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Federal Energy Regulatory Commission.
Final rule.
Pursuant to section 215(d) of the Federal Power Act, the Federal Energy Regulatory Commission (Commission) approves Reliability Standard BAL-003-1 (Frequency Response and Frequency Bias Setting), submitted by the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization. Reliability Standard BAL-003-1 defines the amount of frequency response needed from balancing authorities to maintain Interconnection frequency within predefined bounds and includes requirements for the measurement and provision of frequency response. In addition, the Commission directs NERC to submit certain reports to address concerns discussed in the final rule.
Daniel Woldemariam (Technical Information), Office of Electric Reliability, Division of Reliability Standards, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-8080,
1. Pursuant to section 215(d) of the Federal Power Act (FPA),
2. The Commission also approves four new or revised definitions to the NERC Glossary and NERC's implementation plan and, with two exceptions, the violation risk factors and violation severity levels, and NERC's request for retirement of currently-effective Reliability Standard BAL-003-0.1b.
3. While the Commission believes that the record supports approving Reliability Standard BAL-003-1, we have concerns about certain aspects of the Reliability Standard that warrant further consideration. Therefore, the Commission directs NERC to submit two reports, and to continue its ongoing annual analysis of certain aspects of BAL-003-1
4. The Commission finds NERC's December 30, 2013 “Annual Analysis of Frequency Response” helpful and notes NERC's statement that it intends to continue this work. Specifically, in its 2013 annual analysis, NERC states that the informational filing analyzes the impact of Remedial Action Schemes that trip more than 2,400 MW on the calculation of the Interconnection Frequency Response Obligation (IFRO) for the Western Interconnection, adjustment factors for calculating IFROs and trends in primary frequency response sustainability or withdrawal throughout frequency events. The Commission expects NERC to continue to evaluate these aspects of frequency response and include them in future annual analyses.
5. Section 215(c) of the FPA requires a Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards that are subject to Commission review and approval. Once approved, the Reliability Standards may be enforced by NERC, subject to Commission oversight, or by the Commission independently.
6. Sufficient frequency response is necessary to stabilize frequency within an Interconnection immediately following the sudden loss of generation or load. NERC explains that “[s]ystem frequency reflects the instantaneous balance between generation and load. Reliable operation of a power system depends on maintaining frequency within predetermined boundaries above and below a scheduled value, which is 60 Hertz (Hz) in North America.”
7. Frequency response is provided in two stages, referred to as primary frequency response and secondary frequency response.
8. Primary frequency response and control involves the autonomous, automatic, and rapid action of a generator, or other resource, to change its output (within seconds) to rapidly dampen large changes in frequency. The ability of a power system to withstand a sudden loss of generation or load depends on the presence and adequacy of resources capable of providing rapid incremental power changes to counterbalance the disturbance and arrest a frequency deviation.
9. Secondary frequency response, also known as automatic generation control (AGC), is produced from either manual or automated dispatch from a centralized control system.
10. On March 16, 2007, in Order No. 693, the Commission approved 83 of 107 Reliability Standards pursuant to FPA section 215(d), including currently-effective Reliability Standard BAL-003-0. In addition, pursuant to section 215(d)(5) of the FPA, the Commission directed NERC, among other things, to develop modifications to BAL-003-0 to address certain issues identified by the Commission. Specifically, the Commission directed NERC to:
develop a modification to BAL-003-0 through the Reliability Standards development process that: (1) includes Levels of Non-Compliance; (2) determines the appropriate periodicity of frequency response surveys necessary to ensure that Requirement R2 and other requirements of the Reliability Standard are being met, and to modify Measure M1 based on that determination and (3) defines the necessary amount of Frequency Response needed for Reliable Operation for each balancing authority with methods of obtaining and measuring that the frequency response is achieved.
11. On March 29, 2013, NERC submitted its petition seeking the Commission's approval of Reliability Standard BAL-003-1, four new or modified definitions for inclusion in the NERC Glossary, violation risk factors and violation severity levels, an implementation plan for the proposed standard, and retirement of currently-effective BAL-003-0.1b.
12. The petition states that in 2010 NERC began a frequency response initiative to perform an in-depth analysis of Interconnection-wide frequency response “to achieve a better understanding of the factors influencing frequency response across North America.”
13. NERC requests approval of the implementation plan for proposed BAL-003-1, under which: (1) Requirement R2, Requirement R3 and Requirement
14. NERC states that the purpose of the Reliability Standard is to ensure an adequate amount of Frequency Response and also ensure that “a Balancing Authority's Frequency Bias Setting is accurately calculated to match its actual Frequency Response.” The Reliability Standard also is intended “to provide consistent methods for measuring Frequency Response and determining the Frequency Bias Setting.”
To require sufficient Frequency Response from the balancing authority (BA) to maintain Interconnection Frequency within predefined bounds by arresting frequency deviations and supporting frequency until the frequency is restored to its scheduled value. To provide consistent methods for measuring Frequency Response and determining the Frequency Bias Setting.
