-counter market in securities listed on the BX Venture Market. Based on its breadth of experience overseeing the over-the-counter markets and advanced technology, FINRA will implement electronic surveillance patterns designed to detect a wide range of potential issues, including, for example, insider trading, front-running, fraud, auto-execution manipulation, mid-point cross manipulation, wash sales, layering, open/close marking, and Reg SHO clearing fails. FINRA intends to revise a number of its existing automated surveillance patterns to incorporate NASDAQ OMX BX trading activity and over-the-counter trading activity in issues eligible for trading on The BX Venture Market, and will develop and implement specific automated surveillance patterns to address any rule and functionality changes resulting from The BX Venture Market initiative. FINRA will enhance its review process by calibrating surveillance patterns to detect potential issues that may arise particularly in low priced, less liquid stocks. In addition, the Exchange and FINRA will leverage the expertise of SMARTS Group, a leading technology provider of market surveillance solutions to exchanges and regulators around the world,
The Exchange represents that an agreement with FINRA for these activities will be in place before the BX Venture Market begins operations. Notwithstanding the contractual arrangement with FINRA, the Exchange retains ultimate legal responsibility for and control of all regulatory functions for the Exchange.
The Exchange will monitor real-time trading of securities listed on the BX Venture Market, and plans to implement a broad suite of realtime surveillance patterns and functional analysis tools based on the most up-to-date technology solution, SMARTS.
The Exchange will provide a monthly report to the Directors of the Division of Trading and Markets and the Office of Compliance, Inspections and Examinations describing any significant developments on the BX Venture Market, including companies added or removed from the market during that period. In addition, the Exchange's Chief Regulatory Officer will provide quarterly reports to the Directors of the Division of Trading and Markets and the Office of Compliance, Inspections and Examinations describing the regulatory activities of the Exchange and FINRA during the prior quarter. The Exchange will also provide copies of the Listing Department's procedures manuals and surveillance procedures used by FINRA and the Exchange to the Commission's Office of Compliance, Inspections and Examinations. Finally, before the BX Venture Market is operational, the Exchange will represent, in a letter to the Staff in the Commission's Office of Compliance Inspections and Examinations, that it and FINRA have adequate regulatory procedures and programs in place to effectively regulate the BX Venture Market and its listing
The Exchange has committed to broad dissemination of quotation and last sale information about BX Venture Market listed securities to ensure that public investors and all market participants have all the information needed to make informed investing and trading decisions. Information about securities listed on the BX Venture Market will be disseminated via several mechanisms. First, BX Venture Market listed securities will have real-time consolidated market data for both quotes and trades consistent with that provided by the network processors for national market system securities. The Exchange notes that operation of the BX Venture Market will be conditioned by the Commission upon approval and operation of an arrangement by the Exchange and FINRA to consolidate and disseminate the best quotation and last sale data for BX Venture Market listed securities that is made available by BX and FINRA.
Market data regarding BX Venture Market listed securities will be disseminated in a manner that facilitates adoption and use of the new data provided, in that the Exchange will ensure ease and efficiency for market data vendors and potential recipients. Specifically, consolidated data will leverage the widespread distribution network and administrative operations that the Exchange already employs including existing market data contracts, connectivity ports, transmission lines, network operations, data message specifications, billing and auditing. By leveraging existing data technology and administration, data regarding BX Venture Market listed securities will become instantly available through hundreds of market data distributors reaching an audience of millions of potential users via multiple distribution channels.
Further, the Exchange is committed to ensuring that BX Venture Market securities are clearly distinguished, and distinguishable, from securities listed on the traditional exchanges on those data products and to end-users of the data. To that end, all market data for BX Venture Market securities will include a unique data identifier in the “Market Center” field to distinguish the security from those listed on other exchanges and the over-the-counter markets. This Market Center identifier is already utilized by the Exchange and network processors on every consolidated and proprietary data feed supplied by the network processors and by NASDAQ and other national securities exchanges. The Market Center identifier is utilized by the network processors to demarcate, for example, NASDAQ (“Q”), NYSE (“N”), Amex (“A”), Arca (“P”), and OTC stocks. BX Venture Market listed securities would be identified with its own unique Market Center identifier “B” on any new BX consolidated data feeds and in the BX Venture Market Daily List data product.
The Exchange will require market data distributors, through distribution agreements and by amendments to its global data policy document to prominently identify the BX Venture Market as the listing market, and, where the display of text is not consistent with the display methodology or user needs of the distributor, to use the Market Center identifier “B” to prominently display the listing market with quotation and last sale information for BX Venture Market-listed securities. Every market data vendor that distributes BX Venture Market data to users must sign a data distribution agreement. These agreements bind the data vendor to abide by the terms and conditions of data purchase and usage, including conditions governing data display within the global data policy document. The requirement to prominently display the listing market will be a legal obligation backed by contractual sanctions including termination of the distribution agreement. These agreements have been used effectively in the past to require the display of key data elements to customers. The Exchange represents that these agreements will be in place before the BX Venture Market begins operations, and that the Market Center identifier will be distributed and required to be displayed upon the launch of the market.
Market data distributors and data users, including retail investors, are already familiar with this approach. Data distributors such as Bloomberg and Thompson Reuters, Internet portals such as Google and Yahoo, mutual fund complexes and brokers such as Vanguard, Schwab, and E*Trade, all currently use Market Center identifiers to understand where a security is listed and display that information on their Web sites and portals, typically next to the company name. For example, on Yahoo's Web site, “NasdaqGS” is currently displayed next to the name of all companies listed on The NASDAQ Global Select Market; that display would read, for BX Venture Market companies, “BX Venture” or “BX Venture Market.” The requirement that the Market Center identifier for BX Venture Market listed securities be prominently displayed by all of these market participants will mean that investors viewing a quotation or last sale report will be able to clearly distinguish a stock listed on the BX Venture Market from those listed on NASDAQ or other markets.
The Exchange will, in connection with the launch of the BX Venture Market, proactively review the displays of prominent data distributors and require immediate compliance if they fail to meet the requirements of the market data agreements. Following the launch of the BX Venture Market, the Exchange will conduct periodic audits of all market data vendors to ensure compliance. If a market data vendor does not satisfy the Exchange's display requirements, the Exchange will take action against the vendor, up to and including terminating the vendor's ability to receive data from the Exchange. The Exchange is committed to working with market participants and the Commission to evaluate, on an on-going basis, whether this display requirement is effective in distinguishing BX Venture Market-listed securities from other national exchange-listed securities in order to reduce investor confusion.
The assignment of symbols for companies listed on the BX Venture
Although all BX Venture Market listed companies are subject to listing standards approved by the Commission, and must meet corporate governance requirements similar to those required for listing on other national securities exchanges, the Exchange will require Companies not previously listed on a national securities exchange to adopt a four or five character ticker symbol as a prerequisite to listing on the BX Venture Market. Companies that list on the BX Venture Market following a delisting from another national securities exchange and that traded on that exchange with a one, two, or three character ticker symbol, will be permitted to retain their ticker symbol when listing on the BX Venture Market, provided that the company must, prior to listing on the BX Venture Market, issue a press release announcing its delisting from the other exchange and comply with the disclosure requirements of Item 3.01 of Form 8-K.
Companies would be required to submit an application review fee of $7,500 with their application for listing on the BX Venture Market, and would be required to pay a $15,000 annual fee for the first class listed on the Exchange and $5,000 for each additional class. The annual fee would be pro-rated for a company's first year of their listing. The application review fee will allow the Exchange to recover some of the costs associated with the initial review of the company's application, including staff time and the systems supporting the initial review process. The annual fee would similarly offset the staff and system costs of continued monitoring of the company. The proposed application and annual fees are substantially less than those charged by other national securities exchanges.
Fees would also be assessed for certain one-time events, such as a $7,500 fee for substitution listing events, a $2,500 fee for record-keeping changes, and a $4,000 or $5,000 fee for a written or oral hearing, respectively. These fees are identical to those charged on NASDAQ and are designed to recoup the costs of making changes to the Exchange's systems and distributing those changes to market data users.
Under Proposed Rule 5602, a company considering a specific action or transaction can request an interpretation from the Exchange, and in return, the Exchange will prepare a responsive letter as to how the rules apply to the proposed action or transaction. No company is required to request an interpretation, and Staff will orally discuss the application of the Exchange's rules with companies without any additional charge. However, if the company seeks a written response, the Exchange proposes to charge a $15,000 fee to recoup the cost of Staff's time in reviewing and responding to the request.
As part of the proposed rule change, the Exchange is deleting portions of the Rule 4000 Series related to the listing and trading of securities eligible to be listed on the BX Venture Market and correcting cross-references to those deleted sections. The Exchange is maintaining those provisions of the Rule 4000 Series applicable to securities that will not be eligible to be listed on the BX Venture Market, such as Portfolio Depository Receipts, Index Fund Shares,
The Exchange is deleting Rule 4430, which provided listing criteria for limited partnership rollup transactions using language that was substantially similar to language contained in FINRA Rule 2310. Instead, the Exchange addresses these issues in proposed Rule 5210(h). This rule adopts the same approach taken by NASDAQ and NYSE AMEX by incorporating the FINRA rule by reference.
The Exchange is also moving the additional requirements applicable to the listing of securities issued by NASDAQ OMX or its affiliates from Rule 4370 to Rule 5701.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
In addition, the Exchange believes that the proposed market is consistent with Section 17B of the Act, which codifies Congress' findings that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to improve significantly the information available to brokers, dealers, investors, and regulators with respect to quotations for and transactions in penny stocks and that a fully implemented automated quotation system for penny stocks would meet the information needs of investors and market participants and would add visibility and regulatory and surveillance data to that market. Section 17B further instructs the Commission to facilitate the widespread dissemination of reliable and accurate last sale and quotation information with respect to penny stocks, as the Exchange will for securities listed on the BX Venture Market, through one or more automated quotation systems operated by a registered securities association or a national securities exchange, providing reliable pricing information and reporting of transactions.
Finally, the Exchange believes the fees proposed in this filing are consistent with Section 6 of the Act,
Fees are proposed for certain one-time events, such as substitution listings, recordkeeping changes, and written or oral hearings. These fees, which are the same as those charged on NASDAQ, offset some of the Exchange's costs associated with facilitating these events. Fees charged for a formal, written interpretation of the application of the Exchange's rules to a specific transaction or event similarly serve to recoup the cost of staff's time in providing the interpretation. The Exchange believes these fees are reasonable and fairly allocated. Staff will orally discuss the application of the Exchange's rules without any charge, and the Exchange provides written summaries of interpretations, the answers to frequently asked questions, and other guidance on its publicly available Web site. If, however, a company voluntarily requests a written interpretation tailored its unique facts, it is reasonable to recoup some cost of Staff's time for that process.
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.
Written comments were neither solicited nor received.
After careful review of the proposal and consideration of the comment letters,
As noted above, the Exchange believes that the BX Venture Market will provide a transparent, well-regulated marketplace for companies being delisted from another national securities exchange for failure to meet quantitative listing standards and for smaller companies contemplating an initial exchange listing.
In the Order Instituting Proceedings, the Commission asked whether commenters agree with the Exchange's contention that a BX listing could help companies raise capital and thus promote job creation within the United States. Five commenters supported this statement,
The Commission believes the BX Venture Market could offer a number of benefits to smaller issuers and those who seek to invest in them. The BX Venture Market would provide small companies with an alternative to being quoted on the over-the-counter market by offering these companies the opportunity to list their securities on an exchange, in an environment that offers the potential of enhanced liquidity, transparency and oversight. Moreover, providing an alternative to the over-the-counter market could also facilitate competition for the quotation/listing of securities of smaller issuers.
As discussed more fully below,
The Commission believes that, among other things, listing standards must be designed to assure that only bona fide companies with substantial public float, investor base, and trading interest will be listed. The development and enforcement of adequate listing standards governing the initial and continued listing of securities on an exchange are activities of critical importance to the financial markets and the investing public.
While the BX Venture Market would have quantitative listing standards that are lower than those of any other national securities exchange with an active listings program, the Commission notes that the Exchange proposes to adopt a number of enhanced vetting, surveillance/examination, and disclosure requirements.
In the Order Instituting Proceedings, the Commission asked whether the proposed initial and continued listing standards and the delisting process for the BX listing market are sufficiently designed to prevent the listing of stocks that are of a type that historically have been prone to fraudulent schemes. One commenter stated that the BX Venture Market will be a listing market for penny stocks because of the proposed minimum bid price requirements.
The Commission believes that the proposed quantitative listing standards, while lower than those of any other national securities exchange with an active listings program, are reasonably designed to help ensure that a fair and orderly market be maintained. As proposed, the minimum bid price per share for the initial listing of securities not previously listed on a national securities exchange is $1.00,
With respect to the definition of “previously listed on a national securities exchange,” one commenter stated that “[w]e do not understand why the Exchange suggests a three year and nine month look-back for initially determining whether a security was previously listed on another exchange, and only a three-month look-back when making such a determination after September 30, 2011.”
For continued listing, all securities will be required to maintain a minimum bid price of at least $0.25 per share.
The Commission also notes that, according to the Exchange, the securities listed on the BX Venture Market would be considered penny stocks under Rule 3a51-1 under the Act, unless they qualify for one of the exceptions from the definition of a penny stock as set forth in Rule 3a51-1.
Furthermore, the Commission notes that the BX Venture Market would be an alternative to the over-the-counter market and could provide important benefits to small companies who otherwise would not qualify for an exchange listing. In particular, the Exchange's proposed listing standards would be higher than the requirements for quoting on the OTC Bulletin Board, which does not have any listing requirements per se,
In the Order Instituting Proceedings, the Commission asked whether the proposed corporate governance standards for the BX listing market are sufficiently designed to assure an appropriate level of corporate governance. One commenter expressed support for the proposed corporate governance rules for BX-listed companies and stated that requiring small and emerging companies to have majority independent boards would be inappropriate and impose unnecessary costs upon these companies and their shareholders.
The Commission believes that the proposed qualitative listing requirements strike a reasonable balance between protecting the interests of investors and recognizing that smaller and emerging companies, with fewer resources, are likely to list on the BX Venture Market. The Commission notes that, although the Exchange would not require that a majority of the company's board of directors be independent or an independent nomination committee, the Exchange's listing rules impose independence requirements designed to help assure that certain key decisions of smaller companies are made by independent directors. Specifically, the BX Rules provide the independent directors with significant responsibilities, as well as an opportunity to meet separately from other directors. For example, independent directors must have regularly scheduled meetings at which only independent directors are present (“executive sessions”).
One commenter objected to the proposed rules that allow BX Venture Market-listed companies to phase-in compliance with independent audit committee and compensation committee requirements.
The Commission notes that the phase-in provisions for audit and compensation committees are substantially similar to those of Nasdaq and other national securities exchanges
The Commission believes that the Exchange's proposed vetting and due diligence process of prospective issuers are reasonably designed to reduce the risk of listing companies that might be more prone to fraud and manipulation and that might erode investor confidence in the market. The Commission notes that the Exchange will employ the staff in Nasdaq's Listing Qualifications Department to apply and enforce its listing standards pursuant to a regulatory contract
In connection with the initial listing process, the BX Rules would require applicant companies to disclose, among other things, current and past actions and proceedings involving the company, current executive officers, directors, promoters, and ten percent or greater shareholders,
The Commission emphasizes that the Exchange does not have the discretionary authority to approve the initial listing of securities that do not meet the enumerated listing standards, or to maintain the listing of securities that stay below the continued listing standards.
The Commission notes that one commenter noted the importance of screening prospective listed companies in light of the failure of the former American Stock Exchange Emerging Company Marketplace.
In sum, the Commission believes that the proposed vetting and due diligence measures are reasonably designed to reduce the risk of fraudulent and
The Commission believes that strong and effective surveillance and examination programs are vital, particularly with respect to BX Venture Market-listed securities, which are subject to listing standards that are lower than those of any national securities exchange with an active listings program. Under the proposal, the Exchange will monitor real-time trading of securities listed on the BX Venture Market.
The Commission notes that one commenter stated that there have been significant problems in the penny stock market, including boiler room sales practices by brokerages and market manipulation (including the spreading of false rumors) by stock promoters and brokerages that hold a block of a given stock.
The Exchange also committed to providing a monthly report to the Directors of the Division of Trading and Markets and Office of Compliance Inspections and Examinations describing any significant developments on the BX Venture Market, including companies added to or removed from the market during that period.
The Commission believes that it is important to reduce the likelihood of investor confusion regarding the BX Venture Market. Three commenters expressed concern that investors would confuse BX Venture Market-listed securities with Nasdaq-listed securities.
With respect to the comments regarding ticker symbols, the Exchange stated that the BX Venture Market is a national securities exchange and a party to the existing National Market System Plan for the Selection and Reservation of Securities Symbols (“Symbology Plan”), and as such is eligible to trade symbols of one to five characters.
As noted in Section II above, the Exchange proposes different ticker symbol requirements, depending on whether the company was previously listed on a national securities exchange. Specifically, the Exchange would prohibit companies that were not previously listed on a national securities exchange from utilizing one to three character ticker symbols.
While the Exchange is not substantially changing the ticker symbol length a BX Venture Market-listed company can use,
Additionally, in describing the BX Venture Market, the Exchange will refer to itself as the BX Venture Market, and not as NASDAQ OMX BX, in its communications and marketing literature.
The Exchange will disseminate information about securities listed on the BX Venture Market via several
The Commission believes that the measures described above that are designed to help clarify the differences between the BX Venture Market and the NASDAQ Stock Market should aid in reducing the potential for investor confusion. For example, as stated above, the Exchange stated that it will require market data distributors to prominently display the listing market for BX Venture Market-listed securities through its distribution agreements and its global market data policy document and that these agreements and amendments will be in place before the BX Venture Market begins operations.
The Commission recognizes the reputational tradeoff associated with distinguishing the BX Venture Market from Nasdaq. If the BX Venture Market were to fail, Nasdaq would not suffer as much reputational damage as investors and issuers would not necessarily associate a BX Venture Market failure with Nasdaq. As a result, Nasdaq may not have as much incentive to ensure that the BX Venture Market is a success than if Nasdaq had more reputation capital on the line. While considering this tradeoff, the Commission believes that Nasdaq has sufficient incentives, absent this reputational risk, to ensure that the BX Venture Market is a success, and that avoiding the risk of investor confusion is a priority.
The Commission believes that the proposed deficiency notification, delisting, and appeals procedures strike a balance between the Exchange's obligation to protect investors and their confidence in the market, with its parallel obligation to perfect the mechanism of a free and open market. The measures by which a company may return to compliance with continued listing standards are explicitly delineated, providing transparency to the process and potentially fostering investor confidence in the integrity of the markets.
The Commission further notes that the compliance periods and discretion to allow a non-compliant company to remain listed are generally shorter on the BX Venture Market than what would be allowed a company listed on other exchanges, including Nasdaq. For example, a Hearings Panel would be permitted to grant only 90 calendar days for a company to regain compliance with a listing standard,
One commenter suggested that the Exchange should increase the amount of time a company has to regain compliance with BX listing standards from 90 to 180 days because it will allow companies that are trading publicly for the first time to learn the nuances of the market and to adjust to the market.
Overall, the Commission believes that the proposed appeals process is reasonable and affords adequate due process to issuers, while at the same time bringing efficiency to the listing and delisting processes. Among other things, the process provides companies with the right to appeal a staff determination to deny initial or continued listing to a Hearings Panel.
In response to the proposed fees, one commenter stated that a market targeted to smaller companies, with listing requirements and listing costs tailored to their current economic reality, would open a door that has been closed for many venture-backed companies.
The Commission believes that the proposal does not unfairly discriminate between issuers as all companies will be subject to the same fee schedule. The Commission believes that the proposed fees are reasonable, given the regulatory expenses of the Exchange and the types of companies expected to list on the Exchange. The Commission notes that the Exchange has committed to enhanced vetting, examination, surveillance and disclosure requirements, all of which require additional expenses. In addition, the Commission expects the Exchange to maintain its commitment of resources to its regulatory oversight of the listing process and its ongoing compliance review of listed companies under its regulatory program.
According to the Exchange, the application review fee will allow the Exchange to recover some of the costs associated with the initial review of the company's application, including staff time and the systems supporting the initial review process.
The Commission notes that companies that were previously listed on Nasdaq would receive a credit, which could be used only to offset the annual fee, for any annual fees paid to Nasdaq during the same calendar year that they initially list on the BX Venture Market, for the months following their delisting from Nasdaq.
Currently, NMS securities listed on national securities exchanges are subject to a consolidated trade reporting plan,
In the Order Instituting Proceedings, the Commission asked whether BX sufficiently addressed how quotations and transactions reports relating to BX-listed securities will be disseminated. The Commission was concerned that the proposal could result in fragmentation of pricing information relating to these securities and undermine the ability of investors to receive best execution. One commenter stated that fragmentation of pricing data was a valid concern.
In response, the Exchange stated that it “is committed to ensuring that quotations and transaction information for listed securities occurring on The BX Venture Market * * * are consolidated fully with the same information from OTC quoting and trading that FINRA supervises.”
With respect to the trading of BX Venture Market-listed securities, the Commission notes that until other exchanges have appropriate trading rules and oversight mechanisms for transactions in second-tier securities, other exchanges will not be able to extend UTP to BX-listed securities.
BX-listed securities may be less liquid and more volatile than securities listed on another national securities exchange. In anticipation of the BX Venture Market, the Commission notes that FINRA has issued Regulatory Notice 11-15 (“FINRA Notice”),
The FINRA Notice also states that “[f]irms should take into account volatility and concentrated positions in a single customer account and across all customer accounts, as well as the daily volume and market capitalization of each security when imposing “house” maintenance margin requirements. Firms should also consider the fundamental business drivers and financial performance of the issuer in setting house requirements. Increased maintenance margin requirements can help to ensure that the equity in each customer account is sufficient to cover any large variances in the price of a security.”
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 2, is consistent with the Act. Comments
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
Amendment No. 2 revised the proposed rule change, as modified by Amendment No. 1, to, among other things: (1) Explain the process of reviewing companies for initial listing, including conducting background checks on companies and associated individuals, and the use of third-party investigative firms; (2) clarify the Exchange's discretionary authority to deny listing to or delist companies based on regulatory concerns; (3) add provisions relating to the internal structure and experience of those charged with oversight of the listing program; (4) describe market oversight activities for BX Venture Market-listed securities; (5) detail the use of market center identifiers to distinguish companies listed on the BX Venture Market; (6) add restrictions on ticker symbol length; and (7) clarify the consolidation of BX Venture Market data with over-the-counter information for the same securities. These amendments clarify aspects of the proposal, are responsive to commenters' concerns about investor protection and brand confusion, and strengthen the listing standards of the BX Venture Market. Accordingly, the Commission also finds good cause, pursuant to Section 19(b)(2) of the Act,
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For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange proposes to amend the CBOE Stock Exchange (“CBSX”) Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (
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.
This filing proposes to make changes to the CBSX Fees Schedule. The first change is to eliminate the symbol “Q” from the stocks listed in footnote 3 which are subject to certain transaction fees. The symbol “Q” is being deleted because the stock is no longer available for trading on CBSX.
The Exchange also proposes to eliminate transaction fees and rebates for NBBO Step-Up Trades. Such trades were only available through CBSX's “flash” process. The Commission approved the deletion of CBSX's “flash” rule on April 6, 2011.
CBSX further proposes to modify the transaction fees for a cross trade that is the stock component of a qualified contingent trade. Currently, the fee is $.0010 per share, with a maximum rate of $20 per trade. The Exchange proposes increasing the fee to $.0012 per share and increasing the maximum rate to $25 per trade. CBSX proposes these increases in order to better recoup costs associated with such trades.
These changes will take effect on May 2, 2011.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (“Act”),
CBOE 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.
No written comments were solicited or received with respect to the proposed rule change.
The proposed rule change is designated by the Exchange as establishing or changing a due, fee, or other charge, thereby qualifying for effectiveness on filing 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 e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing with the Commission a proposal to amend PHLX Rule 1064(e) to establish a Floor Qualified Contingent Cross Order (“Floor QCC Order”). The Floor QCC Order will facilitate the execution of stock/option Qualified Contingent Trades that satisfy the requirements of the trade through exemption in connection with Rule 611(d) of Regulation NMS (“QCT Trade Exemption”).
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
On February 24, 2011, the Commission issued an order approving SR-ISE-2010-073, a proposal by the ISE to establish a Qualified Contingent Cross (“ISE QCC Proposal”). The ISE QCC Proposal was controversial, attracting opposition from multiple exchanges including PHLX. In its comment letter on the ISE QCC Proposal, PHLX asserted that the QCC Proposal deviated from “long-held principles in the options market by permitting the crossing of orders without requiring prior exposure” and that the ISE QCC Proposal failed adequately to protect customers with orders resting on the ISE limit order book.
The Commission, in a thorough and thoughtful decision, concluded that the QCC Proposal—including the lack of prior order exposure—is consistent with the Act. With respect to order exposure, the Commission stated:
While the Commission believes that order exposure is generally beneficial to options markets in that it provides an incentive to options market makers to provide liquidity and therefore plays an important role in ensuring competition and price discovery in the options markets, it also has recognized that contingent trades can be “useful trading tools for investors and other market participants, particularly those who trade the securities of issuers involved in mergers, different classes of shares of the same issuer, convertible securities, and
The Approval Order succinctly sets forth the material elements of ISE's Qualified Contingent Cross:
Thus, as modified, an ISE member effecting a trade pursuant to the NMS QCT Exemption could cross the options leg of the trade on ISE as a QCC Order immediately upon entry, without exposure, only if there are no Priority Customer orders on the Exchange's limit order book at the same price and if the order: (i) Is for at least 1,000 contracts; (ii) meets the six requirements of the NMS QCT Exemption; and (iii) is executed at a price at or between the NBBO (“Modified QCC Order”). In the Notice, ISE stated that the modifications to the Original QCC Order (
The Exchange believes that the Commission, having considered and addressed all arguments in favor and in opposition to the QCC, has established binding precedent under which other exchanges can establish a QCC Order that is also consistent with the Act.
In keeping with that precedent, PHLX hereby proposes to add PHLX Rule 1064(e) to establish a Floor QCC Order based on the precedent of ISE's QCC Order.
The Commission in the Approval Order carefully considered the comparison between floor-based and electronic trading, including commissioning a study by the Division of Risk, Strategy and Financial Innovation (“RiskFin Study”). The RiskFin Study and the Approval Order compare electronic trading and floor trading, the similarities between the two forms of trading, and the ability of one to replicate the other. Additionally, the Commission received comment letters from multiple floor-based exchanges that challenged the comparison that ISE drew between floor-based and electronic trading.
Despite facing direct comparisons between floor-based trading and electronic trading by multiple commenters, as well as by its own Division of RiskFin, the Commission Approval focuses on similarities between the two. On its face, the Commission Approval Order draws no distinctions and identifies no material differences between floor-based and electronic trading that would confound the comparison between cross orders executed electronically and those executed on an exchange floor. The Exchange believes that the Floor QCC Order is consistent with the requirements stated in the Approval Order and consistent with the Act. The Exchange also believes that the Commission, in writing the Approval Order assumed that QCC orders entered on the floor of an exchange that meet the requirements stated in the Approval Order are equally consistent with the Act.
The Exchange has analyzed the application to Floor QCC Orders of Section 11(a) of the Act and the rules thereunder. Section 11(a) and the rules thereunder generally prohibit members of an exchange from effecting transactions on the exchange for their own account, the account of an associated person, or an account with respect to which it or an associated person thereof exercises investment discretion unless an exemption applies.
The Exchange has in the past analyzed the application of Section 11(a) to various Exchange systems and order types.
Nonetheless, out of an abundance of caution, the Exchange has added subsection (e)(2) which prohibits Options Floor Brokers from entering Floor QCC Orders for their own accounts, the account of an associated person, or an account with respect to which it or an associated person thereof exercises investment discretion. This modification is designed to remove even a theoretical time and place advantage available to an Options Floor Broker on the Floor of the Exchange that is reflected in the prohibitions of Section 11(a) of the Exchange Act and the rules thereunder. The Exchange is prohibiting by rule certain conduct that runs afoul of Section 11(a) and the rules thereunder, and providing both a surveillance and enforcement mechanism to promote compliance. Thus, it would be incorrect to say that the Floor QCC Order differs from the electronic QCC Order due to the Options Floor Broker's presence on the Floor.
These restrictions set forth in subsection (e)(2) do not limit in any way the obligation of Options Floor Brokers and other Exchange members to comply with Section 11(a) or the rules thereunder. For example, Options Floor Brokers cannot avoid or circumvent their obligations with respect to a Floor QCC Order that triggers a Section 11(a) obligation by transmitting that order to another Options Floor Broker or to an Exchange member off the floor of the Exchange. Likewise, Exchange members off the floor must ensure that their Floor QCC Orders comply with Section 11(a) and the rules thereunder. In both cases, Exchange members must ensure compliance with Section 11(a) and the rules thereunder, including by relying upon an exemption such as those listed above.
Additionally, to provide a mechanism for the Exchange to review whether Floor QCC Orders have been entered properly by Options Floor Brokers, the Exchange proposes to adopt proposed Rule 1064(e)(2). This provision would require Options Floor Brokers to maintain books and records demonstrating that no Floor Qualified Contingent Cross Order was entered by the Options Floor Broker in a prohibited account.
Finally, the Exchange proposes to modify subsections (a), (b), and (c) of Rule 1064. These changes are designed clearly to establish that the requirements applicable to Floor QCC Orders that are set forth in subsection (e) are different from those applicable to the orders described in subsections (a), (b) and (c).
As set forth in proposed Rule 1064(e), the Floor QCC Order must: (i) Be for at least 1,000 contracts,
The Exchange's proposal addresses the mechanics of executing the stock and options components of a net-price transaction. The Exchange believes that it is necessary that it provide members and their customers with the same trading capabilities available on other exchanges with respect to QCCs, including the change proposed herein, which would permit members to execute the options legs of their customers' large complex orders on the Exchange.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The statutory basis for PHLX's proposed Floor QCC Order is identical to the Commission's basis for finding that the ISE's QCC Proposal is consistent with the Act “in that it would facilitate the execution of qualified contingent trades, for which the Commission found in the Original QCT Exemption to be of benefit to the market as a whole, contributing to the efficient functioning of the securities markets and the price discovery process. The Floor [sic] QCC Order would provide assurance to parties to stock-option qualified contingent trades that their hedge would be maintained by allowing the options component to be executed as a clean cross.” In addition, like the ISE's QCC Order, the Exchange's Floor QCC Order “is narrowly drawn to provide a limited exception to the general principle of exposure, and retains the general principle of customer priority.”
PHLX's proposed Floor QCC Order promotes the same Commission goals as or more effectively, and it is as or more narrowly drawn than ISE's QCC Order. Accordingly, the Exchange believes that the proposed rule change must also be consistent with the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the proposed Floor QCC Order is a competitive response to the ISE QCC Order and similar orders adopted by other exchanges.
No written comments were either solicited or received.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend CHX Article 9, Rule 17 which rule governs the treatment of customer orders and the prohibition against trading ahead of customer orders. The text of this proposed rule change is available on the Exchange's Web site at (
In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange is proposing to amend Article 9, Rule 17 of its rules which governs the treatment of customer orders and prohibits a CHX Participant
Currently, CHX Article 9, Rule 17 states, in part, that a Participant is prohibited from trading proprietarily while the Participant personally holds or has knowledge that the Participant (or any partner, officer or director thereof) holds an unexecuted market or limit order to buy (sell) such security in the unit of trading for a customer. The proposed rule change still includes customer order protection language as it applies to unexecuted market and limit orders with the clarification of allowing a Participant, who has traded proprietarily ahead of a customer order, to immediately thereafter execute the customer order up to the size and at the same or better price at which it traded for its own account. In other words, in the event that a Participant trades ahead of an unexecuted customer order at a price that is equal to or better than the unexecuted customer order, such Participant is required to execute the customer order at the price received by the Participant or better; otherwise the Participant shall be in violation of improperly trading ahead of such customer order. The proposal also prescribes the minimum “level” of price improvement necessary for a Participant to execute an order on a proprietary basis when holding an unexecuted customer limit order. For example, for customer limit orders priced greater than or equal to $1.00, the minimum amount of price improvement required is $0.01.
The Exchange also proposes to establish that a Participant must have written procedures in place governing the execution and priority of all pending orders that is consistent with the best execution requirements of CHX Article 17, Rule 3(d) and ensure that these procedures are consistently applied.
In furtherance of ensuring customer order protection, the proposed rule change clarifies Participant obligations in handling marketable customer orders. In meeting these obligations, a Participant must make every effort to execute a marketable customer order that it receives fully and promptly. A Participant that is holding a customer order that is marketable and has not been immediately executed must make every effort to cross such order with any other order received by the Participant on the other side of the market up to the size of such order at a price that is no less than the best bid and no greater than the best offer at the time that the subsequent order is received by the Participant and that is consistent with the terms of the orders. In the event that a Participant is holding multiple orders on both sides of the market that have not been executed, the Participant must make every effort to cross or otherwise execute such orders in a manner that is reasonable and consistent with the objectives of the proposed rule and with the terms of the orders.
In addition, the Exchange is proposing to add several exceptions to the customer order protection rule. The most notable exception is to allow Participants to negotiate terms and conditions on the acceptance of certain large-sized orders (orders of 10,000 shares or more and greater than $100,000 in value) or orders from institutional accounts as defined in this proposal as Interpretation and Policy .09 of CHX Article 9, Rule 17 (collectively referred to as “Institutional/Large-Sized Orders”). Such terms and conditions would permit the Participant to continue to trade along side or ahead of such customer orders if the customer agrees.
Specifically, under the proposed rule, a Participant would be permitted to trade a security on the same side of the market for its own account at a price that would satisfy a customer order provided that the Participant provides clear and comprehensive written disclosure to each customer at account
If a customer does not opt in to the protections with respect to all or any portion of its order(s), the Participant may reasonably conclude that such customer has consented to the Participant trading a security on the same side of the market for its own account at a price that would satisfy the customer's order.
In lieu of providing written disclosure to customers at account opening and annually thereafter, the proposed rule would permit Participants to provide clear and comprehensive oral disclosure to, and obtain consent from, a customer on an order-by-order basis, provided that the Participant documents who provided such consent and that such consent evidences the customer's understanding of the terms and conditions of the order. In addition, where a customer has opted in to the CHX Article 9, Rule 17 protections, a Participant may still obtain consent on an order-by-order basis to trade ahead of or along with an order from that customer, provided that the Participant documents who provided such consent and that such consent evidences the customer's understanding of the terms and conditions of the order.
The Exchange is also proposing to add a “no-knowledge” exception to its customer order protection rule. The proposed exception would allow a proprietary trading unit of a CHX Participant firm to continue trading in a proprietary capacity and at prices that would satisfy customer orders that were being held by another, separate trading unit at the Participant firm. The “no-knowledge” exception would be applicable with respect to NMS stocks, as defined in Rule 600 of SEC Regulation NMS. In order to avail itself of the “no-knowledge” exception, a Participant firm must first implement and utilize an effective system of internal controls (such as appropriate information barriers) that operate to prevent the proprietary trading unit from obtaining knowledge of the customer orders that are held at a separate trading unit. For example, a CHX Institutional Broker
A Participant that structures its order handling practices in NMS stocks to permit its proprietary and/or market-making desk to trade at prices that would satisfy customer orders held as [sic] a separate trading unit must disclose in writing to its customers, at account opening and annually thereafter, a description of the manner in which customer orders are handled by the Participant and the circumstances under which the Participant may trade proprietarily at its market-making desk at prices that would satisfy the customer order.
To the extent a Participant firm structures its order handling practices in NMS stocks to “wall off” customer order flow from its proprietary/market-making desks, CHX is proposing to require the firm to disclose that fact in writing to its customers. This disclosure would include a description of the manner in which customer orders are handled and the circumstances under which the firm may trade proprietarily at prices that would satisfy a customer order. The proposed disclosure would be required at account opening and on an annual basis thereafter and may be combined with the disclosure and negative consent statement permitted in connection with the proposed Institutional/Large-Sized Order exception.
The Exchange's proposal also clarifies that the obligations under this rule shall not apply to a Participant's proprietary trade if such proprietary trade is for the purposes of facilitating the execution, on a riskless principal basis, of another order from a customer (whether its own customer or the customer of another broker-dealer), provided that the Participant: (a) Submits a report, contemporaneously with the execution of the facilitated order, identifying the trade as riskless principal to CHX and (b) has written policies and procedures to ensure that riskless principal transactions relied upon for this exception comply with applicable CHX rules. At a minimum these policies and procedures must require that the customer order was received prior to the offsetting principal transaction, and that the offsetting principal transaction is at the same price as the customer order exclusive of any markup or markdown, commission equivalent or other fee and is allocated to a riskless principal or customer account in a consistent manner and within 60 seconds of execution.
Participants must have supervisory systems in place that produce records that enable the Participant and CHX to reconstruct accurately, readily, and in a time-sequenced manner all orders on which a Participant relies in claiming this exception.
The filing also clarifies that a Participant shall be exempt from the obligation to execute a customer order in a manner consistent with the customer order protection rule with regard to trading for its own account that is the result of an intermarket sweep order routed in compliance with Rule 600(b)(30)(ii) of SEC Regulation NMS (“ISO”) where the customer order is received after the Participant routed the ISO. Where a Participant routes an ISO to facilitate a customer order and that customer has consented to not receiving the better prices obtained by the ISO, the Participant also shall be exempt with respect to any trading for its own account that is the result of the ISO with respect to the consenting customer's order.
In addition, the Exchange proposes applying an exception for a firm's proprietary trade that (1) Offsets a
This proposal also expands the customer order protection requirements to apply at all times that a customer order is executable by the Participant, even outside the period of normal market hours. Thus, customers would have the benefit of the customer order protection rules at all times where such order is executable by the Participant firm, subject to any applicable exceptions. This exception shall apply to those Participants that accept customer orders after normal market hours.
CHX believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, that CHX rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and, in general, to protect investors and the public interest. CHX believes that amending its customer order protection rule as proposed, will bring it more in line with industry standards, most notably FINRA's Rule 5320, which we believe will in turn reduce the complexity of customer order protection for those firms subject to the rules of multiple trading venues. CHX also believes that changing its rule as proposed will maintain the necessary protection of customer orders without imposing any undue regulatory costs on industry participants.
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.
No written comments were either solicited or received.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
CHX will announce the implementation date of the proposed rule change in a Regulatory Notice to be issued no later than 90 days from the date of publication of notice in the
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, 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.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Diversified Investors Corp. (n/k/a Diverse Holdings Corp.) because it has not filed any periodic reports since the period ended August 31, 2000.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Drew Resources (n/k/a Galloway Energy, Inc.) because it has not filed any periodic reports since the period ended March 31, 2001.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of DTI Medical Corp. because it has not filed any periodic reports since the period ended September 30, 1997.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities DTLL, Inc. (n/k/a Solstice Resorts, Inc. because it has not filed any periodic reports since the period ended September 30, 2007.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Dunn's Supply Store, Inc. because it has not filed any periodic reports since it filed a registration statement on May 31, 1996.
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies.
Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on May 10, 2011, through 11:59 p.m. EDT on May 23, 2011.
By the Commission.
U.S. Small Business Administration.
Notice.
This is a notice of an Economic Injury Disaster Loan (EIDL) declaration for the State of Connecticut, dated 05/04/2011.
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.
Notice is hereby given that as a result of the Administrator's EIDL declaration, applications for economic injury disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for economic injury is 125470.
The State which received an EIDL Declaration #__ is Connecticut.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Iowa dated 05/04/2011.
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.
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 number assigned to this disaster for physical damage is 12541C and for economic injury is 125420.
The States which received an EIDL Declaration # are Iowa; Nebraska.
U.S. Small Business Administration.
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for the State of Tennessee (FEMA-1974-DR), dated 05/01/2011.
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.
The notice of the Presidential disaster declaration for the State of Tennessee, dated 05/01/2011 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.
Amendment 3.
This is an amendment of the Presidential declaration of a major disaster for the State of Georgia (FEMA-1973-DR), dated 04/29/2011.
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.
The notice of the Presidential disaster declaration for the State of Georgia, dated 04/29/2011 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.
Amendment 1.
This is an amendment to the Economic Injury Disaster Loan (EIDL) declaration for the State of California, dated 03/31/2011.
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.
The notice of the Administrator's economic injury disaster declaration in the State of California, dated 03/31/2011, is hereby amended to include the following areas as adversely affected by the Salmon Fishery Closure 2010 Season.
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 Louisiana dated 05/04/2011.
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.
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 number assigned to this disaster for physical damage is 12543 B and for economic injury is 12544 0.
The States which received an EIDL Declaration # are Louisiana, Mississippi.
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 Wisconsin (FEMA-1966-DR), dated 04/05/2011.
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.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Wisconsin, dated 04/05/2011, 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.
Amendment 5.
This is an amendment of the Presidential declaration of a major disaster for the State of Alabama (FEMA-1971-DR), dated 04/28/2011.
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.
The notice of the Presidential disaster declaration for the State of Alabama, dated 04/28/2011 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.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of Alabama (FEMA-1971-DR), dated 04/28/2011.
/04/2011.
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.
The notice of the Presidential disaster declaration for the State of Alabama, dated 04/28/2011 is hereby amended to include the following areas as adversely affected by the disaster:
All other information in the original declaration remains unchanged.
Notice of request for public comments.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. The purpose of this notice is to allow 60 days for public comment in the
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The Department will accept comments from the public up to 60 days from May 12, 2011.
Comments and questions should be directed to Nicholas Memos, Office of Defense Trade Controls Policy, Department of State, who may be reached via the following methods:
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You must include the information collection title in the subject lines of your message/letter.
Direct requests for additional information regarding the collection listed in this notice to Nicholas Memos, PM/DDTC, SA-1, 12th Floor, Directorate of Defense Trade Controls, Bureau of Political-Military Affairs, U.S. Department of State, Washington, DC 20522-0112, who may be reached via phone at (202) 663-2804, or via e-mail at
We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of our functions.