15. Requirement R1 requires that each balancing authority or Frequency Response Sharing Group achieve an annual Frequency Response Measure
Each Frequency Response Sharing Group (FRSG) or Balancing Authority that is not a member of a FRSG shall achieve an annual Frequency Response Measure (FRM) (as calculated and reported in accordance with Attachment A) that is equal to or more negative than its Frequency Response Obligation (FRO) to ensure that sufficient Frequency Response is provided by each FRSG or BA that is not a member of a FRSG to maintain Interconnection Frequency Response equal to or more negative than the Interconnection Frequency Response Obligation.
NERC explains that Requirement R1 has the primary objective of “determin[ing] whether a Balancing Authority has sufficient Frequency Response for reliable operations.”
16. Requirement R2 states that:
Each Balancing Authority that is a member of a multiple Balancing Authority Interconnection and is not receiving Overlap Regulation Service
NERC explains that setting the frequency bias to better approximate the balancing authority's natural response characteristic will improve the quality of ACE control and general AGC system control response. NERC states that the ERO, in coordination with the regions of each Interconnection, will annually review Frequency Bias Setting data submitted by the balancing authorities.
17. Requirement R3 states that:
Each Balancing Authority that is a member of a multiple Balancing Authority Interconnection and is not receiving Overlap Regulation Service and is utilizing a variable Frequency Bias Setting shall maintain a Frequency Bias Setting that is: (1.1) Less than zero at all times, and (1.2) Equal to or more negative than its Frequency Response Obligation when Frequency varies from 60 [Hertz] Hz by more than +/− 0.036 Hz.
NERC explains that, in an Interconnection with multiple balancing authorities, the Frequency Bias Setting should be coordinated among all balancing authorities in the Interconnection. According to NERC, when there is a minimum Frequency Bias Setting requirement, it should apply for all balancing authorities. However, balancing authorities using a variable Frequency Bias Setting may have non-linearity in their actual response for a number of reasons including the deadband settings of their generator governors. The measurement to ensure that these balancing authorities are conforming to the Interconnection minimum is adjusted to remove the deadband range from the calculated average Frequency Bias Setting actually used.
18. Requirement R4 states that:
Each Balancing Authority that is performing Overlap Regulation Service shall modify its Frequency Bias Setting in its ACE calculation, in order to represent the Frequency Bias Setting for the combined Balancing Authority area, to be equivalent to either:
• the sum of the Frequency Bias Settings as shown on FRS Form 1 and FRS Form 2 for the participating Balancing Authorities as validated by the ERO, or
• the Frequency Bias Setting shown on FRS Form 1 and FRS Form 2 for the entirety of the participating Balancing Authorities' areas.
NERC states that Requirement R4 is similar to Requirement R6 in the currently-effective BAL-003-0.1b.
19. On July 18, 2013, the Commission issued a Notice of Proposed Rulemaking (NOPR) proposing to approve Reliability Standard BAL-003-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest.
20. While the Commission proposed to approve Reliability Standard BAL-003-1, the Commission raised concerns regarding certain provisions of the proposed standard, some of which NERC itself identified in the reports included in its petition. In the NOPR, the Commission sought comments on the following issues: (1) In Requirement R1, the use of the median statistical method in the calculation of Frequency Response Measure, i.e., selecting the middle value in a set of data that is arranged in an ascending or descending order; (2) the potential for early withdrawal of primary frequency response before secondary frequency response is activated; (3) the need to study frequency response during light-load conditions; (4) whether the resource contingency criteria in the Western Interconnection is properly identified; and (5) the need to adequately ensure that each balancing authority has available the resources it needs to meet its frequency response obligation.
21. In response to the NOPR, the Commission received comments from: NERC, Midcontinent Independent System Operator (MISO), Electricity Consumers Resource Council (ELCON), ISO/RTO Council (IRC), Arizona Public Service Company (APS), Bonneville Power Administration (BPA), and Trade Associations.
22. Pursuant to FPA section 215(d), we approve Reliability Standard BAL-003-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. The Reliability Standard establishes a minimum Frequency Response Obligation for each balancing authority; provides a uniform calculation of frequency response; establishes Frequency Bias Settings that are closer to actual balancing authority frequency response; and encourages coordinated automatic generation control operation. The Reliability Standard addresses an existing gap in reliability, as these matters are either not covered, or not adequately addressed, in any currently-effective Reliability Standard. Further, Reliability Standard BAL-003-1 adequately addresses certain directives from Order No. 693. We also approve the new and modified definitions and, with two exceptions, the proposed violation severity levels and violation risk factors, and retirement of the currently-effective standard and NERC's implementation plan.
23. We discuss below the following issues raised in the NOPR and addressed in the comments: (A) The use of the median statistical method in determining the Frequency Response Measure; (B) the determination of Interconnection Frequency Response Obligation; (C) methods of obtaining frequency response; (D) withdrawal of primary frequency response before secondary frequency response is activated; (E) development of a new light-load case study; (F) assignment of violation risk factors and violation severity levels; and (G) associated and supporting documents.