• Evaluate the accuracy of our estimate of the burden of the proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of technology.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. 14 CFR Part 61 prescribes certification standards for pilots, flight instructors, and ground instructors. The information collected is used to determine compliance with applicant eligibility. This revision to the current approved collection incorporates the burden for the certification of second-in-command pilot type rating, previously approved under the separate OMB control number 2120-0693. This is being done for the purpose of consolidation under a single OMB control number.
Written comments should be submitted by July 11, 2011.
Carla Scott on (202) 385-4293, or by e-mail at:
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. This rule revised the airport certification regulations and establishes
Written comments should be submitted by July 11, 2011.
Carla Scott on (202) 385-4293, or by e-mail at:
Federal Aviation Administration (FAA), DOT.
Notice of Availability of a Draft Environmental Assessment for a Proposed Airport Traffic Control Tower and Base Building, University of Illinois Willard Airport, Savoy, Illinois.
The Federal Aviation Administration (FAA) proposes to fund, construct, and operate a new Airport Traffic Control Tower (ATCT) and Base Building at the University of Illinois Willard Airport (CMI), Savoy, Illinois. The FAA's preferred alternative is to construct the ATCT at a location on the east central portion of CMI. The purpose and need of the proposed project is to enhance visibility and improve safety of airport movement areas, have the capability to meet existing and future operational and administrative expansion requirements, and improve operational efficiency of the facility because the current ATCT facility is a non-standard design of insufficient height and size.
The FAA has prepared a Draft Environmental Assessment (DEA) in conformance with the requirements of the National Environmental Policy Act of 1969 (NEPA) and FAA Order 1050.1E,
The FAA will accept written comments on the DEA until close of business on June 22, 2011. Comments on the DEA may be sent to: Ms. Virginia Marcks, FAA, AJW-C14D, 2300 East Devon Ave., Des Plaines, IL 60018, fax 847-294-7698, e-mail
Ms. Virginia Marcks, Manager, Infrastructure Engineering Center, Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines, Illinois 60018.
Federal Aviation Administration (FAA), DOT.
Notice of RTCA Program Management Committee meeting.
The FAA is issuing this notice to advise the public of a meeting of the RTCA Program Management Committee.
The meeting will be held May 26, 2011 from 12 p.m. to 1 p.m.
The meeting will be held at RTCA, Inc., 1828 L Street, NW., Suite 805, Colson Board Room, Washington, DC 20036.
RTCA Secretariat, 1828 L Street, NW., Suite 850, Washington, DC 20036; telephone (202) 833-9339; fax (202) 833-9434; Web site
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., Appendix 2), notice is hereby given for a RTCA Program Management Committee meeting. The agenda will include:
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), DOT.
Notice of RTCA Special Committee 159 meeting: Global Positioning System (GPS).
The FAA is issuing this notice to advise the public of a meeting of RTCA Special Committee 159: Global Positioning System (GPS).
The meeting will be held May 26, 2011, from 9 a.m. to 11:45 a.m.
The meeting will be held at RTCA, Inc., NBAA—McIntosh and ATA—Hilton Conference Rooms, 1828 L Street, NW., Suite 805, Washington, DC 20036.
RTCA Secretariat, 1828 L Street, NW., Suite 805, Washington, DC 20036; telephone (202) 833-9339; fax (202) 833-9434; Web site
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App 2), notice is hereby given for a Special Committee 159: Global Positioning System (GPS) meeting. The agenda will include:
• Chairman's Introductory Remarks.
• Approval of Summary of the Eighty-Fourth Meeting held February 11, 2011, RTCA Paper No. 082-11/SC159-991.
• Review/Approval of Proposed Final Report—
• Other Business.
• Date and Place of Next Meeting.
• Adjourn.
Federal Aviation Administration (FAA), DOT.
Notice of RTCA Special Committee 217: Joint with EUROCAE WG-44 Terrain and Airport Mapping Databases.
The FAA is issuing this notice to advise the public of a meeting of RTCA Special Committee 217: Joint with EUROCAE WG-44 Terrain and Airport Mapping Databases.
The meeting will be held June 6-10, 2011, from 9 a.m. to 5 p.m.
The meeting will be held at NASA Ames Research Center, Moffett Field, Mountain View, CA 94043. For more information contact John Kasten at
RTCA Secretariat, 1828 L Street, NW., Suite 805, Washington, DC 20036-5133; telephone (202) 833-9339; fax (202) 833-9434; Web site
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., Appendix 2), notice is hereby given for a RTCA Special Committee 217: Joint with EUROCAE WG-44 Terrain and Airport Mapping Databases meeting. The agenda will include:
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
Research and Innovative Technology Administration (RITA), U.S. Department of Transportation (USDOT).
Notice.
This notice is a Request for Information (RFI) and comments that will be used to help identify research and development (R&D) opportunities for wireless technology in surface transportation. The President's Wireless Infrastructure and Innovation Initiative includes a proposed $100M R&D investment to spur innovative wireless applications in surface transportation that advance the Administration's safety, mobility, and environmental sustainability agenda. Feedback and comments on any aspect of the RFI are welcomed from all interested public, private, and academic entities, and individuals. While all feedback is welcomed, the USDOT is particularly interested in feedback on the questions provided in the last section of this RFI.
Responses to this notice are not offers and cannot be accepted by the Government to form a binding contract, to issue a grant or cooperative agreement, or to make any other funding or partnership commitment. Information obtained as a result of this RFI may be used by the government for program planning. If you wish to submit any information under a claim of confidentiality, you should submit via email to the address given below under
For questions about the program discussed herein, please contact Mr. John Augustine, Intelligent Transportation Systems Joint Program Office (ITS JPO), 202-366-9536,
In February, 2011, President Obama announced the Wireless Innovation and Infrastructure Initiative. (
As part of this initiative, a total of $3 billion raised from voluntary spectrum incentive auctions would be used to create a Wireless Innovation (WIN) Fund. This fund would aim to catalyze innovation by funding research and development of emerging broadband wireless technologies and applications. The WIN fund is intended to advance economic growth and competitiveness by supporting the nationwide rollout of the next generation broadband cellular (
Broadband wireless systems consist of several different classes of technology. The most commonly thought of is a wide area, potentially ubiquitous coverage systems such as cellular, including for example, 4th generation cellular or “4G.” However, fixed or mobile local-area coverage such as Wi-Fi, as well as fixed point-to-point, and point-to-multipoint wireless systems may all be used either individually or together to achieve the goal of providing broadband access to all Americans and a platform for innovation. Several complementary technologies may be used for each class of system. This RFI focuses on mobile wireless broadband technologies and applications for surface transportation, including both wide area and local area systems.
The Wireless Innovation for Transportation Program (WIN for Transportation) will provide the USDOT's ITS Program and its stakeholders the ability to seek new and innovative opportunities to pursue ground-breaking research and development toward deployment of wireless technology applications. It will develop and demonstrate innovative wireless transportation applications that deliver safety, mobility, emergency response, energy, and/or environmental benefits to both passenger, fleet and freight transportation systems. The WIN for Transportation program compliments and builds upon the USDOT's ongoing ITS research program (
• Use “living laboratories” in a competitively-selected region or corridor where innovative broadband wireless communications methods and applications can be safely evaluated in an operating environment. These living laboratories will leverage other public and private investments.
• Create broadband wireless “fast lanes” for multi-modal transportation applications such as real-time safety inspections, reporting, and access nationwide, including in underserved rural areas and at border crossings.
• Work with state inspection and public safety partners, along with other Federal agencies, to deploy rural wireless access points in areas of critical need for enhanced emergency communications.
• Require that all applications discourage distracted driving/operations and uncover advances that can work to reduce driver workload.
The USDOT has issued this RFI to help determine the most promising technologies and applications to pursue. Responders are reminded that feedback or comments on any aspect of this notice are welcomed from all interested public, private, and academic entities and individuals. While all feedback is encouraged, the USDOT is particularly interested in feedback on the following questions. Respondents may respond, to some, all, or none of these specific questions. Each question should be considered in the context of whether or not investment of all or part of the five year, $100 million Wireless Innovation for Transportation funding would provide incentives for innovation toward realization of substantial new service and public benefits and/or substantially accelerate the accrual of such benefits.
1. The Federal Communications Commission (FCC)'s
a. What types of rural and sparsely populated locations and what applications would benefit from this type of broadband deployment?
b. What research is needed for techniques such as Machine-to-Machine (M2M) communications that would be needed to implement these applications?
c. What research is needed on alternative broadband approaches other than cellular that may be either more suitable or more cost-effective to deploy broadband mobile wireless in these areas?
2. The overall Wireless Innovation and Infrastructure Initiative has provisions for accelerating the implementation of a nationwide interoperable broadband public safety network. This network would be based on LTE (Long Term Evolution) cellular technology, be built to public safety reliability specifications (public safety grade) and would be capable of transmitting voice, video, images, and multimedia communications. Both public transit (including transit police) and highway maintenance and incident response personnel are eligible to use public safety networks.
a. What ITS applications could be enabled on these networks that cannot be implemented on the existing public safety narrowband radio systems transportation agencies and organizations currently use?
b. If a nationwide public safety broadband network were implemented allowing state departments of transportation (DOTs), public transit properties, and first responders to use broadband interoperable communications equipment, what new ITS applications, operations, and procedures could be implemented for emergency response, coordination with first responders, and disaster response?
c. How might such a network be used to coordinate emergency operations such as evacuations with local, State, and Federal law enforcement and emergency response personnel?
3. The growing use of alternative fuel vehicles brings new challenges. What innovative broadband wireless applications would support the use of alternative fuel vehicles? For example, traveler information is traditionally based on shortest route or fastest route. For alternative fuel vehicles, it may be more important to consider additional parameters such as real time routing based on High-Occupancy Vehicle (HOV) lanes open to alternative fuel vehicles, exemption of alternative fuel vehicles from tolls, authorizing access of alternative fuel vehicles into restricted-access, environmentally-sensitive areas (
4. In addition to addressing the unique challenges facing alternative fuel vehicles, how can the WIN for Transportation program help address issues related to reducing the use of non-renewable fuels and to reducing greenhouse gas emissions from transportation vehicles? What specific research and development areas might be undertaken with these reductions in mind? For example, how could innovative wireless broadband technology be used to monitor unnecessary idling of commercial vehicles, such as idling that does not occur at an intersection, stop sign, or at a bus stop and does not occur for power-take-off?
5. How would the provision of open, real-time, anonymous traffic and travel condition data via wireless broadband significantly increase opportunities for entrepreneurs to develop innovative transportation applications, as the provision of public, standardized transit schedule data has done in cities across the U.S.?
6. Next generation broadband systems are expected to have efficient means of implementing Machine-to-Machine (M2M) communications. One example is using embedded modules (small self-contained units with integrated sensor and communications functions) in vehicles to provide information on road, weather, or environmental conditions to traffic management centers or other centralized entities, in a manner transparent to the driver. In this regard, applications using M2M would meet the USDOT objectives concerning distracted driving.
a. What emerging ITS applications would benefit from M2M?
b. What applications could be prototyped or tested in a “living laboratory”?
7. What new commercial vehicle, fleet, rail, or transit safety applications or new methods for operations, based on the availability of broadband wireless that could substantially reduce the cost and improve the quality of regulated commercial vehicle applications? How might such applications be implemented? Which ones might be possible candidates for integration and testing in the near term? Considerations might include:
a. Wireless “fast lanes” supporting real-time safety inspections, reporting, and information access, including at border crossings and in rural areas. Real-time multi-agency access to information at rural and mobile inspection points nationwide could dramatically transform the way freight and motorcoach safety is implemented. The types of information could include carrier and or operator inspection and enforcement data as well as critical safety and lading information (documents issued by a carrier to a shipper, acknowledging that specified goods have been received).
b. Development and implementation of a standardized, secure freight/hazardous materials electronic manifest system.
c. Continuous automated safety monitoring with periodic reporting via broadband wireless, without the use of roadside inspection stations.
d. Cross-agency access to standardized vehicle and operator data for enhanced data sharing and improved mission effectiveness.
8. How might a future commercial broadband service address connected vehicle applications: (
a. What is required from a commercial broadband service in terms of reliability and resilience to ensure it would be available during emergencies and disasters to support transportation services?
b. What technologies such as mesh or ad-hoc networking or innovative use of relays, femtocells (which are small base stations attached to a fixed broadband connection), or Wi-Fi access points could be used to demonstrate an increase in network resilience for transportation applications?
c. What such applications, technologies and techniques might be prototyped and tested in a “living laboratory” over the next five years?
9. Security standards may need to incorporate techniques to provide anonymity and defeat tracking attempts against individual drivers when using connected vehicle applications or global positioning systems (GPS). Commercial broadband networks are designed to provide location information for emergency response (E911 and NG911) and are increasingly implementing applications using location-based services that specifically track user and/or vehicle locations. These features might limit the suitability of commercial broadband networks for some applications, especially those that may be potentially mandatory and/or government-sponsored
a. What types of ITS applications, especially those that may be potentially mandatory or government-sponsored, might make use of commercial broadband networks?
b. What policy initiatives and possible technical features will need to be implemented to assure users that their privacy is protected regardless of which communications network (or networks) is used?
10. What actions should the USDOT take, either from a technical or policy perspective, to encourage development of integrated, multi-platform wireless devices
11. What other broadband technologies or applications would provide substantial public benefits and testing or deployment of which would be accelerated by WIN funding?
12. Security standards for vehicle-to-vehicle and vehicle-to-infrastructure communications may require techniques for authenticating messages, including verifying the authority to send various classes of messages and the source of the messages. They may also include techniques to encrypt messages if needed.
a. What transportation applications might require such security features when implemented on commercial networks, and what attributes might the applications require (for example, authentication, data integrity, non-repudiation,
b. Could widespread broadband wireless capability be leveraged to address the security requirements transportation and/or other non-transportation applications?
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to Certain Asset Transfers to a Tax Exempt Entity.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for copies of this regulation should be directed to Joel Goldberger, at (202) 927-9368, or at Internal Revenue Service, Room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet, at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 8842, Election To Use Different Annualization Periods for Corporate Estimated Tax.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to Joel Goldberger (202) 927-9368, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to Amortizable Bond Premium.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Joel Goldberger at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or at (202)927-9368, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS soliciting comments concerning information collection requirements related to Capital Gains, Partnership, Subchapter S, and Trusts Provisions.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Joel Goldberger at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or at (202)927-9368, or through the Internet at
The burden estimates for requirement is reflected in the burden estimates for: Form 1040, U.S. Individual Income Tax Return; Form 1065, U.S. Partnership Return of Income; Form 1041, U.S. Income Tax Return for Estates and Trusts; and Form 1120S, U.S. Income Tax Return for an S Corporation.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of this regulation should be directed to Joel Goldberger, (202) 927-9368, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The burden is reflected in the burden of Form 8865.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to Continuation Coverage Requirements Application to Group Health Plans.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of regulation should be directed to Joel Goldberger, (202) 927-9368, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The estimated time per respondent varies from 30 seconds to 330 hours, depending on individual circumstances, with an estimated average of 14 minutes.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection related to Private Foundation Disclosure Rules.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for copies of regulations should be directed to Joel Goldberger (202) 927-9368, Internal Revenue Service, Room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection related to Limitations on Corporate Net Operating Loss.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Joel Goldberger at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or at (202) 927-9368, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to Deductions and Reductions In Earnings and Profits (or Accumulated Profits) With Respect to Certain Foreign Deferred Compensation Plans Maintained by Certain Foreign Corporations or by Foreign Branches of Domestic Corporations.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of this regulation should be directed to Joel Goldberger, at (202) 927-9368, or at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet, at
Estimated Time per Respondent: 508 hours.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, 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, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to Simplification of Entity Classification Rules.
Written comments should be received on or before July 11, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulations should be directed to Joel Goldberger at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or at (202) 927-9368, or through the Internet at
The burden for the collection of information in this regulation is reflected in the burden estimates of Form 8832.
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Notice is hereby given that on May 3, 2011, the Office of Thrift Supervision approved the application of American Eagle Savings Bank, Boothwyn, Pennsylvania, to convert to the stock form of organization. Copies of the application are available for inspection by appointment (phone number: (202) 906-5922 or e-mail:
By the Office of Thrift Supervision.
Fish and Wildlife Service, Interior.
Proposed rule; withdrawal.
We, the U.S. Fish and Wildlife Service (Service), announce our decision to withdraw the proposed listing of the mountain plover (
The December 5, 2002 (67 FR 72396), proposal to list the mountain plover as a threatened species is withdrawn as of May 12, 2011.
This finding is available for viewing on the Internet at
Susan Linner, Field Supervisor, U.S. Fish and Wildlife Service, Colorado Ecological Services Field Office (see
For a detailed description of Federal actions concerning the mountain plover, please refer to the February 16, 1999, proposed rule to list the species (64 FR 7587); the December 5, 2002, proposed rule to list the species with a special rule under section 4(d) of the Act (16 U.S.C. 1531
The document we published on September 9, 2003 (68 FR 53083), withdrew the entire proposed rule we published on December 5, 2002 (67 FR 72396), including our proposal to list the mountain plover as a threatened species and our proposed special 4(d) rule. The September 9, 2003, document also addressed comments we received on both the 1999 and 2002 proposals to list the mountain plover and summarized threat factors affecting the species. The withdrawal of the proposed rule was based on our conclusion that the threats to the mountain plover identified in the proposed rule were not as significant as previously believed and that currently available data did not indicate that threats to the species and its habitat, as analyzed under the five listing factors described in section 4(a)(1) of the Act, were likely to endanger the species in the foreseeable future throughout all or a significant portion of its range.
On November 16, 2006, Forest Guardians (now WildEarth Guardians) and the Biological Conservation Alliance filed a complaint in the District Court for the Southern District of California challenging the September 9, 2003, withdrawal of the proposal to list the mountain plover (68 FR 53083). We entered into a settlement agreement with the plaintiffs, which was filed by the court on August 28, 2009. As part of the settlement agreement, we agreed to reconsider our decision to withdraw the proposed listing of the mountain plover and to submit to the
On June 29, 2010, we published a document in the
Our February 16, 1999, and December 5, 2002, proposed rules (64 FR 7587 and 67 FR 72396, respectively), and our September 9, 2003, withdrawal of our 2002 proposal to list the mountain plover (68 FR 53083) described the species' life history, ecology, and habitat use. For additional background on the natural history of the mountain plover, see the account of the species in
While the majority of relevant information directly pertaining to the mountain plover that has become available since our December 5, 2002, proposal to list (67 FR 72396) and September 9, 2003, withdrawal of that proposal (68 FR 53083) has resulted from local or Statewide studies on the mountain plover's breeding range; two recent documents provide extensive review of current knowledge regarding the mountain plover:
(1) Mountain Plover (
(2) Conservation Plan for the Mountain Plover (
Numerous other recent documents are summarized in our June 29, 2010, notification reinstating our December 5, 2002, proposed rule to list the mountain plover as threatened under the Act (75 FR 37353). These include over twenty peer-reviewed journal articles, and many other reports and summaries relevant to the status of the mountain plover that have become available since 2002.
The following sections highlight and update information on the mountain plover with emphasis on information developed since 2002.
The mountain plover (
Mountain plover feed on ground-dwelling invertebrates and flying invertebrates found on the ground, primarily beetles, crickets, and ants. They forage with a series of short runs and stops, feeding opportunistically as they encounter prey (Knopf and Wunder 2006, unpaginated).
Mountain plover return north to their breeding sites in the western Great Plains and Rocky Mountain States in spring. They arrive at their breeding grounds in northeastern Colorado in late March (Graul 1975, p. 6). Arrival is earlier farther south and later in Montana and at higher elevations in South Park, Colorado (Knopf and Wunder 2006). Mountain plover are territorial during the breeding season, with males defending territories shortly after arrival (Knopf and Wunder 2006). Mountain plover are generally monogamous; they form pairs and begin courtship on arrival at their breeding grounds. Nests consist of a simple ground scrape. Egg laying in northeastern Colorado begins in late April and extends through mid-June (Graul 1975, p. 7). Graul (1973, p. 84) described mountain plover nesting as a “rapid multi-clutch system.” The female normally produces two clutches, typically three eggs each, at different nest sites; the male incubates the first nest site while the female incubates the second. If the first nest or brood is lost early in the breeding season, the adult may renest, so each pair can potentially make four attempts per year to raise a brood. This breeding system may increase breeding success given predation that occurs on mountain plover nests or broods. This breeding system, rare among bird species, may result in greater reproductive potential than in other shorebirds (Knopf and Wunder 2006). It may have developed in response to food fluctuations that typically occur in the shortgrass prairie, where insect populations likely fluctuate in response to annual, seasonal, and local fluctuations in precipitation (Graul 1973, p. 85).
Average incubation period is 29 days (Graul 1975, p. 19). Chicks leave the nest within hours of hatching and obtain their own food. Only one adult normally tends each nest and brood. The minimum habitat requirement for mountain plover broods in Montana was 70 acres (ac) (28 hectares (ha)) (Knopf and Rupert 1996, p. 33), and brood home ranges averaged 143 ac (57 ha) on rangeland in Colorado (Knopf and Rupert 1996, p. 31). Brood home ranges appeared similar for three Colorado landscapes (Dreitz and Knopf 2007, p. 129). Parents stay with chicks until they fledge, which occurs at about 33 to 34 days (Graul 1975, p. 25). Mountain plover breed their first spring and every year thereafter (Knopf and Wunder 2006).
Although often thought of as a grassland species, the mountain plover may best be described as a species of disturbed prairie or semi-desert habitat (Knopf and Miller 1994, p. 505). They are found on open, flat lands including xeric (extremely dry) shrublands, shortgrass prairie, barren agricultural fields, and other sparsely vegetated areas. On grasslands, they often inhabit areas with a history of disturbance by burrowing rodents such as prairie dogs (
Mountain plover breed from Canada (extreme southern Alberta and Saskatchewan) to northern Mexico (Figure 1) with greatest apparent numbers in Colorado and Wyoming, and substantial numbers in Montana, New Mexico, and Nebraska. In Mexico, breeding populations are suspected in the States of Chihuahua, Cohuila, and Nuevo Leon (Andres and Stone 2009, p. 9).
Mountain plover winter in similar habitat, many in California, but also in southern portions of Arizona, Nevada, New Mexico, Texas, and in northern Mexico. While California's Sacramento, San Joaquin, and Imperial Valleys support the greatest documented concentrations of wintering mountain plover, relatively little is known about wintering numbers or distribution in other areas.
Common elements of mountain plover breeding habitat include short vegetation, bare ground, and flat topography. The mountain plover historically nested in a region impacted by a variety of herbivores, including prairie dogs, bison (
On the plains, the mountain plover is generally considered an associate of the shortgrass prairie, dominated by blue grama (
Prairie dog colonies create important habitat for mountain plover, and are especially important to maintaining mountain plover populations in the northern portions of their range (Dinsmore
In the Colorado shortgrass prairie ecosystem, mountain plover densities observed on black-tailed prairie dog colonies were higher than those on dryland agriculture and much higher than those on grasslands without prairie dogs (Dreitz
Mountain plover have been found to regularly use fallow or plowed agricultural fields for nesting (Shackford
Recent studies addressed the mountain plover's nesting ecology, and attempted to identify the extent of breeding distribution and population size in Nebraska (Bly
It remains unknown whether Texas or Mexico crop fields support mountain plover breeding (Andres and Stone 2009, p. 24). Holliday (2010) reported that breeding season sightings of mountain plover from the Texas Panhandle tended to be in cultivated fields as in adjacent Oklahoma, although previously reported nesting in West Texas was in grazed, short-grass habitat.
Knopf and Wunder (2006) described mountain plover as breeding “more predictably” at semi-desert locations west of the shortgrass prairie in Colorado, Wyoming, and Montana. Beauvais and Smith (2003, entire) developed a model of mountain plover breeding habitat in shrub-steppe habitat of western Wyoming. They related favored patches of mountain plover breeding habitat to poor soils, low precipitation, and wind scour, features they predicted would persist over time, especially on public lands. In such habitats, mountain plover are less dependent on prairie dog colonies to create breeding habitat. A Wyoming study located 55 mountain plover nests in grassland or desert scrub habitat in six counties (Plumb
In summary, mountain plover require short vegetation with some bare ground on their breeding sites. In grasslands, this usually requires disturbance, such as that provided by prairie dogs, cattle grazing, fire, or farming. In semi-desert environments, breeding habitat may persist without these forms of disturbance.
Southbound migration of mountain plover is prolonged, with post-breeding flocks numbering in the hundreds forming in late June with some remaining on breeding areas until September or October (Bly
In winter, mountain plover use habitats similar to those on their breeding grounds. Mountain plover are found wintering in California mostly on fallow and cultivated agricultural fields, but also on grasslands and grazed pastures (Hunting
Throughout the Central Valley of California, the field types used by mountain plover vary seasonally, from uncultivated lands in October and November, shifting toward cultivated lands over the winter (Hunting and Edson 2008, pp. 183-184). Mountain plover wintering in the San Joaquin Valley of California used tilled fields, grazed pastures, alkali flats, and burned fields, but they preferred native valley sink scrub (low vegetation dominated by alkali-tolerant shrubs) and nonnative grazed or burned grasslands over any of the more common cultivated land types (Knopf and Rupert 1995, pp. 747-749). Winter habitat availability in California's Carrizo Plain seems linked to a combination of livestock grazing and precipitation, with heavy grazing and dry conditions creating conditions most favorable to the mountain plover. Giant kangaroo rat (
Mountain plover exclusively used cultivated sites in the Imperial Valley of California (Wunder and Knopf 2003, pp. 74-75). While cultivated lands are abundant throughout the Imperial Valley, not all provide suitable feeding habitat. Mountain plover were found to favor irrigated farmland, including burned bermudagrass (
In California, annual climatic variability, especially abundant rainfall, influences field conditions and can reduce mountain plover use of traditionally occupied wintering sites. For example, mountain plover became virtually absent from cultivated fields in the Imperial Valley during the rainy winter of 2004-2005 (Knopf and Wunder 2006). Movement patterns of wintering mountain plover in California are shown to be highly variable, with birds on several occasions moving more than 34 miles (mi) (55 kilometers (km)) in a week (Knopf and Wunder 2006).
In Arizona, mountain plover winter on sod farms and grazed pastures, and are observed using the same sites yearly. Their use of farm fields and other potential habitats is generally unknown, and these areas are rarely surveyed (Robertson 2010, p. 1). A few mountain plover have wintered in recent years on mowed grasses at Gila Bend Air Force Auxiliary Field (Mendelsohn 2010).
In Texas, winter reports of mountain plover were correlated with barren fields and grazed pastures (Holliday 2010). In Williamson and Bell Counties, Texas, mountain plover winter only on large, flat, plowed fields, especially those with some corn or sorghum stubble (Fennel 2002, p. 29). In the Texas coastal bend area (Nueces and San Patricio Counties), wintering plover are largely limited to plowed fields rather than grasslands or fallow fields, with mountain plover often following tractors while feeding (Cobb 2009, pers. comm.). Wintering mountain plover in Texas have also been reported using burned fields (Knopf and Wunder 2006), sod farms (Cobb 2011, pers. comm.), coastal prairies, and alkaline flats (Andres and Stone 2009, p. 12).
In Mexico, mountain plover are found wintering in grassland areas with high densities of prairie dogs (both black-tailed and Mexican) and on heavily grazed pastures (Andres and Stone 2009, p. 12; Macias-Duarte and Panjabi 2010, pp. 5, 7). Consistent with other areas, open habitat with low grass cover and sparse or no shrub cover are elements common to areas used by mountain plover in Mexico. However, significant mountain plover use of crop fields in Mexico has not been reported (Macias-Duarte and Punjabi 2010, p. 7).
Wunder (2007) studied geographic population structure in mountain plover through color-banding and stable isotope concentrations in feathers. He concluded that there is widespread mixing of mountain plover populations in winter and that birds may use alternate wintering sites in different years (Wunder 2007, p. 118). While mountain plover appear annually at some favored wintering sites, site fidelity by individual birds appears low. Mountain plover can move long distances and use various sites even within a given winter.
A long-term study on mountain plover breeding grounds in Phillips County, Montana, provides much of what is known regarding population dynamics of the species. The annual survival rate of adult mountain plover of both sexes in Phillips County ranged from 0.74 to 0.96 yearly (Dinsmore 2008, p. 50). The annual survival rate for juvenile mountain plover (survival to 1 year of age) was 0.06 at hatching, but for those chicks that reached fledging age was 0.62 (Dinsmore 2008, p. 51). Survival estimates did not account for permanent emigration (birds surviving but returning in subsequent years to sites outside of the study area), so the actual annual survival may have been higher.
Previous estimates of survival rates and of estimated mean lifespan of 1.92 years (Dinsmore
Mountain plover have a high nest survival rate compared to other ground-nesting species (Dinsmore
There have been relatively few studies of chick survival (hatching to fledging) and results vary greatly. Dreitz (2009, p. 6) estimated that 30-day survival of chicks of mountain plover from prairie dog colony nesting habitat was 75 percent, and that 30-day survival on other grasslands and on agricultural fields was less than 25 percent. Following similar methodology, research on crop fields in Nebraska found 95 percent survival of chicks accompanying 31 adult mountain plover that were radio-tracked for the 36 days after eggs hatched (Blakesley and Jorgensen 2010). Radio contact was lost with other adults (due to birds leaving the area or transmitter failure), but even if assuming all chicks associated with these adults perished, chick survival was at least 58 percent (Blakesley and Jorgensen 2010). Dreitz
Few studies have estimated seasonal adult survival rates. Dreitz (2010, unpaginated) found 89 percent survival of adults with broods for the 30 days after hatching. A study of overwintering mountain plover in California showed nearly 95 percent survival of wintering birds from November 1 to March 15 (Knopf and Rupert 1995, p. 746). Since survival of adults during stationary periods is believed to be relatively high, and there is no estimate for adult survival during spring and fall migration, there is potential that losses of adults during migration may be significant and efforts to increase adult survival might be focused on migration periods (Dinsmore
A life stage-specific model based on data from three breeding areas, two in Colorado and one in Montana, found that mean adult survival was the parameter that most influenced modeled population growth (Dinsmore
Mountain plover were thought to have high site fidelity to nesting locations, returning to same area where they hatched each year (Graul 1973, p. 71). Skrade and Dinsmore (2010, p. 672) quantified mountain plover dispersal on breeding sites in Montana and reported juvenile (natal) dispersal (hatching year to return at age 1) averaged 8.1 mi (13.0 km) for males and 6.3 mi (10.2 km) for females. Only 4 of 38 banded chicks returning as adults arrived back at the same black-tailed prairie dog colony where they were banded. Knopf and Wunder (2006) noted a chick that had dispersed over 30 mi (50 km) in Colorado.
The previous year's nesting success influences adult dispersal; unsuccessful adults disperse farther than successfully breeding adults (Skrade and Dinsmore 2010, p. 671). While adults rarely move far from the area where they nested the previous year, evidence of potential for year-to-year dispersal in adults is exemplified by an adult mountain plover banded on a breeding area in Colorado in 2009, that was found nesting approximately 25 mi (40 km) away in Nebraska in 2010 (Bly 2010b, pers. comm.).
Results from genetic studies suggest that gene flow among breeding areas is sufficient to offset genetic effects of small populations and reported adult fidelity to breeding areas (Oyler-McCance
Mountain plover are difficult to detect because they are cryptically colored and in general are widely distributed at low densities (Knopf and Wunder 2006). Based on historical observations of mountain plover and extensive habitat changes, there is general agreement that the mountain plover is currently greatly reduced in numbers and range compared to their numbers and range prior to European settlement (Graul and Webster 1976, p. 265; Knopf and Wunder 2006). The mountain plover's historical breeding range is believed to have differed from that currently occupied primarily in its eastern extent, which may have encompassed the western thirds of North Dakota, South Dakota, and Nebraska, and more of western Kansas and the Texas Panhandle than is currently occupied (Graul and Webster 1976, p. 265, Knopf and Wunder 2008).
Population estimates for the species, both historical and recent, appear imprecise. Graul and Webster (1976, p. 266) estimated that mountain plover populations in Montana, Wyoming, eastern Colorado, and New Mexico then totaled 214,200 to 319,220 birds, with 20,820 in the population stronghold of Weld County, Colorado. However, Knopf and Wunder (2008) cited Graul (pers. comm.) as saying that the estimates may have been off (
Knopf (1996, p. 12) estimated the total population of mountain plover to be about 8,000 to 10,000, based on a 1994 wintering survey in California and on assumptions regarding proportion of the wintering population observed (
Accurate trend information for mountain plover numbers is generally lacking. Interpreting trends from the two long standing surveys, the Breeding Bird Survey (BBS) and the National Audubon Society's Christmas Bird Count (CBC), suffer from a variety of problems, including the inherent difficulties associated with using a survey of only a small portion of a total population to infer rangewide trends (Knopf and Wunder 2004, p. 1).
The BBS is a large-scale survey of North American birds that began in 1966, and is conducted during the breeding season by observers driving along roads over established routes. Knopf (1996, p. 12) cited BBS data from 1966 through 1993 as indicative of a steep decline in mountain plover numbers across their breeding range (3.7 percent per year, a decline of approximately two-thirds over the period). However, Knopf and Wunder (2004, p. 1) suggested that the timing of surveys (which occur mostly in June when mountain plover are less conspicuous) and the low densities at which mountain plover occur prevent reliable trend estimates.
Based on recent BBS data analysis (Sauer 2010a), the mountain plover has declined rangewide at an estimated rate of 2.6 percent per year for the period from 1966 to 2009 (95 percent confidence interval (CI) −6.7 to +0.6). However, for the period from 1999 through 2009, the estimated rate of decline decreased to 1.1 percent per year (95 percent CI −5.8, +9.6) (Figure 2). While neither estimate varies statistically from a stable population (at a 95 percent CI), the probability that the estimated long-term trend (1966 through 2009) is less than or equal to zero is 95 percent. The probability that the estimated short-term trend (1999 through 2009) is less than or equal to zero is 68 percent. The estimated long-term decline is consistent with the generally accepted conclusion that the mountain plover's rangewide population is currently smaller than it was in the 1960s. The more recent (1999 through 2009) estimated decline and associated CI lead us to conclude that most or all of the long-term decrease took place before 1999, that any recent declines are modest, and that the mountain plover population may be near stable.
Sauer (2011, pers. comm.) concluded that limited regional data from the BBS (
We conclude that, while the BBS is the only long-term trend information available for the mountain plover on its breeding range, it is an imprecise indicator of mountain plover population trends. Given the wide confidence interval and the conclusion by Sauer (2011, pers. comm.) above, the data provide limited support for any recent (1999 through 2009) trend in mountain plover numbers. Even so, we acknowledge that this is the best available information on trends for this species and BBS survey results suggest a recent (1999 through 2009) moderated rate of decline (Figure 2). We provide long-term and recent BBS trend estimates for three States where the sample size allowed for analysis (see Conservation Status and Local Populations below), but with the same reservations regarding precision.
The CBC is an annual count performed around the end of December in which volunteers observe birds in 15-mi (24-km) radius count circles. While CBCs can be used to infer species population trends, spatial coverage is limited (Knopf and Wunder 2004, p. 1) and established count circles commonly coincide with populated areas where volunteers are available. The CBC data estimated an annual decrease of 2.8 percent in mountain plover observed from 1966 through 2007, but reliability was described as low (Butcher and Niven 2007, Appendix 1).
The vast majority of mountain plover reported in CBCs come from California and, within California, from the South Salton Sea count. Pandolfino (2009, unpaginated) submitted his analysis of CBC data for California and recognized the data's limitations, but concluded that the data reflected long-term and recent declines in mountain plover numbers wintering in California. The CBC data on mountain plover numbers is highly variable from year to year. The Salton Sea South CBC, the only CBC in the Imperial Valley, is limited in scope and does not include portions of the valley where most mountain plover have been seen (Wunder and Knopf 2003, p. 76). Inherent limitations in data collection methods (volunteers surveying small areas relative to total winter range) and lack of sufficient detections of mountain plover in California count circles (Hunting
We conclude, based on observations across the mountain plover's range and BBS trend data, that a historical decline of the mountain plover has occurred since the 1960s. However, we agree with the conclusion of Andres and Stone (2009, p. 3) that precise and accurate information on recent trends in mountain plover numbers is lacking. The recent (1999 through 2009) decline estimate from BBS data is modest (1.1 percent per year) and any difference from a stable population estimate (slope of 0.0) is statistically insignificant. However, we acknowledge that the BBS data is the best available information on trends for the mountain plover and that BBS results suggest a recent (1999 through 2009) moderated rate of decline (Figure 2). The CBC wintering data are highly variable and come mostly from California, but also suggest a long-term decline. No comprehensive trend data across the mountain plover's wintering range are available. The discussion below provides information on populations and trends within States, Canada, and Mexico, where available.
The mountain plover is listed as endangered in Canada, as a sensitive species in Alberta, and as a threatened species in Mexico (Andres and Stone 2009, p. 13; Gober 2010). The mountain plover is identified by the Service as a Bird of Conservation Concern (Service 2008), is considered “highly imperiled” in the U.S. Shorebird Conservation Plan (2004, p. 2), a category assigned to species listed as threatened or endangered nationally, and all species with significant population declines and either low populations or some other high risk factor. It is also identified as “G3-vulnerable” by NatureServe (2010). The species is listed as a sensitive species by the U.S. Forest Service (USFS) (2010) and by the Bureau of Land Management (BLM) (2000a, 2006, 2010a). It is identified as a species of global conservation concern in the American Bird Conservancy and National Audubon Watchlist, and it is listed as “near threatened” by the International Union for the Conservation of Nature (IUCN) (BirdLife International 2010). The designations discussed above may, in part, reflect population estimates at the time those designations were established. The IUCN previously (from 2004 to 2007) listed the species as “vulnerable,” a higher level of concern than “near threatened,” but changed its rating as higher rangewide population estimates emerged. The U.S. Shorebird Conservation Plan provided a rangewide estimate of 9,000 mountain plover until 2006, when the estimate was revised upward to 12,500 (Morrison
All States within the range of the mountain plover have included the species in their Comprehensive Wildlife Conservation Strategy or Wildlife Action Plans or both (State Plans) (Arizona Game and Fish Department 2006; University of California 2005; Colorado Division of Wildlife 2006; Wasson
In Eastern Colorado, the shortgrass prairie ecosystem provides flat, dry breeding habitat for the mountain plover. The species occupies grasslands within prairie dog colonies, grasslands without prairie dog colonies, and dry land agricultural fields (Dreitz
Knopf and Miller (1994, p. 504) noted the PNG, Weld County, Colorado, as a breeding stronghold for the species, but in the mid-1990s the population fell dramatically. The PNG now supports relatively few breeding mountain plover. In 2009, Knopf provided an overview of mountain plover studies on the PNG from 1986 through 2007. He suggested that mountain plover numbers on the PNG had been in decline since the late 1930s and early 1940s, and that the dramatic decline in the mid-1990s was the abrupt endpoint of a process of deteriorating habitat, exacerbated by other factors such as wet spring weather, increased predation, and the relocation of breeding mountain plover to better habitats elsewhere (Knopf 2008, p. 61).
Despite the virtual loss of the PNG population, over half of all mountain plover are thought to breed in Colorado (Andres and Stone 2009, p. 15). A recent study reported a conservative estimate of 8,577 breeding mountain plover in eastern Colorado (95 percent CI 7,511 to 35,130) (Tipton
The BBS data from Colorado, 1966 through 2009 (−0.9 percent decline annually, 95 percent CI (−7.0 to 3.5)) and 1999 through 2009 (0.3 percent increase annually, 95 percent CI (−5.5 to 14.7)) (Sauer 2010a), suggest little long-term or recent change in breeding numbers in Colorado. Based on these data, we conclude that the current breeding population in Colorado, which likely supports half or more of all breeding mountain plover, is relatively stable.
Wyoming has the highest estimated number of breeding mountain plover outside of Colorado. The mountain plover is locally common and has been detected in every county of Wyoming (Smith and Keinath 2004, p. 3). A projected 20.5 million ac (8.3 million ha) of mountain plover habitat exists in Wyoming, with 59 percent occurring on public lands (Wyoming Natural Diversity Database (WYNDD) 2010; Emmerich 2010).
Nesting of mountain plover in Wyoming occurs in both grassland, mostly in the eastern part of the State, and desert-shrub (Plumb
Plumb
The BBS data from Wyoming (Sauer 2010a), 1966 through 2009 (−1.2 percent decline annually, 95 percent CI (−5.7 to 3.3)) and 1999 through 2009 (−2.3 percent decline annually, 95 percent CI −13.9 to 4.5)), suggest that both long-term and recent declines in breeding mountain plover numbers in Wyoming may have occurred.
Primary breeding habitat for mountain plover in Montana is in the north-central portion of the State where mountain plover are highly dependent on black-tailed prairie dog colonies for habitat. Montana Fish, Wildlife and Parks modeled suitable mountain plover habitat in the State. Mapping indicated that the greatest area of highly suitable habitat occurs in Phillips, Blain, Valley, and Fergus Counties with patchy distribution though the central and southeast portions of the State. The total area of suitable habitat estimated was 18.5 million ac (7.5 million ha) (McDonald 2010).
Childers and Dinsmore (2008, p. 706) reported an estimate of 1,028 mountain plover in Phillips and Valley Counties in 2004 (95 percent CI (903 to 1,153)). In 2010, standardized census areas in southwest, central, and northeast Montana produced fewer sightings than previous surveys (1992-2000, 2004); however, McDonald (2010) stated that results were negatively influenced by above average rainfall, increased vegetation height, and limited private land access; therefore, results cannot be relied upon. Other than apparent confirmation of a previously documented decline in the southwest census area (FaunaWest Wildlife Consultants 2004, pp. 4-5), no trends could be inferred from the 2010 survey.
Andres and Stone (2009, p. 8) used the above estimate by Childers and Dinsmore (2008, p. 706) and previous estimates of about 600 mountain plover elsewhere in Montana and provided a Statewide estimate of approximately 1,600 mountain plover. BBS observations of mountain plover on routes in Montana were insufficient to provide estimates of population trend.