24. As discussed above, Requirement R1 of Reliability Standard BAL-003-1 provides that each balancing authority or Frequency Response Sharing Group achieve an annual Frequency Response Measure that is equal to or more negative than its Frequency Response Obligation needed to ensure sufficient frequency response. NERC proposed to define the Frequency Response Measure as “the median of all the Frequency Response observations reported annually by balancing authorities or Frequency Response Sharing Groups for the frequency events specified by the ERO.”
25. NERC stated in its petition that the standard drafting team evaluated different approaches for averaging individual event observations to compute a technically sound estimate of Frequency Response Measure, including median and linear regression analysis.
In general, statisticians use the median as the best measure of a central tendency when a population has outliers. Based on the analyses performed thus far, the standard drafting team believes that the median's superior resiliency to this type of data quality problem makes it the best aggregation technique at the time. However, the standard drafting team sees merit and promise in future research with sample filtering combined with a technique such as linear regression. When compared with the mean, linear regression shows superior performance with respect to the elimination of noise because the measured data is weighted by the size of the frequency changes associated with the event. The standard drafting team acknowledges that linear regression should be re-evaluated for use in the BAL-003 Reliability Standard once more experience is gained with data collected.
26. In the NOPR, the Commission stated that NERC provided adequate rationale for using the median to determine the required Frequency Response Measure.
27. However, in the NOPR, the Commission expressed concern “whether use of the median adequately represents actual data that could, on occasions, be significantly higher or lower than the median.”
28. NERC, IRC and Trade Associations disagree with the NOPR proposal, and support use of the median statistical measure. NERC states that the Commission's proposed directive to develop a modification to the methodology for determining the Frequency Response Measure is premature. NERC asserts that the standard drafting team evaluated different approaches for averaging individual event observations to compute a technically sound estimate of Frequency Response Measure, including the median and linear regression analysis. NERC also notes that, in the NOPR, the Commission indicated that NERC provided adequate rationale for using the median to determine the required Frequency Response Measure, and that use of the median is supported by the analyses performed to date.
29. Trade Associations and IRC also disagree with the Commission's proposal to direct NERC to develop a modification to the proposed standard and assert that the standard drafting team selected the most appropriate methodology. Trade Associations assert that the standard drafting team's reasoning was “well thought out and balanced considering the advantages and disadvantages of both approaches (i.e., `median' and `linear regression').”
30. BPA raises a concern that use of the median method for determining the Frequency Response Measure “gives equal weight to large and small disturbances.”
31. In reply comments, NERC responds to BPA's proposed revisions, stating that the values in Table 1 are not static and are revised on an annual basis pursuant to a written process for identifying candidate frequency events and an annual review of the calculations. Further, NERC explains that the methodology set forth in Table 1 of Attachment A to Reliability Standard BAL-003-1 is based on frequency and not the size of events, as suggested by BPA.
32. The Commission does not adopt the NOPR proposal that NERC develop a modification to replace the use of the median with a more appropriate methodology and, instead, approves the use of the median methodology to determine the required Frequency Response Measure as set forth in Reliability Standard BAL-003-1. As indicated by NERC, the standard drafting team considered various approaches for averaging individual event observations to compute a technically sound estimate of Frequency Response Measure and determined that “the median's superior resiliency to this type of data quality problem [i.e., a data set with outliers] makes it the best aggregation technique at the time.”
33. Further, with respect to BPA's concerns regarding NERC's process for determining the appropriate Frequency Response Measure, we agree with NERC's explanation that NERC has developed an acceptable methodology for identifying candidate frequency events and an annual review of the calculations.
34. In addition, while the use of the median provides an adequate initial means to achieve the objectives of Reliability Standard BAL-003-1, we continue to believe that over the long term the Reliability Standard can be improved by adopting the linear method.
35. Reliability Standard BAL-003-1 establishes an Interconnection Frequency Response Obligation designed to require sufficient frequency response for each Interconnection to arrest frequency decline even for severe, but possible, contingencies. The methodology for determining each Interconnection's obligation for obtaining the necessary amount of frequency response is set forth in Attachment A of the Reliability Standard. The Interconnection Frequency Response Obligation is based on the “resource contingency criteria,” which is the largest “Category C” event for the Interconnection,
36. In the NOPR, with respect to the determination of the Interconnection Frequency Response Obligation, the Commission discussed two matters: (1) Eastern Interconnection—prevailing first step of under-frequency load shedding and (2) Western Interconnection—identifying the largest N-2 contingency.
37. For the Eastern Interconnection, Attachment A to the Reliability Standard identifies 59.5 Hz as the “first step” of under-frequency load shedding in the calculation of the default Interconnection Frequency Response Obligation. Attachment A notes that this set point is “a compromise value set midway between the stable frequency minimum established in Reliability Standard PRC-006-1 (59.3 Hz) and the local protection under frequency load shedding setting of 59.7 Hz used in Florida and Manitoba.”