Most breeding season reports of mountain plover in New Mexico have come from the northeast and western counties. Sager (1996, pp. 8-9) found 152 presumed breeding adults at 35 sites in 11 counties in northern New Mexico. Marguilies
At BLM's North Unit, Taos County, point counts in 2005 through 2007 estimated 176 mountain plover on 8,400 ac (3,400 ha) of the 50,000-ac (20,000-ha) unit considered to be favorable mountain plover breeding habitat, based on past observation of mountain plover (Hawks Aloft 2007, pp. 9-11). If the entire unit was occupied at the same density, an estimated 1,000 mountain plover might have been present on the North Unit. Manderson (2010, pers. comm.) inspected habitat away from survey routes in 2010, and suggested that, based on habitat quality, 500 or more mountain plover could be present on the entire unit. Mountain plover numbers seen on the same survey routes in 2010 were comparable to those in earlier (2005 through 2007) surveys (Hawks Aloft 2010, p. 13), suggesting this population may be stable.
Goguen (2010, pers. comm.) estimated a minimum of 40 to 50 breeding mountain plover on the Vermejo Ranch, Colfax and Taos Counties. Mountain plover were also recently reported present in El Malpais National Conservation Area, Cibola County (Hawks Aloft 2008, entire).
We found no Statewide breeding surveys or estimates of Statewide breeding populations for mountain plover in New Mexico, other than Andres and Stone's (2009, p. 8) conservative estimate of 500. Given the above data from Union County, the BLM's North Unit in Taos County, the Vermejo Ranch in Colfax and Taos Counties, and likely mountain plover occurrence in several other counties, we believe that at least 1,000 and potentially significantly more mountain plover breed in New Mexico.
BBS data from New Mexico (Sauer 2010a), 1966 through 2009 (−5.0 percent decline annually, 95 percent CI (−8.6 to −1.2)) and 1999 through 2009 (−4.8 decline annually, 95 percent CI (−12.1 to 2.7)), demonstrate a long-term decline and also suggest a short-term decline in breeding mountain plover numbers in New Mexico. New Mexico is the only State for which the long-term BBS trend statistically differs from zero.
In our December 5, 2002, proposal to list the mountain plover we estimated 200 mountain plover in Nebraska (67 FR 72399). Recent studies attempted to identify the extent of breeding distribution and population size in Nebraska (Bly
Nebraska is the only State that has regulatory mechanisms in place to conserve the mountain plover and its habitat, which likely protect relatively few individuals. The Nebraska Game and Parks Commission lists the mountain plover as a “threatened” species. Listing of endangered and threatened species identifies those animals and plants whose continued existence in Nebraska is in jeopardy. Efforts can then be made to restore the species or to prevent extirpation or extinction. Once a species is listed, a State law, titled the Nebraska Nongame and Endangered Species Conservation Act, automatically prohibits take, exportation, and possession, and imposes severe penalties on violators (Nebraska Game and Parks Commission
Recent studies to determine the breeding distribution and population size in Oklahoma detected mountain plover in Cimarron and Texas Counties in the Oklahoma panhandle, mostly on fallow or barren agricultural fields (McConnell
The Kansas Department of Wildlife and Parks (2005) stated that mountain plover breed only on dry upland in the shortgrass prairie of western Kansas. While conversion to agriculture has left little native breeding habitat, Cable and Seltman (2010, pp. 50-51) reported mountain plover are an uncommon but regular breeding species in western Kansas and that they also use idle cropland. Morton County may also serve as a staging area for migration in late summer (Cable and Seltman 2010, p. 51). Andres and Stone (2009, p. 8) estimated 200 breeding mountain plover in Kansas. No comprehensive surveys of breeding mountain plover in Kansas have been attempted; however, given their apparent use of both prairie and cropland, and a substantial population in nearby Colorado, the estimate may be appropriate.
The mountain plover likely breeds in Texas, but there are no confirmed reports of breeding since 1993 (Andres and Stone 2009, p. 16). Holliday (2010) described breeding season sight reports of mountain plover from the Texas Panhandle near known Oklahoma breeding sites. Holliday (2004) also mapped potential breeding habitat, much of it on private land that has not been surveyed. Andres and Stone (2010) did not provide an estimate of breeding mountain plover in Texas. We believe that at least minimal numbers of mountain plover breed in Texas.
The only known mountain plover nesting in Arizona is in Apache County in east-central portion of the State, with at maximum perhaps a dozen breeding birds (Gardner 2010, pers. comm.). Breeding has occurred on grasslands where cattle were concentrated and at Gunnison prairie dog (
The mountain plover has been a historically rare breeder in shrub-steppe habitat in the Uinta Basin of northeastern Utah. Manning and White (2001, p. 225) described a small breeding population that averaged about 15 adults yearly. Mountain plover breeding in the area subsequently declined, and no birds have been found during surveys of the area since 2003 (Maxfield 2010, pers. comm.). Andres and Stone (2009, p. 8) estimated fewer than 50 breeding mountain plover in Utah. Based on no recent records of breeding mountain plover, this estimate may be optimistic.
The mountain plover once bred in these States, with higher numbers present in South Dakota, but there are no recent breeding records in either North Dakota or South Dakota (North Dakota Game and Fish Department 2010; South Dakota Game, Fish and Parks 2010).
A review of breeding records for Canada (Knapton
Breeding records of mountain plover in Mexico have been documented in southeastern Coahuila and Nuevo Leon, following a history of breeding season observations in Mexican prairie dog colonies (Desmond and Chavez-Ramirez 2002 entire; Gonzalez-Rojas 2006, pp. 81-84). Nesting is suspected in San Luis Potosi, 130 mi (200 km) south of the above records (Luevano
The extent of mountain plover breeding in Mexico is largely unknown. Andres and Stone (2009, pp. 8, 15) estimated fewer than 300 mountain plover breeding in Mexico (fewer than: 50 in Chihuahua, 100 in Cohuila, 100 in Nuevo Leon, and 50 in San Luis Potosi), but suspect that if there are major concentrations of breeding mountain plover not yet discovered anywhere in their range, they are likely in Mexico. The estimate of fewer than 300 birds is at best a guess, but is appropriately conservative given the lack of knowledge regarding breeding mountain plover occurrence and distribution in Mexico.
In summary, we believe that the rangewide breeding population of mountain plover likely exceeds 20,000, with largest populations in Colorado, conservatively 11,000; Wyoming,
Mountain plover are found from north-central California to the Mexico border, mostly from September to mid-March, with peak numbers from December through February (Knopf and Wunder 2006; Hunting and Edson 2008, p. 181). Mountain plover were historically common on the coastal plain in southern California (coastal prairie, alkaline flats, agricultural fields) before being displaced by human development (Hunting and Edson 2008, p. 182; Wunder and Knopf 2003, p. 78). Historically, much of the mountain plover habitat in the Central Valley grasslands was lost following the decline of grazing elk (
Mountain plover currently occur in the greatest numbers in two general areas in California: (1) The western Central Valley from southern Colusa and Yolo Counties in the north to Kern County in the south (especially the western San Joaquin Valley, the name by which the southern Central Valley is known); and (2) the Imperial Valley in Imperial County (Hunting and Edson 2008, p. 182). The Carrizo Plain, separated from the San Joaquin Valley by the Temblor Range, and the Panoche Valley are also regularly occupied wintering areas.
Populations and trends in the Central Valley are difficult to determine due to the abundance of potential habitat, flock movements, and lack of systematic surveys (Knopf and Rupert 1995, p. 749; Edson and Hunting 1999, p. 17). In our December 5, 2002, proposal to list the mountain plover (67 FR 72396), we included Edson and Hunting's 1999 (p. 27) comment that mountain plover were “rare and local, exceedingly rare, or accidental” within individual counties in the San Joaquin Valley. Wunder and Knopf (2003, p. 78) suggested that, as a result of habitat loss, many mountain plover had shifted from the Central Valley to the Imperial Valley. Hunting and Edson (2008, p. 182) considered reports of 200 to 300 birds in the San Joaquin Valley in winter of 2004-2005, 100 to 200 in Madera County in 2005-2006, 645 in Tulare County in December 2005, and about 300 in western Kings County in January 2006 to be “exceptional.” They also found noteworthy a survey total of 381 mountain plover at the Carrizo Plain in 2006 (Hunting and Edson 2008, p. 182). However, recent reports from the Central Valley also include 645 birds in Madera County in 2006 (McCaski and Garrett 2006, p. 283), 426 in Tulare County in 2007 (McCaski and Garrett 2007, p. 326), 230 in San Joaquin County in 2008 (eBird 2010), 230 in Solano County in 2008 (Central Valley Bird Club 2010), and 223 in Kern County in 2010 (eBird 2010). These reports suggest that significant numbers of mountain plover continue to use widespread areas of the Central Valley annually. Nearby, a recent high count for the Carrizo Plain National Monument was 540 birds in 2009 (Sharum 2010).
In the Imperial Valley, coordinated surveys by 26 observers over 2 days in December 1999 sighted 3,758 mountain plover (Shuford
Hunting
While California remains the best documented wintering area for the mountain plover, it may winter less than 50 percent of the estimated breeding population (Andres and Stone, p. 9). Knopf (1996, p. 12) estimated 7,000 mountain plover wintering in California and 1,000 to 3,000 wintering elsewhere. In our December 5, 2002, proposed rule to list the mountain plover as threatened, we suggested that few mountain plover wintered in Texas, Arizona, and Mexico (67 FR 72397). We do not know the actual number of mountain plover wintering in California or how the number varies from year to year; however, given no recent evidence that wintering birds in California number more than the 7,000 estimate above (Knopf 1996, p. 12), and our current rangewide estimate of at least 20,000 breeding mountain plover, the previous contention that California winters the majority of all mountain plover appears incorrect. The fewer mountain plover that are wintering in California, on average or in any given winter, the more important that wintering areas outside California become. Unfortunately, we have little information to pinpoint where the majority of mountain plover are wintering.
Holiday (2010), based on an examination of LandSat (satellite) photos, found that winter records of mountain plover in Texas correlated to the distribution of barren fields and grazed pastures. He also suggested that the northern limit of the wintering range
Approximately 500 mountain plover are believed to winter in agricultural areas of southern and western Arizona, but numbers could be higher because private and Tribal lands are largely unsurveyed (Gardner 2010). Wintering numbers in La Paz and Pinal Counties appeared stable; numbers in Cochise County have significantly decreased in the last 10 to 15 years due to urban expansion; and Yuma County populations were characterized as increasing, with 150 to 300 birds annually (Gardner 2010; Robertson 2010, pp. 3-4). Wintering mountain plover are also reported from the Sulphur Springs Valley in Cochise County (Robertson 2010, p. 2). Andres and Stone (2009, p. 20) provided an estimate of 200 mountain plover wintering in Arizona. Given limited coverage of potential wintering habitat, we consider the above estimate of 500 birds wintering in Arizona the likely minimum.
Wintering mountain plover are rarely reported from Nevada, with the most recent reports of up to 17 mountain plover coming from the Armagosa Valley near the Nevada-California border northwest of Las Vegas (eBird 2010).
While some mountain plover likely winter in southern New Mexico, we have no information regarding locations or numbers.
Mountain plover's winter distribution in Mexico has not been well studied, but the species is believed to winter from along the United States-Mexico border south into the border States of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon, and Tamaulipas, and beyond into Durango, Zacatecas, and San Luis Potosi (Gonzales-Rojas
Two primary concentration areas within the Chihuahuan Desert are believed to be most important for wintering mountain plover: (1) The Janos area in northwestern Chihuahua; and (2) the El Tokio grasslands in southern Coahuila, Nuevo Leon, northeastern Zacatecas, and northern San Luis Potosi (Macias-Duatre and Punjabi 2010, pp. 3-6). Mountain plover are most abundant in the La Soledad region of the El Tokio grasslands. The highest estimated density in Llano de la Soledad (based on data from the winter of 2005-2006) extrapolated over the area suggests that over 2,000 mountain plover were present. Extrapolation from Llano de la Soledad to all prairie dog colonies in the entire El Tokio region provided an estimate of 6,800 mountain plover (Macias-Duarte and Punjabi 2010, p. 6). While this estimate is crude and may be optimistically high, it is not inconsistent with reports of mountain plover flocks in the area totaling 1,600 to 3,500 birds reported by Andres and Stone (2009, p. 18). In the winter of 2005-2006, surveys in Janos estimated 1,435 birds (Salinas 2006, p. 43).
The reported sightings and the estimates presented above are maximums reported, and the numbers can vary greatly from year to year. However, these reports suggest that a substantial number of mountain plover may winter in Mexico. Andres and Stone (2009, p. 20) provided an estimate of 5,000 birds wintering in Mexico. Changes in sampling methodology, annual variability in mountain plover numbers, and the short duration covered by recent systematic surveys prevent any conclusions regarding trends (Macias-Duarte and Punjabi 2010, pp. 5-6, 16, 17).
We requested written comments from the public on the proposed listing of the mountain plover during the June 29, 2010, through August 30, 2010, comment period that followed our June 29, 2010, document (75 FR 37353) vacating our September 9, 2003, withdrawal (68 FR 53083) and reinstating our December 5, 2002, proposal to list the mountain plover (67 FR 72396). We contacted appropriate Federal, State, and local agencies; scientific organizations; and other interested parties, and invited them to comment on the proposed rule and supporting documents. Following an initial draft of our final determination we contacted 5 peer reviewers and asked them to review selected portions of the draft.
We received 53 comments in response to the December 5, 2002, proposed rule (67 FR 72396) during the June 29, 2010, to August 30, 2010, comment period. These included comments from 3 Federal entities, 10 States, 3 local governments, 28 organizations or groups (business, industry, environmental), and 8 private parties. WildEarth Guardians also forwarded us 302 similar comments from individuals, and the Colorado Farm Bureau forwarded us 8 similar comments from individuals. We received no requests for public hearings. We also reviewed comments received after our February 16, 1999, and December 5, 2002, proposals to list the mountain plover (64 FR 7587 and 67 FR 72396, respectively) for relevant issues not addressed in more recent comments. All substantive comments have either been incorporated into this final determination or are addressed below.
In accordance with our policy published in the
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Based on a variety of existing and projected trends in land use, the further reduction of grassland and crop fields used by mountain plover for wintering in California seems likely. However, as of 2007, California supported over 25 million ac (10 million ha) of land in farms, including 9.5 million ac (3.8 million ha) of cropland, 5.5 million cattle, and 600,000 sheep (USDA 2010). The mountain plover is a highly mobile species that uses habitat opportunistically in winter. The mountain plover's preference for certain agricultural lands above others is well documented. However, the pervasive expanse of agriculture throughout the Central Valley and Imperial Valley suggests to us that, while current and foreseeable future changes may reduce favored wintering habitat, the quantity and variety of agricultural habitat remaining in California will continue to provide sufficient wintering areas for the mountain plover.
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Section 4 of the Act (16 U.S.C. 1533) and implementing regulations (50 CFR 424) set forth procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, a species may be determined to be endangered or threatened based on any of the following five factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
The February 16, 1999 (64 FR 7587), proposed listing rule provided a description of threats affecting the mountain plover under the five listing factors identified in section 4(a)(1) of the Act. The December 5, 2002, proposal (67 FR 72396), which was described as a “supplemental proposal,” provided pertinent new information. Both of the proposed rules concluded that the mountain plover was likely to become an endangered species in the foreseeable future unless measures were taken to reverse its decline. Conservation measures to reverse the decline were discussed in both of the proposals.
In our February 16, 1999, proposed rule to list the species (64 FR 7587) and our December 5, 2002, proposed rule to list the species (67 FR 72396) we described a number of potential threats to the mountain plover. We cited historical decline in the black-tailed prairie dog (98 percent range wide) and its effect on mountain plover habitat. We described effects of past rangeland loss to agricultural conversion (30 percent of the Great Plains) and more recent conversion at specific mountain plover breeding sites. We addressed residential expansion into a mountain plover breeding area in South Park, Colorado, and stated that buildout of private lands would be detrimental. We hypothesized that cultivated areas used for breeding by mountain plover may
In the nine years since our 2002 proposal, substantial new information has been developed regarding the mountain plover and potential threats to its existence. Our December 3, 2009, 12-month finding on a petition to list the black-tailed prairie dog summarized new information on the species and provided a basis for us to assess whether threats to black-tailed prairie dog may, in turn, affect the mountain plover (74 FR 63343). We now believe that the black-tailed prairie dog is a resilient species and that, overall, populations in the mountain plover breeding range are not likely to decline. Recent data confirms that rangeland conversion to agriculture remains insignificant across the mountain plover's breeding range. Of the States where we previously documented rangeland declines, none have experienced significant decline in rangeland in recent years. Expanded human development of mountain plover breeding habitat in South Park, Colorado, did not proceed as previously anticipated, and is not expected to do so in the foreseeable future. Mountain plover use of cultivated lands has been further investigated, providing insight into the value of crop lands to breeding mountain plover. It now appears that perhaps one quarter of the rangewide mountain plover population breeds in crop fields and little evidence has surfaced to suggest that is problematic. Energy production in mountain plover habitat continues to expand, including increased development of oil and gas, and wind energy projects. Studies to date have not documented adverse impacts of oil and gas development, or wind energy projects. Effects of such projects on mountain plover merit continued study, largely because of their potential future scope. In California, land use changes continue in the Imperial Valley and elsewhere. However, based on current rangewide mountain plover population estimates (over 20,000 breeding birds) we now believe that the majority of mountain plover winter in areas other than California. We conclude that even with reduction of California wintering habitat, sufficient area of wintering habitat will remain, in California and elsewhere, to support current populations. Life span, site fidelity, and dispersal of both adult and juvenile mountain plovers have been further investigated. Contrary to our previous belief, the mountain plover is now considered a relatively long-lived species. Results of genetic research provide evidence that mixing among mountain plover breeding populations is occurring. Dispersal, especially by returning one year old mountain plover, appears significant. Site fidelity and the mountain plover's ability to seek out alternative sites for breeding are no longer of concern. While substantially more information has been developed regarding exposure of mountain plover to pesticides, no evidence of actual impacts to individuals, or suggestions that pesticides are having local or rangewide impacts to the species have surfaced.
The following summary builds on scientific and commercial information presented in our 1999 and 2002 proposals and provides our current analysis based on all information currently available.
Recent summaries of the mountain plover's status (Dinsmore 2003; Knopf and Wunder 2006; Andres and Stone 2009) have highlighted the loss or degradation of mountain plover habitat as the greatest threat to the species. The primary issues that have been raised are potential loss of prairie dog populations and the mountain plover habitat they create; loss of native prairie and rangeland habitats; cropland breeding habitat as a potential reproductive sink; oil, gas, and mineral development; wind and solar energy development; loss and changes to wintering habitat in California; livestock grazing practices; and urbanization. We address these below.
Much of the mountain plover breeding range described above follows the range of the black-tailed prairie dog on grasslands of the Great Plains from Canada to Mexico. To a lesser extent, mountain plover also breed within the ranges of the white-tailed, Gunnison's, and Mexican prairie dogs. Mountain plover often nest in black-tailed prairie dog colonies at densities greater than in other habitats (Childers and Dinsmore 2008, p. 707; Tipton
On December 3, 2009, the Service published a 12-month finding on a petition to list the black-tailed prairie dog as endangered or threatened under the Act (74 FR 63343). We found listing to be not warranted. Here, we rely heavily on the analysis and results of that finding to assess the potential threat to the mountain plover from current or future loss of breeding habitat in the United States that is created and maintained by the black-tailed prairie dog.
In our December 5, 2002, proposal to list the mountain plover we discussed historical reduction of the black-tailed prairie dog numbers, but not current populations or recent population trends (67 FR 72402). In our 2009 finding regarding the black-tailed prairie dog, we estimated that 2.4 million ac (1 million ha) of occupied black-tailed prairie dog habitat exists in a shifting mosaic over time, throughout an estimated 283 million ac (115 million ha) of suitable habitat. We evaluated
The following evaluation of black-tailed prairie dog status highlights the three States, Colorado, Montana, and Wyoming, which have the greatest number of breeding mountain plover associated with black-tailed prairie dog colonies. In Colorado, occupied black-tailed prairie dog habitat historically existed in the eastern half of the State, east of the Front Range Mountains (Hall and Kelson 1959, p. 365). Currently, the distribution of the black-tailed prairie dog is scattered in remnant populations throughout at least 75 percent of the historical range (Van Pelt 2009, p. 14). The most recent estimate of occupied habitat is 788,657 ac (319,158 ha) (Odell
The Conservation Plan for Grassland Species in Colorado (Conservation Plan) (Colorado Division of Wildlife 2003, p. 1) has a goal “to ensure, at a minimum, the viability of the black-tailed prairie dog and associated species (mountain plover, burrowing owl, swift fox, and ferruginous hawk (
In Montana, where mountain plover are strongly associated with prairie dog colonies (Childers and Dinsmore 2008, p. 701), black-tailed prairie dog occupied habitat historically existed in the eastern two-thirds of the State, with the exception of the northeastern corner of the State (Hall and Kelson 1959, p. 365). Current prairie dog distribution is scattered in remnant populations over 90 percent of the historical range (Van Pelt 2009, p. 20). Currently, 193,862 ac (78,453 ha) of occupied habitat are estimated to occur in Montana (Hanauska-Brown 2009). This represents nearly a seven-fold increase over occupied habitat thought to be present in Montana in 1961.
In Wyoming, the black-tailed prairie dog historically occupied habitat in the eastern half of the State, east of the Rocky Mountains (Hall and Kelson 1959, p. 365). Currently, distribution is scattered in remnant populations throughout at least 75 percent of the historical range (Van Pelt 2009, p. 40). A 2006 study estimated the amount of occupied habitat to be 229,607 ac (92,919 ha) (Grenier
In the past, the conversion of native prairie habitat or rangeland to cropland reduced black-tailed prairie dog colonies, and thereby impacted the mountain plover's most productive breeding habitat in the grassland ecosystem. Conversion of native prairie to cropland historically progressed across the Great Plains from east to west. The most intensive farming activity remains in the east, in portions of North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, and Texas, where higher rainfall amounts and generally better soils result in greater agricultural production, and the land supports crops such as corn and soybeans. This land conversion resulted in the historical reduction in black-tailed prairie dog populations; as well as reductions in mountain plover populations in Nebraska, Kansas, Oklahoma, and Texas; it also resulted in the extirpation of the mountain plover populations in North Dakota and South Dakota. Land with the highest potential for traditional farming uses was converted many years ago. The threat of future destruction of both prairie dog and mountain plover habitat through cropland conversion is minimal, much less than in the early days of agricultural development in the Great Plains (see Loss of Breeding Habitat to Land Conversion and Development, below).
The present or threatened alteration of habitat due to oil, gas, coalbed methane, and mineral extraction, and wind energy development, affects portions of black-tailed prairie dog occupied habitat; however, we have no information regarding the extent of potential impacts. Nevertheless, prairie dog occupancy has apparently increased within oil and gas development areas in Wyoming (Sorensen
Approximately 110 million ac (45 million ha) of cropland and 283 million ac (115 million ha) of rangeland occur within the black-tailed prairie dog's range at present (Ernst 2008, pp. 10-19). In our December 3, 2009, finding for the black-tailed prairie dog (74 FR 63343), we contrasted the 2.4 million ac (1 million ha) of currently occupied habitat with the 283 million ac (115 million ha) of rangeland and concluded that sufficient potential habitat still occurs within the range of the species in the United States to accommodate large expansions of prairie dog populations (which in turn would benefit the mountain plover) if the landowners and public sentiment allow. We concluded that the present or threatened destruction, modification, or curtailment of habitat or range is not a limiting factor for the black-tailed prairie dog and that we do not anticipate that impacts from habitat loss are likely to negatively impact the status of the species in the foreseeable future. Because of the association between the mountain plover and the black-tailed prairie dog, we believe that appropriate habitat to support prairie dog colonies is not a limiting factor within the breeding range of the mountain plover.
Sylvatic plague is an exotic disease foreign to the evolutionary history of North American prairie dogs. It is caused by the bacterium
We documented in our 12-month finding on a petition to list the black-tailed prairie dog that, since the early 1960s, occupied black-tailed prairie dog habitat has increased in every State, even in those States where sylvatic plague has been present for over 50 years (74 FR 63355-63356). This increase has occurred despite continued impacts from sylvatic plague and other threats. In our 2009 finding, we concluded that the status of the black-tailed prairie dog, as indicated by increased occupied habitat since the early 1960s, indicates that sylvatic plague is not a limiting factor for the species (74 FR 63357).
Similarly, the increase in black-tailed prairie dog numbers in the United States has occurred despite conflicting Federal and State regulations and policies that encourage conservation of prairie dogs through development of State and rangewide management plans, yet in many cases continue to allow shooting and poisoning of prairie dogs. Nevertheless, affected Federal and State agencies are engaged in black-tailed prairie dog management and monitoring to a much greater extent than they were 10 years ago.
Efforts to conserve the black-tailed prairie dog will likely be beneficial to the mountain plover. Our December 3, 2009, finding for the black-tailed prairie dog (74 FR 63343) described the 1998 establishment of the Black-tailed Prairie Dog Conservation Team, with representatives from each State within the historical range of the species, and the development of “The Black-tailed Prairie Dog Conservation Assessment and Strategy” (Van Pelt 1999, entire), which initiated development of “A Multi-State Conservation Plan for the Black-tailed Prairie Dog,
Climate change will likely affect black-tailed prairie dogs and their habitat; however, at this time we have no information on the direct relationship between climate change and black-tailed prairie dog population trends, and we cannot quantify the potential magnitude or extent of impact that climate change may have on the species. While climate change may potentially impact the species in future decades, particularly through its effects on sylvatic plague, it is not apparent that a net loss in occupied habitat will result. The current status of the black-tailed prairie dog does not suggest that the combined effects of sylvatic plague and climate change are currently limiting factors for the species or that they will become so within the foreseeable future, and we do not believe climate change will result in significant population-level impacts to the black-tailed prairie dog.
In summary, we believe that the black-tailed prairie dog is a resilient species and that overall United States populations are not expected to be significantly affected by habitat loss due to conversion to cropland, sylvatic plague, shooting, poisoning, or climate change (74 FR 63364, December 3, 2009).
Mountain plover populations in Montana, and to a lesser extent other breeding areas, are dependent on the prairie dog for breeding habitat. Given our conclusion that habitat created or enhanced by black-tailed prairie dogs is unlikely to decrease, we conclude that threats to the black-tailed prairie dog in the United States do not represent a threat to the continued existence of the mountain plover.
Potential dependence of both wintering and breeding mountain plover populations on remaining prairie dog colonies in Mexico is of concern (Macias-Duarte and Panjabi 2010, pp. 9-10). In Mexico, decline of native grasslands supporting the black-tailed prairie dog and the Federally endangered Mexican prairie dog have been extensive, despite some environmental regulations designed to protect prairie dogs and their habitats. The large black-tailed prairie dog complex at Janos has been reduced by 73 percent since 1988, to approximately 38,000 ac (16,000 ha), while Mexican prairie dog colonies within the El Tokio region have also been reduced to approximately 79,000 ac (32,000 ha) (Andres and Stone 2009, p. 28; Ceballos
These losses in prairie dog habitat in Mexico have degraded or eliminated the extent of wintering plover habitat in these areas. Recent efforts to protect prairie dogs and grasslands also benefit wintering mountain plover and may help stop or reverse recent trends. Government designation of protected areas in Chihuahua and Nuevo Leon, and efforts by Pronatura Noreste, The Nature Conservancy, and other institutions, hold promise (Andres and Stone 2009, pp. 33, 40; Macias-Duarte and Punjabi 2010, p. 10). In 2009, the 1.3-million-ac (526,000-ha) Janos Biosphere Reserve was established to protect some of the best remaining shortgrass prairie in Mexico and thereby benefit the black-tailed prairie dog. This conservation initiative is led by Mexico's National Protected Areas Commission and the Chihuahuan State government (The Nature Conservancy 2010). The Llano de la Soledad, which encompasses the major Mexican prairie dog complexes of the El Tokio area, a 26,000-ac (10,500-ha) area, has been designated a State Natural Area for Ecological Conservation administered by the Agency of Environmental Protection and Natural Resources of Nuevo Leon. Neotropical migratory bird grants from the Service have supported efforts led by Pronatura Noreste to protect and manage key lands through purchase and easement. While past habitat loss for the mountain plover at Janos and El Tokio has been significant, international attention to these and to other important grassland complexes in Mexico improves prospects for future conservation and maintenance of mountain plover wintering habitat.
Knowledge of mountain plover breeding on prairie dog colonies in Mexico is limited. The primary known
Despite the ongoing effects of habitat conversion, sylvatic plague, shooting and poisoning, and lack of regulatory mechanisms that provide protection, black-tailed prairie dog habitats have increased in the United States over the last 50 years (74 FR 63343, December 3, 2009). Although there is significant concern about the status of black-tailed and Mexican prairie dogs and their habitats in Mexico, there is no information available to indicate that further reductions in prairie dogs in Mexico are threatening the mountain plover. At this time, the best available scientific information does not indicate that the loss of prairie dog habitat is likely to threaten the mountain plover now or in the foreseeable future.
As described above, losses of native grasslands in the Great Plains have been severe since European settlement. Losses of these native grasslands have been greatest in the eastern Great Plains and have impacted the mountain plover mainly from conversion of prairie grasslands to crop fields incompatible with mountain plover breeding, including those planted to corn and soybeans. These losses are likely the reason why the mountain plover no longer breeds in the Dakotas, has a limited range in Nebraska, and is now a rare breeder in Kansas (Graul and Webster 1976, p. 266; Knopf and Wunder 2006). Land conversion to agriculture continues, primarily in the northern Great Plains, but at a much slower rate. Over the 15-year period from 1982 to 1997, in Montana, Wyoming, and Colorado, there were no decreases in the amount of rangeland or pastureland present (USDA 2010). Conversion to cropland may be locally affecting mountain plover in some areas of Montana. Approximately 47,000 ac (19,000 ha) of native grassland was converted to agriculture in Montana from 2005 to 2009 (Ducks Unlimited,
The best information available does not allow us to estimate the specific amount of occupied grassland breeding habitat for mountain plover that has been converted to other uses in recent years. However, given the apparent low rate of grassland conversion in Montana and rangewide, and the mountain plover's ability to use grassland that has been converted to other uses such as certain agricultural crops including wheat, sorghum, and millet, we believe that grassland conversion does not pose a substantial threat to the mountain plover in Montana, or elsewhere in its breeding range, now or in the foreseeable future.
In our 1999 and 2002 proposals to list the mountain plover as a threatened species (64 FR 7587 and 67 FR 72396, respectively), we also addressed the concern that grassland breeding habitat may be lost to human development. Since the mountain plover's breeding range is extensive, there are undoubtedly instances where human development is and will locally displace the mountain plover. We agree with the conclusion of Andres and Stone (2009, p. 22) that habitat in the mountain plover breeding range is subject to little overall threat from residential and commercial development, because human development is not expected to be very extensive in the largely rural areas of the species' breeding habitat.
An area that generated past concern in our 1999 and 2002 proposals is South Park, Park County, Colorado, an approximately 480,000 ac (200,000 ha) grassland basin where the mountain plover breeding population is estimated to be about 2,300 birds. Much of the mountain plover habitat in South Park is privately owned, and 32 percent of this area has been subdivided (Granau and Wunder 2001, pp. 8-9). Substantial build-out of those properties currently subdivided would be detrimental to mountain plover; however, human population growth in South Park is modest (Nichols 2010, pers. comm.). Many of the subdivisions occurred in the 1960s and 1970s, and have not been developed. Earlier forecasts suggested South Park would have a human population of 10,000 by 2010, but the current human population stands at approximately 3,500 (Nichols 2010, pers. comm.). Issuance of building permits countywide have decreased steadily in recent years, from 297 in 2002 to 70 in 2009 (Carrington 2010, pers. comm.). In addition, land protection and conservation efforts by the BLM, Park County, Colorado Open Lands, and The Nature Conservancy are ongoing in South Park. The BLM (2009a, p. 2) amended their Royal Gorge Resource Area Management Plan for the South Park Subregion in light of new resource goals, including the protection of mountain plover breeding habitat. Their Land Tenure Designation Plan for South Park was modified to keep a greater portion of the BLM's approximately 63,000 ac (26,000 ha) of South Park lands in Federal ownership and make less sensitive BLM lands available for exchange to consolidate Federal lands of highest resource value. Primary goals of Park County's Master Plan include protection of environmentally sensitive areas, and managing the location and pace of residential growth (Park County 2001, p. 13). In addition, Colorado Open Lands and their partners have preserved approximately 17,000 ac (7,000 ha) of lands in South Park to minimize development in and around significant conservation areas (Colorado Open Lands 2011).
The current level of residential development in South Park is not currently a threat to the mountain plover and, given recent development trends and conservation initiatives, we do not consider residential development in South Park to be a threat in the foreseeable future. Elsewhere, threats from human development are largely limited to wintering habitat.
In summary, we do not believe that conversion of the mountain plover's grassland breeding habitat to cropland, or to human residential and commercial development, represents a threat to the mountain plover now or in the foreseeable future.
Breeding mountain plover in grasslands are strongly associated with heavy grazing and soil disturbance (Knopf and Wunder 2006). In the absence of prairie dogs, activities such as heavy cattle grazing, the concentration of cattle at loafing areas and at water, and burning of rangeland provide habitat for mountain plover. However, typical range management practices such as fencing, rotational grazing, decreased stocking rates, and planting nonnative grasses to improve soil moisture promote uniform vegetative cover and taller grasses, which are less beneficial to breeding mountain plover. In addition, human efforts to suppress wildfire are generally detrimental to mountain plover.
Specific range management options for mountain plover are somewhat limited. Cattle grazing provides benefits to mountain plover, but this is especially true when it maintains low vegetation and patches of bare ground. Heavy cattle grazing may not be a financially justifiable option for ranchers and can create conditions unfavorable to many other species of wildlife. Aside from grazing, specific range management options for mountain plover are somewhat limited. Mountain plover use burned areas for breeding, and prescribed burning can be used as a habitat management tool (Knopf 2008, p. 61; Andres and Stone 2009, p. 29). Ongoing USFS burning programs on the PNG and the Comanche National Grasslands in Colorado to attract breeding mountain plover have had some success (Augustine 2010a, pers. comm.). However, primary benefits of burning a site are generally of short duration,
Even without rangeland management that specifically benefits the mountain plover, soil type, site history, or drought may create habitat conditions that are beneficial to breeding mountain plover. Rocky or clay pan substrate may suppress vegetation and provide breeding habitat (Knopf and Wunder 2006). In years of low precipitation, grazing at relatively low intensity has a greater impact on grassland vegetation and can produce habitat conditions favorable for mountain plover breeding.
Knopf (2008, entire) provided an historical account of mountain plover populations on the PNG, Weld County, Colorado, and discussed the future of mountain plover in the area. He suggested that mountain plover numbers in the area had been in decline since the post-dust bowl days of the late 1930s and early 1940s, and that the dramatic decline in the mid-1990s was the abrupt end point of a process of deteriorating mountain plover habitat (recovery of grassland habitat), which was exacerbated by other factors such as wet spring weather and predation (Knopf 2008, p. 60). Given current range management practices, Knopf suggested that short-term benefits from prescribed burning and, more significantly, the maintenance of prairie dog colonies were the only viable means to enhance mountain plover habitat on the PNG.
Sheep grazing can maintain the low vegetation structure that is beneficial to breeding mountain plover. However, the current level of sheep grazing does not maintain significant amounts of mountain plover breeding habitat rangewide. The sheep industry in the United States has been in decline for more than 60 years and now supports about one-tenth of the number of sheep present in the 1940s. Decreases in sheep grazing may have been a contributing factor to loss of favorable grassland breeding habitat for the mountain plover in the past. The future of the industry is uncertain; continued declines in the industry are likely in some areas, but changes in the industry also present opportunities for its growth (National Academy of Sciences 2008, p. 4). For the foreseeable future, it appears likely that sheep grazing will remain a minor rangewide contributor to maintenance of favorable mountain plover breeding habitat, but that potential for any further decline in breeding habitat due to additional loss of acreage grazed by sheep is minimal.
A number of conservation efforts target the conservation of grasslands, prairie ecosystems, and prairie birds: The Great Plains Landscape Conservation Cooperative (a public/private initiative to proactively conserve declining habitats on private lands); The Nature Conservancy's ecoregional plan for the Central Shortgrass Prairie; the Colorado Division of Wildlife's Conservation Plan for Grassland Species and similar efforts in other States; Natural Resources Conservation Service conservation efforts under the Farm Bill; preservation of grasslands via conservation easements, including more than 350,000 ac (140,000 ha) in easements reported by the Colorado Cattleman's Agricultural Land Trust (2010); the Rocky Mountain Bird Observatory's Prairie Partners; and The Nature Conservancy's “Prairie Wings” effort. Many of these initiatives include conservation of the mountain plover, the black-tailed prairie dog, and other species supported by the prairie dog ecosystem.
In summary, the extent to which mountain plover are benefitted by cattle grazing on any given site is determined by the range management practices employed. While some current management practices result in habitat conditions that are not optimal for mountain plover breeding, a large number of mountain plover nest on rangeland. We do not anticipate future changes to the current pattern of range management across the breeding range of the mountain plover that would prove detrimental to the mountain plover and its habitat. The extent to which range management practices could benefit the mountain plover in the future is dependent on conservation of black-tailed prairie dog colonies and, to a lesser extent, on willingness to employ prescribed burning as a range management tool. Grazing by sheep can create favorable breeding habitat for mountain plover. The sheep industry in the western United States has declined over time, but we do not anticipate that future changes in the sheep industry will have a net negative impact on existing mountain plover habitat or be a threat to existing mountain plover habitat in the future.
Agricultural practices can destroy mountain plover nests and eggs from mechanical treatment (tilling, planting, application of fertilizers and pesticides), and crops growing beyond a certain height may cause nest abandonment (Knopf and Rupert 1999, p. 85; Dinsmore 2003, p. 27). In our 1999 and 2002 proposals to list the mountain plover as a threatened species (64 FR 7587 and 67 FR 72396, respectively), we raised the concern that these activities could create a reproductive “sink,” or in other words a situation in which mountain plover are drawn to crop fields for nesting but do not produce viable young at a rate that would sustain the population.
Knopf and Rupert (1999, p. 84) suggested that breeding mountain plover having the opportunity to nest on either agricultural or prairie areas chose both equally. In the eastern Colorado shortgrass prairie ecosystem, mountain plover breeding densities on crop fields were twice as high as the densities found on grasslands without prairie dogs, although only one-fifth as high as the densities found on prairie dog colonies (Tipton
In Colorado, mountain plover hatching success was found to be similar in native grasslands and crop fields, although causes of nest mortality differed between the two habitats (Dreitz and Knopf 2007, pp. 684-685). Use of crop fields was not determined to be detrimental to mountain plover hatching success. However, a subsequent eastern Colorado study found chick survival to be similar on crop fields (23 percent) to shortgrass habitat without prairie dogs (24 percent), but lower than chick survival on shortgrass habitat occupied by black-tailed prairie dogs (75 percent), and the author again suggested that crop fields may represent a reproductive sink or “ecological trap” (Dreitz 2009, pp. 875-877). Given the study results, the same concern could be raised regarding shortgrass habitat lacking prairie dogs. In contrast to the study above, recent research on crop fields in Nebraska found 95 percent survival of chicks of adult mountain plover tracked for 35 days (Blakesley and Jorgensen 2010, pers. comm.), although loss of contact with other adult mountain plover suggests that actual chick survival was somewhat lower (Blakesley 2010, pers. comm.). Preliminary data from studies of radio-tracked chicks in Montana and Colorado in 2010 (Dreitz
Shackford
While recent analysis of mountain plover populations suggests that efforts targeting chick survival may hold more conservation value than those efforts to enhance nest success, management techniques to achieve higher chick survival may be difficult to employ. In addition, nest marking programs have helped establish ties between the agricultural community and wildlife managers (Dreitz and Knopf 2007, pp. 685-686; VerCauteren 2010). Outreach efforts to farmers continue, including education regarding mountain plover and transition from nest marking to landowners' taking the lead in finding and avoiding mountain plover nests in the course of their field operations. Community efforts, such as the annual Mountain Plover Festival sponsored by the Karval Community Alliance in Lincoln County, Colorado, promote stewardship of the mountain plover and other wildlife as an integral part of both farming and ranching practices.
Studies documenting numbers and reproductive success of mountain plover breeding on crop fields in eastern Colorado and Nebraska do not entirely resolve the issue of the relative value of this habitat to the mountain plover. However, in studies from eastern Colorado, nest success in crop fields (Dreitz and Knopf 2007, pp. 684-685) and chick survival in crop fields (Dreitz 2009, pp. 875-877; Dreitz
Another concern is the potential that change in current agricultural practices will result in future loss of the types of crop fields that currently provide breeding habitat for mountain plover. Dryland agriculture is the type of agriculture that most frequently supports breeding mountain plover, and it is dominated by wheat, but also includes crops of sorghum, millet, and sunflowers. Annual variation in the use of dryland agriculture fields is dictated by a number of factors including weather, government programs, crop prices, and preferences of individual farmers. It is not known whether any significant future changes to dryland agriculture that the mountain plover uses for breeding are likely to occur or how they would affect mountain plover (Andres and Stone 2009, p. 23).
In recent years, ethanol production from corn has expanded in the United States; however, most corn is cultivated east of the range of the mountain plover (Westcott 2007, pp. 1-3). Additionally, the increase in corn production largely occurs by adjusting crop rotations between corn and soybeans (Westcott 2007, p. 7); neither crop regularly supports mountain plover. We do not anticipate that increased ethanol production will result in a substantial loss in the species' occupied or potential habitat because the majority of this activity lies outside the range of the mountain plover.
In conclusion, we believe that approximately one quarter of the rangewide mountain plover population breeds in crop fields in Colorado, Nebraska, or elsewhere, but there is no evidence that this represents a reproductive sink detrimental to the rangewide population. Dryland agriculture has changed little over recent decades, and we have little evidence to suggest that crop fields now, or in the future, represent a significant threat to the mountain plover.
Development targeting oil and gas, coal bed methane, wind energy, and other mineral resources is extensive within the breeding range of the mountain plover. Energy development is a national priority as mandated by Executive Orders 13212 (Actions to Expedite Energy-Related Projects) (66 FR 28357, May 22, 2001) and 13514 (Federal Leadership in Environmental, Energy, and Economic Performance) (74 FR 52117, October 8, 2009), and the Energy Independence and Security Act of 2007 (42 U.S.C. 17001
The magnitude of the issue is best exemplified by energy development in Wyoming, where the Wyoming Natural Diversity Database (WYNDD) (2010) has used habitat mapping and mountain plover observation records to map the probability of mountain plover presence. In Wyoming, WYNDD (2010) predicts a high probability of mountain plover occurrence over about 7 million ac (3 million ha) and a medium probability of occurrence over about 14 million ac (6 million ha). We evaluated overlap between predicted mountain plover presence and energy development (Lindstom 2010).
As of February 2010, 5,043 wells, approximately 12 percent of operating oil and gas wells in Wyoming (Wyoming Oil and Gas Commission 2010), occurred in areas of high probability of mountain plover occurrence, while 13,266 wells, about 32 percent of wells, occurred in areas with medium probability of mountain plover occurrence. While wells are clustered in well fields, this would equate to one well per about 1,400 ac (560 ha) in areas of high probability of mountain plover occurrence and one well per 1,080 ac (430 ha) in areas medium probability of occurrence. We believe that this represents a relatively low overall potential impact to mountain plover habitat.
Of 13 million ac (6 million ha) of authorized (both developed and undeveloped) BLM oil and gas leases in Wyoming (BLM 2009b), we estimated that 52 percent were in areas of high or medium probability of mountain plover occurrence (or about one-third of all areas of high or medium probability of mountain plover occurrence were under BLM lease).
Areas in Wyoming of wind classes 4 through 7 (a measure of wind resource potential) account for about 6 million ac (2.4 million ha), or about 30 percent, of those areas of high or medium probability of mountain plover occurrence (National Renewable Energy Laboratory 2002). Since additional factors determine development potential, only a portion of these areas would likely see future wind energy development.
Future energy development will depend on whether oil and gas resources are actually present, the location of wind resources relative to consumers, future demand, economic considerations, and environmental regulations. Therefore, it is uncertain to what degree energy projects will be developed in mountain plover breeding habitat in Wyoming, or other portions of the range, in the foreseeable future. However, given our evaluation above, we believe that current and future energy development in mountain plover habitat may be substantial in Wyoming. Existing and proposed oil and gas development and wind energy projects also occur in mountain plover habitat in Montana and the plains of Colorado, as well as in other States within the mountain plover's breeding, migratory, and wintering range. The cumulative total of current and future energy development elsewhere in the mountain plover's breeding range may not approach that likely to occur in Wyoming, but energy development is likely to occur within many breeding areas used by the species. For example, oil and gas development continues in Weld County, Colorado, and renewed exploration is occurring on and near the PNG (Philbrook 2010, pers. comm.), formerly an important breeding area for the mountain plover.
Concerns over impacts of oil and gas development to landscapes and to various wildlife species have prompted environmental review standards (BLM 2010c), and may lead to more widespread use of development practices that minimize impacts. For example, directional drilling, where feasible, has the potential to decrease habitat impacts. Increased piping, product storage in central locations, and remote sensing of wells may reduce vehicular traffic and the impact of roads.
Despite the prevalence of energy development activities throughout the range of the mountain plover, there is little evidence as to whether, or to what extent, the overall effects of energy development are detrimental to mountain plover (Andres and Stone 2009, p. 25). Although oil and gas field development modifies and fragments nesting, brood rearing, and foraging habitats, mountain plover continue to use these areas (Smith and Keinath 2004, p. 36; Carr, in review). For many wildlife species, the principal impact of energy development is fragmentation rather than habitat loss. Energy development, even when extensive, may directly impact only a small percentage of an area. In a study of the Big Piney-LaBarge oil and gas field in the Upper Green River Valley of Wyoming, where well density averaged about one well per 64 ac (26 ha), 97 percent of the landscape was within 0.25 mile (0.40 kilometer) of infrastructure (roads, pipelines, well pads, waste pits), but only 4 percent of the area was directly impacted by oil and gas infrastructure (Morton
Because the mountain plover generally favors disturbance that reduces vegetative cover and exposes bare ground (
Carr (in review) provides the only targeted study of mountain plover response to oil and gas development. The USGS study evaluated the effects of oil and gas development on mountain plover population density and nesting success in mixed desert shrublands in Wyoming. Results suggested that the presence of wells, roads, and associated infrastructure at densities studied (up to 8 wells per square mile (3 per square kilometer)) did not have detectable negative effects on breeding mountain plover (Carr, in review). Carr (in review) concluded that energy development at low to moderate levels may be compatible with nesting mountain plover, although the author suggested the need for additional studies of potential effects of energy development on chick survival and potential for impacts at higher well densities.
Tolerance to disturbance from energy development by mountain plover could result in nesting or foraging in areas where continued human disturbance and vehicular traffic could pose threats to adults and chicks. Carr (in review) cautioned that human activities at well sites might keep mountain plover from their nests, subjecting eggs to possible overheating. In Oklahoma, mountain plover appeared unaffected by the presence of roads (MacConnell
Other impacts of energy development on the mountain plover and its habitat could occur. These include a potential for increase in predators, increased opportunity for spread of invasive plants, and potential changes in human land use such as cessation of grazing. Despite these concerns, to date, impacts of oil and gas development at levels typically seen in mountain plover breeding habitat have not been shown to decrease mountain plover populations.
Coalbed methane extraction is a process in which: (1) Wells are drilled into the coal seam; (2) the seam is dewatered; and (3) the methane is then extracted from the seam, compressed, and piped to market. In Wyoming, some water from coalbed methane operations is used for surface or subsurface irrigation of agriculture fields and rangeland. There is concern that plover habitat, including prairie dog colonies, have been and could be lost to these practices, thereby altering or eliminating important mountain plover habitat (Rogers 2010, pers. comm.). In the Powder River Basin, about 2,000 ac (800 ha) of such irrigation is occurring and more than 7,000 ac (3,000 ha) is permitted (Fischer 2010, pers. comm.). We have no information as to whether or not mountain plover have been displaced. While changes in habitat caused by this irrigation may alter habitat and cause a local impact to mountain plover, we do not believe that the relatively small area involved represents a threat to overall mountain plover populations in this region.
Like oil and gas development, wind energy development presents a range of habitat changes and disturbance factors that could affect the mountain plover. In addition, there is concern that the mountain plover's use of areas may decline during and after construction due to avoidance of wind turbines or increased mortality attributable to collisions, primarily with moving rotor blades. Lock (2010) highlighted the potential for wind energy projects to displace breeding mountain plover, but described the potential threat of mortality from collisions as being of “low certainty.”
The most comprehensive study conducted on potential effects of wind power development on the mountain plover came from the facility on Foote Creek Rim in Carbon County, Wyoming, where mountain plover were studied from 1994 (prior to construction) through 2007 (Young
Wind towers, rotors, and associated meteorological towers pose an added risk that mountain plover may be struck by blades or fly into stationary structures. However, carcass searches at Foote Creek Rim documented no mountain plover mortalities attributable to collisions over the 3 years the studies were conducted. On breeding grounds, mountain plover fly at low heights. In a common courtship display, a male flies only to a height of approximately 16 to 33 ft (5 to 10 m) (Knopf and Wunder 2006). The lowest point of rotor sweep on the Foote Creek Rim site (57 ft (17 m)) was above the typical heights flown by mountain plover during courtship and breeding (Young
Wind energy development could present a greater potential issue for post-breeding congregations of mountain plover, because hundreds of birds may flock in a single area. However, we have no information regarding behavior of post-breeding flocks that could be applied to the potential threat of bird strikes from wind turbines. Little is known regarding their potential to strike moving blades or stationary structures, although based on mortality studies, shorebirds (plovers, sandpipers, and similar species) do not seem to be at great risk of colliding with turbines or communication towers (Kerlinger 2011, pers. comm.). Wind energy projects have reportedly been constructed and are proposed in South Texas agricultural fields that may overlap with areas used by wintering mountain plover (Cobb 2010, pers. comm.). The potential for mountain plover displacement or collisions in Texas is unknown. In California, wind energy development projects tend to be located on mountain ridges where wind speeds are greater and, therefore, are less likely to impact wintering mountain plover.
Surface mining for coal and other minerals can displace mountain plover within the footprint of the work for the duration of the active mining. Whether or not this would result in permanent displacement is dependent on whether and how restoration occurs. We have little site-specific data on impacts of surface mining to nearby mountain plover. Surveys over 28 years at Cloud Peak Energy's Antelope Mine in Campbell and Converse Counties, Wyoming, documented mountain plover's use of the mine permit area and adjacent lands (Green 2010). Mountain plover numbers declined as mining and the footprint of surface disturbance progressed, but in general they showed tolerance to mining activities nearby (Green 2010). In 2010, adult mountain plover and chicks were, for the first time, seen using a reclaimed mine area at the Antelope Mine (Green 2010). Mountain plover can be directly affected by surface mining through temporary or permanent loss of their habitat. However, we do not believe that surface mining, currently or in the future, will impact a significant amount of the mountain plover's breeding range or represent a threat to the species.
The BLM considers the mountain plover, among other species, when evaluating the impacts of energy development on the environment. The BLM, through its Special Status Species program, has developed various management scenarios for the protection of the mountain plover throughout its range. In 2005, the BLM analyzed the potential effects to the mountain plover from management actions approved in Resource Management Plans for the various BLM field offices in Wyoming (BLM 2005). At the time, we concluded that BLM's proactive conservation measures should aid in protecting the species from further decline (Kelly 2007). The conservation measures committed to by the BLM included habitat screening (determining whether habitat might support the mountain plover) and, as appropriate, subsequent surveys for the possible presence of mountain plover prior to approval of ground-disturbing activities; designation of a 0.25-mi (0.40-km) buffer around occupied nests during the nesting season, with restrictions on activities to protect nesting plover; and continued research and census activities targeting the mountain plover on BLM-administered land in Wyoming (BLM 2005). A number of best management practices were also provided, to be considered on a case-by-case basis, to help protect the mountain plover and expand suitable nesting habitat. While these measures are not binding, and on-the-ground conservation efforts likely vary by BLM field office, a proactive cooperative approach between the BLM and the Service in Wyoming has heightened recognition of mountain plover conservation on BLM-administered lands and provides a basis for future cooperation to safeguard the species.
Solar energy projects are likely to displace mountain plover when situated in breeding or wintering habitat. Unlike oil and gas wells or wind turbines, solar collectors are placed so close together that they effectively eliminate the ability of mountain plover to use the habitat. Solar energy development potential is greatest in southwestern States and California and, except for Colorado's San Luis Valley and Northern New Mexico, occurs in areas used mostly by wintering rather than breeding mountain plover. See Changes in Land Use in Mountain Plover Wintering Range below for a discussion of solar energy development.
In summary, potential effects to the mountain plover from energy and mineral development are largely uncertain. Ground disturbance from oil and gas development and wind energy development may, in some cases, enhance or create mountain plover habitat, but whether the net effect of such activity is beneficial or detrimental has not been determined. The risk of significant mortality through mountain plover being struck by rotors of wind turbines appears low. Whether, or to what extent, construction of wind energy projects displaces breeding or wintering mountain plover has not been clearly established. Surface mining displaces mountain plover, at least until an area is restored, and development of solar fields likely results in habitat loss. Overall, more information regarding possible impacts of energy and mineral development to mountain plover is needed. However, the information currently available does not indicate that energy and mineral development threatens the mountain plover now or is likely to do so within the foreseeable future.
In our December 5, 2002, proposal to list the mountain plover (67 FR 72396), we emphasized the potential impact to mountain plover populations from changes to wintering habitat in California, including changes stemming from human population growth, changes in agriculture, water availability, and burning restrictions. It now appears that the proportion of the rangewide population of mountain plover that winter in California is far less than previously believed (see Conservation Status and Local Populations above). However, the importance of mountain plover wintering habitat in California has been a continued topic of investigation and interest (Kopft and Rupert 1995; Hunting
Concern continues to center on land use trends, conversion of agricultural lands to other uses, and changes in agriculture (Andres and Stone 2009, pp. 22-24; Hunting and Edson 2008, p. 184). Due to population growth in California, more rural and agricultural land is being urbanized. Between 1982 and 2007, approximately 8 percent of California's croplands, 11 percent of the State's pasturelands, and 6 percent of State's rangelands were lost (USDA 2010). However, as of 2007, California still supported approximately 9.5 million ac (3.8 million ha) of cropland,
The dynamic, market-driven nature of agricultural production and changes in cultivation practices
Development of energy projects, especially solar energy, in mountain plover wintering habitat is also a concern in California. California's electric utility companies were required by California statute (Chapter 464, Statutes of 2006) to use renewable energy to produce 20 percent of their power by 2010. Governor Schwarzenegger's Executive Order of November 2008 (#S-13-08) set a higher, more ambitious goal of 33 percent by 2020 (California Energy Commission 2010).
As described in Conservation Status and Local Populations above, the California winter range of the mountain plover is primarily in the Central Valley (including the Sacramento and San Joaquin valleys) and the Imperial Valley. The Carrizo Plain in San Luis Obispo County is also recognized as an important wintering site. Other areas where mountain plover are regularly observed include the Panoche and Antelope valleys.
In the Central Valley, human population growth over the last 20 years has resulted in a declining trend in agricultural area, with a smaller, but corresponding, trend of conversion to urban uses (California Department of Conservation (CDC) 2010). The rate of land conversion to urban uses in the Central Valley increased beginning in 1990. With the exception of Solano County, the human populations of Central Valley counties within the wintering range of the mountain plover all grew faster than the Statewide average between 2000 and 2009 (U.S. Census Bureau 2010).
In the Sacramento Valley, urbanization in Yolo and Solano Counties, the two principal counties supporting wintering mountain plover, has not adversely impacted the mountain plover to date, because known wintering locations are located outside city planning boundaries. However, continued population growth beyond the current planning horizon could potentially threaten individual wintering localities that are close to urban areas, particularly those in areas most proximate to Sacramento.
In the San Joaquin Valley, human population growth has been approximately 17 percent over the period from 1997 through 2010. To date, most of the resulting urban growth has occurred adjacent to, and in the general vicinity of, the towns, such as Modesto, Fresno, and Bakersfield, that developed along Highway 99 in the eastern portion of the San Joaquin Valley (Teitz
In the San Joaquin Valley counties (Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, Tulare), cropland declined by about 3 percent from 1997 to 2007, to about 5.2 million ac (2.1 million ha) (USDA 2010). Crop fields in alfalfa and other hay, favored by mountain plover, were relatively stable and accounted for about one-third of all cropland in the San Joaquin Valley in 2007 (USDA 2010).
While relatively little agricultural land is being lost, conversion from annual agricultural crops to permanent crops that do not provide mountain plover with habitat is significant within the San Joaquin Valley. For example, in the San Luis Unit of the Central Valley Project (CVP), in Fresno, Kings, and Merced Counties, agricultural acreage has increasingly been converted to permanent crops of orchards or vineyards. We estimate the percentage of land in permanent crops at somewhere between 16 percent and 24 percent of the San Luis Unit, compared with 10 percent in 2000. General field observations and land value reports (California Society of Farm Managers and Rural Appraisers 2009, pp. 31-64) suggest that this is a continuing trend, with new orchards displacing cotton and tomato crops in many areas of the Central Valley. In Madera County, some locations formerly utilized by wintering mountain plover have been converted from rangeland to annual crops or to permanent crops such as pistachio trees (Woods 2009, pers. comm.).
Outside of the Central Valley, orchard land in San Luis Obispo County, which includes the Carrizo Plain, a known mountain plover wintering area, rose from 29,000 ac (12,000 ha) to 54,000 ac (22,000 ha) from 2007 to 2009, to about 18 percent of cropland in the county. Conversion to orchard crops in the nearby Maricopa and Cuyama valleys near the Carrizo Plain area have resulted in loss of wintering mountain plover habitat (Sharum 2010). Overall, conversion of annual cropping systems to permanent crops is expected to continue and poses an additional, but unquantified, source of habitat loss for the mountain plover.
As a result of the large-scale irrigation efforts in the western San Joaquin Valley, approximately 1,750,000 ac (710,000 ha) of agricultural lands with shallow groundwater tables have become impaired due to accumulated concentrations of naturally occurring toxic elements, including selenium.
A portion of the lands proposed for retirement are expected to be used for drainage reclamation; between 1,280 and 3,300 ac (5,170 and 1,340 ha) of existing irrigated cropland will be converted to treatment facilities and evaporation basins, while
Due to the historical importance of agriculture in the Central Valley, the valley has the highest percentage of privately owned land in the State. Only 4 percent of Sacramento Valley land and 7 percent of San Joaquin Valley land is public open space. In the Central Valley, a variety of conservation and restoration projects have been implemented to protect natural resources, although 57 percent of such conservation projects report a focus on riparian habitat enhancement (Great Valley Center 2005, p. 30). Twenty-three local and regional land trusts operate in the Central Valley to protect valley wildlife, farmland, habitat, rivers, and native vegetation (Great Valley Center 2005, pp. 30-31). The Service does not have information on the area of specific habitat types that have been protected within the range of the mountain plover or whether these efforts have produced substantial benefits to the species.
In the Sacramento Valley, we have found no planned solar energy development likely to threaten the mountain plover's habitat. However, the legislation cited above (Chapter 464, Statutes of 2006, and Governor Schwarzenegger's
To date, small projects are proposed for scattered locations across the southern San Joaquin Valley, while large projects have been proposed both within the San Joaquin Valley, and in the Carrizo Plain and Panoche Valley areas. The solar projects proposed on the valley floor are typically situated on active or recently cultivated agricultural lands and several larger projects have been proposed for lands that have been used for livestock grazing.
The Service is currently aware of up to six small solar projects, each approximately 200 ac (80 ha) in size, which are expected within the mountain plover's general wintering range in the southern San Joaquin Valley. The projects will be constructed by Pacific Gas and Electric, a major California utility company. In the San Joaquin Valley, the solar projects proposed on the valley floor are typically situated on active or recently cultivated agricultural lands and several larger projects have been proposed for lands that have been used for livestock grazing. The Service concludes that sites will be unsuitable for mountain plover after development.
Several large proposals are located within the mountain plover's general wintering range. A large 32,000-ac (13,000-ha) park, the Westlands Solar Park, has been proposed for western Fresno and Kings Counties, with an initial phase of approximately 10,000 ac (4,000 ha). It will be constructed on agricultural land that the Westlands Water District has slated for land retirement (Woody 2010). We expect that additional proposals for retired farmland are likely due to the general perception that such lands have few environmental issues.
The Maricopa Sun Solar Complex (approximately 9,000 ac (3,600 ha)) is proposed for agricultural lands in western Kern County near the edge of the plover's winter range. We do not know whether the mountain plover uses the site. Development of the project includes cancellation of a contract to preserve agricultural land. The Draft Environmental Impact Report identifies mountain plover as a potential winter migrant (Kern County Planning and Community Development Department 2010, pp. 1, 4.4-8).
In the Carrizo Plain, San Luis Obispo County, two solar projects have been proposed, including the 4,000-ac (1,619-ha) California Valley Solar Ranch (CVSR) and the 4,500-ac (1,800-ha) Topaz Solar Farm. Both facilities would be located approximately 6 miles north of the Carrizo Plains National Monument, an important natural area for the plover, on a mixture of natural lands, grazing lands, and cropped lands (Aspen Environmental Group 2010, pp. C3-2-C3-3, C6-4). Suitable foraging and roosting habitat for the mountain plover occurs on sites under consideration (Aspen Environmental Group 2010, pp. C6-4-C6-5, C6-11). Mountain plover have been observed on the CVSR site but likely occur sporadically and in low numbers (Boroski 2011, pers. comm.).
The Panoche Valley, an area of about 12,000 ac (5,000 ha) in San Benito County, receives annual use by wintering mountain plovers. A solar project is currently proposed on 3,200 ac (1,300 ha) of potential mountain plover wintering habitat, or about one-third of the potential mountain plover habitat present in the Panoche Valley. Proposed mitigation would preserve and manage other nearby habitat.
The Antelope Valley, an area of approximately 900,000 ac (360,000 ha) in Los Angeles and Kern Counties, supports wintering mountain plover annually, with numbers estimated in the low 100s using crop fields and grasslands (eBird 2010). How much of the valley's area is mountain plover habitat is unclear. The valley is primarily privately owned land, and its proximity to human population centers has generated high interest in renewable energy (solar and wind) development that could reduce mountain plover wintering habitat.
Solar energy projects currently planned in the San Joaquin Valley, the
As future solar projects are proposed and implemented, we conclude that they will cause some continued loss of mountain plover wintering habitat in California. While cumulative impacts of these projects, and other factors such as urbanization and changes in agriculture, are likely to reduce the total area of wintering habitat available, substantial acreage of appropriate wintering habitat will persist in the Central Valley, Carrizo Plain, Panoche Valley, and Antelope Valley.
As of 2009, about 381,000 ac (154,000 ha) of field crops existed in the Imperial Valley (Imperial Irrigation District (IID) 2009a). The Imperial County has witnessed a decline in annual area used for agricultural purposes from 1984 through 2008 of about 21,000 ac (8,000 ha) or 4 percent (CDC 2010), while the county saw an increase in area used for urban areas in the same period of about 6,000 ac (2,400 ha) or 29 percent (CDC 2010). Urban expansion has accounted for only a relatively small portion of the 4 percent decline in agricultural lands over a period of 24 years. At this rate, conversion of agricultural lands to urban lands in Imperial County has a modest impact.
Habitat in the Imperial Valley believed most important for mountain plover includes alfalfa fields, especially those harvested then grazed by sheep, and bermudagrass fields burned following harvest (Wunder and Knopf 2002, pp. 75-76). Both alfalfa and bermudagrass acreages have declined in recent years (2005-2009) (IID 2009a). However, in 2009, these crops occupied 195,000 ac (79,000 ha) or approximately 51 percent of total field crop acreage in the Imperial Valley (IID 2009a). Area devoted to all hay (including alfalfa and bermudagrass), 233,000 ac (90,000 ha), was the same in Imperial County in both 1997 and the 2007 (USDA 2010). Data available also suggest the number of sheep in the Imperial Valley have declined recently as well but that numbers fluctuate over time. It is not known whether these short-term declines are indicative of future trends.
The continued success of agricultural habitats used by the mountain plover in the Imperial Valley depends on a reliable water supply. The Imperial Valley depends on Colorado River water to irrigate its crops, but there has been increasing pressure for more water to be diverted to urban areas. In 2003, the State of California and water agencies across the State signed the Quantification Settlement Agreement (QSA) to dictate distribution of water from the Colorado River. The settlement allocated 370,000 acre-feet (ac-ft) (456 million cubic meters (cu-m)) of water to urban areas in Southern California and Tribal areas (IID 2010a, p. 2). Most of the 370,000 ac-ft (456 million cu-m) will come from improvements in on-farm water efficiency and improved irrigation technology (IID 2010a, p. 2; Delfino 2006, p. 161).
Under the QSA, Imperial County must also fallow agricultural land, some of which will be transferred to the San Diego Water Authority, and some of which will go to mitigation to restore the Salton Sea (IID 2010a, p. 1). The area of land fallowed depends on the intensity of water use, not farm size (IID 2010b, p. 1). Fallowing will be conducted on a sliding scale. The program began in 2003 with lands fallowed that had been irrigated by under 10,000 ac-ft (1.2 million cu-m) of water, and peaked in 2010 to lands fallowed that had been irrigated by over 80,000 ac-ft (9.9 million cu-m) of water. The program will slowly decline before agricultural fallowing ends in 2017 (IID 2009b). The area of land fallowed in 2009-2010 was about 10,500 ac (4,300 ha) or about 2 percent of agricultural land in the valley. Overall, lands fallowed will reduce the area of crop fields in the Imperial Valley but we have no specific information as to extent to which those fields fallowed provide wintering habitat to the mountain plover.
The future of the QSA is in question. On January 13, 2010, the Superior Court of California found that funding provisions of the QSA were unconstitutional, and officially invalidated the QSA on January 19, 2010 (
The yield from alfalfa crops is related to the amount of irrigation the land receives (Hanson
Yield and acreage of bermudagrass could be affected by restrictions on burning in the Imperial Valley due to pollution concerns. To comply with California's air pollution restrictions (California Code of Regulations 2001, pp. 80100-80170), the Imperial County Air Pollution Control District (ICAPCD) has set forth rules and regulations (ICAPCD 2010b, pp. 701.1-702.1) governing implementation of a smoke management program (ICAPCD 2010a, pp. 1-37) for agricultural burning. These rules and regulations allow for agricultural burning after the ICAPCD has analyzed several factors: (1) Quantitative and qualitative analysis of meteorological conditions; (2) current smoke complaints; (3) source/receptor consideration; and (4) current air quality levels (ICAPCD 2010b, p. 8). The number of burn days permissible in the areas of Imperial County has declined (California Air Resources Board 2010) since 2003, but the amount of bermudagrass acreage burned in the same period (2003 to 2009) shows little trend and averages about 18,000 ac (7,000 ha) (Lancero, pers. comm.; Cavazos 2010, pers. comm.). Any concern that current burning restrictions limit bermudagrass cultivation appears unsupported by these data.
Future trends in alfalfa and Bermudagrass may largely determine the extent and quality of mountain plover wintering habitat available in the Imperial Valley. While no predictions of
Currently, there is no habitat conservation plan (HCP) implemented in the Imperial County. The Imperial Irrigation District is currently working on an HCP, but they have not yet finalized the plan or been issued a section 10(a)(1)(b) permit under the Act (Roberts 2010, pers. comm.); however, in the current draft of the HCP, mountain plover is a covered species.
Individually, urbanization, water restrictions, and trends in agriculture do not appear to pose significant threats to the acreage or quality of wintering habitat available or to the mountain plover's use of the Imperial Valley. However, in the foreseeable future, their combined effects, along with climate change, could appreciably reduce habitat available to mountain plover and potentially affect the nature or extent of wintering mountain plover use of the Imperial Valley.
Mountain plover winter over a large range and in diverse habitats. In our February 16, 1999, proposed rule to list the species we cited sources suggesting that most mountain plover, an estimated 7,000 of a rangewide population of 8,000 to 10,000 birds, wintered in California (64 FR 7587). However, we now believe that less than half of the rangewide population, estimated at over 20,000 birds, winter in California (see Population Size and Trends above). As of 2007, over 18 million ac (7 million ha) in California (about 18 percent of the State) supported cropland, pastureland, or rangeland (USDA 2010). While only a portion of this area provides habitat for the mountain plover in any given winter, the total includes 1.7 million ac (0.7 million ha) of alfalfa, Bemudagrass, and other hay crops that the mountain plover utilizes, including 230,000 ac (90,000 ha) in Imperial County alone. The total also includes 1.1 million ac (0.4 million ha) of pastureland, often used by mountain plover. To exploit these and other wintering habitats, mountain plover are able to move long distances and use various sites as conditions become favorable within a given winter (Knopf and Wunder 2006). Mountain plover appear annually at some favored wintering sites, but site fidelity by individual birds appears low. Birds may also alternate between wintering areas in California and elsewhere in different years. Cumulatively, the potential changes in land uses in California described above will likely result in a reduction of mountain plover wintering habitat in the State. However, given the available agricultural acreage cited above, it is not apparent that even a reduction in California wintering habitat substantially larger than that which we anticipate would significantly affect California's ability to support mountain plover numbers currently wintering in the State. We conclude that any likely reduction of mountain plover wintering habitat in California will not threaten the mountain plover plover's ability to maintain a wintering population in California or threaten the species range wide in the foreseeable future.
Elsewhere, in the Phoenix area, Maricopa County, and some other wintering sites in southern Arizona, mountain plover have been displaced by growth of human populations (Gardner 2010; Robertson 2010, pers. comm.). Declines are likely to occur in the Tucson area, Pinal County, and perhaps in Yuma County as well, due to increased human populations and, more directly, due to an accompanying reduction in agriculture. Wintering mountain plover populations in Cochise County, where there is less urban development and where the amount of cropland increased from 1997 to 2007 (USDA 2010), will likely remain more stable. Solar energy development is occurring in areas of southern Arizona, but the extent to which projects may overlap mountain plover wintering habitat has not yet been determined.
Both increases in human population and expansion of agriculture are occurring in areas of southern Arizona (Council for Agricultural Science and Technology 2009, pp. 8-12). Rather than the total area urbanized, the extent and nature of future agriculture that is present in southern Arizona and available for mountain plover use will likely dictate the future value of this area to wintering mountain plover. However, water resources are limited, and urban uses may compete with agriculture for available water. Southern Arizona is thought to winter a relatively small portion of the rangewide mountain plover population. We believe that any net future decreases in agricultural lands in southern Arizona will be limited and that these potential future decreases in agricultural lands in southern Arizona will not markedly affect the ability of the area to support these wintering mountain plover.
Other than potential impacts from wind energy development described in Energy and Mineral Development above, we have no information regarding threats to wintering mountain plover from habitat changes in Texas.
Outside of the trends in wintering areas in Mexico described in Threats to Prairie Dogs and Associated Loss of Habitat above, we have little information regarding threats to the mountain plover from wintering habitat changes in Mexico. Based on their wintering habitat preferences in the United States, significant numbers of mountain plover may winter in agricultural areas in Mexico. Possible areas of concentration and the types of agriculture utilized remain undocumented.
The mountain plover occupies a wide geographic range across the breeding, migration, and wintering seasons. The extensive and diverse habitats it utilizes are subject to a number of changes that represent potential threats.
Black-tailed prairie dogs create favorable breeding habitat for the mountain plover in States including Colorado, Montana, and Wyoming. Black-tailed prairie dog numbers have increased by a factor of six since 1981 in States where they are present, and associated mountain plover habitat has likewise increased. We do not anticipate loss of black-tailed prairie dog numbers or the mountain plover habitat they maintain in the foreseeable future.
Current conversion of prairie and grasslands to other land uses within mountain plover breeding habitat appears negligible when viewed from a rangewide perspective. Formerly expressed concerns regarding human development in South Park, Colorado, where a high density of mountain plover breeds, now seem unfounded.
Cattle grazing generally benefits mountain plover breeding habitat, but some range management practices do not create favorable conditions for mountain plover breeding. Specific range management to benefit mountain plover could be employed, but overall we expect current cattle grazing to continue relatively unchanged in the foreseeable future.
Suggestions that cropland use by breeding mountain plover may be detrimental to populations have not been substantiated.
Energy and mineral development alters landscapes, and some activities can adversely impact mountain plover habitat, at least locally and temporally. The mountain plover often benefits from ground disturbance and may tolerate or
Wintering mountain plover are wide-ranging, and seek out a variety of grassland, rangeland, crop field, and semi-desert landscapes, from the Gulf Coast to the Pacific Ocean, to meet their needs. Habitat in California and across the mountain plover's wintering range is dynamic, based on yearly weather patterns, grazing levels, crops present, and timing of planting or harvest. Currently available wintering habitat can not be easily quantified, nor can its projected quantity and quality in the foreseeable future be easily predicted. A future net loss of wintering habitat in California appears likely, based on solar development projects and other factors described above, but given the expanse of wintering habitat currently present, it is not apparent that this will have any affect on the number of wintering mountain plover California will support.
Dinsmore
We conclude that the best information available indicates that the mountain plover is not now, or in the foreseeable future, threatened by the present or threatened destruction, modification, or curtailment of its habitat or range to the extent that listing under the Act as an endangered or threatened species is warranted at this time.
Mountain plover were historically hunted for human consumption on the Great Plains (Knopf and Wunder 2006). Under the Migratory Bird Treaty Act (MBTA) (16 U.S.C. 703-712), mountain plover are not legally hunted in the United States, Canada, or Mexico, although Andres and Stone (2009, p. 27) note that some illegal shooting may occur in some areas of Mexico. The extent or significance of any such activity is unknown, but, because we have no information that such illegal hunting activity is widespread, we believe it is unlikely to be a significant threat to the mountain plover's continued existence.
Birders (bird watchers) may seek out mountain plover for viewing. This activity is most likely to occur on a few publicized sites and often takes place from, on, or near roadways. Mountain plover are relatively tolerant of disturbance and often ignore humans in vehicles. If approached on foot they quickly retreat (Knopf and Wunder 2006). We believe that observation by birders does not represent a threat to the mountain plover because it is limited in extent and most birders attempt to minimize disturbance to birds as they pursue their activities.
Most research conducted on mountain plover relies on passive sampling (
We do not have any evidence of risks to mountain plover from overutilization for commercial, recreational, scientific, or educational purposes, and we have no reason to believe that that this factor will become a threat to the species in the foreseeable future. We conclude that the best scientific and commercial information available indicates that the mountain plover is not now, nor in the foreseeable future, threatened by overutilization for commercial, recreational, scientific, or educational purposes.
We are not aware of any diseases or parasites that pose a threat to the mountain plover at this time. West Nile virus, which has been documented to cause deaths in many bird species, has not been found in mountain plover (Andres and Stone 2009, p. 29). Since 2007, 4,888 dead birds have been identified throughout California as deaths attributed to the West Nile virus (California Department of Public Health (CDPH) 2010). Within this time span, West Nile virus has been reported from a number of Central Valley counties, but to date no mountain plover deaths have been attributed to the virus (CDPH 2010). Over the same time period, there have been no bird deaths associated with West Nile virus in Imperial County.
Dreitz
The Intergovernmental Panel on Climate Change (IPCC) (2007, p. 51) suggests that the distribution of some disease vectors may change as a result of climate change. However, we have no information to suggest any specific disease may become problematic to the mountain plover as a result of climate change.
The list of predators on mountain plover, their nests, and young is extensive, and includes the American badger (
Survival rates of adult mountain plover are thought to be quite high on
Knopf (2008, p. 50) cited the swift fox as the major predator on eggs and the primary predator on chicks on the PNG in Colorado, and suggested that reduced predator control and subsequent increase in predators was a contributing factor in the dramatic decline in mountain plover the area experienced. Thirteen-lined ground squirrels (
Knopf and Wunder (2006) suggested mountain plover nest visits by researchers could lead to predation by ravens (
We do not believe that natural levels of predation present a threat to the mountain plover, although the risk could be increased through human development and habitat fragmentation. This may result where predators concentrate their foraging activities and movements along habitat edges. However, Mettenbrink
While predation accounts for a major portion of chick mortality, we have no information that would lead us to conclude that predation on mountain plover chicks differs from levels experienced by other upland nesting shorebirds or that, across the range of the mountain plover, it is a current or future threat to the survival of the species.
We do not find evidence that disease is currently impacting the mountain plover, nor do we have information to indicate that disease outbreaks will increase in the future. While the level of predation on mountain plover nests and chicks is high, it is not inconsistent with that found in other ground-nesting bird species. Fragmentation of habitats, including that associated with energy development, could increase predation, but evidence to date does not suggest any increase is occurring. We do not have information at this time to indicate that predation is impacting the mountain plover at a level that threatens the species. We conclude that the best scientific and commercial information available indicates that the mountain plover is not now, or in the foreseeable future, threatened by disease or predation to the extent that listing under the Act as an endangered or threatened species is warranted at this time.
Under this factor, we examine whether existing regulatory mechanisms are inadequate to address the threats to the mountain plover discussed in
In analyzing whether the existing regulatory mechanisms are inadequate, the Service reviews relevant Federal, State, and Tribal laws, plans, regulations, Memoranda of Understandings (MOUs), Cooperative Agreements, and other such mechanisms that influence conservation. We give strongest weight to statutes and their implementing regulations, and management direction that stems from those laws and regulations. An example would be the terms and conditions attached to a grazing permit that describe how a permittee will manage livestock on a BLM allotment. They are non-discretionary and enforceable, and are considered a regulatory mechanism under this analysis. Other examples include State governmental actions enforced under a State statute or constitution, or Federal action under statute. Some other agreements (MOUs and others) are more voluntary in nature; in those cases we analyze the specific facts for that mechanism to determine the extent to which it can be relied on in the future. We consider all pertinent information, including the efforts and conservation practices of State governments, whether or not these are enforceable by law. Regulatory mechanisms, if they exist, may preclude the need for listing if such mechanisms are judged to adequately address the threat to the species such that listing is not warranted.
Conversely, threats on the landscape are not ameliorated when not addressed by existing applicable regulatory mechanisms, or when the existing mechanisms are not adequate (or not adequately implemented or enforced). We cannot predict when or how State and Federal laws, regulations, and policies will change; however, most Federal land use plans are valid for at least 20 years. In this section, we review actions undertaken by State and Federal
The mountain plover is covered under the provisions of the Migratory Bird Treaty Act (MBTA), which provides regulatory protection for mountain plover by prohibiting actions causing direct mortality and destruction of nests. In addition, the mountain plover is listed as a Bird of Conservation Concern by the Service in all 12 Bird Conservation Regions encompassing the species' breeding and wintering ranges. Birds of Conservation Concern represent the highest conservation priorities under the MBTA for the Service's Migratory Bird Program (Service 2008, p. iii). The goals of the Service's Migratory Bird Program include the protection, restoration, and management of migratory bird populations to ensure long-term ecological sustainability (Service 2011). The Service's goal is to prevent or remove the need for additional bird listings under the Act by implementing proactive management and conservation actions. The list is to be used to develop research, monitoring, and conservation actions to stimulate coordinated and collaborative proactive conservation actions among Federal, State, Tribal, and private partners (Service 2008, p. iii). However, the designation as a Bird of Conservation Concern does not in and of itself provide any extra protections for the mountain plover or its habitat.
The BLM and the USFS are the primary Federal agencies that manage lands that provide breeding or wintering habitat for the mountain plover. The BLM's lands and USFS-managed National Grasslands provide important breeding habitat in Montana, Wyoming, Colorado, and New Mexico. The BLM's lands in California and southern Arizona may provide habitat for wintering mountain plover.
The Federal Land Policy and Management Act of 1976 (FLPMA) (43 U.S.C. 1701
Mountain plover have been designated as a BLM Sensitive Species in Colorado (BLM 2000a), California (BLM 2006), and Wyoming (BLM 2010a). The management guidance afforded sensitive species under BLM Manual 6840—Special Status Species Management (BLM 2008, entire) states that “Bureau sensitive species will be managed consistent with species and habitat management objectives in land use and implementation plans to promote their conservation and to minimize the likelihood and need for listing under the [Act]” (BLM 2008, p. 05V). The BLM Manual 6840 further requires that Resource Management Plans (RMPs) should address sensitive species, and that implementation “should consider all site-specific methods and procedures needed to bring species and their habitats to the condition under which management under the Bureau sensitive species policies would no longer be necessary” (BLM 2008, p. 2A1). See our discussion above under
The BLM in Montana has designated a Mountain Plover Area of Critical Environmental Concern (ACEC), which contains 24,730 ac (9,892 ha) of habitat suitable for breeding mountain plover (BLM 2000b, p.1). Management prescriptions apply within the ACEC to protect breeding mountain plover during its nesting period. All construction activity and surface disturbance are prohibited from April 1 to July 31, road construction is minimized within the ACEC, and seasonal restrictions also apply to off-highway travel (BLM 2000b, pp. 8-9). While the ACEC is a focus of BLM's efforts to conserve the mountain plover, the area covers only a small fraction of all mountain plover habitat in Montana.
As a designated sensitive species under BLM Manual 6840, mountain plover conservation must be addressed in the development and implementation of RMPs on BLM lands. RMPs are the basis for all actions and authorizations involving BLM-administered lands and resources. They establish allowable resource uses, resource condition goals and objectives to be attained, program constraints and general management practices needed to attain the goals and objectives, general implementation sequences, and intervals and standards for monitoring and evaluating the plan to determine effectiveness and the need for amendment or revision (43 CFR 1601.0-5(n)). The RMPs provide a framework and programmatic guidance for activity plans, which are site-specific plans written to implement decisions made in an RMP. Examples include Allotment Management Plans that address livestock grazing, oil and gas field development, travel management (motorized and mechanized road and trail use), and wildlife habitat management. Activity plan decisions normally require additional planning and National Environmental Policy Act (NEPA; 42 U.S.C. 4321
The BLM has regulatory authority for oil and gas leasing on Federal lands and on private lands with a severed Federal mineral estate, as provided at subpart 3100 (Onshore Oil and Gas Leasing; General) of Title 43 of the CFR
Management of National Forest System lands is guided principally by the National Forest Management Act (NFMA) (16 U.S.C. 1600-1614, August 17, 1974, as amended). The NFMA specifies that all National Forests must have a Land and Resource Management Plan (LRMP) (16 U.S.C. 1604) to guide and set standards for all natural resource management activities on each National Forest or National Grassland. The NFMA requires USFS to incorporate standards and guidelines into LRMPs (16 U.S.C. 1604(c)). The USFS conducts NEPA analyses on its LRMPs, which include provisions to manage plant and animal communities for diversity, based on the suitability and capability of the specific land area in order to meet overall multiple-use objectives. The USFS planning process is similar to that of the BLM. The mountain plover is a USFS sensitive species in Region 2, which includes all of Colorado and portions of Wyoming and Nebraska.
The USFS policy provides direction to analyze potential impacts of proposed
In Colorado and Wyoming, a multi-agency team, consisting of biologists from the Service, BLM, USFS, and National Park Service, developed a non-regulatory screening tool to allow for proactive and consistent management and conservation of the mountain plover on public lands and to provide a tool for streamlining agency review and implementation of activities (BLM 2004). The screening tool allows agency personnel to evaluate the impacts of projects (such as energy development, rangeland management, and recreation) that would occur within or adjacent to mountain plover habitat to determine whether the project would result in an impact to the species at the local or rangewide scale. Use of the screening tool would not stop any projects from occurring, but rather would alert agency personnel to possible project impacts so that the project could be modified if possible. While the screening tool provides a good non-regulatory mechanism for Federal biologists in Colorado and Wyoming to evaluate the effects of their proposed actions, it does not require that projects ultimately have no effect on mountain plover. However, this screening tool provides for advanced notice of actions and facilitates coordination between the multi-state agency team.
The Federal laws, regulations, and actions cited above are designed to reduce or remove threats to the mountain plover and its habitat. There is no information available to indicate that the species is threatened by the inadequacy of existing Federal laws and regulations.