38. Noting that the actual first-step of under-frequency load shedding for the Eastern Interconnection is 59.7 Hz, the NOPR sought comment on the technical source or support for NERC's statement that the first-step value of 59.5 Hz in the calculation of the Interconnection Frequency Response Obligation imposes no greater risk of under-frequency load shedding operation in FRCC for an external resource loss than for an internal FRCC event. Also, the NOPR sought clarification of whether the intent of the proposal is that FRCC will start shedding load automatically before an event meets the value of 59.5 Hz used in the Reliability Standard to determine the Interconnection Frequency Response Obligation.
39. NERC, Trade Associations, and MISO submitted comments in support of using the prevailing under-frequency load shedding first step for the Eastern Interconnection of 59.5 Hz. Trade Associations state that they understand that FRCC has evaluated the impact of the proposed standard and has determined that the probability of a load shedding event caused by a generation loss within the Eastern Interconnection is comparable with an event internal to the FRCC region.
40. NERC comments that FRCC's 59.7 Hz under-frequency load shedding setting is designed to arrest dynamic transients for system events occurring on the Florida peninsula to avoid separation from the rest of the Eastern Interconnection. NERC states that further analysis by NERC showed that the under-frequency load shedding settings on the Florida peninsula are not susceptible to activation even by very large resource losses within the main body of the Eastern Interconnection. NERC explains that “[u]sing the `generic' dynamics case available, a follow-on analysis was performed by NERC staff to determine the general order of magnitude of a frequency event that could be sustained by the Eastern Interconnection without violating the 59.7 Hz first step under-frequency load shedding in FRCC. A simulation was run that tripped about 8,500 MW of generation in the southeast United
41. NERC further states that the initial nadir of 59.78 Hz in southern Florida from the simulation is lower than the nadir in northern Florida due to the wave properties of the disturbance.
42. MISO also supports the proposed first-step value of 59.5 Hz for the Eastern Interconnection and asserts that NERC has provided sufficient support for using the 59.5 Hz value. According to MISO, the FRCC 59.7 Hz frequency value reflects local concerns specific to Florida, based on the observation that an event in Florida causes a wider frequency swing locally than what propagates out to the rest of the Eastern Interconnection. MISO asserts that there has been no recorded case of frequency in the Eastern Interconnection declining to 59.7 Hz.
43. The Commission accepts NERC's and MISO's explanation of the technical support for using 59.5 Hz as the “first step” of under-frequency load shedding in the calculation of the default Interconnection Frequency Response Obligation. The Commission also agrees with Trade Associations' assertion that FRCC has evaluated the impact of the proposed standard and has determined that the probability of a load shedding event caused by a generation loss within the Eastern Interconnection is comparable with an event within the FRCC region. Accordingly, the Commission is satisfied with the NOPR responses and takes no further action on this matter.
44. The Interconnection Frequency Response Obligation is based on the largest Category C event, or N-2 (loss of two or more bulk electric system elements) for the Interconnection. The default Interconnection Frequency Response Obligation for the Western Interconnection is based on the loss of two Palo Verde generating station units, which results in a resource contingency criterion of 2,740 MW.
45. In the NOPR, the Commission expressed concern regarding whether the N-2 contingency identified as an input to the Attachment A methodology for calculating the Interconnection Frequency Response Obligation accurately identifies the largest N-2 event in the Western Interconnection. The NOPR referenced the Frequency Response Initiative Report, which indicates that the Pacific Northwest Remedial Action Scheme could result in a larger contingency that, if included as an input to the Attachment A calculation, would produce more accurate results.
46. Trade Associations comment that they recognize the Commission's issue and have no concerns with a directive mandating the ERO to study the implications of the Pacific Northwest Remedial Action Scheme and other similar arrangements that intentionally involve the tripping of greater than 2,400 MW of generation.
47. BPA comments that “[Remedial Action Scheme] events should not determine the Resource Contingency Criteria in the Western Interconnection” because,
48. In light of NERC's December 30, 2013 annual analysis informational filing, we will not adopt our NOPR proposal. In its 2013 annual analysis NERC explains that “[Remedial Action Schemes] in the Western Interconnection that trip generation resources in excess of 2,400 MW for transmission system contingencies should not be used for the resource contingency protection criteria for the Western Interconnection. Because of the location of the resources tripped and the fact that [Remedial Action Schemes] would not be armed to trip those levels of generation under peak conditions, the loss of two Palo Verde units is a larger hazard to the interconnection.”
49. While BPA advocates that Remedial Action Schemes should not be considered in determining the Interconnection Frequency Response Obligation, BPA did not provide support in the record for its claim that activation of Remedial Action Schemes will reduce system stress while the loss of two Palo Verde units will increase it. Contrary to BPA's argument, we believe that it is appropriate to study this matter, as NERC has done, and take possible future action depending on study results because if the obligation is set too low, the Western Interconnection may not have sufficient frequency response to arrest frequency decline.