The Nebraska Game and Parks Commission lists the mountain plover as “threatened.” But, this regulatory mechanism likely protects relatively few individuals (see Conservation Status and Local Populations above). While some States, such as Colorado, have specific management plans that address mountain plover conservation, and all States within the range of the species include it within their State Wildlife Conservation Strategies (see Conservation Status and Local Populations above), there is no rangewide or intrastate coordinated management effort and no requirement to implement specific management actions. However, there is no information available to indicate that the species is threatened by the inadequacy of existing State regulatory mechanisms.
The mountain plover has been listed as endangered in Canada since 1987. Knapton
In 2001, Mexico established a list of species classified as endangered, threatened, under special protection, or probably extinct in the wild (Commission for Environmental Cooperation (CEC) 2011). The mountain plover was listed as threatened (Andres and Stone 2009, p. 14). Under the General Wildlife Law, the use of at-risk species may be authorized only for the collection and capture for restoration, repopulation, and reintroduction activities (CEC 2011). However, regulatory powers and wildlife management prerogatives reside largely with the Federal government with States taking a more minor role. Shifting Federal agency responsibility and lack of agency funding results in inadequate protection and management of wildlife resources (Valdez
While mountain plover conservation has been addressed in some State, Federal, and international plans, laws, regulations, and policies, none of these have applicability throughout the range of the mountain plover sufficient to provide effective population-level conservation. However, we have found in the analysis of the other four factors (A, B, C, and E) that there are no activities that currently rise to the level of a significant threat to the mountain plover. Therefore, we conclude that the best scientific and commercial information available indicates that the mountain plover is not now, and is not expected to become within the foreseeable future, threatened by the inadequacy of existing regulatory mechanisms to the extent that listing under the Act as an endangered or threatened species is warranted at this time.
The loss of local populations may impact a species because local populations may possess unique genetic characteristics that are important to the species' genetic diversity and its ability to adapt to future environmental changes. However, for mountain plover, genetic studies using nuclear microsatellites have concluded that mountain plover across sampled breeding locations in Colorado and Montana comprise a single, relatively homogenous gene pool (Oyler-McCance 2005, p. 359; Oyler-McCance
In our December 5, 2002, proposed listing rule (67 FR 72396), we stated, “* * * that because the average lifespan of a mountain plover is less than 2 years, and breeding does not occur until 1 year of age, an individual mountain plover will likely have only one breeding season to contribute to population recruitment.” Previous study results underestimated adult survival and, more importantly, our proposed rule erroneously concluded that average lifespan reflected typical adult survival. In the best available estimate of adult mountain plover survival, the annual survival rate of adult mountain plover of both sexes in Phillips County, Montana, ranged from 0.74 to 0.96 yearly (Dinsmore 2008, p. 50). Based on this study, a mountain plover returning to its breeding ground would likely return multiple additional years. Dinsmore
In our February 16, 1999 (64 FR 7587), and December 5, 2002 (67 FR 72396), proposals to list the mountain plover as a threatened species, we considered the plover to have high fidelity to breeding sites. In patchy habitat, when nesting habitat is destroyed or unavailable, it may be difficult for the mountain plover to find a new place to breed, thus resulting in the decline of populations. Dispersal ability may be important to the use of available habitat and conservation of the mountain plover given the patchiness of desirable breeding habitat. Altered or fragmented landscapes may force mountain plover to disperse greater distances. For example, in Montana, where the mountain plover is highly dependent on black-tailed prairie dog colonies for breeding habitat, sylvatic plague outbreaks often make previously used breeding habitat undesirable. As discussed above, Skrade and Dinsmore (2010, pp. 671-672) demonstrated the mountain plover's ability to disperse at least locally to exploit favorable breeding habitats nearby, and in at least one instance, an adult mountain plover returned to breed at a site about 25 mi (40 km) from a site where it was banded during the previous season. We conclude that while the mountain plover generally exhibits fidelity to breeding sites, it is capable, at least locally, of seeking out and exploiting new habitat through both juvenile dispersal and through adult birds returning to different breeding sites in subsequent years. On a local scale (several mi/km), loss or fragmentation of breeding habitat is unlikely to have an inordinate effect on mountain plover survival and reproduction (
Previously, concern arose as to whether a preponderance of male mountain plover among those birds handled by researchers in California suggested a skewed sex ratio (more males than females) range wide and whether this might adversely affect reproductive potential. Knopf (2003, pers. comm.) speculated that a slightly unbalanced sex ratio in California might result from slightly higher overall mortality in females or from differential wintering, with females wintering further south, in Mexico. Rangewide sex ratios for mountain plover are still unknown (Knopf and Wunder 2006) and we have no evidence that relative number of males and females in mountain plover populations represents a threat to the species.
Potential exposure of mountain plover to pesticides and agrochemicals on wintering areas in California, and resulting impacts to mountain plover health and reproduction, have been cited as a potential threat (Knopf and Wunder 2006). Exposure of mountain plover to direct pesticide application is likely minimized because most pesticide application occurs on growing crops, and less frequently on harvested and fallow fields, or grazed pastures that mountain plover frequent.
The organochlorine agricultural pesticide DDT, and its byproduct DDE, can cause thinning of eggshells and decreased reproductive success in birds (Longcore
Historically, soils in the Imperial Valley are known to be high in DDE (California Department of Food and Agriculture (CDFA) 1985, p. 27). Studies have shown unchanging levels of the chemical in the past decades; this suggests a persistent, local source of the chemical (Gervais and Catlin 2004, pp. 509-510). The Imperial Valley is the suspected source for high DDE concentrations and decreased reproductive success in white-faced
Service biologists recently collected and analyzed mountain plover eggs, soils, and soil invertebrates from breeding areas in Colorado, Wyoming, and Montana, and soils and soil invertebrates from wintering areas in the Imperial Valley (Zeeman 2011, pers. comm.). Chemical analyses of eggs showed measurable, and in some cases high, levels of persistent organic pollutants, most notably DDE. Much lower concentrations of polychlorinated biphenyls (PPBs), hexachlorobenzene, tetrachlorobenzenes, alpha chlordane, oxychlordane (chlordane metabolite), heptachlor epoxide, and dieldrin were found. Contaminants detected in mountain plover eggs were also detected in soil and invertebrate samples from fields in Imperial Valley, but no measurable levels were found in soil and invertebrates at the breeding grounds.
The upper concentrations of DDE detected, 50 ppm (wet weight) in two eggs, was within the range of values (which can range from as low as 3 ppm in sensitive species to 30 ppm in less sensitive species) associated with eggshell thinning and reproductive impairments in wild birds (Blus 1996). Conspicuous signs of impacts associated with DDE exposure, such as eggshell cracking and embryo malformation, were not detected in mountain plover (Zeeman 2011, pers. comm.). Based on concentrations found in eggs, DDE from wintering areas, including the Imperial Valley, could potentially affect mountain plover (Zeeman 2011, pers. comm.). The potential for the other contaminants detected in eggs, both individually or in combination, to affect the mountain plover is being evaluated by the Service (Zeeman 2011, pers. comm.). The results cited above suggest that exposure varies by individual and that few mountain plover have DDE levels that raise a concern. In addition, no effects of DDE to adult mountain plover, their eggs, or chicks have been established. At this time, we believe that if an effect occurs, it would probably be localized, and would affect individual birds or eggs and not have an effect at a population or species level.
Certain organophosphate insecticides are still used to control insect pests on crops in California's Central Valley within the range of the mountain plover. Iko
The Central Valley is one of the State's primary growing regions for alfalfa. Sixty percent of the State's hay crop is grown here, with over 600,000 ac (240,000 ha) planted to alfalfa within the Central Valley (Godfrey 2002, p. 4). Insecticides used on alfalfa pests include chlorpyrifos, malathion, and pyrethroids. Insecticide applications in alfalfa usually occur once insects reach damaging levels, typically in March or later in the growing season (Godfrey 2002, pp. 4-10), suggesting that exposure of wintering mountain plover to treatments would be limited, if any. Because early spring insecticide treatments in alfalfa have been found to largely eliminate nontarget insect species complexes (Godfrey 2002, pp. 4-6), an unknown but potential residual effect to mountain plover prey availability may exist in specific areas the following winter. If present, such an effect could locally reduce desirability of certain alfalfa fields to wintering mountain plover, but would not have a rangewide impact to the species.
Malathion, a broad-spectrum organophosphate insecticide, has been used to control the beet leaf-hopper (
Although beet leaf-hopper control is potentially immense in scale, in the 10 years up to 2002, an average of only about 4,400 ac (1,800 ha) per year were treated in the bird's wintering range within the San Joaquin Valley, primarily in sloped terrain that is not thought to be desired by the mountain plover (CDFA 2007, p. 79). The limited area and quality of mountain plover habitat treated, coupled with the species' large wintering range in California, led the CDFA to determine that the curly top treatment program would not be likely to significantly impact the mountain plover (CDFA 2007, p. 80). On public lands managed by the BLM, prescribed usage avoids malathion spraying on wintering mountain plover areas when the plover is present (BLM 2002, p. 1).
Chemical exposure in Mexico where regulations and enforcement may be less stringent could be of concern (Andres and Stone 2009, p. 30). DDE levels in mountain plover eggs reported by Zeeman (2011, pers. comm.) may have resulted from exposure in Mexico, where DDT is still used. While we believe that crop fields in Mexico have potential to support large numbers of wintering mountain plover, significant mountain plover use of crop fields in Mexico has not been reported (Macias-Duarte and Punjabi 2010, pp. 3, 7), nor have specific issues regarding pesticide use and impact to mountain plover been identified. While changing agricultural practices regarding pesticide application or evolution of new chemicals for use in the United States or Mexico could prove a future threat, we have no basis for predicting the potential of such an occurrence.
We have no evidence that pesticides are significantly impacting mountain plover populations either locally or rangewide. However, given the information summarized above, additional evaluation of any possible effects to mountain plover from former and ongoing pesticide use within the mountain plover's range appears prudent.
Within the western San Joaquin Valley, selenium is present in the soil and has the potential to occur in ponded irrigation water in fields and drainages. Irrigation with drainwater used to flood wetlands has resulted in biological accumulation of selenium sufficient to harm reproduction of shorebirds and other wildlife (Ohlendorf
Because the mountain plover is an upland bird feeding primarily on terrestrial insects, its habits may limit its exposure to selenium. Still, selenium bioaccumulation in the food chain could create a contaminant hazard for mountain plover feeding on insects in alkaline flats, grazed pastures, and plowed fields in this area. Specific exposure of the mountain plover to selenium, or any adverse effects of such exposure have not been documented.
In summary, it has been documented that mountain plover have been exposed to various levels of potentially harmful pesticides and chemical toxins in various portions of its range. However, we have no information to indicate that the mountain plover is responding negatively to this exposure or that it is likely to respond negatively in the future. Exposure levels that elicit negative responses in other bird species do not appear to elicit a similar negative response in mountain plover. Therefore, we do not believe that mountain plover are threatened by exposure to pesticides and chemical toxins.
Efforts to control grasshoppers and Mormon crickets, especially Federal control programs on BLM lands, have been cited as potentially detrimental to breeding mountain plover. Grasshoppers occur throughout the breeding range of the mountain plover and can reach population levels considered to be a threat to agriculture. The USDA's Animal and Plant Health Inspection Service (APHIS) conducts rangeland grasshopper and Mormon cricket control, including areas occupied by breeding mountain plover. Logically, a significant reduction in these mountain plover foods could affect mountain plover fecundity and survival. However, efforts to control grasshoppers and Mormon crickets on Federal lands are generally limited to suppressing populations in years and areas where infestations occur, and do not have the goal of eradication, but rather the goal of reducing densities to levels that limit economic impacts (BLM 2010b). Numbers of these insects present after treatment may remain greater than those present in a normal year. The BLM currently is pursuing a strategy of “reduced area and agent treatments,” with the majority of treatments through aerial spraying of a pesticide (diflubenzuron, a chiton inhibitor) with limited impacts to non-target species (BLM 2010b). Broad spectrum insecticides (carbaryl and in limited cases malathion) are used more sparingly, and as a secondary treatment.
Control on private lands can be undertaken by State or local government agencies, or private landowners without participation or oversight by APHIS. Treatment on private lands likely varies depending on resources available and the economic implications of infestations. Where treatment occurs, it likely has the similar goal of reducing insect densities to acceptable levels. Grasshopper and cricket control can have an impact on mountain plover prey and could, in some years and at some locations, adversely affect mountain plover breeding. However, since the scope and impact of these control efforts appear minimal relative to the mountain plover breeding range, we conclude that grasshopper and Morman cricket control does not represent a significant threat to rangewide mountain plover populations.
Annual weather variation influences mountain plover habitat and breeding success. Inclement weather may hinder egg laying (Knopf and Wunder 2006). Cold, rain, and hail can result in loss of nests and decreased chick survival. Dreitz
Wunder (2007, pp. 119-121) presented evidence that recruitment may be linked to regional patterns of weather, with highest recruitment coming from breeding areas with low precipitation and a subsequent 1- to 2-year lag observed in increased populations of adults (Wunder 2007, pp. 119-121). Productivity may be influenced by drought cycles, with dry years reducing predation from mammals and suppressing vegetative growth, thus providing increased accessibility to insects. Annual survival of mountain plover in Montana proved higher during periods of drought, although prolonged drought eventually decreases abundance of insect foods (Dinsmore 2008, p. 52). Weather variation affects mountain plover productivity across its breeding range, but we have no evidence that normal weather fluctuations represent a threat to the mountain plover.
There is no information available on the direct relationship between the environmental changes associated with climate change and mountain plover population trends. However, climate change could potentially impact the species. According to the IPCC (2007, p. 6), “warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level.” Average Northern Hemisphere temperatures during the second half of the 20th century were very likely higher than during any other 50-year period in the last 500 years and likely the highest in at least the past 1,300 years (IPCC 2007, p. 30). It is very likely that over the past 50 years cold days, cold nights, and frosts have become less frequent over most land areas, and hot days and hot nights have become more frequent (IPCC 2007, p. 6). It is likely that heat waves have become more frequent over most land areas, and the frequency of heavy precipitation events has increased over most areas (IPCC 2007, p. 30).
Changes in the global climate system during the 21st century are likely to be larger than those observed during the 20th century (IPCC 2007, p. 19). For the next 2 decades, a warming of about 0.2 degrees Celsius (°C) (0.4 degrees Fahrenheit (°F)) per decade is projected (IPCC 2007, p. 19). Afterward, temperature projections increasingly depend on specific emission scenarios (IPCC 2007, p. 19). Various emissions scenarios suggest that by the end of the 21st century, average global temperatures are expected to increase 0.6 to 4.0 °C (1.1 to 7.2 °F), with the greatest warming expected over land and at most high northern latitudes (IPCC 2007, p. 46).
The IPCC (2007, p. 48) predicts that the resiliency of many ecosystems is likely to be exceeded this century by an unprecedented combination of climate change associated disturbances (
The mountain plover is primarily a species of grasslands and semi-desert. Grasslands in the Great Plains of the United States and southern Canada are predicted to get warmer and drier with climate change (North American Bird
Climate Wizard (TNC 2007) predicts an average temperature increase of approximately 4 to 6 °F by the 2050s for the majority of mountain plover breeding and wintering habitat within the United States. Precipitation is projected to decline slightly in the southwest portion of the range, and to increase by 10 to 15 percent in the more northern portions of the range in the same time period. However, as stated above, warmer temperatures and evaporation may offset any gains in precipitation. By the 2080s, temperatures are predicted to increase by as much as 7.5 °F within the species' breeding range, and precipitation to decline from 2050s levels throughout the range (TNC 2007). Weather data in the Imperial Valley recorded by the Desert Research Institute of the Western Regional Climate Center (WRCC) between 1927 and 2010 show an increasing trend in average temperature during the months of September through March, when mountain plover are present in the area (WRCC 2010a, Figure 1). Projected temperature change for the Imperial Valley was obtained through the Climate Wizard, in which an average of all models was used to display change in temperature. These data indicate a 3.9 °F increase in temperature for the 2050s and a 5.7 °F increase for the 2080s (TNC 2007). The WRCC also documented in Imperial, California, a slight increasing trend in average precipitation (inches) from 1925-2010 (WRCC 2010b). Projected change in precipitation values for the Imperial Valley was also obtained through the Climate Wizard in which an average of all models was used to display percent change in precipitation. These data indicate a 1.1 percent increase in precipitation for the 2050s and an increase of 0.3 percent by the 2080s (TNC 2007).
Change in plant phenology (timing of life cycle events such as vegetative growth and reproduction) may be one of the earliest observed responses to rapid global climate change and could potentially have serious consequences both for plants and animals that depend on periodically available resources (Moza and Batnegar 2005, p. 243). A change in the timing of availability of insects that mountain plover and their chicks rely on as a food source could occur as a result in changes in plant phenology.
Because they are often highly competitive, invasive plant species are altering the plant composition of ecosystems and changing their structure and function over large landscape areas. Addition of fine fuels from these species often increases fire frequency, which can lead to increased dominance by invasive species and further habitat degradation. Climate change is exacerbating these changes by altering the amount and seasonal distribution of precipitation and seasonal temperature patterns in ways that often favor the invasive species (Tausch 2008). This could potentially result in changes in the amount of ground cover in mountain plover habitat, which could discourage mountain plover nesting. Nonnative wildlife species that could compete with the mountain plover for resources or prey on the species could potentially move into their habitats.
Although the mountain plover was not included in “The State of the Birds—2010 Report on Climate Change” (North American Bird Conservation Initiative), it was assessed using the sensitivity traits analysis used in that report (Sauer 2010b, pers. comm.). The threat of climate change impacts to the plover was considered low, as it was only considered sensitive to one of the five main traits (it was considered a breeding obligate to a single habitat type) (Sauer 2010b, pers. comm.). Species that occupy only a single habitat for breeding are vulnerable should climate change reduce or eliminate that habitat. While the mountain plover has been often described as a grassland obligate (
Specific information on mountain plover suggests that the species might be adapted to drought, and that climate change predictions of the Great Plains becoming warmer and drier might benefit the species (Dinsmore 2008, p. 52). Andres and Stone (2009, p. 31) predicted increased summer temperatures and decreased precipitation could benefit mountain plover breeding. Recruitment of juvenile mountain plover into the population appears linked to regional patterns of precipitation, with highest recruitment coming from areas with lowest precipitation every year, and a subsequent increase in populations of adults observed from the same areas after a 1- to 2-year lag (Wunder 2007, pp. 119-121). Annual survival of mountain plover in Montana proved higher during periods of drought, despite potential reduction in insect foods (Dinsmore 2008, p. 52). Peterson (2003, pp. 291-292) concluded that there have been subtle shifts northward in ranges of grassland birds, including mountain plover, potentially due to climate change.
Climate change predictions are based on models with assumptions, and there are uncertainties regarding the magnitude of associated climate change parameters, such as the amount and timing of precipitation and seasonal temperature changes. There is also uncertainty as to the magnitude of effects of predicted climate parameters. The mountain plover, along with its habitat, will likely be affected in some manner by climate change. A shift in the species' geographic range may occur due to an increase in temperature and drought, although climate change would likely not pose as great a risk to mountain plover habitat as it may to species in polar, coastal, or montane ecosystems. Nonnative and invasive species, both plants and animals, could move into plover habitat as a result of
Based on all the potential climate change factors, a shift in range of the species could be possible, but there is no information available to suggest that a net loss in occupied breeding habitat or a significant impact to the status of the species will result. Although currently difficult to quantify, changes in climate, including higher temperatures, increasing stochastic precipitation events, high winds, and increasing soil dryness, will likely lead to a loss of agricultural production in the Imperial Valley; however, wintering habitat seems adequate to support the species. The species is adaptable to a wide array of climes, as evidenced by a geographic range that includes 12 States, Canada, and Mexico. Based on the best available information on climate change projections modeled over the next 40 to 70 years, we do not consider climate change to be a significant threat to the mountain plover at this time.
Knopf and Wunder (2006) stated that mountain plover on nests are extremely tolerant of human disturbance from vehicles, tractors, and aircraft, but quickly moved away when approached by a human on foot. While adult mountain plover would not likely be affected by humans on foot, eggs left unprotected for a period of time could become overheated if exposed to direct sun on hot days.
It seems likely that heavy construction activities nearby could impact nesting mountain plover. Such activities are limited in scope across mountain plover breeding habitat at any one time. In addition, timing stipulations that restrict construction related to oil and gas development, wind-power development, and some other activities in the vicinity of mountain plover during the nesting season exist for some Federal lands (Knopf and Wunder 2006).
Mountain plover are only one of a number of breeding bird species found in the habitats and locations where they nest. While prohibitions under the MBTA govern direct mortality and the destruction of mountain plover nests, general awareness of MBTA protections and of efforts to protect nesting birds, their nests, and their eggs may help limit human disturbance to nesting mountain plover.
Andres and Stone (2009, p. 27) suggested population-level effects from human disturbance were unlikely. We conclude that while human-caused disturbance may impact mountain plover, such impacts are generally of limited scope, and human disturbance is not likely a significant threat to the species.
Some of the threats discussed in this finding could work in concert with one another to cumulatively create situations that potentially impact the mountain plover beyond the scope of each individual threat. For example, as discussed under
Similarly, under
We have not identified other likely scenarios where the potential threats discussed in the five factors above have potential to work in concert to synergistically produce threats to the mountain plover above those which we have analyzed. We conclude that, at this time, there are no identifiable cumulative impacts likely to threaten the existence of the mountain plover in the foreseeable future.
We conclude that the best scientific and commercial information available indicates that the mountain plover is not now, or likely in the future, threatened by genetic stochasticity, its typical lifespan, its site fidelity, exposure to pesticides, selenium toxicity, grasshopper and cricket control, weather, climate change, or human disturbance, or cumulative impacts of potential threats such that the species is in danger of extinction or likely to become so within the foreseeable future.
As required by the Act, we considered the five factors in assessing whether the mountain plover is endangered or threatened throughout all, or a significant portion of its range. We have carefully examined the best scientific and commercial information available regarding the status and past and present and future threats faced by the mountain plover. We reviewed information in our files, other available published and unpublished information, and information provided by interested parties following our February 16, 1999, and December 5, 2002, proposals to list the mountain plover (64 FR 7587 and 67 FR 72396, respectively), and following our June 29, 2010, document (75 FR 37353) vacating our September 9, 2003, withdrawal (68 FR 53083) and reinstating our 2002 proposal. We also consulted with Federal and State land managers.
There have been historical impacts to the mountain plover, in particular the loss of much of the native prairie ecosystem, including bison, prairie dog colonies, other native grazers, and wildfires that produced extensive mountain plover habitat on the Great Plains. However, past concerns regarding continuing and future loss of breeding habitat provided by black-tailed prairie dog colonies appears unfounded. Conversion to agriculture remains insignificant across the mountain plover's breeding range. Human development and resultant impact to mountain plover breeding habitat in South Park, Colorado, has not occurred as previously anticipated, and is not expected to do so in the foreseeable future. Little evidence has
In the past, we were concerned that mountain plover life span was short compared to other plovers and that this, in combination with high breeding site fidelity, presented a threat to breeding populations. Contrary to our previous belief, the mountain plover is now considered a relatively long-lived species. Site fidelity and ability to seek out alternative sites for breeding does not appear to be a concern. Based on new information regarding life span, site fidelity, and dispersal, we no longer believe that these aspects of the mountain plover's life history represent any threat to the species. Lastly, recent information confirms that some mountain plover are exposed to pesticides, but no evidence of impacts to individuals, local populations, or rangewide impacts to the species have been demonstrated.
The current status of the mountain plover does not suggest that future habitat changes, or the combination of climate change and habitat changes will result in significant population-level impacts in the foreseeable future. Their geographically widespread breeding and wintering locations, and ability to use a variety of habitats, contribute to their security. During breeding, they utilize short- and mixed-grass prairie, prairie dog colonies, agricultural lands, and semi-desert (Dinsmore 2003, pp. 14-17). The variety of habitats in which they successfully breed suggests that threats affecting one habitat type would not greatly increase the mountain plover's vulnerability to extinction. Mountain plover have proven to be adaptable to many human activities, such as using crop fields for breeding and wintering, and benefitting from some cattle grazing practices. Over time, the extent of wintering habitat in California is likely to decline, but wintering mountain plover exploit a variety of grassland, rangeland, crop fields, and semi-desert landscapes from the Gulf Coast to the Pacific Ocean. We conclude that any foreseeable future declines in wintering habitat, in California or elsewhere, are unlikely to imperil the mountain plover.
We estimate the current rangewide mountain plover breeding population to be over 20,000 birds. This is more than double the estimate of 8,000 to 10,000 mountain plover that we cited in our December 5, 2002, proposal to list the mountain plover as a threatened species (67 FR 72396). While we have no evidence that an actual population increase has occurred, a larger known population provides added security from current and future potential influences and threats.
Based on our review of the best available scientific and commercial information pertaining to the five factors, we find that the threats, alone or cumulatively, are not of sufficient imminence, severity, or magnitude to indicate that the mountain plover is in danger of extinction, or likely to become endangered within the foreseeable future, throughout all or a significant portion of it range. The mountain plover has experienced historical losses of native habitat resulting in a significant decline in the rangewide population. However, BBS survey results suggest that the recent (1999 through 2009) rate of decline has moderated (see Population Size and Trends above). We have no evidence that potential threats (as discussed in Factors A, B, C, D, and E) are acting on the species or its habitat in a way that would reverse this positive trend or result in an increased rate of population decline within the foreseeable future. The currently estimated rangewide mountain plover population, more than 20,000 breeding birds, is more than double that estimated in 2002, providing the species with added security should increased threats to its wellbeing arise. As stated above, the mountain plover's geographically widespread breeding and wintering ranges, and ability to exploit a variety of habitats, contribute to its security. According to the Act, the term “endangered species” means any species which is in danger of extinction throughout all or a significant portion of its range; the term “threatened species” means any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. We conclude that the mountain plover does not meet the definition of endangered, because there is an apparent trend toward stability of the species' rangewide population, it remains widespread over both its breeding and wintering ranges, and it can exploit a variety of habitats including areas of human disturbance. In addition, we have found no threats acting on the mountain plover in a way that would drive the species towards being endangered in the foreseeable future; therefore, the species does not meet the definition of threatened. Therefore, we find that listing the mountain plover as an endangered or threatened species is not warranted throughout all or a significant portion of its range at this time (see the Significant Portion of the Range discussion below). As such, we withdraw our December 5, 2002, proposed rule (67 FR 72396) to list the mountain plover as a threatened species.
After assessing whether the species is endangered or threatened throughout its range, we next consider whether a distinct vertebrate population segment (DPS) or whether any significant portion of the mountain plover range meets the definition of endangered or is likely to become endangered in the foreseeable future (threatened).
Under the Service's Policy Regarding the Recognition of Distinct Vertebrate Population Segments Under the Endangered Species Act (61 FR 4722, February 7, 1996), three elements are considered in the decision concerning the establishment and classification of a possible DPS. These are applied similarly for additions to or removal from the Federal List of Endangered and Threatened Wildlife. These elements include:
(1) The discreteness of a population in relation to the remainder of the species to which it belongs;
(2) The significance of the population segment to the species to which it belongs; and
(3) The population segment's conservation status in relation to the Act's standards for listing, delisting, or reclassification (
Under the DPS policy a population segment of a vertebrate taxon may be considered discrete if it satisfies either one of the following conditions:
(1) It is markedly separated from other populations of the same taxon as a consequence of physical, physiological, ecological, or behavioral factors. Quantitative measures of genetic or morphological discontinuity may provide evidence of this separation.
(2) It is delimited by international governmental boundaries within which differences in control of exploitation, management of habitat, conservation
We do not consider any population segment of mountain plover to be markedly separated from other populations of the same taxon as a consequence of physical, physiological, ecological, or behavioral factors. Mountain plover are naturally distributed across a large landscape in a discontinuous fashion. Available breeding and wintering habitats exist in a constantly shifting mosaic of suitable habitat throughout the western Great Plains and Rocky Mountain States from Canada to Mexico. As an avian species, mountain plover are able to move long distances during migration, and to return to different geographical areas for breeding or wintering.
Although there is some evidence that mountain plover exhibit some site fidelity to their breeding areas (Graul 1973, p. 71; Skrade and Dinsmore 2010, p. 672), other studies have shown that the species can disperse over relatively long distances (Knopf and Wunder 2006; Bly 2010b, pers. comm.). There are no known barriers to movement throughout the geographic range of the species. Wunder (2007, p. 118) concluded that there is widespread mixing of mountain plover populations in winter and that birds may use alternate wintering sites in different years. A genetic study using nuclear microsatellites concluded that mountain plover across sampled breeding locations in Colorado and Montana comprised a single, relatively homogenous gene pool (Oyler-McCance
The mountain plover spans international boundaries between the United States, Canada, and Mexico; however, the vast majority of occupied breeding habitat occurs in the United States with few breeding records in Canada and Mexico. Mexico likely winters a substantial number of mountain plover that breed in the United States. The known relative distribution of mountain plover between the three countries has remained fairly constant in recent years. Additionally, we are not aware of any differences in control of exploitation, management of habitat, conservation status, or regulatory mechanisms that exist in Canada or Mexico that are significant in light of section 4(a)(1)(D) of the Act (the inadequacy of existing regulatory mechanisms). Therefore, we do not believe that international boundaries provide evidence of discrete mountain plover populations.
We determine, based on a review of the best available information, that no mountain plover population segments meet the discreteness conditions of the 1996 DPS policy. Therefore, no mountain plover population segment qualifies as a DPS under our policy, and no DPS is a listable entity under the Act.
The DPS policy is clear that significance is analyzed only when a population segment has been identified as discrete. Because we found that no mountain plover populations meet the discreteness element and, therefore, do not qualify as a DPS under the Service's DPS policy, we will not conduct an evaluation of significance.
The Act defines an endangered species as one “in danger of extinction throughout all or a significant portion of its range,” and a threatened species as one “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The term “significant portion of its range” is not defined by the statute. For the purposes of this finding, a significant portion of a species' range is an area that is important to the conservation of the species because it contributes meaningfully to the representation, resiliency, or redundancy of the species. The contribution must be at a level such that its loss would result in a significant decrease in the viability of the species.
If an analysis of whether a species is endangered or threatened in a significant portion of its range is appropriate, we engage in a systematic process that begins with identifying any portions of the range of the species that warrant further consideration. The range of a species can theoretically be divided into portions in an infinite number of ways. However, there is no purpose in analyzing portions of the range that are not reasonably likely to be significant and endangered or threatened. To identify only those portions that warrant further consideration, we determine whether there is substantial information indicating that (i) the portions may be significant and (ii) the species may be in danger of extinction there or likely to become so within the foreseeable future. In practice, a key part of this analysis is whether the threats are geographically concentrated in some way. If the threats to the species are essentially uniform throughout its range, no portion is likely to warrant further consideration. Moreover, if any concentration of threats applies only to portions of the range that are unimportant to the viability of the species, such portions will not warrant further consideration.
We next address whether any portions of the mountain plover's range warrant further consideration. On the basis of our review, we found no geographic concentration of threats on breeding or wintering habitat such that the subspecies may be in danger of extinction in that portion. Although the mountain plover's wintering habitat in California is likely to decrease in the future because of changes in land use and agriculture, we have determined that the likely extent of change will not result in a significant threat to the species' ability to maintain a wintering population in California. Similarly, we found that there is no area within the breeding range of the mountain plover where the potential threat of changes to habitat are concentrated or may be substantially greater than in other portions of the range. The factors affecting the species are essentially uniform throughout its range, indicating that no portion of the mountain plover's range warrants further consideration of possible endangered or threatened status.
We request that you submit any new information concerning the status of, or threats to, the mountain plover to our Colorado Ecological Services Office (see
A complete list of references cited is available on the Internet at
The primary authors of this document are the staff members of the Colorado Ecological Services Office (see
The authority for this section is section 4 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (Commission or CFTC) is proposing regulations that would implement the new statutory framework in the Commodity Exchange Act (CEA), added by the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). These new provisions of the CEA require, among other things, the Commission to adopt capital requirements for certain swap dealers (SDs) and major swap participants (MSPs). The proposed rules also provide for related financial condition reporting and recordkeeping by SDs and MSPs. The Commission further proposes to amend existing capital and financial reporting regulations for futures commission merchants (FCMs) that also register as SDs or MSPs. The proposed regulations also include requirements for supplemental FCM financial reporting to reflect section 724 of the Dodd-Frank Act. In order to align the comment periods for this proposed rule and the Commission's earlier proposed rulemaking on margin requirements for uncleared swaps,
Comments must be received on or before July 11, 2011.
You may submit comments, identified by RIN 3038-AD54, by any of the following methods:
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All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
Thomas Smith, Deputy Director, Thelma Diaz, Associate Director, or Jennifer Bauer, Special Counsel, Division of Clearing and Intermediary Oversight, 1155 21st Street, NW., Washington, DC 20581. Telephone number: 202-418-5137 and electronic mail:
On July 21, 2010, President Obama signed the Dodd-Frank Act.
The legislative mandate to establish registration and regulatory requirements for SDs and MSPs appears in section 731 of the Dodd-Frank Act, which adds a new section 4s to the CEA. Section 4s(e) explicitly requires the adoption of rules establishing capital and margin requirements for SDs and MSPs, and applies a bifurcated approach that requires each SD and MSP for which there is a prudential regulator to meet the capital and margin requirements established by the applicable prudential regulator, and each SD and MSP for which there is no prudential regulator to comply with Commission's capital and margin regulations.
The term “prudential regulator” is defined in a new paragraph 39 of the definitions set forth in section 1a of the CEA, as amended by section 721 of the Dodd-Frank Act. This definition includes the Board of Governors of the Federal Reserve System (Federal Reserve Board); the Office of the Comptroller of the Currency (OCC); the Federal Deposit Insurance Corporation (FDIC); the Farm Credit Administration; and the Federal Housing Finance Agency (FHFA). The definition also specifies the entities for which these agencies act as prudential regulators, and these consist generally of federally insured deposit institutions; farm credit banks; federal home loan banks; and the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. In the case of the Federal Reserve Board, it is the prudential regulator not only for certain banks, but also for bank holding companies and any foreign banks treated as bank holding companies. The Federal Reserve Board also is the prudential regulator for subsidiaries of these bank holding companies and foreign banks, but excluding their nonbank subsidiaries that are required to be registered with the Commission as SDs or MSPs.
In general, therefore, the Commission is required to establish capital requirements for all registered SDs and MSPs that are not banks, including nonbank subsidiaries of bank holding companies regulated by the Federal Reserve Board. In addition, certain swap activities currently engaged in by banks may be conducted in such nonbank subsidiaries and affiliates as a result of the prohibition on Federal assistance to swap entities under section 716 of the
The Commission is further required to adopt other regulations that implement provisions in section 4s related to financial reporting and recordkeeping by SDs and MSPs. Section 4s(f)(2) of the CEA specifically directs the Commission to adopt rules governing financial condition reporting and recordkeeping for SDs and MSPs, and section 4s(f)(1)(A) expressly requires each registered SD and MSP to make such reports as are required by Commission rule or regulation regarding the SD's or MSP's financial condition. The Commission also is authorized to propose record retention and inspection requirements consistent with the provisions of section 4s(f)(1)(B).
Section 4s(e)(3)(D) of the CEA calls for comparability of the capital requirements that the Commission, United States Securities and Exchange Commission (SEC) and prudential regulators (together, referred to as “Agencies”) adopt for SDs, MSPs, security-based swap dealers (SSDs) and major security-based swap participants (MSSPs) (together, referred to as “swap registrants”). Section 4s further specifies the expected scope and frequency of consultation by the Agencies regarding the capital requirements of swap registrants. Section 4s(e)(3)(D) requires the Agencies to establish and to maintain, to the maximum extent practicable, comparable minimum capital requirements. Section 4s(e)(3)(D) also requires the Agencies to periodically, but not less frequently than annually, consult on minimum capital requirements for swap registrants.
As directed by Dodd-Frank, and consistent with precedent for harmonizing where practicable the minimum capital and financial condition and related reporting requirements of dual registrants, staff from each of the Agencies has had the opportunity to provide oral and/or written comments to the regulations for SDs and MSPs in this proposing release, and the proposed regulations incorporate elements of the comments provided. The Commission will continue its discussions with the Agencies in the development of their respective capital regulations to implement the Dodd-Frank Act.
The Commission is relying to a great extent on existing regulatory requirements in proposing capital requirements for SDs and MSPs. Specifically, under this proposal, any SD or MSP that is required to register as an FCM would be required to comply with the Commission's existing capital requirements set forth in § 1.17 for FCMs. Furthermore, any SD or MSP that is neither a registered FCM nor a bank, but is part of a U.S. bank holding company, would be required to comply with the applicable bank capital requirements that are established by the Federal Reserve Board for bank holding companies. Lastly, any SD or MSP that was not required to register as an FCM and is not part of a U.S. bank holding company would compute its capital in accordance with proposed regulations summarized in part II of this release.
Section 4s(e)(2)(C) of the CEA requires the Commission, in setting capital requirements for a person designated as a swap registrant for a single type or single class or category of swap or activities, to take into account the risks associated with other types/classes/categories of swap and other activities conducted by that person that are not otherwise subject to regulation by virtue of their status as an SD or MSP. Section 4s(e)(3)(A) also refers to the need to offset the greater risk that swaps that are not cleared pose to SDs, MSPs, and the financial system, and the Commission, SEC, and prudential regulators are directed to adopt capital requirements that: (1) Help ensure the safety and soundness of the registrant; and (2) are appropriate for the risk associated with the uncleared swaps held by the registrants.
Entities that register as SDs and MSPs may include entities that also are registered as FCMs.
FCM capital requirements in § 1.17 are designed to require a minimum level
Paragraph (a) of § 1.17 addresses the first component of the FCM capital rule by specifying the minimum amount of adjusted net capital that a registered FCM is required to maintain. Specifically, § 1.17 sets the minimum adjusted net capital requirement as the greatest of: (1) $1,000,000; (2) for an FCM that engages in off-exchange foreign currency transactions with persons that are not eligible contract participants as defined in section 1a(12) of the CEA (i.e. retail participants), $20,000,000, plus 5 percent of the FCM's liabilities to the retail forex participants that exceeds $10,000,000; (3) 8 percent of the risk margin (as defined in § 1.17(b)(8)) of customer and non-customer exchange-traded futures positions and over-the-counter (OTC) swap positions that are cleared by a clearing organization and carried by the FCM; (4) the amount of adjusted net capital required by a registered futures association of which the FCM is a member; and (5) for an FCM that also is registered as securities broker or dealer, the amount of net capital required by rules of the SEC.
The requirements for the calculation of the FCM's adjusted net capital represent the second component of the FCM capital rule. Regulation 1.17(c)(5) generally defines the term “adjusted net capital” as an FCM's “current assets”, i.e., generally liquid assets, less all of its liabilities (except certain qualifying subordinated debt), and further reduced by certain capital charges (or haircuts) to reflect potential market and credit risk of the firm's current assets.
FCMs historically have not engaged in significant OTC derivatives transactions. The capital treatment of such transactions under § 1.17 is one of the factors that has resulted in OTC transactions being conducted in affiliated entities. Specifically, an FCM in computing its adjusted net capital is required to mark its OTC derivatives position to market, and to reflect any unrealized gain or loss in its statement of income. If the FCM experiences an unrealized loss on its OTC derivatives position, the unrealized loss is recorded as a liability to the counterparty and results in a reduction of the firm's adjusted net capital. If the FCM experiences an unrealized gain on the OTC derivatives position, the FCM would record a receivable from the counterparty. If the receivable was not secured through the receipt of readily marketable financial collateral, the FCM would be required to exclude the receivable from the calculation of its current assets under § 1.17(c)(2)(ii).
An FCM, in computing its adjusted net capital, is further required to compute a capital charge to reflect the potential market risk associated with its OTC derivatives positions. Regulation 1.17(c)(5) establishes specific capital charges for market risk for an FCM's proprietary positions in physical inventory, forward contracts, fixed price commitments, and securities. Historically, the Commission has required an FCM to use the capital charge provisions specified in § 1.17(c)(5)(ii), or capital charges established by the SEC for securities brokers or dealers, for its OTC derivatives positions.
Section 4s(e)(3)(B)(i) of the CEA recognizes that the requirements applicable to SDs and MSPs under section 4s do not limit the Commission's authority with respect to FCM regulatory requirements. Furthermore, with respect to cleared swaps, section 724 of the Dodd-Frank Act provides that if a SD or MSP accepts any money, securities, or property (or extends credit in lieu of money, securities, or property) from, or on behalf of, a swaps customer to margin, guarantee, or secure a swap position cleared by or through a derivatives clearing organization, the SD or MSP must register with the Commission as an FCM.
Consistent with the objectives set forth above, part II of this release summarizes regulations that the Commission proposes in order to establish minimum capital and financial reporting requirements for SDs and MSPs that are not banks. As noted in previous proposed rulemaking issued by the Commission, the Commission intends, where practicable, to consolidate regulations implementing section 4s of the CEA in a new part 23.
In addition to the amendments being proposed for subpart E of part 23, the Commission also is proposing certain other amendments to FCM regulations contained in part 1. The proposed regulations for SD and MSP capital and financial reporting, as well as capital and financial reporting requirements for FCMs, are discussed in part II of this release. Additional amendments for part 140 of the Commission's regulations are discussed in part III of this release.
Proposed § 23.101 would specify capital requirements applicable to SDs and MSPs. Regulation 23.101 includes language specifying exemptions from the Commission's proposed SD-MSP capital rules, however, for any SD or MSP that is: (1) Subject to regulation by a prudential regulator; (2) designated by the Financial Stability Oversight Council as a systemically important financial institution (SIFI) and subject to supervision by the Federal Reserve Board; or (3) registered as an FCM.
The capital requirements of SDs and MSPs that are subject to regulation by a prudential regulator would be established by the prudential regulator. As identified by the prudential regulators, applicable capital regulations for the entities they regulate include the following: (1) In the case of insured depository institutions, the capital adequacy guidelines adopted under 12
Any SD or MSP that was determined to be a SIFI by the Financial Stability Oversight Council would be subject to supervision by the Federal Reserve Board.
While the Commission is not proposing to impose capital requirements on a registered SD or MSP that is subject to prudential regulation or is designated as a SIFI, the Commission is proposing to require such an entity to file capital information with the Commission upon request. Proposed § 23.105(c)(2) provides that, upon the request of the Commission, each SD or MSP subject to prudential supervision or designated as a SIFI must provide the Commission with copies of its capital computations and accompanying schedules and other supporting documentation. The capital computations must be in accordance with the regulations of the applicable prudential regulator with jurisdiction over the SD or MSP.
Furthermore, any SD or MSP that is required to register as an FCM, including an SD or MSP that is subject to supervision by a prudential regulator or is designated a SIFI and subject to regulation by the Federal Reserve Board, would be subject to the capital requirements set forth in § 1.17 for FCMs. Part II.B.2 of this release discusses the applicable requirements for FCMs that also are registered as SDs or MSPs.
The requirements for SDs and MSPs under proposed § 23.101 reflect the fact that these firms may include subsidiaries of U.S. bank holding companies that are required by section 716 of Dodd-Frank to “push out” to an affiliate certain swap trading activities. The prudential regulators for the banks that may be required to comply with section 716 include the Federal Reserve Board, the FDIC, and the OCC. The capital rules of these banking agencies have addressed OTC derivatives since 1989, when the banking agencies implemented their risk based capital adequacy standards under the first Basel Accord.
Described in very general terms, the capital rules adopted by these banking agencies establish the required minimum amount of regulatory capital in terms of a “minimum ratio of qualifying total capital to weighted risk assets of 8 percent, of which at least 4.0 percentage points should be in the form of Tier 1 capital.”
The terms of proposed § 23.101 have been drafted to maintain consistent capital requirements among bank and nonbank subsidiaries (other than FCM
The Commission has determined that it is appropriate to defer to the Federal Reserve Board's existing capital requirements for SDs and MSPs that are nonbank subsidiaries of a U.S. bank holding company because the existing capital requirements encompass the scope of the swaps activity and related hedging activity contemplated under the Dodd-Frank Act; the existing requirements sufficiently account for certain risk exposures, including credit and market risks; and the existing requirements meet the statutory requirement of ensuring the safety and soundness of the SD or MSP and are appropriate for the risk associated with the non-cleared swaps held by the SD or MSP.
The proposed regulation provides that a SD or MSP that is a nonbank subsidiary of a U.S. bank holding company would have to comply with a regulatory capital requirement specified by the Federal Reserve Board as if the subsidiary itself were a U.S. bank holding company. The scope of such a regulatory capital requirement would include the swap transactions and related hedge positions that are part of the SD's or MSP's swap activities. Specifically, the SD or MSP would be required to comply with a regulatory capital requirement equal to or in excess of the greater of: (1) $20 million of Tier 1 capital as defined in 12 CFR part 225, appendix A, § II.A;
The proposed $20 million minimum Tier 1 capital requirement is consistent with the minimum adjusted net capital requirement that Congress established for Commission registrants engaging in bilateral off-exchange foreign currency transactions with retail participants.
The additional proposed minimum capital requirement based on membership requirements of a registered futures association is similar to FCM requirements under § 1.17, and is appropriate in light of proposed Commission rules that would require each SD and MSP to be a member of a registered futures association. Currently, the National Futures Association (NFA) is the only registered futures association. The proposal recognizes that NFA may adopt SD and MSP capital rules at some later date, and would incorporate such requirements into the Commission's regulation.
Certain SDs and MSPs subject to proposed regulation § 23.101 may be commercial firms or other entities with no affiliations to U.S. bank holding companies. For such SDs and MSPs, the proposed rule would require that their regulatory capital requirement as measured by “tangible net equity” meet or exceed: (1) $20 million of “tangible net equity,” plus the amount of the SD's or MSP's over-the-counter derivatives credit risk requirement and additional market risk exposure requirement (as defined below), or (2) the capital required by a registered futures association of which the SD or MSP is a member.
For purposes of the proposed capital requirement, the term “tangible net equity” is defined in proposed § 23.102 as a SD's or MSP's equity as computed under generally accepted accounting principles as established in the United States, less goodwill and other intangible assets.
The term “over-the-counter derivatives credit risk requirement” is defined in proposed § 23.100 and refers to the capital that the SD or MSP must maintain to cover potential counterparty credit exposures for receivables arising from OTC swap positions that are not cleared by or through a clearing organization. The term “additional market risk exposure requirement” is defined in proposed § 23.100 and refers to the additional amount of capital the SD or MSP must maintain for the total potential market risk associated with such swaps and any product used to hedge such swaps, including futures, options, other swaps or security-based swaps, debt or equity securities, foreign currency, physical commodities, and other derivatives. The Commission is proposing to include swap transactions and related hedge positions that are part of the SD's swap activities in the over-the-counter derivatives credit risk requirement and market risk exposure requirement, and not swap positions or related hedges that are part of the SD's commercial operations.
The computation of regulatory capital based upon an SD's or MSP's tangible net equity is a significant, but necessary, departure from the Commission's traditional adjusted net capital rule for FCMs. A primary distinction between the tangible net equity and adjusted net capital methods is that the tangible net equity approach does not require that a registrant maintain the same degree of highly liquid assets as the traditional FCM adjusted net capital computation. The proposed tangible net equity computation would allow SDs and MSPs to include in their minimum capital computation assets that would not qualify as current assets under FCM adjusted net capital requirements, such as property, plant and equipment, and other potentially-illiquid assets.
The Commission is proposing a capital requirement based upon a SD's or MSP's tangible net equity based upon its understanding that potential SD and MSP registrants do not conduct their business operations in a manner comparable to traditional FCMs. For example, certain entities that are extensively or primarily engaged in the energy or agricultural business may be required to register as SDs or MSPs. Although these SDs and MSPs may have significant amounts of balance sheet equity, it may also be the case that significant portions of their equity is comprised of physical and other non-current assets, which would preclude the firms from meeting FCM capital requirements without engaging in significant corporate restructuring and incurring potentially undue costs.
The Commission believes that setting a capital requirement that is different from the traditional FCM adjusted net capital approach is acceptable for SDs and MSPs that are not acting as market intermediaries in the same manner as FCMs. Readily available liquid assets are essential for FCMs to meet their key financial obligations. FCMs have core obligations for the funds they hold for and on behalf of their customers, and FCMs further guarantee their customers' financial obligations with derivatives clearing organizations, including obligations to make appropriate initial and variation margin payments to derivatives clearing organizations. SDs and MSPs, however, do not interact with derivatives clearing organizations to clear customer transactions and cannot engage in transactions with customers trading on designated contract markets without registering as FCMs.
The Commission is proposing to essentially impose the current FCM capital regime on SDs and MSPs that also are registered as FCMs. FCMs currently are required, pursuant to § 1.17, to maintain a minimum level of adjusted net capital that is equal to or greater than the greatest of: (1) $1,000,000; (2) $20,000,000 for an FCM engaged in off-exchange foreign currency transactions with retail participants, plus an additional 5 percent of the total liabilities to the retail foreign currency customers that exceeds $10,000,000; (3) the sum of 8 percent of the risk margin on cleared futures and cleared swap positions carried in customer and non-customer accounts; (4) the amount of adjusted net capital required by a registered futures association of which the FCM is a member; and (5) for an FCM that also is registered as a securities broker-dealer, the amount of net capital required by rules of the SEC.
The Commission is proposing amendments to § 1.17 that would impose a minimum $20 million adjusted net capital requirement if the FCM also is an SD or MSP. The $20 million minimum requirement is consistent with the Commission's proposal to adopt a $20 million minimum capital requirement for SDs and MSPs that are not FCMs, and is further consistent with the Commission's recent adoption of a $20 million minimum capital requirement for FCMs that engage in off-exchange foreign currency transactions with retail participants.
Furthermore, the Commission notes that the current capital regulations would impose a risk-based capital requirement on SDs and MSPs that are required to register as FCMs as a result of their carrying and clearing of customer swap or futures transactions with a clearing organization. As noted above, the current regulation requires an FCM to maintain adjusted net capital that is equal to or greater than 8 percent of the risk margin associated with cleared futures and swap transactions carried by the FCM in customer and non-customer accounts. The 8 percent of margin, or risk-based capital rule, is intended to require FCMs to maintain a minimum level of capital that is associated with the level of risk associated with the customer positions that the FCM carries.
The proposed regulations include an application process by which certain SDs and MSPs may apply to the Commission for approval to use proprietary internal models for their capital calculations required by part 23. For those SDs and MSPs whose calculations are not permitted to be based upon such models, the proposed regulations sets forth other specified requirements for the SD's or MSP's required market and credit risk calculations.
The Commission recognizes that internal models, including value-at-risk (VaR) models, can provide a more effective means of recognizing the potential economic risks or exposures from complex trading strategies involving OTC derivatives and other investment instruments. In this connection, the Commission has previously adopted § 1.17(c)(6), which allows certain FCMs that are dually-registered with the SEC to elect to use internally developed models to compute market risk deductions for proprietary positions in securities, forward contracts, foreign currency, and futures contracts, and credit risk deductions for unsecured receivables from counterparties in OTC transactions (the “Alternative Capital Computation”) in lieu of the standard deductions set forth in § 1.17(c). A precondition of using the Alternative Capital Computation is the SEC's review and written approval of the firm's application to use internal models in computing its capital under SEC regulations, and the requirement that the model and the firm's risk management meet certain qualitative and quantitative requirements set forth in SEC Rule 15c3-1e. The firm also was required to maintain at least $1 billion of tentative net capital and $500 million in net capital.
Significant resources, however, are necessary for regulators to effectively assess and to periodically review proprietary internal models. Absent concerns regarding future Commission resources to implement an adequate program for the effective direct supervision of internal models used by SDs and MSPs, the Commission would propose regulations to establish a framework by which FCMs that are registered as SDs or MSPs could submit internal models to the Commission for review and approval for use in their required capital calculations. Such a program would include the continuous and direct review by Commission staff of the policies and procedures applicable to, and output of, such proprietary models.
In view, however, of current Commission resources which does not support the development of a program to conduct the initial review and ongoing assessment of internal models, and the uncertainty of future funding levels for the necessary staffing resources, this release provides for an application process for approval of SD and MSP capital calculations using internal models, but limits the initial pool of applicants to those whose internal models are subject to review by the Federal Reserve Board or the SEC. Specifically, proposed § 23.103 would permit a nonbank SD or MSP that also is part of a U.S. bank holding company subject to oversight by the Federal Reserve Board to apply to the Commission for approval by written order to use proprietary internal models to compute market risk and credit risk capital requirements under the applicable U.S. bank holding company regulations. The SD or MSP also may apply for such approval if it also is registered as an SSD or MSSP, and the internal models for which it seeks approval have been reviewed and are subject to the regular assessment by the SEC.
As set forth in the proposed regulation, the application must address several factors including: (1) Identifying the categories of positions that the SD or MSP holds in its proprietary accounts; (2) describing the methods that the SD or MSP will use to calculate its market risk and credit risk capital requirements; (3) describing the internal models; and (4) describing how the SD or MSP will calculate current exposure and potential future exposure. The SD or MSP also must explain the extent to which the internal models have been reviewed and approved by the Federal Reserve Board, or, as applicable, the SEC.
The proposal would further provide that the internal models must meet such requirements as are adopted by U.S. regulators under the Basel Accord, including requirements implemented as part of Basel III. In particular, the internal models must meet the requirements that are set forth in regulations of the Federal Reserve Board at 12 CFR part 225, appendix E and appendix G applicable to market risk and OTC counterparty credit risk; or, as applicable to SSDs or MSSPs, the requirements set forth in SEC regulations. Such requirements include, but are not limited to, the requirements in these regulations to assess the effectiveness of such models by conducting appropriate backtesting and for the application of multipliers to the model outputs that would be based on the results of such backtesting.
The proposed regulation further specifies that the application shall be in writing and filed with the regional office of the Commission having jurisdiction over the SD or MSP as set forth in § 140.2 of the Commission's regulations. The application may be filed electronically in accordance with instructions approved by the Commission and specified on the Commission's Web site. A petition for confidential treatment of information within the application may be submitted according to procedures set forth in § 145.9. The proposed rule further provides that the SD or MSP must promptly, upon the request of the Commission at any time, provide any other explanatory information as the Commission may require at its discretion regarding the SD's or MSP's internal models and related capital computations.
As set forth in proposed § 23.103, upon recommendation by Commission staff, the Commission may approve the application, or approve an amendment to the application, in whole or in part, subject to any conditions or limitations the Commission may require, if the Commission finds the approval to be necessary or appropriate in the public interest or for the protection of investors, after determining, among other things, whether the applicant has met the requirements of this section and is in compliance with other applicable rules promulgated under the Act and by self-regulatory organizations. The proposed rule also specifies the following conditions under which such Commission approval may be terminated: (1) Internal models that were previously approved are no longer approved or periodically reviewed by the Federal Reserve Board or the SEC; (2) the SD or MSP has changed materially a mathematical model described in the application or changed materially its internal risk management control system without first submitting amendments identifying such changes and obtaining Commission approval for such changes; (3) the Commission in its own discretion determines that as a result of changes in the operations of the SD or MSP the internal models are no longer sufficient for purposes of the capital calculations of the SD or MSP; (4) the SD or MSP fails to come into compliance with its requirements under the terms of the Commission's approval under § 23.103, after having received from the Commission's designee written notification that the firm is not in compliance with its requirements, and must come into compliance by a date specified in the notice; or (5) upon any other condition specified in the Commission approval order.
If the application made under proposed part 23 is from an SD or MSP that also is an FCM, proposed § 23.103 provides that the application shall specify that the firm requests approval to calculate its adjusted net capital (not tangible net equity or other regulatory capital) using proprietary internal models. The Commission also is proposing to provide in § 1.17(c)(7) that any FCM that also is registered as an SD or MSP, or also is registered as an SSD or MSSP, and which has received approval of its application to the Commission under § 23.103 for capital computations using the firm's internal models, shall calculate its adjusted net capital in accordance with the terms and conditions of such Commission approval. The Commission further is proposing to amend § 1.17(c)(6)(i) to recognize the possibility that FCMs that have been authorized to elect to use the Alternative Capital Computation may be SDs or MSPs and required to register as such with the Commission. The amended § 1.17(c)(6)(i) would permit these FCMs to continue to apply the Alternative Capital Computation pending the Commission's determination of the application that such FCMs must file under proposed part 23.
As noted earlier, the internal models that may be approved for use in the capital calculations of SDs and MSPs must meet qualifying standards under the Basel Accord. In addition to specifying qualifying criteria for internal models, the Basel Accord also includes other requirements for capital calculations that do not incorporate measurements from the firm's internal models.
Proposed § 23.104 sets forth capital calculations for OTC derivatives credit risk that are based on Basel requirements that do not incorporate internal models. The proposed required credit risk deduction also includes a concentration charge specified in SEC Rule 15c3-1e. The charge as proposed would equal the sum of (1) a counterparty exposure charge (summarized below) and (2) a counterparty concentration charge, which would equal 50 percent of the amount of the current exposure to any counterparty in excess of 5 percent of the SD's or MSP's applicable minimum capital requirement, plus a portfolio concentration charge of 100 percent of the amount of the SD's or MSP's aggregate current exposure for all counterparties in excess of 50 percent of the SD's or MSP's applicable minimum capital requirement.
The counterparty exposure charge would equal the sum of the net replacement values in the accounts of insolvent or bankrupt counterparties plus the “credit equivalent amount” of the SD's or MSP's exposure to its other counterparties. The SD or MSP would be permitted to offset the net replacement value and the credit equivalent amount by the value of collateral submitted by the counterparty, as specified and subject to certain haircuts in the proposed rule. The resultant calculation would be multiplied by a credit risk factor of 8 percent.
For purposes of this computation, the credit equivalent amount would equal the sum of the SD's or MSP's current exposure and potential future exposure to each of its counterparties that is not insolvent or bankrupt. The current exposure for multiple OTC positions would equal the greater of (i) the net sum of all positive and negative mark-to-market values of the individual OTC positions, subject to permitted netting pursuant to a qualifying master netting agreement; or (ii) zero.
• The collateral must be in the swap dealer or major swap participant's physical possession or control;
• The collateral must meet the requirements specified in a credit support agreement meeting the requirements of § 23.151;
• If the counterparty is a swap dealer, major swap participant or financial entity as defined in § 23.150, certain additional requirements apply as described in the proposed rule at § 23.104(j); and
• Applicable haircuts must be applied to the market value of the collateral.
Once the credit equivalent amount is computed as described above, the SD or MSP would be required to apply a credit risk factor of 50 percent, regardless of any credit rating of the counterparty by any credit rating agency.
Proposed § 23.103 specifies required calculations for market risk that are based on Basel “standardized” measurement procedures for assessing market risk arising from positions in traded debt and equity and in commodities and foreign currencies. The Basel standardized approach also includes market risk exposure requirements for options that have debt instruments, equities, foreign currency, or commodities as the underlying positions. Although proposing requirements based on the Basel standardized approach for market risk calculations, Commission staff recognizes that the Basel Accord expressly supports capital requirements based on internal risk measurement models as the better approach for a bank that has a significant business in options or commodities.
The Basel standardized charges seek to address “general market risk,” meaning the risk of changes in the market value of transactions that arise from broad market movements, such as changing levels of market interest rates, broad equity indices, or currency exchange rates. Where applicable, the Basel standardized charges also seek to address “specific” risk, which is defined as changes in the market value of a position due to factors other than broad market movements. Such specific risk may include default risk,
Applying the Basel standardized approach, the proposed rules require the calculation of separate charges for general and specific market risk for positions in equities and debt instruments (including options with underlying instruments in these categories), which are summed to determine the total charge required with respect to such positions. Only general market charges are calculated for positions in commodities and foreign currencies (including options with underlying instruments in these categories). For purposes of computing such specific and general market risk charges, off-balance sheet positions are included. For example, swaps are included in the calculation as two positions, with a receiving side treated as a long position and a paying side treated as a short position, and using market values of the notional position in the underlying debt or equity instrument, or index portfolio. The required calculations for specific risk and general market risk charges are described in more detail below.
For positions in equities, the proposed specific risk charge equals 8 percent of the firm's gross equity positions, i.e., the absolute sum of all long equity positions and of all short equity positions, with netting allowed when the SD or MSP has long and short positions in exactly the same instrument.
The specific risk charge required for debt instruments is based on risk-weight factors applied to the debt instrument positions of the SD or MSP. The applicable required risk weight factor is based in part on the identity of the obligor. For example, all positions in debt instruments of national governments of the Organization of Economic Co-operation and Development (“OECD”) countries are assigned zero specific risk. Other debt securities issued by “qualifying” borrowers are assigned risk weights that vary by maturity; specifically, 0.25 percent (6 months or less); 1 percent (6 to 24 months); or 1.6 percent (over 24 months). Qualifying debt instruments include those issued by U.S. government-sponsored agencies; general obligation debt instruments issued by states and other political subdivisions of OECD countries and multilateral development banks; and debt instruments issued by U.S. depository institutions or OECD-banks that do not qualify as capital of the issuing institution.
The Basel standardized approach also permits certain rated corporate debt securities to be included as qualifying debt. However, given the legislative directive to eliminate the use of credit ratings in Commission regulations, the proposed rules do not permit any differentiation among the charges applied to corporate debt securities. As a result, the proposed rule would apply the same haircut to highly-rated debt as to debt that is not highly-rated, i.e., the maximum specific risk weight of 8 percent. The total proposed specific risk charge for debt instruments would equal the sum of the risk-weighted positions, with netting allowed for long and short positions (including derivatives) in identical debt issues or indices.
In drafting the terms of proposed § 23.103, the Commission has taken into consideration Basel provisions relating to specific risk that have been incorporated into banking regulations of the Federal Reserve Board, FDIC, and OCC.
In contrast to the Basel standardized approach to specific risk charges, the federal banking agencies have not adopted the Basel standardized approach for computing general market risk capital charges.
The standardized measure of market risk for equities applies to direct holdings of equity securities, equity derivatives and off-balance-sheet positions whose market values are directly affected by equity prices. The required charge is the sum of the specific risk charge, calculated as described above, and of the general market risk charge, which is equal to 8.0 percent of the difference between the sum of the firm's long and the sum of the firm's short positions. The net long or short position must be calculated separately for each national market. Thus, for example, a long position in U.S. companies traded on the New York Stock Exchange cannot be netted against a short position in Japanese companies traded on the Tokyo Stock Exchange. Long and short equity positions (including derivatives) in identical equity issues or equity indices in the same market may be netted.
Applying the “maturity” method under the Basel standardized approach, on and off-balance-sheet debt positions are distributed among a range of time-bands and zones that are specified by the Basel Accord, which are designed to take into account differences in price sensitivities and interest rate volatilities across various maturities. The time-band into which a position is distributed is determined by its maturity (fixed rate instruments) or the nearest interest rate reset date of the instrument (floating rates). Long positions are treated as positive amounts and short positions are treated as negative amounts. The net long or short position for each time-band is multiplied by the risk weight specified in a table set forth in the Basel Accord.
The standardized approach also requires a “time-band disallowance” to address the basis risk that exists between instruments with the same or similar maturities and also the possibly different price movements that may be experienced by different instruments within the same time-band due to the range of maturities (or repricing periods) that may exist within a time-band. To capture this risk, a disallowance of 10 percent is applied to the smaller of the offsetting (long or short) positions within a time-band.
Additional disallowances address the risk that interest rates along the yield curve are not perfectly correlated and that the risk-weighted positions may not be offset fully. The required disallowances, which apply to the smaller of the offsetting positions, are specified in a table provided under the Basel Accord, and range from 30 percent to 100 percent. The amount of each disallowance varies in size by zone: Greater netting is allowed for positions in different time bands but within the same zone than is allowed for positions that are in different zones. The firm must first determine “intra-zone” disallowance amounts, and then the required “inter-zone” disallowances across zones. An SD's or MSP's general market risk requirement for debt instruments within a given currency would be the sum of (1) the value of its net risk-weighted position and (2) all of its time-band, intra-zone and inter-zone disallowances.
Certain debt securities would not be included in the charges described above, but would instead be subject to the capital treatment under applicable provisions in the SEC's capital regulation at 17 CFR 240. 15c3-1. For example, municipal securities would be subject to capital requirements in the SEC rule.
The market risk capital requirement for commodities risk applies to holdings or positions taken in commodities, including precious metals, but excluding gold (which is treated as a foreign currency because of its market liquidity). The required charge addresses directional risk, which is the risk that a commodity's spot price will increase or decrease, as well as other important risks such as basis risk, interest rate risk, and forward gap risk.
For purposes of determining the charge, the firm is required to calculate its net position in each commodity on the basis of spot rates. Long and short positions in the same commodity may be netted, and different categories of commodities may be netted if deliverable against each other. Under the “simple” approach under the Basel Accord, the firm's capital charge for directional risk would equal 15 percent of its net position, long or short, in each commodity, and a supplemental charge of 3.0 percent of the gross position in each commodity is added to cover basis, interest rate and forward gap risk.
The market risk capital requirement for foreign exchange covers the risk of holding or taking positions in foreign currencies (including gold). The charge is determined by the firm's net positions in a given currency, including its net spot and forward positions; any guarantees that are certain to be called and likely to be irrecoverable; its net future income and expenses that are not yet accrued, but that are already fully hedged; and any other items
The standardized approach assumes the same volatility for all currencies and requires an SD or MSP to take capital charge equal to 8.0 percent of the sum of (a) its net position in gold and (b) the greater of the sum of the net short positions or the sum of the net long positions in each foreign currency.
The proposed rule is based on the “delta-plus method” under the Basel standardized approach, which includes capital charges related to the option's
(2) The gamma impact for each option will be positive or negative, and for options on the same underlying, the individual gamma impacts will be summed, resulting in a net gamma impact for each underlying that is either positive or negative.
(3) Net positive gamma impacts amounts are disregarded, and the capital charge equals the absolute value of the sum of all of the net negative gamma impact amounts.
The existing capital treatment under § 1.17 for those FCMs that are not approved to use internal models would remain the same under the proposed rules. Thus, SDs and MSPs that are also FCMs and not approved to use internal models for their capital calculations would be required to deduct 100 percent of the receivables associated with their uncleared swaps, except the extent of the market value, minus specified haircuts, of acceptable collateral that secure such receivables. The margin rules that have been proposed may result in fewer unsecured receivables for the FCM's uncleared swaps, especially as the Commission also is proposing to amend § 1.17(c)(2)(ii)(G) to provide that receivables from third-party custodians that arise from initial and/or variation margin deposits associated with bilateral swap transactions pursuant to proposed § 23.158 will be included in the FCM's current assets.
The Commission also is proposing to provide greater clarity and transparency to the market risk haircut charges under § 1.17 for OTC derivatives positions, by adding new paragraphs (iii) and (iv) to § 1.17(c)(5) that would address proprietary OTC swap transactions that are not cleared by or through a clearing organization. The proposal is intended to codify existing guidance provided by the Commission and SEC regarding the computation of capital charges for OTC derivative transactions.
As proposed, § 1.17(c)(5)(iii)(A) would require a capital charge equal to the notional amount of an interest rate swap multiplied by the applicable percentages of the underlying securities specified in SEC Rule 15c3-1(c)(2)(vi)(A)(1), as if such notional amount was the market value of a security issued or guaranteed as to principal or interest by the United States, if the interest rate swap position was not hedged with U.S. Treasury securities of corresponding maturities or matched with offsetting interest rate swap positions with corresponding terms and maturities.
Proposed § 1.17(c)(5)(iv) addresses the capital charges on proprietary OTC swap positions in credit default swaps, equity swaps, or commodity swaps that are not cleared by or through a clearing organization. Credit default swaps that are not hedged by the same securities underlying the swap are subject to a capital charge computed by multiplying the notional principal amount of the
Equity swaps would be subject to a capital charge equal to 15 percent of the net notional principal amount of the swap transaction. Commodity swaps would be subject to a capital charge equal to 20 percent of the net market value of the notional amount of the commodities underlying the swap transaction.
Regulation 1.17(a)(4) currently provides that any FCM that fails to meet, or is unable to demonstrate compliance with, the minimum capital requirement must transfer all customer accounts and immediately cease doing business as an FCM until it is capable of demonstrating compliance with the capital requirements. The FCM may continue to trade for liquidation purposes only unless the Commission or the FCM's designated self-regulatory organization (DSRO) provides otherwise.
The Commission is not proposing to amend § 1.17(a)(4). Accordingly, if an FCM that also is registered as an SD or MSP fails to maintain the minimum level of capital, it would have to cease operating as an FCM and transfer the customer futures and cleared swap accounts that it carries to another FCM. The FCM also could request that the Commission or DSRO grant the firm up to 10 business days to come back into compliance with the minimum capital requirements if the FCM could demonstrate an immediate plan to achieve compliance.
The Commission recognizes that an FCM that is an SD or MSP and has open uncleared bilateral swap transactions cannot transfer the uncleared bilateral swap transactions in a manner similar to customer futures and cleared swap transactions. In such situations, the agreements between the SD or MSP and its counterparties should dictate the process. As previously proposed by the Commission, each SD or MSP would be required to establish written policies and procedures reasonably designed to ensure that each SD or MSP and its counterparties have agreed in writing to all of the terms governing their swap trading relationship. The Commission further has proposed that the swap trading relationship documentation include a written agreement by the parties on terms relating to events of default or other termination events, and dispute resolution procedures. Therefore, the SD's or MSP's written agreements with its counterparties should address the possible undercapitalization of the SD or MSP and the parties' rights in such a situation.
Proposed § 23.105(a) requires an SD or MSP to provide the Commission with immediate notice if the SD or MSP fails to maintain compliance with the minimum capital requirements. FCMs also are required to provide the Commission with immediate notice under § 1.12(a). Upon receipt of an undercapitalization notice, the Commission would engage the SD or MSP to assess the situation and to determine whether the SD or MSP would be able to take reasonable actions to bring itself back into compliance with the minimum capital requirements. The Commission would further assess what other actions were necessary depending on the facts and circumstance of each situation, including the need for providing immediate notice to the SD's or MSP's swap counterparties.
Section 4s(f)(1)(A) of the CEA, as amended by section 731 of the Dodd-Frank Act, expressly requires each registered SD and MSP to make such reports as are required by Commission rule or regulation regarding the SD's or MSP's financial condition. The Commission is proposing new § 23.106, which would require certain SDs and MSPs to file monthly unaudited financial statements and annual audited financial statements with the Commission and with any registered futures association of which they are members.
Proposed § 23.106 would apply to SDs and MSPs, except any SDs or MSPs that are subject to the capital requirements of a prudential regulator, or designated by the Financial Stability Oversight Council as a SIFI. SDs and MSPs that are subject to regulation by a prudential regulator would comply with the applicable financial reporting obligations imposed by such prudential regulator. SDs and MSPs that are designated as SIFIs would comply with any financial reporting obligations imposed by the Federal Reserve Board. Registered SDs or MSPs that are subject to prudential regulation or designated as SIFIs, however, would be required pursuant to proposed § 23.105(d) to provide the Commission with copies of their capital computations and supporting documentation upon the Commission's request. In addition, SDs and MSPs that are required to register with the Commission as FCMs would not be required to file financial reports under § 23.106, and would continue to comply with the FCM financial reporting obligations set forth in § 1.10 of the Commission's regulations.
The proposed financial statements under part 23 would include a statement of financial condition; a statement of income or loss; a statement of cash flows; and a statement of changes in stockholders', members', partners', or sole proprietor's equity. The financial statements also would include a schedule reconciling the firm's equity, as set forth in the statement of financial condition, to the firm's regulatory capital by detailing any goodwill or other intangible assets that are required to be deducted from the SD's or MSP's equity in order to compute its net tangible equity as required under proposed § 23.101. The schedule would further disclose the firm's minimum required capital under § 23.101 as of the end of the month or end of its fiscal year, as applicable, and the amount of regulatory capital it held at such date.
The proposed financial statements would be required to be prepared in accordance with generally accepted accounting principles as established in the United States, using the English language, and in U.S dollars. The unaudited financial statements would be required to be filed within 17 business days of the end of each month and the annual audited financial statements would be required to be filed within 90 days of the end of the SD's or MSP's fiscal year.
Proposed § 23.106 also would authorize the Commission to require a SD or MSP that was not subject to regulation by a prudential regulator to
Proposed § 23.105 would require SDs and MSPs to provide the Commission, and the registered futures association of which the SDs or MSPs are members, with written notice in the event of certain enumerated financial or operational issues. The proposal is intended to provide the Commission and the appropriate registered futures association with timely notice of potentially adverse financial or operational issues that may warrant immediate attention and ongoing surveillance. The proposed notice requirements are comparable to the notice requirements currently existing for FCMs under § 1.12 of the Commission's regulations. Proposed § 23.105 would not be applicable to SDs and MSPs that are registered as FCMs. Such SDs and MSPs would be subject to the FCM notice requirements set forth in § 1.12 and, as noted above, such requirements are comparable to the proposed SD and MSP notice requirements set forth in § 23.105.
Proposed § 23.105 also would not be applicable to SDs or MSPs that are subject to the capital requirements of a prudential regulator, with the exception of two provisions that are discussed below. SDs and MSPs that are subject to capital requirements imposed by a prudential regulator would be subject to the applicable financial surveillance program of its prudential regulator. The first exception is the proposed requirement in § 23.105(c) that a SD or MSP that is subject to the capital rules of a prudential regulator file notice with the Commission and with a registered futures association if the SD or MSP fails to maintain compliance with the minimum capital requirements established by its prudential regulator. The second exception is set forth in proposed § 23.105(e) which requires an SD or MSP to provide the Commission with notice if it fails to maintain current books and records.
While the prudential regulator will be assessing such an SD's or MSP's financial condition, the Commission believes that notice of a CFTC registrant's failure to maintain compliance with applicable minimum capital requirements is critical information that may impact the Commission's assessment and monitoring of the SD's or MSP's ongoing compliance with applicable non-capital CFTC regulations and the SD's or MSP's potential adverse impact on counterparties, including other Commission registered SDs and MSPs.
The proposed notice provisions would require a SD or MSP to give telephonic notice to the Commission, followed by a written notice, whenever it knows or should know that the firm does not maintain tangible net equity in excess of its minimum requirement under § 23.101. The SD or MSP also would be required to file documentation containing a calculation of its current tangible net equity with its notice of undercapitalization.
Proposed § 23.105 also would require a SD or MSP to file a written notice with the Commission whenever its tangible net equity fails to exceed 110 percent of its minimum tangible net equity requirement as computed under § 23.101. The SD or MSP would be required to file the notice within 24 hours of failing to maintain tangible net equity at a level that is 110 percent or more above its minimum tangible net equity requirement. Proposed § 23.105 also would require a registered SD or MSP to provide written notice of its failure to maintain current books and records, or of a substantial reduction in capital as previously reported to the Commission.
The Commission issued in December 2010 an advanced notice of proposed rulemaking seeking comment on possible models to implement section 4d(f)(2) of the CEA, as added by section 724 of the Dodd-Frank Act, which provides that funds deposited by customers to margin a cleared swap transaction shall not be commingled with the funds of the FCM or used to margin, guarantee or secure the positions of any other customer other than the customer that deposited the funds.
Regulation 1.10 currently requires each FCM to prepare and to file unaudited financial condition reports, Form 1-FR-FCM, within 17 business days of the close of business each month. The Form 1-FR-FCM is required to be filed with the Commission and with the FCM's DSRO. An FCM also is required to file a Form 1-FR-FCM audited by an independent public accountant as of the end of the FCM's fiscal year. The audited financial Form 1-FR-FCM is required to be filed with the Commission and with the FCM's DSRO organization within 90 calendar days of the date of the FCM's fiscal year end.
Regulation 1.10(d) provides that each unaudited and audited Form 1-FR-FCM must include: a Statement of Financial Condition; a Statement of the Computation of Minimum Capital Requirements; a Statement of Income (Loss); a Statement of Changes in Ownership Equity; a Statement of Changes in Liabilities Subordinated to Claims of General Creditors Pursuant to a Satisfactory Subordination Agreement; a Statement of Segregation Requirements and Funds in Segregation for Customers Trading on U.S. Commodity Exchanges; and a Statement of Secured Amounts and Funds Held in Separate Accounts for Foreign Futures and Options Customers Pursuant to § 30.7.
The Commission is proposing to amend §§ 1.10(d)(1) and (2) to include a new Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts Under 4d(f) of the CEA in both the unaudited monthly Form 1-FR-FCM and the audited annual Form
Pursuant to the proposal, each FCM would be required to include the Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts Under 4d(f) of the CEA in both its unaudited monthly financial Form 1-FR-FCM filings and its annual audited Form 1-FR-FCM filings. In addition, each FCM would be required to include a reconciliation of any material reconciling items between the Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts Under 4d(f) of the CEA contained in the audited annual Form 1-FR-FCM and the corresponding unaudited monthly financial Form 1-FR-FCM filed as of the FCM's year end date, or include a statement that there were no material reconciling items.
The Commission also is proposing to amend § 1.10(g)(2)(ii) to provide that an FCM's Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts Under 4d(f) of the CEA will not be treated as exempt from mandatory public disclosure under the Freedom of Information Act and the Government in the Sunshine Act and Parts 145 and 147 of Chapter I of the Commission's regulations. This proposed amendment would treat the public disclosure of an FCM's financial information regarding the holding of funds for customers' cleared swap transactions in a manner that is consistent with the public disclosure of information regarding the segregation of customer funds for trading on U.S. commodity exchanges, and regarding the securing of customer funds for trading on foreign boards of trade pursuant to § 30.7 of the Commission's regulations.
The Commission is further proposing a technical amendment to § 1.10(c)(1), which directs an FCM, and other registrants, to file the reports and other information required by § 1.10 with Commission's Regional Office with jurisdiction over the registrant's principal place of business. Commission § 140.02 establishes the jurisdiction of each Regional Office over filing requirements of registrants based upon the geographic location of the principal business office of the registrants. In order to clarify where a registrant should file required financial information with the Commission, the Commission proposes to amend § 1.10(c) to include a reference to the geographic listing in § 140.02 of the Commission's regulations.
Except for the technical amendment described above, the other proposed amendments implementing reporting requirements for funds of cleared swap customers would not be adopted or effective unless the Commission adopts, after issuing proposed rules for comment, regulations establishing requirements for collateral posted by cleared swap customers under section 4d(f) of the CEA.
The Commission is proposing to amend § 1.16 of the Commission's regulations. Regulation 1.16 sets forth the qualifications that an independent public accountant must meet to be qualified to conduct the annual examinations of an FCM as required by § 1.10(b)(1)(ii), and establishes the minimum audit objectives of the independent accountant's examination of an FCM.
Regulation 1.16(c)(2) provides that the accountant's report on the audit of an FCM must state whether the audit was made in accordance with generally accepted auditing standards and must designate any auditing procedures deemed necessary by the accountant under the circumstances of the particular case which have been omitted and the reason for the omission of such procedures. Regulation 1.16(c)(3) further provides that the accountant's report must clearly state the opinion of the accountant with respect to the financial statements and schedules covered by the report and the accounting principles and practices reflected therein.
Regulation 1.16(d) sets forth the required audit objective of the accountant's examination of the financial statements of an FCM and provides, in relevant part, that the audit must be made in accordance with generally accepted auditing standards and must include a review and appropriate tests of the accounting systems, the internal accounting controls, and the procedures for safeguarding customer and firm assets in accordance with the CEA and Commission regulations, since the last examination date. The scope of the audit and review of the FCM's accounting systems, the internal accounting controls, and procedures for safeguarding customer and firm assets must be sufficient to provide reasonable assurance that any material inadequacies existing at the dates of the examination in (1) The accounting systems, (2) the internal accounting controls, and (3) the procedures for safeguarding customer and firm assets (including the segregation requirements of section 4d(a)(2) of the CEA and Commission regulations, and the secured amount requirements of the CEA and part 30 of the Commission's regulations) will be discovered. Regulation 1.16(d) further provides that as specified objectives the audit must include reviews of the practices and procedures followed by the FCM in making daily computations of the segregation requirements of section 4d(a)(2) of the CEA and the secured amount requirements of part 30 of the Commission's regulations.
The proposed amendments would revise § 1.16 to include the proposed new Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts Under 4d(f) of the CEA within the explicit audit scope of the examination of an FCM. Specifically, the Commission is proposing to amend the term “customer” as defined in § 1.16(a)(4) to include an FCM's swap customers that engage in cleared swap transactions. The proposed amendment would bring cleared swap positions carried in swap customers' accounts explicitly within the scope of the accountant's audit objectives, as set forth in § 1.16(d), which includes the review and appropriate testing of the accounting systems, the internal accounting control, and the procedures for safeguarding customer and firm assets.
The Commission also proposes to amend § 1.16(d)(1) to explicitly provide that the scope of the independent accountant's review of the accounting systems, internal accounting controls, and procedures for safeguarding customer assets must be sufficient to provide reasonable assurance that any
The proposed amendments to § 1.16 would not be adopted or effective unless the Commission adopts, after issuing proposed rules for comment, regulations establishing segregation requirements for collateral posted by cleared swap customers under section 4d(f) of the CEA. As previously noted, the Commission published an advanced notice of proposed rulemaking on this topic on December 2, 2010.
Regulation 1.12 requires an FCM to provide notice to the Commission and to the FCM's DSRO of certain material financial or operational events. The self-reporting of these financial and operational events by an FCM is a key to the Commission's and self-regulatory organizations' financial surveillance oversight programs as such notices may lead to the discovery of accounting, recordkeeping, risk management, or other regulatory failures that require prompt attention to safeguard customer funds and to protect the clearing system.
Regulation 1.12(b) is referred to as the “early warning capital provisions” and currently requires an FCM to file written notice with the Commission and with its DSRO whenever its adjusted net capital is less than: (1) 150 percent of the minimum dollar amount of adjusted net capital required by § 1.17(a)(1)(i)(A); (2) 150 percent of the amount of adjusted net capital required by a registered futures association of which the FCM is a member (except if the registered futures association has adopted a margin-based capital rule, then the FCM is required to file a written notice if its adjusted net capital is less than 110 percent of its minimum adjusted net capital requirement as computed under the registered futures association's margin-based capital requirement); or (3) 110 percent of the FCM's margin-based capital requirement as computed under § 1.17(a)(1)(i)(B). An FCM that also is registered with the SEC as a broker or dealer is required to provide the Commission with written notice whenever it fails to maintain net capital (as defined in SEC Rule 15c3-1) in an amount that exceeds the “early warning level” set forth in SEC Rule 17a-11(c). The early warning capital provisions are intended to provide the Commission and the FCM's DSRO with prompt notice of potential adverse financial or operational issues that may impact the FCM's ability to meet its obligations to its customers and the clearing system, and provide an opportunity for Commission and DSRO staff to review the financial condition of an FCM that does not maintain a significant amount of excess adjusted net capital prior to the firm falling under the minimum net capital requirement.
The Commission is proposing to amend § 1.12(b) by adding a new paragraph (b)(5) to require any FCM that also is registered with the SEC as a SSD or a MSSP to file a notice with the Commission if the SSD or MSSP fails to maintain net capital above the minimum “early warning level” established by rules or regulations of the SEC. The proposed new paragraph (b)(5) would provide the Commission and the FCM's DSRO with an opportunity to review the financial condition of an FCM and, if necessary, to assess possible courses of regulatory action to protect customer funds and to review potential financial risk presented by the FCM to the clearing system.
The Commission also is proposing to amend § 1.12(f)(4). Regulation 1.12(f)(4) requires an FCM to provide immediate notice by telephone communication, followed by immediate written confirmation, whenever any commodity futures, options, cleared swaps, or other Commission regulated account that the FCM carries is subject to a margin call, or a call for other deposits required by the FCM, that exceeds the FCM's excess adjusted net capital determined under § 1.17, and the call for additional deposits has not been answered by the close of business on the day following the issuance of the call.