50. In Order No. 693, the Commission directed NERC to develop a modification to BAL-003-0 that includes methods for obtaining frequency response.
51. In the NOPR, the Commission stated that Reliability Standard BAL-003-1 imposes an obligation, subject to compliance and enforcement, on each balancing authority to obtain frequency response. The Commission recognized, however, that balancing authorities must obtain frequency response from other entities with available resources, and Reliability Standard BAL-003-1 imposes no obligation on those entities to provide frequency response.
52. In the NOPR, the Commission proposed to direct NERC to submit a report 15 months after implementation of BAL-003-1 that provides an analysis of the availability of resources for each balancing authority to meet its Frequency Response Obligation during the first year of implementation.
53. NERC, Trade Associations, IRC, APS, and ELCON generally support the Commission's proposal that NERC submit a report regarding the availability of resources for frequency response. Trade Associations comment that they “recognize the potential benefit of such a study,” but suggest that 20 to 24 months is a more reasonable time frame for a directive. Trade Associations also ask the Commission to exercise care when directing NERC to conduct studies to ensure that scarce resources are not expended unnecessarily.
54. NERC commits to submitting an analysis of resource availability as proposed in the NOPR. However, NERC provides a detailed timeline for implementation and indicates that it will not receive the necessary information from responsible entities until March 24 of the year following the implementation of Requirement R1 of BAL-003-1, beyond the 15 month time frame proposed in the NOPR. Thus, NERC proposes to submit the report “within six months of the validation by the ERO of the Frequency Bias Setting values and computation of the sum of all Frequency Bias Setting values for each Interconnection and determination of the L 10 values for the CPS 2 criterion for each Balancing Authority or, if applicable, confirmation of the Frequency Bias Setting to be used for the calculation of the Balancing Authority ACE limit.”
55. Several commenters, including IRC, APS and BPA, raise concerns regarding the compliance responsibilities of balancing authorities to meet a Frequency Response Obligation. IRC asserts that BAL-003-1 creates an inequitable alignment of compliance responsibility and generator performance capability. IRC states that while the obligation to meet the frequency response requirements lies with the balancing authority, the ability to provide the resources necessary to meet those obligations lies primarily with generators. Therefore, while IRC supports the analysis proposed in the NOPR, IRC also requests that the Commission direct prospective revisions to the Reliability Standard to assign responsibilities based on performance capability. IRC contends that this approach is appropriate because balancing authorities have no control over generators' performance in supporting the Frequency Response Obligation assigned to balancing authorities.
56. BPA agrees with the Commission that Reliability Standard BAL-003-1 does not address the ability of each balancing authority to ensure adequacy of resources to meet its frequency response obligations. According to BPA, there is a proposal in WECC to develop a regional Reliability Standard complementary to NERC BAL-003-1 to address this gap. BPA comments that, until such a standard is developed, each balancing authority must determine how to meet its own frequency response obligation. BPA states that this frequency response, measured by balancing authority interchange, includes not only the response of balancing authority generation but also incremental transmission losses and natural load response to voltage and frequency.
57. APS believes it is appropriate for NERC to study and report on the availability of resources. However, APS asserts it is neither just nor reasonable for a balancing authority to be held to this requirement when frequency response services are simply not available. APS states that until such time that NERC has completed the studies, the results are reviewed, and appropriate solutions are developed to assure that affected entities have the resources available to comply under all conditions, either the implementation of the requirements should be delayed, or in the alternative, those balancing authorities who cannot obtain the required frequency response should be exempt from the proposed requirements.
58. APS also proposes that the Commission take a phased-in approach to compliance obligations to allow adequate time for necessary activities such as testing generation units for ramp-up capability, tuning generation and retesting, as well as time to allow a frequency response market to develop. APS comments that the types of resources a balancing authority has in its portfolio may significantly impact its ability to comply with BAL-003-1 because some resources, such as hydroelectric generation, are more effective in responding to frequency declines. APS asserts that it does not have sufficient fast-ramping resources to provide the required frequency response should the Western Interconnection experience an event that results in significant frequency response deviation. To address its concern, APS suggests a revision to the definition of a Balancing Authority's “annual generation” to exclude non-responsive units and apply a higher weighting factor for responsive units. According to APS, this revision would align the allocation of Frequency Response Obligation with a generator's physical ability to provide it.
59. In its reply comments, NERC responds to APS, stating that the standard drafting team determined technical evidence indicates that sufficient frequency response resources would be available for balancing authorities to comply with the requirements of Reliability Standard BAL-003-1.
60. The Commission adopts the NOPR proposal and directs NERC to submit a report that provides an analysis of the availability of resources for each balancing authority and Frequency Response Sharing Group to meet its Frequency Response Obligation during the first year of implementation. However, NERC indicates in its comments that it needs more than the proposed 15 months to prepare the report based on the time frame for NERC to receive relevant data from applicable entities.