The Commission intends for all of the notice provisions of § 1.12 to apply, as applicable, to FCMs that carry swap customer accounts. The Commission, however, believes it is necessary to amend § 1.12(f)(4) due to the reference in the regulation to “commodity interest” accounts. The term “commodity interest” is defined in § 1.3(yy) as any contract for the purchase or sale of a commodity for future delivery and any contract, agreement, or transaction submitted under section 4c of the CEA. To avoid any confusion and to ensure that an FCM provides the Commission and its self-regulatory organizations with appropriate early warning notice, the Commission is proposing to amend § 1.12(f)(4) to require notice of a failure of the owner of any commodity futures, option, swap, or other Commission regulated account carried by the FCM to meet a margin call that exceeds the FCM's excess adjusted net capital. The proposed amendment is intended to ensure that an FCM is required to file a written notice if a customer account containing cleared swap transactions fails to meet a margin call that exceeds the FCM's excess adjusted net capital.
The Commission also is proposing to amend § 1.12(h) to require an FCM to provide the Commission and its DSRO with immediate notice by telephone, confirmed immediately in writing, if the amount of funds on deposit in accounts segregated for the benefit of the FCM's swap customers is less than the amount that the FCM is required to hold in such accounts. The proposed amendment to § 1.12(h) would impose an obligation upon the FCM that is consistent with an FCM's current obligation to provide immediate telephone notice, confirmed by writing, whenever the FCM fails to maintain the amount of funds in customer segregated or secured accounts as required by § 1.20 and § 30.7, respectively.
The Commission proposes to amend Commission regulation 1.17(c)(2)(i) by adding references to cleared swap customers to this regulation, which currently provides that FCMs must exclude from current assets any unsecured commodity futures and options account (as amended, this would include cleared swaps customers and other Commission regulated accounts) containing a ledger balance and open trades, the combination of which liquidates to a deficit or containing a debit ledger balance only:
The Commission also is proposing to amend provisions in § 1.17(c)(5)(v) that require an FCM to incur a capital charge not only on its proprietary securities included in the FCM's calculation of adjusted net capital, but also for securities held in customer segregated accounts when such securities were not deposited in segregation by a specific customer (i.e., the securities were purchased with cash held in the customer segregated accounts). The purpose of both of these capital requirements is to ensure that the FCM maintains a capital cushion in order to cover potential decreases in the value of the securities. The proposed rule would further require the FCM to incur a capital charge for any securities purchased by the FCM using funds belonging to the FCM's customers and held in the secured accounts for customers trading on foreign markets pursuant to § 30.7 or in segregated accounts for cleared swap customers pursuant to section 4d(f) of the CEA.
The Commission requests comment on all aspects of the proposed capital and financial reporting regulations. In particular, the Commission request comment on the following:
(1) The Commission's capital proposal for SDs and MSPs includes a minimum dollar level of $20 million. A non-bank SD or MSP that is part of a U.S. bank holding company would be required to maintain a minimum of $20 million of Tier 1 capital as measured under the capital rules of the Federal Reserve Board. An SD or MSP that also is registered as an FCM would be required to maintain a minimum of $20 million of adjusted net capital as defined under § 1.17. In addition, an SD or MSP that is not part of a U.S. bank holding company or registered as an FCM would be required to maintain a minimum of $20 million of tangible net equity, plus the amount of the SD's or MSP's market risk exposure and OTC counterparty credit risk exposure.
The Commission requests comment on the amount of the proposed minimum dollar amount of regulatory capital. Should the minimum dollar amount of capital be set at a higher or lower level? Is a consistent $20 million of minimum regulatory capital appropriate for all SDs and MSPs?
(2) The Commission is proposing in § 23.101 to incorporate bank capital requirements into the CFTC capital requirements by requiring non-bank SDs and MSPs that are part of a U.S. bank holding company to meet bank capital requirements. The Commission requests comment on the appropriateness of the proposed incorporation of banking capital regulations in the terms of § 23.101 for such SDs or MSPs.
(3) The Commission is proposing in § 23.101 to establish a regulatory capital requirement that is based upon tangible net equity if the SD or MSP is not: (1) An FCM; (2) part of a U.S. bank holding company; or (3) designated a SIFI. Proposed § 23.102 provides that tangible net equity shall be determined under generally accepted accounting principles and shall exclude goodwill and other intangible assets. The Commission requests comment on the proposed definition of tangible net equity. Should all intangible assets be excluded?
(4) The Commission requests comment on the appropriateness of establishing a minimum regulatory capital requirement based upon tangible net equity for all SDs and MSPs that are not also registered as FCMs, part of U.S. bank holding companies, or designated as SIFIs. Specifically, is the tangible net equity method appropriate for SDs and MSPs that are primarily engaged in non-financial operations? Is the tangible net equity method appropriate for SDs and MSPs that are primarily engaged in financial operations? Should minimum regulatory capital requirements be established under a different method for SDs and MSPs that are primarily financial or trading entities, such as funds or trading firms? Should the Commission impose additional capital or alternative capital requirements on financial firms that qualify to use the tangible net equity approach? What additional or alternative capital requirements would be appropriate for such firms?
(5) The proposed tangible net equity capital computation does not require an SD or MSP to maintain the same level of highly liquid assets as the Commission's current capital requirement for FCMs. Specifically, the tangible net equity capital requirement would allow an SD or MSP to include fixed assets and other illiquid assets in meeting its regulatory capital requirement. Should the capital requirement for the tangible net equity method include a liquidity component that would effectively require an SD or MSP to hold a defined amount of highly liquid assets? What factors should the Commission consider in adopting a liquidity requirement?
(6) One possible approach to a minimum liquidity requirement is to require an SD or MSP to hold unencumbered liquid assets equal to the sum of the total amount of initial margin that the SD or MSP would have to post with a counterparty for all uncleared swap transactions and the total amount of any unpaid variation margin that the SD or MSP owes to any counterparty. Liquid assets that could qualify for purposes of the liquidity requirement could be limited to cash, obligations guaranteed by the U.S., and obligations of government sponsored entities. Such assets could be part of the general operating assets of the SD or MSP and would not have to be held or “segregated” in any special account by the SD or MSP. Assets posted by the SD or MSP with custodians as margin on uncleared swap transactions could be included in meeting the liquidity requirement. The qualifying liquid assets also could be subject to market value haircuts set forth in the proposed margin rule § 23.157(c). The Commission request comment on this approach to the computation of a liquidity requirement. If the Commission were to adopt such a liquidity requirement, would it be appropriate to incorporate minimum margin thresholds that would have to be exceeded before the SD or MSP was subject to the liquidity requirement? For example, should the Commission consider a rule that would impose a liquidity requirement only if the SD's or MSP's initial and variation margin obligations on uncleared swaps exceeded a minimum threshold? How would such thresholds be determined? What are the appropriate market value haircuts that should be imposed?
(7) The Commission is proposing to amend § 1.17 to specify capital charges for uncleared swap transactions held by an FCM. The Commission request comment on the appropriateness of the proposed calculations. Furthermore, the Commission request comment on viable alternative methods to compute capital charges for uncleared swap positions. Specifically, the Commission requests comment on whether capital charges should be based upon the margin calculations that would be required to be conducted under Part 23 of the proposed regulations.
(8) SDs and MSPs that also are registered as FCMs are required under § 1.17(c)(2)(ii) to exclude unsecured receivables from counterparties to OTC transactions in determining their adjusted net capital under § 1.17. Certain SDs or MSPs that also are
The Commission seeks comment on the appropriateness of allowing SDs and MSPs that also are registered as FCMs and have received approval to use internal models to compute their capital requirements to use such models to reduce the 100 percent capital charge for unsecured receivables arising from uncleared OTC swap transactions. The Commission requests comment on this issue as it is concerned that SDs and MSPs may have significant unsecured receivables for uncleared swap transactions that are not subject to variation margin requirements (e.g., bilateral swap positions entered into prior to the effective date of the Dodd-Frank Act). If such SDs and MSPs also were to register as FCMs, the unsecured receivables could have a significant impact on the financial condition of the FCMs and adversely impact the FCMs' customers if the debtor were to default.
(9) The Commission solicits comment on all of the proposed rules related to the use of internal models for computing market risk and counterparty credit risk for capital purposes. Specifically, comment is requested regarding what resources, expertise, and capacity SDs and MSPs ought to have in order to be approved to use internal models.
(10) The Commission solicits comment regarding whether it is appropriate to permit SDs and MSPs to use internal models for computing market risk and counterparty credit risk charges for capital purposes if such models have been approved by a foreign regulatory authority and are subject to periodic assessment by such foreign regulatory authority. What criteria should the Commission consider in assessing whether to approve or to accept a model approved by a foreign regulatory authority?
(11) The Commission previously has proposed regulations that require each SD and MSP to promptly report to the Commission any swap valuation dispute not resolved within one business day if the counterparty is SD or MSP, or five business days if the counterparty is not an SD or MSP.
(12) What are the costs to counterparties resulting from the capital requirements being proposed by the Commission?
(13) FCMs currently file monthly unaudited financial statements with the Commission, and the Commission is proposing to extend this monthly filing requirement to SDs and MSPs. The Commission seeks comment regarding the frequency of the filing of SD and MSP unaudited financial statements. Specifically, what challenges and costs are associated with monthly financial statement filings? Would the Commission receive adequate financial information from SDs and MSPs if they filed on a quarterly basis? Are there other financial statements or schedules other than, or in addition to, the proposed statements and schedules that the Commission should require from SDs and MSPs?
(14) The Commission is proposing in § 23.106(i) to make available to the public regulatory capital information provided by each SD and MSP in their financial statement filings with the Commission. Specifically, the Commission would make publicly available for each SD or MSP its minimum regulatory capital requirement, the amount of its regulatory capital, and any excess or deficiency in its regulatory capital. The disclosure of the regulatory capital information of SDs and MSPs is consistent with the disclosure of FCM financial information.
Commission §§ 1.10, 1.12, and 1.17 reserve certain functions to the Commission, the greater part of which the Commission has delegated to the Director of the Division of Clearing and Intermediary Oversight through the provisions of § 140.91 of the Commission's regulations. The Commission proposes to amend § 140.91 to provide similar delegations with respect to functions reserved to the Commission in Part 23.
Proposed § 23.101(c) would require an SD or MSP to be in compliance with the minimum regulatory capital requirements at all times and to be able to demonstrate such compliance to the Commission at any time. Proposed § 23.103(d) would require an SD or MSP, upon the request of the Commission, to provide the Commission with additional information regarding its internal models used to compute its market risk exposure requirement and OTC derivatives credit risk requirement. Proposed § 23.105(a)(2) would require an SD or MSP to provide the Commission with immediate notification if the SD or MSP failed to maintain compliance with the minimum regulatory capital requirements, and further authorizes the Commission to request financial condition reporting and other financial information from the SD or MSP. Proposed § 23.105(d) authorizes the Commission to direct an SD or MSP that is subject to capital rules established by a prudential regulator, or has been designated a systemically important financial institution by the Financial Stability Oversight Council and is subject to capital requirements imposed by the Board of Governors of the Federal Reserve System to file with the Commission copies of its capital computations for any periods of time specified by the Commission.
The Commission is proposing to amend § 140.91 to delegate to the Director of the Division of Clearing and Intermediary Oversight, or the Director's designee, the authority reserved to the Commission under proposed §§ 23.101(c), 23.103(d), and 23.105(a)(2) and (d). The delegation of such functions to staff of the Division of Clearing and Intermediary Oversight is necessary for the effective oversight of SDs and MSPs compliance with minimum financial and related reporting requirements. The delegation of authority also is comparable to the authorities currently delegated to staff of Division of Clearing and Intermediary Oversight under § 140.91 regarding the supervision of FCMs compliance with minimum financial requirements.
The following provisions relating to margin requirements are also proposed to be included in Part 140, in order to provide within Part 140 a complete listing of the functions reserved to the Commission under Subpart E that are
The Commission also is proposing in this release to delegate authority with respect to the Commission's recently proposed § 23.157(d), which would authorize the Commission to take the following actions regarding margin assets: (i) Require a CSE to provide further data or analysis concerning any margin asset posted or received; (ii) require a CSE to replace a margin asset posted to a counterparty with a different margin asset to address potential risks posed by the asset; (iii) require a CSE to require a counterparty that is an SD, MSP, or a financial entity to replace a margin asset posted with the CSE with a different margin asset to address potential risks posed by the asset; (iv) require a CSE to provide further data or analysis concerning margin haircuts; or (v) require a CSE to modify a margin haircut applied to an asset received from an SD, MSP, or a financial entity to address potential risks posed by the asset.
Finally, under proposed § 23.158(c), the Commission may at any time require a CSE to provide further data or analysis concerning any custodian holding collateral collected by the CSE. Further, the Commission may at any time require a CSE participant to move assets held on behalf of a counterparty to another custodian to address risks posed by the original custodian. The Commission is proposing also to include delegations in Part 140 with respect to these functions reserved to the Commission under § 23.158(c). Each of the proposed delegations would be to the Director of the Division of Clearing and Intermediary Oversight, with the concurrence of General Counsel. The Commission requests comment on each of the proposed amendments to § 140.91 described in this release.
The Regulatory Flexibility Act (“RFA”)
The Commission previously has determined that FCMs should not be considered to be small entities for purposes of the RFA. The Commission's determination was based in part upon their obligation to meet the minimum financial requirements established by the Commission to enhance the protection of customers' segregated funds and protect the financial condition of FCMs generally.
The Commission also has previously determined that large traders are not “small entities” for RFA purposes.
The Commission is carrying out Congressional mandates by proposing these rules. The Commission is incorporating capital requirements of SDs and MSPs into the existing regulatory capital frameworks. In so doing, the Commission has attempted to formulate requirements in the manner that is consistent with the public interest and existing regulatory requirements. Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the proposed rules will not have a significant economic impact on a substantial number of small entities.
The Paperwork Reduction Act of 1995 (PRA)
The Commission has included as an exhibit to this proposed rulemaking the additional schedule that the proposed amendments to § 1.10 would require FCMs to file with respect to the cleared swaps of their customers. The collection of information required by the amended § 1.10 are necessary for the Commission's oversight of the FCM's compliance with its minimum financial requirements under the CEA and
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In the rulemaking proposing margin requirements for uncleared swaps, the Commission would require any SD or MSP to file its margin model with the Commission for approval. Each filing must include an explanation of the manner in which the model meets the requirements of the margin rules; the mechanics of, theoretical basis of, and empirical support for the model; and independent third party validation of the model. The Commission would process filings for models that comply with the minimum requirements established in the margin rules, or that are currently used by a derivatives clearing organization for margining cleared swaps, that are currently used by an entity subject to regular assessment by a prudential regulator for margining uncleared swaps, or that are made available for licensing by a vendor. At a later date, at which point the Commission may have sufficient resources to evaluate such models, the Commission may begin processing filings of proprietary models to be used by SDs and MSPs.
The Commission cannot estimate with precision the frequency with which margin model filings will be made by SDs and MSPs annually, as an SD or MSP may be expected to make one initial filing and then to change or supplement its margin model occasionally. In an attempt to provide conservative estimates, the calculations below have been developed in accordance with the Commission's estimate that there will be 250 SDs and 50 MSPs that will register with it, and with the assumption that 40% of registrants will make 3 model filings per year with respect to the margining of various swap instruments. The estimated average number of hours per filing includes not only preparation of the filing, but also the time associated with third party evaluation of the model.
In this rulemaking proposing capital requirements for SDs and MSPs, the Commission would permit SDs and MSPs to use internal models to calculate minimum capital requirements, subject to the submission of an application to the Commission for approval of the internal model. The application must address several factors, including: (1) Identifying the categories of positions that the SD or MSP holds in its proprietary accounts; (2) describing the methods that the SD or MSP will use to calculate its market risk and credit risk capital requirements; (3) describing the internal models; and (4) describing how the SD or MSP will calculate current exposure and potential future exposure. The SD or MSP also must explain the extent to which the models have been reviewed and approved by the Federal Reserve Board or, as applicable, the SEC.
The Commission cannot estimate with precision the frequency with which SDs and MSPs will file applications with the Commission for the use of internal capital models. At present, only those SDs or MSPs that are subject to prudential regulation or regulation by the SEC will be permitted to use internal models. The Commission cannot presently determine which SDs and MSPs will be subject either to prudential regulation or regulation by the SEC, how many of those SDs or MSPs will file applications with the Commission, or how frequently those SDs and MSPs may submit applications with respect to revised or new models. The Commission additionally cannot presently determine at what time it may be able to consider applications by SDs and MSPs that will be subject solely to Commission regulation, or how many of those SDs and MSPs may eventually file applications with the Commission.
In an attempt to provide conservative estimates, the calculations below have been developed in accordance with the Commission's estimate that there will be 250 SDs and 50 MSPs that will register with it, and that 70% of those SDs and MSPs will file initial applications with the Commission for the use of an internal model. The Commission additionally estimates that in subsequent years, it will be asked to review 30 capital models annually.
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This proposed capital rulemaking permits an SD or MSP, which is required to apply a credit risk factor to its counterparties, to apply to the Commission for approval to assign internal individual ratings to each of its counterparties, or for an affiliated bank or affiliated broker-dealer to do so. The Commission does not have experience with such an application process, and therefore cannot estimate with precision the burden hours associated with this regulatory provision. In an attempt to provide conservative estimate, the Commission estimates that it may receive up to 4 applications per year from 70% of the 300 anticipated SDs and MSPs that may use internal application models, and that the preparation and submission of these applications would consume up to 8 hours per application. At such time as the Commission is able to approve internal models of SDs and MSPs that are not subject to prudential regulation, the Commission estimates that it will receive up to 4 applications per year from an additional 20% of SDs and MSPs.
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In this proposed capital rulemaking, the Commission would require SDs and MSPs to present certain information to the Commission on request. Proposed § 23.104 would authorize the Commission to require an SD or MSP that is not subject to prudential regulation to file with the Commission additional financial or operational information, and to prepare and to keep current ledgers or other similar records which show or summarize each transaction affecting the SD's or MSP's asset, liability, income, expense and capital accounts. Under proposed § 23.105, the Commission would require each registered SD or MSP subject to prudential supervision, or each SD or MSP designated as a SIFI, to provide to the Commission, on request, copies of its capital computations and accompanying schedules and other supporting documentation demonstrating compliance with the applicable prudential regulator with jurisdiction over the SD or MSP.
SDs and MSPs additionally will be required to keep comprehensive data records supporting the information contained in the SD's or MSP's unaudited and annual audited financial reports for a period of five years. SDs and MSPs using internal capital models also would be obligated to make and keep current a record of the basis for the credit rating it applies to each of its counterparties for a period of five years.
The Commission is unable to estimate with precision how many requests it will make of SDs and MSPs under proposed §§ 23.104 and 23.105 annually. Additionally, it is unable to estimate with precision the number of records an SD or MSP will be obligated to keep related to the credit rating it applies to its counterparties. In an attempt to provide conservative estimates, the Commission anticipates that it will make 200 requests under §§ 23.104 and 23.105 in the aggregate annually, and that responding to those requests would consume 5 burden hours. It is estimated that recordkeeping of monthly and annual reports, estimated at 3,900 records, would consume .4 burden hours. And, it is estimated that .7 burden hours would be consumed by 210 SDs and MSPs initially and 270 SDs and MSPs eventually to keep credit rating bases for up to an average of 75 counterparties annually.
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Finally, the proposed capital rulemaking contains provisions that would require registered SDs and MSPs to provide notice to the Commission in the event that certain material financial or operational events occur. These include the notice filing obligations contained in § 1.12 and in proposed §§ 23.104 and 23.105. In an attempt to provide conservative estimates, the Commission anticipates receiving up to 90 occasional notices annually and that the burden of providing those notices will consume up to .7 burden hours.
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The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission will consider public comments on such proposed requirements in:
• Evaluating whether the proposed collections of information are necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
• Evaluating the accuracy of the estimated burden of the proposed information collection requirements, including the degree to which the methodology and the assumptions that the Commission employed were valid;
• Enhancing the quality, utility, and clarity of the information proposed to be collected; and
• Minimizing the burden of the proposed information collection requirements on FCMs, SDs, and MSPs, including through the use of appropriate automated, electronic, mechanical, or other technological information collection techniques,
Copies of the submission from the Commission to OMB are available from the CFTC Clearance Officer, 1155 21st Street, NW., Washington, DC 20581, (202) 418-5160 or from
• The Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503,
• (202) 395-6566 (fax); or
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Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rule preamble. Please refer to the
Section 15(a) of the CEA
The proposed regulations also amend existing requirements for FCMs. Section 724 of the Dodd-Frank Act adds a new Section 4d(f) of the Act, which requires an FCM to segregate from its own assets any money, securities, and property deposited by swap customers to margin, guarantee, or secure swap transactions cleared by or through a derivatives clearing organization. The proposed regulations would require each FCM holding customer funds for cleared swap customers to prepare a monthly Statement of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts under 4d(f) of the CEA (Cleared Swap Segregation Statement). The Cleared Swap Segregation Statement would be filed as part of the FCMs Form 1-FR-FCM. The proposal also would amend the notice filing requirements and capital requirements for FCMs.
The Commission has decided to propose capital rules for SDs and MSPs falling under four separate categories: (C1) Those that are affiliates of U.S. bank holding companies (BHCs) and are not registered as FCMs; (C2) those that are not affiliated with a BHC and are not registered as FCMs; (C3) those that are affiliates of a BHC and are registered as FCMs; (C4) those that are not affiliated with a BHC and are registered as FCMs. Costs and benefits for each of these four categories is discussed relative to one of two approaches: (D1) What constitutes capital follows the current practice for the given category, and the method for determining the amount of required capital follows an internal models based approach approved by a prudential regulator; (D2) what constitutes capital is tangible net equity, and the method for determining the amount of required capital follows an internal models based approach approved by a prudential regulator. The first approach, D1, which defines capital as bank capital per the Basel Accords, applies to C1 (affiliates of BHCs that are not FCMs). D1 also applies to C3 (affiliates of BHCs that are FCMs) and C4 (non-affiliates of BHCs that are FCMs); in which cases, the definition of capital is adjusted net capital per Regulation 1.17.
The rules proposed by the Commission for non-bank subsidiaries of BHCs would be the capital rules of the prudential regulator unless the SD or MSP was an FCM, in which case the capital rules would be the Commission's current FCM capital rules.
The Commission notes that the five prudential regulators have recently issued proposed rules that would not impose new capital requirements on the swap entities subject to their prudential supervision. Instead, the swap entities are required to comply with the regulatory capital rules already made applicable to them by their prudential regulators. As noted by the prudential regulators:
The Agencies have preliminarily determined that compliance with these regulatory capital requirements is sufficient to offset the greater risk to the swap entity and the financial system arising from the use of non-cleared swaps, helps ensure the safety and soundness of the covered swap entity, and is appropriate for the greater risk associated with the non-cleared swaps and non-cleared security-based swaps held as a [swap entity]. In particular, the Agencies note that the capital rules incorporated by reference into the proposed rule already address, in a risk-sensitive and comprehensive manner, the safety and soundness risks posed by a [swap entity's] derivatives positions. In addition, the Agencies preliminarily believe that these capital rules sufficiently take into account and address the risks associated with the derivatives positions that a covered swap entity holds and the other activities conducted by a covered swap entity. (internal footnotes omitted).
The Commission is anticipating that some number of nonbank subsidiaries of BHCs will register with the Commission in order to hold positions that Section 716 of the Dodd-Frank Act may require federally insured bank subsidiaries to “push out” into affiliates within the same bank holding company structure. The number of such potential registrants is not known, but the Commission has proposed rules that would result in the same capital requirements regardless of which non-FCM subsidiary within the bank holding company organization holds the positions. This approach produces neither any material costs nor benefits relative to D1, defined as bank capital per the Basel Accords.
To further promote consistent treatment where an FCM is also a subsidiary of a BHC, the Commission has proposed amendments to § 1.17 to allow it to compute its capital using internal models that have been approved by the Federal Reserve Board, or as applicable, the SEC. Following parallel logic as stated above, the effect of the proposed rule on C3 (affiliate of a BHC that is an FCM), therefore, is to produce neither any material costs nor benefits with respect to the alternative.
For SDs/MSPs that are not affiliated with BHCs and are not FCMs (C2), the tangible net equity approach would not place undue restrictions on an affected firm's working capital. This approach takes into consideration comments received at a public roundtable held jointly by the CFTC and SEC on December 10, 2010, which included representatives from each of the five prudential regulators. Industry commenters noted that some portion of SD and MSP registrants may include commercial or other entities for whom the costs of compliance with either FCM or bank regulatory capital requirements could be substantial, and that such rules may not fully recognize the ability of such firms to act as financially responsible SDs and MSPs by excluding some of their valuable assets from being counted towards regulatory capital.
SDs and MSPs that are not affiliated with BHCs and are not FCMs (C2) and SDs and MSPs that not affiliates of a BHC and are FCMs (C4) might not be permitted to use models. Rather they might have to use the standardized Basel approach. C2 (non-affiliate of BHCs that are not FCMs) would be required to follow the tangible net equity method with a standardized Basel approach with respect to credit and market risks. C4 (non-affiliates that are FCMs) would be required to follow § 1.17, which generally does not include models. Consequently, while C2 and C4 do not share a common capital definition, the costs and benefits of each relate to the potential for SDS and MSPs potentially being subject to a less risk-sensitive (
In this case, the cost of requiring an SD/MSP to take a standardized capital charge for some period of time (perhaps, indefinitely) is the opportunity cost on the potentially higher capital requirement under the standardized approach measured relative to an internal models based approach. When determining its proposed rules, the Commission took into consideration commitments by international regulators to develop risk-sensitive capital requirements for SDs and MSPs. As noted in an October 2010 of the Financial Stability Board:
Supervisors should apply prudential requirements that appropriately reflect the risks, including systemic risks, of non-centrally cleared OTC derivatives products, such as the reforms proposed by [Basel Committee on Banking Supervision] relating to higher capital requirements * * *.
Under the proposed rules, the amount of capital that these SDs and MSPs must hold would be determined by proposed market risk and OTC credit risk requirements that are based on internationally recognized Based Accord “standardized” methodologies for assessing market risk and OTC derivatives credit risk. The requirements would apply only to uncleared swaps of the SD that are associated with its swap activities, and also would apply to any related hedge positions. These proposed requirements would establish risk sensitive capital requirements that would require SDs and MSPs to hold increasing or decreasing levels of capital as the risk of proprietary positions that they carry increases or decreases, although the level of risk sensitivity achieved under these requirements may prove less than the corresponding level attributable to a well calibrated internal model.
To the extent that the proposed rules would limit the potential use of models, they would potentially increase capital requirements. This potential cost, in turn, needs to be balanced against the operational cost to the Commission of validating internal capital models, as well as the potential model risk arising from an internal models based capital calculation that turns out to be less conservative than the corresponding standardized calculation. Since both potential increased capital requirements resulting under the proposed rules as well as forgone investment opportunities attributable to that increased capital are difficult to assess, the Commission invites comment.
Finally, if increased capital requirements result under the proposed rules, such requirements may promote financial integrity by reducing the aggregate amount of capital at risk, with the cost of this reduction being paid in terms of reduced return expectations. Depending on the level of the increased capital required and the effect it has on the willingness of market participants to engage in swaps transactions, market efficiency may be negatively impacted through the introduction of higher costs. Any significant reduction in market participation would be anticipated to exercise correspondingly negative consequences on price discovery through reductions in liquidity.
Brokers, Commodity futures, Reporting and recordkeeping requirements.
Swaps, Swap dealers, Major swap participants, Capital and margin requirements.
Authority delegations (Government agencies).
For the reasons stated in this release, the Commission proposes to amend chapter I of title 17 of the Code of Federal Regulations, by amending in that chapter part 1; part 23, as proposed to be added at 75 FR 71379, published November 23, 2010; and part 140, as follows:
1. The authority citation for part 1 is revised to read as follows:
7 U.S.C. 1a, 2, 6, 6a, 6b, 6b-1, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6j, 6k, 6l, 6m, 6n, 6o, 6p, 7, 7a, 7b, 8, 9, 9a, 12, 12a, 16, 18, 19, 21, and 23.
2. Amend § 1.10 by revising paragraphs (c), (d)(1)(v), (d)(2)(iv), (d)(2)(vi), and (g)(2)(ii) to read as follows:
(c)
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(v) For a futures commission merchant only, the statements of segregation requirements and funds in segregation for customers trading on U.S. commodity exchanges and for customers' dealer options accounts, the statement of secured amounts and funds held in separate accounts for foreign futures and foreign options customers in accordance with § 30.7 of this chapter, and the statement of cleared swap customer segregation requirements and funds in cleared swap customer accounts under section 4d(f) of the Act as of the date for which the report is made; and
(2) * * *
(iv) For a futures commission merchant only, the statements of segregation requirements and funds in segregation for customers trading on U.S. commodity exchanges and for customers' dealer options accounts, the statement of secured amounts and funds held in separate accounts for foreign futures and foreign options customers in accordance with § 30.7 of this chapter, and the statement of cleared swap customer segregation requirements and funds in cleared swap customer accounts under section 4d(f) of the Act as of the date for which the report is made;
(vi) A reconciliation, including appropriate explanations, of the statement of the computation of the minimum capital requirements pursuant to § 1.17 of this part and, for a futures commission merchant only, the statements of segregation requirements and funds in segregation for customers trading on U.S. commodity exchanges and for customers' dealer option accounts, the statement of secured amounts and funds held in separate accounts for foreign futures and foreign options customers in accordance with § 30.7 of this chapter, and the statement of cleared swap customer segregation requirements and funds in cleared swap customer accounts under section 4d(f) of the Act, in the certified Form 1-FR with the applicant's or registrant's corresponding uncertified most recent Form 1-FR filing when material differences exist or, if no material differences exist, a statement so indicating; and
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(ii) The following statements and footnote disclosures thereof: the Statement of Financial Condition in the certified annual financial reports of futures commission merchants and introducing brokers; the Statements (to be filed by a futures commission merchant only) of Segregation Requirements and Funds in Segregation for customers trading on U.S. commodity exchanges and for customers' dealer options accounts, and the Statement (to be filed by a futures commission merchant only) of Secured Amounts and Funds held in Separate Accounts for foreign futures and foreign options customers in accordance with § 30.7 of this chapter, and the Statement (to be filed by futures commission merchants only) of Cleared Swap Customer Segregation Requirements and Funds in Cleared Swap Customer Accounts under section 4d(f) of the Act.
3. Amend § 1.12 by:
a. Revising paragraphs (b)(3), (b)(4), (f)(4), and (h); and
b. Adding paragraph (b)(5).
The revisions and addtion read as follows:
(b) * * *
(3) 150 percent of the amount of adjusted net capital required by a registered futures association of which it is a member, unless such amount has been determined by a margin-based capital computation set forth in the rules of the registered futures association, and such amount meets or exceeds the amount of adjusted net capital required under the margin-based capital computation set forth in § 1.17(a)(1)(i)(B) of this part, in which case the required percentage is 110 percent,
(4) For securities brokers or dealers, the amount of net capital specified in Rule 17a-11(c) of the Securities and Exchange Commission (17 CFR 240.17a-11(c)), or
(5) For security-based swap dealers or material security-based swap participants, the amount of net capital specified in the rules of the Securities and Exchange Commission that impose comparable reporting requirements as set forth in this paragraph (b), must file written notice to that effect as set forth in paragraph (i) of this section within twenty-four (24) hours of such event.
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(4) A futures commission merchant shall report immediately by telephone, confirmed immediately in writing by facsimile notice, whenever any commodity futures, option, swap or other Commission regulated account it carries is subject to a margin call, or call for other deposits required by the futures commission merchant, that exceeds the futures commission merchant's excess adjusted net capital, determined in accordance with § 1.17 of this part, and such call has not been answered by the close of business on the day following the issuance of the call. This applies to all accounts carried by the futures commission merchant, whether customer, noncustomer, or omnibus, that are subject to margining, including commodity futures, options on futures, and swap positions. In addition to actual margin deposits by an account owner, a futures commission merchant may also take account of favorable market moves in determining whether the margin call is required to be reported under this paragraph.
(h) Whenever a person registered as a futures commission merchant knows or should know that the total amount of its funds on deposit in segregated accounts on behalf of customers, that the total amount set aside on behalf of customers trading on non-United States markets, or that the total amount of its funds in segregated accounts on behalf of customers for cleared swap transactions is less than the total amount of such funds required by the Act and the Commission's rules to be on deposit in segregated futures accounts, secured amount accounts, or segregated cleared swap accounts, the registrant must report such deficiency immediately by telephone notice, confirmed immediately in writing by facsimile notice, to the registrant's designated self-regulatory organization and the principal office of the Commission in Washington, DC, to the attentions of the Director and the Chief Accountant of the Division of Clearing and Intermediary Oversight.
4. Amend § 1.16 by revising paragraphs (a)(4), (d)(1), and (d)(2)(iv) to read as follows:
(a) * * *
(4)
(d)
(2) * * *
(iv) Result in violations of the Commission's segregation, secured amount or cleared swaps segregation amount (in the case of a futures commission merchant), recordkeeping or financial reporting requirements to the extent that could reasonably be expected to result in the conditions described in paragraph (d)(2)(i), (ii), or (iii) of this section
5. Amend § 1.17 by:
a. Revising paragraph (a)(1)(i)(A);
b. Revising paragraph (b)(2);
c. Revising paragraph (b)(9);
d. Revising paragraph (c)(2)(i);
e. Revising paragraphs (c)(2)(ii)(D) and (G);
f. Adding paragraphs (c)(5)(iii) and (iv);
g. Revising paragraphs (c)(5)(v), (viii), and (ix);
h. Revising paragraph (c)(6); and
i. Redesignating paragraphs (c)(7) and (c)(8) as paragraphs (c)(8) and (c)(9) and add new paragraph (c)(7).
The revisions and additions read as follows:
(a)(1)(i) * * *
(A) $1,000,000,
(b) * * *
(2)
(9)
(c) * * *
(2) * * *
(i) Exclude any unsecured commodity futures, option, cleared swap, or other Commission regulated account containing a ledger balance and open trades, the combination of which liquidates to a deficit or containing a debit ledger balance only:
(ii) * * *
(D) Receivables from registered futures commission merchants or brokers, resulting from commodity futures, options, cleared swaps, or other Commission regulated transactions, except those specifically excluded under paragraph (c)(2)(i) of this section;
(G) Receivables from third-party custodians that arise from initial margin deposits associated with bilateral swap transactions pursuant to § 23.158 of this chapter.
(5) * * *
(iii) For positions in over-the-counter interest rate swaps that are not cleared by a clearing organization, the following amounts:
(A) If not hedged with U.S. Treasury securities of corresponding maturities or matched with offsetting interest rate swap positions with corresponding terms and maturities, the applicable haircut shall be the notional amount of the interest rate swaps multiplied by the applicable percentages for the underlying securities specified in Rule 240.15c3-1(c)(2)(vi)(A)(i) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(2)(vi)(A)(i)), as if such notional amount was the market value of a security issued or guaranteed as to principal or interest by the United States;
(B) If hedged with U.S. Treasury securities of corresponding maturities or matched with offsetting interest rate swap positions with corresponding terms and maturities, and such interest rate swaps are maturing in ten years or less, the applicable haircut shall be one percent of the notional amount of the interest rate swaps; and
(C) If hedged with U.S. Treasury securities of corresponding maturities or matched with offsetting interest rate swap positions with corresponding terms and maturities, and such interest rate swaps are maturing in excess of ten years, the applicable haircut shall be three percent of the notional amount of the interest rate swaps;
(iv) For the net position in the following:
(A) Over-the-counter credit default swaps that are not cleared by a clearing organization, the notional principal amount multiplied by the applicable percentages, as determined by the underlying securities and the remaining maturity of the swap agreement, that are
(B) Over-the-counter equity swaps that are not cleared by a clearing organization, 15 percent of the notional principal amount;
(C) Over-the-counter foreign currency swap transactions involving euros, British pounds, Canadian dollars, Japanese yen, or Swiss francs, 6 percent of the notional principal amount of the swap transaction;
(D) Over-the-counter foreign currency swap transactions involving currencies other than euros, British pounds, Canadian dollars, Japanese yen, or Swiss francs, 20 percent of the notional principal amount of the swap transaction;
(E) Over-the-counter commodity swaps, 20 percent of the market value of the notional amount of the underlying commodities; or
(F) Over-the-counter swap transactions involving an underlying instrument that is not listed in paragraph (c)(5)(iv)(A), (B), (C), (D), or (E) of this section, 20 percent of the effective notional principal amount of the swap transaction.
(v) In the case of securities and obligations used by the applicant or registrant in computing net capital, and in the case of a futures commission merchant with securities in segregation pursuant to sections 4d(a)(2) and 4d(f) of the Act and the regulations in this chapter, and § 30.7 secured accounts as set forth in part 30 of this chapter, which were not deposited by customers, the percentages specified in Rule 240.15c3-1(c)(2)(vi) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(2)(vi)) (“securities haircuts”) and 100 percent of the value of “nonmarketable securities” as specified in Rule 240.15c3-1(c)(2)(vii) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(2)(vii));
(viii) In the case of a futures commission merchant, for undermargined customer commodity futures, options, cleared swaps or other Commission regulated accounts the amount of funds required in each such account to meet maintenance margin requirements of the applicable board of trade or if there are no such maintenance margin requirements, clearing organization margin requirements applicable to such positions, after application of calls for margin or other required deposits which are outstanding three business days or less. If there are no such maintenance margin requirements or clearing organization margin requirements, then the amount of funds required to provide margin equal to the amount necessary after application of calls for margin or other required deposits outstanding three business days or less to restore original margin when the original margin has been depleted by 50 percent or more:
(ix) In the case of a futures commission merchant, for undermargined commodity futures, options, cleared swaps, or other Commission regulated noncustomer and omnibus accounts the amount of funds required in each such account to meet maintenance margin requirements of the applicable board of trade or if there are no such maintenance margin requirements, clearing organization margin requirements applicable to such positions, after application of calls for margin or other required deposits which are outstanding two business days or less. If there are no such maintenance margin requirements or clearing organization margin requirements, then the amount of funds required to provide margin equal to the amount necessary after application of calls for margin or other required deposits outstanding two business days or less to restore original margin when the original margin has been depleted by 50 percent or more:
(6) * * *
(i)(A) Any futures commission merchant that is also registered with the Securities and Exchange Commission as a securities broker or dealer, and who also satisfies the other requirements of this paragraph (c)(6), may elect to compute its adjusted net capital using the alternative capital deductions that the Securities and Exchange Commission has approved by written order, provided, however, that such order was dated before May 12, 2011;
(B) If an election under this paragraph (c)(6) was authorized before the date specified in paragraph (c)(6)(i)(A) of this section, and the futures commission merchant otherwise remains in compliance with this paragraph (c)(6), a futures commission merchant that is permitted by the Securities and Exchange Commission to use alternative capital deductions for its unsecured receivables from over-the-counter transactions in derivatives, or for its proprietary positions in securities, commodities, forward contracts, swap transactions, options, or futures contracts, may continue to use these same alternative capital deductions when computing its adjusted net capital in lieu of the standard deductions otherwise specified in this section.
(C) If a futures commission merchant computing alternative deductions under paragraph (c)(6)(B) of this section is also registered with the Commission as swap dealer or major swap participant, or registered with the Securities and Exchange Commission as a security-based swap dealer or major security-based swap participant, the alternative deductions approved under this paragraph (c)(6) shall remain effective only if the futures commission merchant has filed an application under § 23.103 of this chapter and the application is pending approval. A denial or approval of an application made under § 23.103 shall also terminate approval of alternative deductions under this paragraph (c)(6). The futures commission merchant's capital deductions must thereafter be calculated as required under the terms of the Commission's order issued under § 23.103.
(7) Any futures commission merchant that is also registered as a swap dealer
6. The authority citation for part 23 continues to read as follows:
7 U.S.C. 1a, 2, 6, 6a, 6b-1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21.
7. Part 23, as proposed to be added at 75 FR 71379, November 213, 2010, is amended by adding Subpart E to read as follows:
For purposes of §§ 23.101 through 23.149 of subpart E, the following terms are defined as follows:
(a)(1) Except as provided in paragraph (a)(2), (3), or (4) of this section, each registered swap dealer must meet or exceed the greatest of the following regulatory capital requirements:
(i) Tangible net equity (as defined in § 23.102 of this part) in an amount equal to $20,000,000 plus the amounts calculated under this part for the swap dealer's market risk exposure requirement and its over-the-counter derivatives credit risk requirement associated with swap positions and related hedge positions that are part of the swap dealer's swap activities; or,
(ii) The amount of capital required by a registered futures association of which the swap dealer is a member.
(2) Except as provided in paragraph (a)(3) or (4) of this section, each registered swap dealer that is a subsidiary of a U.S. bank holding company must meet or exceed the greatest of the following regulatory capital requirements:
(i) $20 million of Tier 1 capital as defined in 12 CFR part 225, appendix A, § II.A;
(ii) The swap dealer's minimum risk-based ratio requirements set forth in 12 CFR part 225, and any appendices thereto, as if the swap dealer itself were a U.S. bank-holding company; or,
(iii) The amount of capital required by a registered futures association of which the swap dealer is a member.
(3) A registered swap dealer that is subject to minimum capital requirements established by rule or regulation of a prudential regulator, or a registered swap dealer that also is a registered futures commission merchant subject to the capital requirements of § 1.17 of this chapter, is not subject to the regulatory capital requirements set forth in paragraph (a)(1) or (2) of this section.
(4) A registered swap dealer that is a U.S. nonbank financial company that has been designated a systemically important financial institution by the Financial Stability Oversight Council and subject to supervision by the Board of Governors of the Federal Reserve System is not subject to the regulatory capital requirements set forth in paragraph (a)(1) or (2) of this section.
(b)(1) Except as provided in paragraph (b)(2), (3), or (4) of this section, each major swap participant must meet or exceed the greatest of the following regulatory capital requirements:
(i) Tangible net equity (as defined in § 23.102 of this part) in an amount equal to $20,000,000 plus the amounts calculated under this part for the major swap participant's market risk exposure requirement and its over-the-counter derivatives credit risk requirement associated with its swap positions and related hedge positions; or
(ii) The amount of capital required by a registered futures association of which the major swap participant is a member.