61. In response to the concerns expressed by the IRC, BPA and APS that balancing authorities may not have control over adequate resources necessary to support the Frequency Response Obligations assigned to the balancing authorities, we will not forego compliance or delay implementation. Certainly, a balancing authority's ability or inability to draw on the necessary resources to meet the compliance obligations of BAL-003-1 might be a potential mitigating factor in a compliance action, depending on the efforts made to obtain resource commitments. Moreover, NERC and its stakeholders had, and still have, the option to propose a Reliability Standard imposing obligations directly on resources, if they find it appropriate. (Similarly, we may consider a directive for such a Standard or other options such as market or tariff mechanisms, if appropriate.) However, we are not persuaded that a blanket waiver or delay in compliance is warranted.
62. While we share concerns regarding the ability of balancing authorities and Frequency Response Sharing Groups to meet the Frequency Response Obligation pursuant to BAL-003-1, we do not believe that such changes are warranted based on the current record in the proceeding. Rather, a recent NERC study indicates that sufficient frequency response resources would be available for balancing authorities to comply with the requirements of Reliability Standard BAL-003-1.
63. We do not discount the concerns of APS and others regarding resource availability. However, we believe that the prudent course is to have NERC complete the directed report. The
64. In its petition, NERC indicated that, while the standards drafting team addressed the early withdrawal of primary frequency response, there are no requirements that address this issue and it remains a concern.
65. NERC's Frequency Response Initiative Report states that “[w]ithdrawal of primary frequency response is an undesirable characteristic associated most often with digital turbine-generator control systems using set point output targets for generator output. These are typically outer-loop control systems that defeat the primary frequency response of the governors after a short time to return the unit to operating at a requested MW output.”
66. In the NOPR, the Commission explained that “following the sudden loss of generation, the automatic and immediate increase in power output by resources providing primary frequency control seeks to quickly arrest and stabilize the frequency of the interconnection, usually within 30 seconds or less. After this rapid primary frequency response, AGC provides secondary frequency response to return frequency to the scheduled value in time frames of several minutes after the loss of generation.”
67. In the NOPR, the Commission expressed concern that Reliability Standard BAL-003-1 does not adequately address the reliability issue created by the withdrawal of primary frequency response prior to activation of secondary frequency response. The withdrawal of primary frequency response before the activation of resources providing secondary frequency response may lead to under-frequency load shedding and possible cascading outages. Accordingly, the Commission proposed to direct NERC to develop a modification to BAL-003-1 to address the concern of premature withdrawal of primary frequency response prior to the activation of secondary frequency response.
68. NERC disagrees with the need for the proposed directive. First, NERC asserts that Form 1 of the Reliability Standard addresses premature withdrawal of frequency response and suggests that experience with the actual implementation of the Reliability Standard will better indicate whether premature withdrawal is an issue that requires revisions to the Reliability Standard and, if necessary, definitions of the scope and parameters of the potential issue. Second, NERC notes that the premature withdrawal issue could be impacted by the Commission's ongoing effort to determine whether action is necessary to coordinate the requirements of the Reliability Standard with tariffs and market rules.
69. NERC maintains that the standard drafting team accounted for the issue of premature withdrawal of frequency response in the calculation of theB-value averaging period within the Frequency Response Measure. NERC states that “[t]he team recognized that there would be more AGC response in the 20 to 52 second period, but the team also recognized that the 20 to 52 second period would provide a better measure of squelched response from outer loop control action. The 20 to 52 second period was selected because it would indicate squelched response from outer-loop control and
70. NERC also maintains that, while Reliability Standard BAL-003-1 applies to balancing authorities and Frequency Response Sharing Groups, the premature withdrawal issue applies to generators. Therefore, NERC asserts, the withdrawal issue could be addressed with alternative mechanisms, including other Reliability Standards or guidelines. NERC further asserts that there are emerging technologies that can and will affect withdrawal, including energy storage devices. NERC notes that the premature withdrawal issue could be affected by whatever tariff or market solutions the Commission may adopt in related Docket AD13-8. For these reasons, NERC believes the Commission's proposed directive requiring a specific solution, i.e., a modification to BAL-003-1 Reliability Standard, is premature. NERC states that, consistent with the recommendations in the Frequency Response Initiative Report, it will evaluate whether a modification to Reliability Standard BAL-003-1 is necessary to address premature withdrawal and will submit an informational filing to the Commission two years after Requirement R1 of Reliability Standard BAL-003-1 becomes effective.
71. Trade Associations disagree with the Commission's concern over premature withdrawal of frequency response. Trade Associations state that Reliability Standard BAL-003-1, along with other Reliability Standards awaiting implementation, such as BAL-001-2, sufficiently addresses this concern. Trade Associations assert that the Eastern Interconnection has significant inertia which buffers the initial drop in frequency in major events making premature primary frequency response withdrawal more apparent. Trade Associations state that the exemplary post-contingent recovery of all Interconnections' frequency as demonstrated over time supports their view that premature withdrawal is not a significant factor at this time. Finally, Trade Associations state that the desired outcome of automatic generation control for a balancing authority should result in a dispatch of resources to meet the secondary control requirements of NERC BAL-001. Based upon the overall balance of resources and demand, Trade Associations assert that automatic generation control may at times, guide individual regulating resources within a balancing authority, where a positive ACE exists, to withdraw energy (i.e., to reduce ACE) to meet the secondary control requirements of CPS2 under Reliability Standard BAL-001-1. Trade Associations assert that the response of such a unit would be to withdraw support, thereby resulting in an outcome contrary to the desire to sustain frequency response.