(2) Except as provided in paragraph (b)(3) or (4) of this section, each registered major swap participant that is a subsidiary of a U.S. bank-holding company must meet or exceed the greatest of the following regulatory capital requirements:
(i) $20 million of Tier 1 capital as defined in 12 CFR part 225, appendix A, section II.A;
(ii) The major swap participant's minimum risk-based ratio requirements set forth in 12 CFR part 225, and any appendices thereto, as if the major swap participant itself were a U.S. bank-holding company; or,
(iii) The amount of capital required by a registered futures association of which the major swap participant is a member.
(3) A registered major swap participant that is subject to minimum capital requirements established by rule or regulation of a prudential regulator, or a registered major swap participant that also is a registered futures commission merchant subject to the capital requirements of § 1.17 of this chapter, is not subject to the regulatory capital requirements set forth in paragraph (b)(1) or (2) of this section.
(4) A registered major swap participant that is a U.S. nonbank financial company that has been designated a systemically important financial institution by the Financial Stability Oversight Council and subject to supervision by the Board of Governors of the Federal Reserve System is not subject to the regulatory capital requirements set forth in paragraph (b)(1) or (2) of this section.
(c)(1) Before any applicant may be registered as a swap dealer or major swap participant, the applicant must demonstrate to the satisfaction of the National Futures Association one of the following:
(i) Its compliance with the applicable regulatory capital requirements in paragraphs (a)(1), (2), (b)(1) or (2) of this section;
(ii) that it is a futures commission merchant that complies with § 1.17 of this chapter;
(iii) that its minimum regulatory capital requirements are supervised by a prudential regulator in paragraph (a)(3) or (b)(3) of this section; or
(iv) that it is designated by the Financial Stability Oversight Council as a systemically important financial institution and subject to supervision by the Federal Reserve Board under paragraph (a)(4) or (b)(4) of this section.
(2) Each swap dealer and major swap participant subject to the minimum capital requirements set forth in paragraphs (a) and (b) of this section must be in compliance with the Commission's minimum capital requirements at all times and must be able to demonstrate such compliance to the satisfaction of the Commission.
(a) Tangible net equity is a swap dealer's or major swap participant's equity as determined under U.S. generally accepted accounting principles, and excludes goodwill and other intangible assets.
(b)(1) Subject to the provisions of paragraph (b)(2) of this section:
(i) Tangible net equity is computed by consolidating in a single computation assets and liabilities of any subsidiary or affiliate for which the swap dealer or major swap participant guarantees, endorses, or assumes directly or indirectly the obligations or liabilities; or
(ii) If an opinion of outside counsel is obtained as provided for in paragraph (b)(3) of this section, a swap dealer or major swap participant may elect to consolidate assets and liabilities of a subsidiary or affiliate whose liabilities and obligations have not been guaranteed, endorsed, or assumed directly or indirectly by the swap dealer or major swap participant, but which is majority owned and controlled by the swap dealer or major swap participant.
(2) If the consolidation required or permitted under paragraph (b)(1) of this section results in the increase of the swap dealer's or major swap participant's tangible net equity or decreases the minimum regulatory capital requirement, such benefits shall not be recognized unless an opinion of counsel meeting the requirements of paragraph (b)(3) of this section has been obtained by the swap dealer or major swap participant.
(3) For purposes of paragraph (b)(1) or (2) of this section, the swap dealer or major swap participant shall demonstrate by written opinion of outside counsel that the net asset values or the portion thereof related to the parent's ownership interest in the subsidiary or affiliate, may be caused by the swap dealer or major swap participant or an appointed trustee, to be distributed to the swap dealer or major swap participant within 30 calendar days. Such opinion also must set forth the actions necessary to cause such a distribution to be made, identify the parties having the authority to take such actions, identify and describe the rights of other parties or classes of parties, including but not limited to customers, general creditors, subordinated lenders, minority shareholders, employees, litigants, and governmental or regulatory authorities, who may delay or prevent such a distribution and such other assurances as the Commission by rule or interpretation may require. Such opinion must be current and periodically renewed in connection with the swap dealer's or major swap participant's annual audit pursuant to part 23 of this title or upon any material change in circumstances.
(4) In preparing a consolidated computation of tangible net equity:
(i) Consolidated tangible net equity shall be reduced by the estimated amount of any tax reasonably anticipated to be incurred upon distribution of the assets of the subsidiary or affiliate; and
(ii) Each swap dealer or major swap participant included within the consolidation shall at all times be in compliance with the regulatory capital requirements to which it is subject.
(5) No swap dealer or major swap participant shall guarantee, endorse, or assume directly or indirectly any obligation or liability of a subsidiary or affiliate unless the obligation or liability is reflected in the computation of tangible net equity of the swap dealer or major swap participant, except as provided in paragraph (b)(4)(ii) of this section.
(a) A registered swap dealer or major swap participant may apply to the Commission for approval to use internal models under terms and conditions required by the Commission and by these regulations when calculating:
(1) the amounts that the swap dealer or major swap participant must add to its tangible net equity for its market risk exposure requirement and over-the-counter derivatives credit risk requirement to compute its minimum regulatory capital requirement under §§ 23.101(a)(1)(i) or 23.101(b)(1)(i), respectively, of this part;
(2) Its market risk and over-the-counter derivatives credit risk requirements under 12 CFR part 225, Appendix E and Appendix G, if the swap dealer or major swap participant is a subsidiary of a U.S. bank holding company that must meet regulatory capital requirements set forth in § 23.101(a)(2)(ii) or § 23.101(b)(2)(ii) of this part; or
(3) The deductions from its net capital for market risk exposure and over-the-counter derivatives credit risk, in lieu of deductions otherwise required under § 1.17(c) of this chapter, if the swap dealer or major swap participant also is registered as a futures commission merchant.
(b) The application shall be in writing and filed with the regional office of the Commission having local jurisdiction over the swap dealer or major swap participant as set forth in § 140.2 of this chapter. The application may be filed electronically in accordance with instructions approved by the Commission and specified on the Commission's Web site. A petition for confidential treatment of information within the application may be submitted according to procedures set forth in § 145.9 of this chapter.
(c) The application must identify the categories of positions for which the
(d) The swap dealer or major swap participant must promptly, upon the request of the Commission at any time, provide any other explanatory information as the Commission may require at its discretion regarding the swap dealer's or major swap participant's internal models and the swap dealer's or major swap participant's computation of its market risk exposure or over-the-counter derivatives credit risk requirements.
(e) Except as permitted under paragraph (f) of this section, the swap dealer or major swap participant requesting approval under this section must be either:
(1) A subsidiary of a U.S. bank holding company whose calculations of minimum risk-based capital requirements under § 23.101 complies with the requirements that are set forth in regulations of the Board of Governors of the Federal Reserve System (Federal Reserve Board) at 12 CFR part 225, appendix E and appendix G for calculating capital requirements for its market risk exposure and over-the-counter derivatives credit risk requirements, and whose internal models have been reviewed and are subject to regular assessment by the Federal Reserve Board; or
(2) A security-based swap dealer or major security-based swap participant registered with the Securities and Exchange Commission, and whose internal models used for calculating capital requirements for its market risk exposure and its over-the-counter derivatives credit risk have been reviewed and are subject to regular assessment by the Securities and Exchange Commission.
(f) At any time after the effective date of this rule, the Commission may in its sole discretion determine by written order that swap dealers or major swap participants not described in paragraph (e) of this section also may apply for approval under this section to calculate the amount of their market risk exposure requirements or over-the-counter derivatives credit risk requirements using proprietary internal models.
(g) The Commission may approve or deny the application, or approve an amendment to the application, in whole or in part, subject to any conditions or limitations the Commission may require, if the Commission finds the approval to be necessary or appropriate in the public interest or for the protection of customers, after determining, among other things, whether the applicant has met the requirements of this section and is in compliance with other applicable rules promulgated under the Act and by self-regulatory organizations.
(h) A swap dealer or major swap participant may no longer use internal models to compute its market risk exposure requirement and over-the-counter counterparty credit risk requirement, upon the occurrence of any of the following:
(1) Internal models that received Commission approval under paragraph (e) of this section are no longer periodically reviewed or assessed by the Federal Reserve Board or the Securities and Exchange Commission;
(2) The swap dealer or major swap participant has changed materially a mathematical model described in the application or changed materially its internal risk management control system without first submitting amendments identifying such changes and obtaining Commission approval for such changes;
(3) The Commission determines that the internal models are no longer sufficient for purposes of the capital calculations of the swap dealer or major swap participant as a result of changes in the operations of the swap dealer or major swap participant;
(4) The swap dealer or major swap participant fails to come into compliance with its requirements under this section, after having received from the Director of the Division of Clearing and Intermediary Oversight written notification that the firm is not in compliance with its requirements, and must come into compliance by a date specified in the notice; or
(5) The Commission by written order finds that permitting the swap dealer or major swap participant to continue to use the internal models is no longer necessary or appropriate for the protection of customers of the futures commission merchant (if the swap dealer or major swap participant is also a futures commission merchant) or of the integrity of Commission-regulated markets.
(a)
(b)
(i) Swaps that are not cleared; and
(ii) Debt instruments, equities, commodities or foreign currency, including derivatives of the same, that hedge such uncleared swaps;
(2) A swap dealer or major swap participant that must meet the requirements in § 23.101(a)(2)(ii) or § 23.101(b)(2)(ii) of this part shall calculate the market risk deductions required by 12 CFR part 225, Appendix E as the sum of the amounts for specific risk in paragraphs (c) of this section and the amounts for market risk in general in paragraph (d) of this section, as applied to the swap dealer's or major swap participant's “covered positions”, as that term is defined in 12 CFR part 225, Appendix E. Section 2(a); and
(3) A swap dealer or major swap participant that is also a futures commission merchant shall calculate its deductions from net capital for market risk and over-the-counter derivatives credit risk in accordance with § 1.17(c) of this chapter.
(4) The following definitions apply for purposes of the calculation of the market risk exposure requirement:
“
(c)
(2)
(i) Interest rate derivatives shall be included as set forth in paragraph (d)(2) of this section;
(ii) Credit derivatives shall be included as set forth in paragraph (c)(4) of this section;
(iii) Long and short debt positions (including derivatives) in identical debt issues or debt indices may be netted; and
(iv) Debt instruments are classified in Table A of this section as one of the following categories:
(A)
(B) “
(C)
(v) Table A is as set forth as follows:
(3)
(i) Equity derivatives shall be included as set forth in paragraph (d)(4) of this section; and
(ii) Long and short equity positions (including derivatives) in identical equity issues or equity indices in the same market may be netted.
(4)
(i) For each credit derivative in which the swap dealer or major swap participant is the protection seller, the credit derivative is treated as a long notional position in the reference exposure, and where the swap dealer or major swap participant is the protection buyer, the credit derivative is treated as a short notional position in the reference exposure.
(ii) The specific risk charge for an individual debt position that represents purchased credit protection is capped at the market value of the protection.
(iii) A set of transactions consisting of a debt position and its credit derivative hedge has a specific risk charge of zero if the debt position is fully hedged by a total return swap (or similar instrument where there is a matching of payments and changes in market value of the position) and there is an exact match between the reference obligation of the swap and the debt position, the maturity of the swap and the debt position, and the currency of the swap and the debt position.
(iv) The specific risk charge for a set of transactions consisting of a debt position and its credit derivative hedge that does not meet the criteria of paragraph (c)(4)(iii) of this section is equal to 20.0 percent of the capital requirement for the side of the transaction with the higher capital requirement when the credit risk of the position is fully hedged by a credit default swap or similar instrument and there is an exact match between the reference obligation of the credit derivative hedge and the debt position, the maturity of the credit derivative
(v) The specific risk charge for a set of transactions consisting of a debt position and its credit derivative hedge that does not meet the criteria of either paragraphs (c)(4)(iii) or (iv) of this section, but in which all or substantially all of the price risk has been hedged, is equal to the specific risk charge for the side of the transaction with the higher specific risk charge.
(vi) The total specific risk charge for a portfolio of nth-to-default credit derivatives is the sum of the specific risk charges for individual nth-to-default credit derivatives, as computed under this paragraph. The specific risk charge for each nth-to-default credit derivative position applies irrespective of whether a swap dealer or major swap participant is a net protection buyer or net protection seller.
(vii) The specific risk charge for a first-to-default credit derivative is the lesser of:
(A) The sum of the specific risk charges for the individual reference credit exposures in the group of reference exposures; or
(B) The maximum possible credit event payment under the credit derivative contract.
(viii) Where a swap dealer or major swap participant has a risk position in one of the reference credit exposures underlying a first-to-default credit derivative and this credit derivative hedges the swap dealer's or major swap participant's risk position, the swap dealer or major swap participant is allowed to reduce both the specific risk charge for the reference credit exposure and that part of the specific risk charge for the credit derivative that relates to this particular reference credit exposure such that its specific risk charge for the pair reflects the net position in the reference credit exposure. Where a swap dealer or major swap participant has multiple risk positions in reference credit exposures underlying a first-to-default credit derivative, this offset is allowed only for the underlying reference credit exposure having the lowest specific risk charge.
(ix) The specific risk charge for a second or-subsequent-to-default credit derivative is the lesser of:
(A) The sum of the specific risk charges for the individual reference credit exposures in the group of reference exposures, but disregarding the (n-1) obligations with the lowest specific risk add-ons; or
(B) The maximum possible credit event payment under the credit derivative contract.
(x) For second-or-subsequent-to-default credit derivatives, no offset of the specific risk charge with an underlying reference credit exposure is allowed.
(d)
(1)
(i) Each long or short interest rate position shall be reported at its current market value and distributed into the time bands of the maturity ladder specified in Table B of this section. Interest rate derivatives shall be included as set forth in paragraph (d)(2) of this section. For purposes of this distribution into time-bands, fixed-rate instruments are allocated according to the remaining term to maturity and floating-rate instruments according to the next repricing date.
(ii) The long interest rate positions in each time-band are summed and the short interest rate positions in each time-band are summed.
(iii) The summed long interest rate positions in each time-band are multiplied by the appropriate risk-weight factor set forth in Table B of this section to determine the risk-weighted long interest rate position for each time-band. The summed short interest rate positions in each time-band also are multiplied by the appropriate risk-weight factor in Table B of this section to determine the risk-weighted short interest rate position for each time-band.
(iv) Table B is as set forth as follows:
(v) If a time-band includes both risk-weighted long interest rate positions and short interest rate positions, such risk-weighted long positions and short interest rate positions are netted, resulting in a single net risk-weighted long or short interest rate position for each time-band.
(vi) If risk-weighted long interest rate positions and risk-weighted short interest rate positions in a time-band have been netted, a “time-band disallowance” charge is computed equal to 10 percent of the smaller of the total risk-weighted long interest rate position
(vii) The total time-band disallowance equals the sum of the absolute values of the individual disallowances for each time-band in Table B.
(viii) Table C of this section also groups the time-bands into three “zones”: Zone 1 consists of the first three time-bands (0 up to 1 month; 1 month up to 3 months, and 3 months up to 6 months); zone 2 consists of the next four time-bands (6 months up to 12 months; 1 year up to 2 years; 2 years up to 3 years; and 3 years up to 4 years), and the remaining time-bands in Table C are in zone 3. Table C is as set forth below:
(A) If a zone includes both risk-weighted long positions and risk-weighted short interest rate positions in different time-bands, the risk-weighted long positions and risk-weighted short positions in all of the time-bands within the zone are netted, resulting in a single net risk-weighted long or short position for each zone.
(B) An “intra-zone disallowance” is computed by multiplying the percent disallowance factors for each zone set out in Table C of this section by the smaller of the net risk-weighted long or net risk-weighted short positions within the zone, or if the positions are equal, a percentage of either position.
(C) The total intra-zone disallowance equals the sum of the absolute values of the individual intra-zone disallowances.
(D) Risk-weighted long and short positions are then netted between zone 1 and zone 2, between zone 2 and zone 3, and then zone 3 and zone 1.
(E) An “inter-zone disallowance” is calculated by multiplying the percent disallowance in Table C of this section by the smaller of the net long or short position eliminated by the inter-zone netting, or if the positions are equal, a percentage of either position.
(F) The total inter-zone disallowance equals the sum of the absolute values of the individual inter-zone disallowances.
(G) Lastly, the net risk-weighted long interest rate position or net risk-weighted short interest rate position remaining in the zones are summed to reach a single net risk-weighted long or net risk-weighted short.
(2)
(ii) Futures and forward contracts (including forward rate contracts) are converted into a combination of a long position and short position in the notional security. The maturity of a futures contract or a forward rate contract is the period until delivery or exercise of the contract, plus the life of the underlying instrument.
(iii) Swaps are treated as two notional positions in the relevant instruments with appropriate maturities. The receiving side is treated as the long position and the paying side is treated as the short position. For example, an interest rate swap in which the registrant is receiving floating-rate interest and paying fixed is treated as a long position in a floating rate instrument with a maturity equivalent to the period until the next interest rate reset date and a short position in a fixed-rate instrument with a maturity equivalent to the remaining life of the swap.
(iv) For swaps that pay or receive a fixed or floating interest rate against some other reference price, for example, an equity index, the interest rate component is slotted into the appropriate repricing maturity category, with the long or short position attributable to the equity component being included in the equity framework set out in this section.
(v) Offsets of long and short positions (both actual and notional) are permitted in identical derivative instruments with exactly the same issuer, coupon, currency, and maturity before slotting these positions into time-bands. A matched position in a futures and its corresponding underlying may also be fully offset and, thus, excluded from the calculation, except when the futures comprises a range of deliverable instruments. No offsetting is allowed between positions in different currencies.
(vi) Offsetting positions in the same category of instruments can in certain circumstances be regarded as matched and treated by the swap dealer or major swap participant as a single net position which should be entered into the appropriate time-band. To qualify for this treatment the positions must be based on the same underlying instrument, be of the same nominal value, and be denominated in the same currency. The separate sides of different swaps also may be “matched” subject to the same conditions. In addition:
(A) For futures, offsetting positions in the notional or underlying instruments
(B) For swaps and forward rate contracts, the reference rate (for floating rate positions) must be identical and the coupon closely matched; and
(C) For swaps, forward rate contracts and forwards, the next interest reset date, or for fixed coupon positions or forwards the remaining maturity, must correspond within the following limits:
(
(
(3)
(4)
(ii) Futures and forward contracts relating to individual equities should be reported as current market prices of the underlying. Futures relating to equity indices should be reported as the marked-to-market value of the notional underlying equity portfolio. Equity swaps are treated as two notional positions, with the receiving side as the long position and the paying side as the short position. If one of the legs involves receiving/paying a fixed or floating interest rate, the exposure should be slotted into the appropriate repricing maturity band for debt securities. Matched positions in each identical equity in each national market may be treated as offsetting and excluded from the capital calculation, with any remaining position included in the calculations for specific and general market risk. For example, a future in a given equity may be offset against an opposite cash position in the same equity.
(5)
(i) 8.0 percent of the sum of:
(A) The greater of the sum of the net open short positions or the sum of the net open long positions in each currency; and
(B) The net open position in gold, regardless of sign.
(ii) For purposes of the calculation in paragraph (d)(5)(i) of this section, the net open position in each currency and gold is the sum of:
(A) The net spot position determined by deducting all liabilities denominated in a currency (or gold) from all assets denominated in the same currency (or gold), including accrued interest earned but not yet received and accrued expenses, and
(B) All foreign exchange derivatives and any other item representing a profit or loss in foreign currencies. Forward currency positions should be valued at current spot market exchange rates.
(iii) In order to report the required charge in U.S. currency, the calculation of the net open position requires the nominal amount (or net present value) of the net open position in each foreign currency (and gold) to be converted at spot rates into the reporting currency.
(6)
(i) 15.0 percent of the net open position, long or short, in each commodity, and
(ii) 3.0 percent of the swap dealer or major swap participant's gross positions, long plus short, in the particular commodity. In valuing gross positions in commodity derivatives for this purpose, a swap dealer or major swap participant should use the current spot price.
(7)
(ii) Except for options for which no capital charge is required under paragraph of (d)(7)(i) of this section, a swap dealer or major swap participant shall calculate its market risk charges (both specific and general market) for option activities using the “delta-plus method”. Under the delta plus method, a swap dealer or major swap participant shall include delta-weighted options positions within the appropriate measurement framework set forth in paragraphs (c) through (d)(6) of this section.
(iii) The delta-weighted option position is equal to the market value of the underlying instrument multiplied by the option delta. The delta represents the expected change in the option's price as a proportion of a change in the price of the underlying instrument. For example, an option whose price changes $1 for every $2 change in the price of the underlying instrument has a delta of 0.50.
(iv) In addition to the capital charges associated with the option's delta, each option position is subject to additional capital charges to reflect risks for the gamma (the change of the delta for a given change in the price of the underlying) and the vega (the sensitivity of the option price with respect to a change in volatility) for each such option position (including hedge positions). The option delta, and gamma and vega sensitivities shall be calculated according to the swap dealer or major swap participant's option pricing model and will be subject to Commission review. The capital requirement for delta risk, plus the additional capital charges for gamma and vega risks, are calculated as follows:
(A)
(
(
(
(
(
(
(B)
(
(
(
(C)
(
(
(
(D)
(
(
(
(e)
(1) A counterparty exposure charge in an amount equal to the sum of the following:
(i) The net replacement value in the account of each counterparty that is insolvent, or in bankruptcy, or that has senior unsecured long-term debt in default; and
(ii) For a counterparty not otherwise described in paragraph (e)(1)(i) of this section, the credit equivalent amount of the swap dealer or major swap participant's exposure to the counterparty, minus collateral values as set forth in this section, multiplied by a credit risk factor of 50 percent or a credit risk factor computed under paragraph (e)(1)(iii) of this section, multiplied by 8 percent;
(iii) Counterparties may be rated by the swap dealer or major swap participant, or by an affiliated bank or affiliated broker-dealer of the swap dealer or major swap participant, upon
(2) A concentration charge by counterparty in an amount equal to 50 percent of the amount of the current exposure to the counterparty in excess of 5 percent of the tangible net equity of the swap dealer or major swap participant and a portfolio concentration charge of 100 percent of the amount of the swap dealer or major swap participant's aggregate current exposure for all counterparties in excess of 50 percent of the tangible net equity of the swap dealer or major swap participant.
(f)
(g) The current exposure of the swap dealer or major swap participant to a counterparty is calculated as follows:
(1) For a single over-the-counter position, the current exposure is the greater of the mark-to-market value of the over-the-counter position or zero.
(2) For multiple over-the-counter positions, the current credit exposure is the greater of:
(i) The net sum of all positive and negative mark-to-market values of the individual over-the-counter positions, subject to permitted netting pursuant to a qualifying master netting agreement; or
(ii) Zero.
(h) The potential future exposure of the swap dealer or major swap participant
(1) For a single over-the counter position, the potential future exposure, including an over-the-counter position with a negative mark-to-market value, is calculated by multiplying the notional principal amount of the position by the appropriate conversion factor in Table E of this section. For purposes of this calculation, the swap dealer or major swap participant must use the apparent or stated notional principal amount multiplied by any multiplier in the over-the-counter position. For exchange rate contracts and other similar contracts in which the notional principal amount is equivalent to the cash flows, notional principal amount is the net receipts to each party falling due on each value date in each currency. The potential future exposure of the protection provider of a credit derivative is capped at the net present value of the amount of unpaid premiums. For an over-the-counter derivative contract with multiple exchanges of principal, the conversion factor is multiplied by the number of remaining payments in the derivative contract. For an over-the-counter derivative contract that is structured such that on specified dates any outstanding exposure is settled and the terms are reset so that the market value of the contract is zero, the remaining maturity equals the time until the next reset date. For an interest rate derivative contract with a remaining maturity of greater than one year that meets these criteria, the minimum conversion factor is 0.005.
(2) For multiple over-the-counter positions that are subject to a qualifying master netting agreement, the swap dealer or major swap participant shall compute its potential future exposure in accordance with the following formula: Anet = (0.4 × Agross) + (0.6 × NGR × Agross), where:
(i) Agross equals the sum of the potential future exposure for each individual over-the-counter position subject to the qualifying master netting agreement; and
(ii) NGR equals the ratio of the net current credit exposure to the gross current credit exposure. In calculating the NGR, the gross current credit exposure equals the sum of the positive current credit exposures of all individual over-the-counter derivative contracts subject to the qualifying master netting agreement.
(i)
(1) The netting agreement is legally enforceable in each relevant jurisdiction, including in insolvency proceedings;
(2) The gross receivables and gross payables that are subject to the netting agreement with a counterparty can be determined at any time; and
(3) For internal risk management purposes, the swap dealer or major swap participant monitors and controls its exposure to the counterparty on a net basis.
(j)
(i) The collateral must be in the swap dealer or major swap participant's physical possession or control;
(ii) The collateral must meet the requirements specified in a credit support agreement meeting the requirements of § 23.151 of this part; and
(iii) If the counterparty is a swap dealer, major swap participant or financial entity as defined in § 23.150 of this part:
(A) The collateral must be financial collateral that is liquid and transferable; marked-to-market each day, and subject
(B) The collateral must be capable of being liquidated promptly by the swap dealer or major swap participant without intervention by any other party;
(C) The collateral must be subject to an agreement that is legally enforceable by the swap dealer or major swap participant against the counterparty and any other parties to the agreement;
(D) The collateral cannot consist of securities issued by the counterparty or a party related to the swap dealer or major swap participant or to the counterparty; and
(E) The collateral cannot be used in determining the credit rating of the counterparty.
(2) A swap dealer or major swap participant must reduce the market value of the counterparty's collateral used to reduce the swap dealer's or major swap participant's credit risk equivalent amount computed under paragraph (f) of this section by:
(i) Applying the market haircuts specified in § 1.17(c)(5) of this chapter, and a further deduction of 8 percent of the market value of the collateral when the settlement currency of the interest rate position and collateral currency are not the same; or
(ii) where the collateral has been received from a counterparty that is not a swap dealer, major swap participant, or a financial entity as defined in § 23.150 of this part, applying the haircuts required pursuant to a credit support agreement meeting the requirements of § 23.151.
(k)
(i) Qualifying bond, $13.33mn market value, remaining maturity 8 years, coupon 8 percent;
(ii) Government bond, $75mn market value, remaining maturity 2 months, coupon 7 percent;
(iii) Interest rate swap, $150 mn, bank receives floating rate interest and pays fixed, next interest reset after 12 months, remaining life of swap is 8 years (The position should be reported as the market value of the notional underlying. Depending on the current interest rate, the market value of each leg of the swap (i.e. the 8 year bond and the 9 months floater) can be either higher or lower than the notional amount. For sake of simplicity the example assumes that the current interest rate is identical with the one the swap is based on.)
(iv) Long position in interest rate future, $50mn, delivery date after 6 months, life of underlying government security is 3.5 years (assumes the current interest rate is identical to the one the futures is based on).
(2) A vertical disallowance is calculated for time-band 7-10 years, and equals 10 percent of the matched positions in the time-band—10.0 × 0.5 = 0.05 ($50,000).
(3) A horizontal disallowance is calculated for zone 1, and equals 40 percent of the matched positions in the zone—40.0 × 0.20 = 0.80 ($80,000). The remaining net position in Zone 1 equals +1.00.
(4) A horizontal disallowance is calculated for adjacent zones 2 and 3. It equals 40 percent of the matched positions between the zones—40.0 × 1.125 = 0.45 (450,000). The remaining position in zone 3 equals −4.00.
(5) A horizontal disallowance is calculated between zones 1 and 3. It equals 100 percent of the matched positions between the zones—100 × 1.00 = 1.00 (1,000,000).
(6) The remaining net open position equals 3.00 ($3,000,000). The total capital requirement for general market risk for this portfolio equals:
(l)
(2) The first step under the delta-plus method is to multiply the market value of the commodity by the absolute value of the delta: 500 × 0.721 = 360.5. The delta-weighted position is then incorporated into the measure described for general market risk for commodities. If no other positions in the commodity exist, the delta-weighted position is multiplied by 0.15 to calculate the capital requirement for delta: 360.5 times 0.15 = 54.075.
(3) The capital requirement for gamma is calculated according to the Taylor expansion by multiplying the absolute
(4) The capital requirement for vega is calculated next. The assumed current (implied) volatility is 20 percent. Since only an increase in volatility carries a risk of loss for a short call option, the volatility has to be increased by a relative shift of 25 percent. This means that the vega capital requirement has to be calculated on the basis of a change in volatility of 5 percentage points from 20 percent to 25 percent in this example. According to the Black-Scholes formula used here, the vega equals 168. Thus, a 1 percent or 0.01 increase in volatility increases the value of the option by 1.68. Accordingly, a change in volatility of 5 percentage points increases the value: 5 × 1.68 = 8.4. This is the capital requirement for vega risk.
(m)
(2) The chart provided in paragraph (m)(1) of this section is provided as a summary only. The requirements for specific risk and general market risk charges applicable to interest rate derivatives are set forth in paragraphs (a) through (d) of this section.
(a) Each swap dealer or major swap participant who is subject to the minimum capital requirements under § 23.101 of this part and who knows or should have known that its capital at any time is less than the minimum required by § 23.101 of this part, must:
(1) Give telephonic notice, to be confirmed in writing by facsimile notice, that the swap dealer's or major swap participant's capital is less than that required by § 23.101 of this part. The notice must be given immediately after the swap dealer or major swap participant knows or should know that its capital is less than that required by § 23.101 of this part; and
(2) Provide together with such notice documentation in such form as necessary to adequately reflect the swap dealer's or major swap participant's capital condition as of any date such person's capital is less than the minimum required. The swap dealer or major swap participant must provide similar documentation for other days as the Commission may request.
(b) Each swap dealer or major swap participant who is subject to the minimum capital requirements under § 23.101 of this part and who knows or should have known that its capital at any time is less than 110 percent of its minimum capital requirement as determined under § 23.101 of this part, must file written notice to that effect within 24 hours of such event.
(c) Each swap dealer or major swap participant who is subject to capital rules established by a prudential regulator, or has been designated a systemically important financial institution by the Financial Stability Oversight Council and is subject to capital requirements imposed by the Board of Governors of the Federal Reserve System, must provide immediate written notice transmitted by facsimile if it fails to maintain compliance with the minimum capital requirements established by the prudential regulator or the Board of Governors of the Federal Reserve System.
(d) Upon the request of the Commission, each swap dealer or major swap participant who is subject to capital rules established by a prudential regulator, or has been designated a systemically important financial institution by the Financial Stability Oversight Council and is subject to capital requirements imposed by the Board of Governors of the Federal Reserve System must provide the Commission with copies of its capital computations for any periods of time specified by the Commission. The capital computations must be computed in accordance with the requirements of the swap dealer's or major swap participant's prudential regulator, and must include all supporting schedules and other documentation.
(e) If a swap dealer or major swap participant at any time fails to make or to keep current the books and records required by these regulations, such swap dealer or major swap participant must, on the same day such event occurs, provide facsimile notice of such fact, specifying the books and records which have not been made or which are not current, and within 48 hours after giving such notice file a written report stating what steps have been and are being taken to correct the situation.
(f) A swap dealer or major swap participant that is subject to the minimum capital requirements set forth in § 23.101 of this part, must provide written facsimile notice of a substantial reduction in capital as compared to that last reported in a financial report filed with the Commission pursuant to § 23.105 of this part. This notice shall be provided as follows:
(1) If any event or series of events, including any withdrawal, advance, loan or loss cause, on a net basis, a reduction in tangible net equity of
(2) If the equity capital of the swap dealer or major swap participant would be withdrawn by action of a stockholder or a partner or a limited liability company member or by redemption or repurchase of shares of stock by any of the consolidated entities or through the payment of dividends or any similar distribution, or an unsecured advance or loan would be made to a stockholder, partner, sole proprietor, limited liability company member, employee or affiliate, such that the withdrawal, advance or loan would cause, on a net basis, a reduction in excess net tangible equity of 30 percent or more, notice must be provided at least two business days prior to the withdrawal, advance or loan that would cause the reduction:
(3) Upon receipt of such notice from a swap dealer or major swap participant, the Director of the Division of Clearing and Intermediary Oversight or the Director's designee may require that the swap dealer or major swap participant provide, within three business days from the date of the request or such shorter period as the Director or designee may specify, such other information as the Director or designee determines to be necessary based upon market conditions, reports provided by swap dealer or major swap participant, or other available information.
(g) Every notice and written report required by this section to be filed by a swap dealer or major swap participant shall be filed with the regional office of the Commission with jurisdiction over the state in which the swap dealer's or major swap participant's principal place of business is located, as set forth in § 140.02 of this chapter, and with the registered futures association of which the swap dealer or major swap participant is a member. In addition, every notice and written report required to be given by this section must also be filed with the Chief Accountant of the Division of Clearing and Intermediary Oversight at the Commission's principal office in Washington, DC.
(a)(1) Except as provided in paragraph (a)(2) of this section, each registered swap dealer or major swap participant must comply with the requirements set forth in paragraphs (b) through (j) of this section.
(2) The requirements in paragraphs (b) through (j) of this section do not apply to any swap dealer or major swap participant that:
(i) Is subject to the capital requirements of a prudential regulator;
(ii) Has been designated a systemically important financial institution by the Financial Stability Oversight Council and is subject to supervision by the Board of Governors of the Federal Reserve System; or
(iii) Is registered as a futures commission merchant.
(b) Each swap dealer or major swap participant shall prepare and keep current ledgers or other similar records which show or summarize, with appropriate references to supporting documents, each transaction affecting its asset, liability, income, expense and capital accounts, and in which (except as otherwise permitted in writing by the Commission) all its asset, liability and capital accounts are classified in accord with generally accepted accounting principles as established in the United States, and as otherwise may be necessary for the capital calculations required under § 23.101. Such records must be maintained in accordance with § 1.31 of this chapter.
(c)(1) Each swap dealer and major swap participant shall file financial reports meeting the requirements in paragraph (c)(2) of this section as of the close of business each month. Such financial reports must be filed no later than 17 business days after the date for which the report is made.
(2) The monthly financial reports must be prepared in the English language and be denominated in United States dollars. The monthly financial reports shall include a statement of financial condition, a statement of income/loss, a statement reconciling the net equity in the statement of financial condition to the firm's tangible net equity, a schedule detailing, as applicable under § 23.101, the calculation of the firm's minimum tangible net equity requirement or its minimum risk-based capital ratios requirements, and showing the excess or deficiency in its regulatory capital after subtracting the minimum tangible net equity requirement from its tangible net equity, or after comparing its risk-based capital ratios to its minimum risk-based capital ratios. The monthly report and schedules must be prepared in accordance with generally accepted accounting principles as established in the United States.
(d)(1) Each swap dealer and major swap participant shall file annual audited financial reports certified in accordance with paragraph (d)(2) of this section, and including the information specified in paragraph (d)(3) of this section, as of the close of its fiscal year no later than 90 days after the close of the swap dealer's and major swap participant's fiscal year.
(2) The annual audited financial report shall be certified in accordance with the provisions of paragraphs (a) through (e) of § 1.16 of this chapter:
(3) The annual audited financial reports shall be prepared in accordance with generally accepted accounting principles as established in the United States, be prepared in the English language, and denominated in United States dollars. The annual audited financial reports must include the following:
(i) A statement of financial condition as of the date for which the report is made;
(ii) Statements of income (loss), cash flows, and changes in ownership equity for the period between the date of the most recent certified statement of financial condition filed with the Commission and the date for which the report is made;
(iii) Appropriate footnote disclosures;
(iv)(A) If the swap dealer or major swap participant must comply with capital requirements set forth in § 23.101(a)(1) of this part, a schedule including the swap dealer's or major swap participant's net equity; its intangible assets; its minimum tangible net equity; its minimum tangible net equity requirement; and the excess or deficiency in its regulatory capital after subtracting the minimum tangible net equity requirement from its tangible net equity; or
(B) If the swap dealer or major swap participant must comply with capital requirements set forth in § 23.101(a)(2) of this part, a schedule including the swap dealer's or major swap participant's minimum risk-based capital ratio requirements as calculated using requirements set forth in 12 CFR.
(v) Such further material information as may be necessary to make the required statements not misleading.
(e) A registered swap dealer or major swap participant may not change its fiscal year from that used in its most recent report filed under paragraph (c) or (d) of this section unless it has requested and received written approval for the change from a registered futures association of which it is a member.
(f) Attached to each financial report filed pursuant to this section must be an oath or affirmation that to the best knowledge and belief of the individual making such oath or affirmation the information contained in the financial report is true and correct. The individual making such oath or affirmation must be: If the swap dealer or major swap participant is a sole proprietorship, the proprietor; if a partnership, any general partner; if a corporation, the chief executive officer or chief financial officer; and, if a limited liability company or limited liability partnership, the chief executive officer, the chief financial officer, the manager, the managing member, or those members vested with the management authority for the limited liability company or limited liability partnership.
(g) From time to time the Commission may, by written notice, require any swap dealer or major swap participant to file financial or operational information on a daily basis or at such other times as may be specified by the Commission. Such information must be furnished in accordance with the requirements included in the written Commission notice.
(h)
(2) All filings of financial reports made pursuant to this section may be submitted to the Commission in electronic form using a form of user authentication assigned in accordance with procedures established by or approved by the Commission, and otherwise in accordance with instructions issued by or approved by the Commission, if the swap dealer or major swap participant has provided the Commission with the means necessary to read and to process the information contained in such report. Any such electronic submission must clearly indicate the swap dealer or major swap participant on whose behalf such filing is made and the use of such user authentication in submitting such filing will constitute and become a substitute for the manual signature of the authorized signer. In the case of a financial report required under paragraphs (c), (d), or (g) of this section and filed via electronic transmission in accordance with procedures established by or approved by the Commission, such transmission must be accompanied by the user authentication assigned to the authorized signer under such procedures, and the use of such user authentication will constitute and become a substitute for the manual signature of the authorized signer for the purpose of making the oath or affirmation referred to in paragraph (f) of this section.
(i)
(2) The following information will be publicly available:
(i) As applicable, the amounts calculated by the swap dealer or major swap participant as its tangible net equity; its minimum tangible net equity requirement; its tangible net equity in excess of its minimum tangible net equity requirement; its risk-based capital ratios; and the excess or deficiency in its regulatory capital after comparing its risk-based capital ratios to its minimum risk-based capital ratio requirements.
(ii) The opinion of the independent public accountant in the certified annual financial reports.
(3) All information that is exempt from mandatory public disclosure under paragraph (i)(1) of this section will, however, be available for official use by any official or employee of the United States or any State, by the National Futures Association and by any other person to whom the Commission believes disclosure of such information is in the public interest.
7. The authority citation for part 140 continues to read as follows:
7 U.S.C. 2 and 12a.
8. Amend § 140.91 by revising the section heading and adding paragraphs (a)(9) through (15) to read as follows:
(a) * * *
(9) All functions reserved to the Commission in § 23.101(c)(2) of this chapter, with the concurrence of the General Counsel or his or her designee;
(10) All functions reserved to the Commission in § 23.103(d) of this chapter, with the concurrence of the General Counsel or his or her designee;
(11) All functions reserved to the Commission in § 23.105(a)(2) and (d) of this chapter, with the concurrence of the General Counsel or his or her designee;
(12) All functions reserved to the Commission in § 23.155(b)(4)(ii), (iii) and (c)(4) of this chapter, with the concurrence of the General Counsel or his or her designee;
(13) All functions reserved to the Commission in § 23.156(c)(1) and (2) of this chapter, with the concurrence of the General Counsel or his or her designee;
(14) All functions reserved to the Commission in § 23.157(d) of this chapter, with the concurrence of the General Counsel or his or her designee; and
(15) All functions reserved to the Commission in § 23.158(c) of this chapter, with the concurrence of the General Counsel or his or her designee.
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Gensler and Commissioners Dunn, Sommers and Chilton voted in the affirmative; Commissioner O'Malia voted in the negative.
I support the proposed rulemaking to establish capital requirements for nonbank swap dealers and major swap participants. The Dodd-Frank Act requires capital requirements to help ensure the safety and soundness of swap dealers and major swap participants. Capital rules help protect commercial end-users and other market participants by requiring that dealers have sufficient capital to stand behind their obligations with such end-users and market participants. The proposal fulfills the Dodd-Frank Act's mandate in Section 731 to establish capital rules for all registered swap dealers and major swap participants that are not banks, including nonbank subsidiaries of bank holding companies.
The proposed rule addresses capital requirements for swap dealers and major swap participants in three different categories: (1) If they are an futures commission merchants (FCMs); 2) if they are subsidiaries of bank holding companies or systemically important financial institutions; or 3) if they are neither.
With regard to dealers that also are FCMs, generally speaking, the Commission's existing capital rules for FCMs would apply. This is to ensure that FCMs have sufficient capital to continue to carry and clear customer swaps and futures transactions cleared by a DCO.
The proposed rule would require dealers that are subsidiaries of bank holding companies or that have been designated as systemically important financial institutions by the Financial Stability Oversight Council (FSOC) to follow the rules set by the prudential regulators. For instance, a subsidiary of a U.S. bank holding company would have to comply with the capital requirements set by the Federal Reserve Board as if the subsidiary itself were a U.S. bank holding company. This is intended to prevent regulatory arbitrage and ensure consistency among capital regimes for those entities that are regulated by prudential regulators.
For those swap dealers and major swap participants that are not regulated for capital by a prudential capital and not FCMs, part of a bank holding company or a systemically important financial institution, the proposed rule departs from bank capital rules. It takes into consideration that these dealers are likely to have different balance sheets from those financial institutions that traditionally have been subject to prudential supervision. Such entities would be required to maintain a minimum level of tangible net equity greater than $20 million plus a measurement for market risk and a measurement for credit risk. This market risk and credit risk would be scaled to the dealers' activities and be measured based upon swaps activity and related hedges. The proposal would allow such firms to recognize as part of their capital fixed assets and other assets that traditionally have not been recognized by prudential regulators.
I also support the proposed rulemaking's financial condition reporting requirements that relate generally to capital and other matters. These reporting requirements are comparable to existing requirements for FCMs and will facilitate ongoing financial oversight of these entities.
CFTC staff worked very closely with prudential regulators to establish these capital requirements that are comparable to the maximum extent practicable. Staff also consulted with the SEC and with international authorities. The rule benefited from the CFTC and SEC staff roundtable on capital and margin requirements where we received significant input from the public.
The following exhibit also will not appear in the Code of Federal Regulations.