72. IRC states that the Commission's concern about premature withdrawal of frequency response is unwarranted. IRC maintains that the Commission should adopt a more comprehensive perspective, taking into account frequency response and withdrawal patterns over an extended period of time and across Interconnections to understand the potential impact of premature withdrawal. IRC states that data collected and analyzed during the standard drafting team's field trial indicated how quickly and steadily frequency is, on average, brought back to a stable level over a five minute response window in all three Interconnections. IRC explains that the standard drafting team considered data regarding the mean frequency recovery rate (mHz/Sec) for all frequency-related events in each of the major Interconnections from 2010 to 2013. IRC states that early withdrawal of primary frequency response has not been a significant problem because “most responses are incomplete at the time that frequency has been initially arrested and the additional response has generally been sufficient to make up for more than these unpreventable reductions in response.”
73. ELCON states that secondary frequency response (Regulation) is primarily delivered through automatic generation control, which is governed by Reliability Standard BAL-005-0.2b. That Reliability Standard contains requirements applicable to balancing authorities which therefore, ELCON states, have “the responsibility to ensure its operability.”
74. BPA states that it shares the Commission's concerns on early withdrawal of frequency response and provides a recorded frequency response withdrawal by a combined cycle plant.
75. The Commission is persuaded not to adopt the NOPR proposal to require NERC to develop a modification to Reliability Standard BAL-003-1 to address premature withdrawal of frequency response. The Commission believes that the nature and extent of the problems that could result from the premature withdrawal of primary frequency response, and how best to address it if necessary, will be better understood after NERC and balancing authorities have more experience with Reliability Standard BAL-003-1. Accordingly, in light of NERC's December 30, 2013 annual analysis informational filing, the Commission expects NERC to continue to evaluate the impact of the withdrawal of primary frequency response before secondary frequency response is activated in its annual analyses.
76. The Commission recognizes BPA's concerns about the early withdrawal of frequency response, particularly the possibility that load controllers may prematurely over-ride primary frequency response. However, we agree with NERC that the need to take action, including requiring load controllers to include a frequency bias term similar to AGC to sustain frequency response or otherwise modifying Reliability Standard BAL-003-1, should be decided after we have actual experience with the Reliability Standard.
77. In the NOPR, the Commission highlighted NERC's conclusion in its Frequency Response Initiative Report that “[s]ustainability of primary frequency response becomes more important during light-load conditions when there are generally fewer frequency-responsive generators online.”
78. In the NOPR, the Commission focused on the resource contingency criterion in Reliability Standard BAL-003-1 for calculating the Interconnection Frequency Response Obligation for the Eastern Interconnection, and the potential concerns with the use of an event that took place during heavy system load conditions. The use of a generic governor stability case in the stability simulation testing for the Eastern Interconnection resource contingency criteria used in the determination of the Interconnection Frequency Response Obligation represented conditions far different than light-load conditions. This raises questions regarding whether, and by what amount, light load conditions would lower system inertia and load response. The Frequency Response Initiative Report recommended the development of a new light-load case study, and the re-simulation of the resource contingency criterion for the Eastern Interconnection Frequency Response Obligation.
79. The Commission agreed with NERC that the study of light-load scenarios is useful in determining an appropriate Interconnection Frequency Response Obligation, especially for the Eastern Interconnection.
80. BPA, Trade Associations, and IRC submitted comments agreeing with the Commission that the study of light-load scenarios is useful in determining an appropriate Interconnection Frequency Response Obligation, especially for the Eastern Interconnection.
81. IRC states that it does not oppose the development of a new light-load case study, but believes that better modeling data needs to be collected before an accurate study can be conducted. IRC states that “[i]n
82. BPA states that while frequency response is expected to be lower during off-peak light load conditions, there have not been a sufficient number of events under light load conditions to confirm the severity of the problem. BPA states that currently all WECC regions are exceeding their frequency response obligations.
83. The Trade Associations support the Commission's proposal to direct NERC to submit their light-load case study and recommendations.
84. The Commission adopts the proposal in the NOPR and directs NERC to submit the results of the Eastern Interconnection Reliability Assessment Group's light-load case, using actual turbine governor response data. Additionally, the Commission directs NERC to submit a recommendation on whether further actions are warranted no later than 15 months after implementation of the Final Rule. Further, the report should discuss any appropriate changes to the Interconnection Frequency Response Obligation warranted by the study.
85. In the NOPR, the Commission proposed to approve each violation risk factor assignment NERC proposed for a requirement of the proposed Reliability Standard, with one exception. The Commission indicated that NERC did not adequately justify assignment of a medium violation risk factor to Requirement R1, which establishes the Frequency Response Measure that a balancing authority must achieve to arrest a decline in system frequency. While NERC asserted that a violation of this requirement will not cause bulk electric system instability, separation or cascading failures because “a balancing authority's previous year's Frequency Bias setting is included within its ACE equation and would provide support for the contingency,” the Commission indicated that this explanation does not apply to Requirement R1. The Commission noted that the ACE equation provides input to secondary frequency control, which differs from the primary control needed to arrest a frequency decline, as established by Requirement R1. The Commission proposed to direct NERC to assign a high violation risk factor to Requirement R1 because (1) NERC described frequency response as a critical component to the reliable operation of the Bulk-Power System, indicating that Requirement R1 does not impose merely an administrative burden, and (2) the medium violation risk factor that the Commission approved for each BAL-003-0.1b requirement does not apply to Requirement R1 because it has no equivalent in that standard.
86. Trade Associations state that while Requirement R1 may merit a high violation risk factor, responsible entities must achieve an annual Frequency Response Measure as calculated in accordance with Attachment A to Reliability Standard BAL-003-1. The Trade Associations therefore observe that it would be inappropriate to apply the violation risk factor for Requirement R1 to a single event rather than to an annual Frequency Response Measure.
87. Commenting that the standard drafting team took a rational approach to its violation risk factor assignments, and that each such assignment appears appropriate and well-reasoned to approximate the impact of a violation on reliability, IRC requests that the Commission accept the medium violation risk factor for Requirement R1 as developed by the standard drafting team and agreed to by industry.
88. APS disagrees with the Commission's proposal to assign a high violation risk factor to Requirement R1. APS agrees with NERC that a violation of this requirement will not cause Bulk Electric System instability, separation or cascading failures. APS maintains that frequency response in the Western Interconnection is and has been stable. APS states that there are almost forty balancing authorities in the Western Interconnection, and even if individual balancing authorities should fall short of their obligation, there is no measurable risk to the Interconnection.
89. APS also states that the worst case scenario from a violation of Requirement R1 is some loss of load due to under-frequency load shedding. APS contends that over the last fifteen years in the Western Interconnection, frequency has not declined below 59.7 Hertz for a generation loss of 3,000 megawatts or less. APS states that the first under-frequency load shedding in the Western Interconnection occurs at 59.5 Hertz, and hence, there has not been a significant impact to the bulk electric system for loss of generation. APS submits that a medium violation risk factor is appropriate.
90. We direct NERC to change the violation risk factor for Requirement R1 to “high,” as proposed in the NOPR. No commenter disagreed with the Commission's observation that Requirement R1 addresses primary frequency control that is necessary to arrest frequency decline within seconds after it begins. Without sufficient primary frequency control, a frequency decline may not be arrested in sufficient time to prevent instability, uncontrolled separation or cascading failures. While APS maintains that frequency in the Western Interconnection is and has been stable, that stability depends on compliance with Requirement R1 by balancing authorities that have sufficient resources to meet Requirement R1. The fact that one entity's violation of Requirement R1 may be offset by the efforts of others is not a basis for ignoring or downplaying the substantial risk posed by inadequate frequency response. Accordingly, we conclude that a “high” violation risk factor for Requirement R1 is appropriate. We agree with Trade Associations that Requirement R1 mandates achievement of an annual Frequency Response Measure, and that compliance with that requirement cannot be determined by a single event.
91. In the NOPR, the Commission proposed changes to NERC's proposed violation severity level assignments for Requirement R1. NERC proposed two violation severity levels depending
92. The Commission proposed that NERC modify its severity level assignments for Requirement R1 to remove references to performance by other entities or otherwise so as to address a concern that NERC assigned these severity levels partly on performance of Requirement R1 by all other responsible entities in the Interconnection in which a violator is located. The Commission concluded that it would be unfair to base a penalty on a responsible entity in part upon the collective compliance or lack of compliance by independent entities, because: (1) NERC's sanction guidelines focus violation severity levels on a violator's deviation from required performance, not the risk the violation is expected to pose to reliability or performance by other entities; and (2) a balancing authority or Frequency Response Sharing Group subject to Requirement R1 does not control any other responsible entity's compliance with this requirement.
93. APS agrees with the Commission's proposal that NERC change Requirement R1 violation severity level assignments that are in part based on the performance of other entities in the Interconnection. However, APS contends that there is no justification for a “severe” violation severity level applicable to this requirement. APS comments that the violation severity level should be “low” for a responsible entity missing its annual Frequency Response Obligation by small amounts (less than 20 percent) and “medium” for missing by a larger amount (greater than 20 percent).
94. IRC states that the standard drafting team took an appropriate, rational approach to its violation severity level proposal, taking into account that frequency response is an interconnection-wide service, not balancing authority specific. IRC contends that a single balancing authority should not be penalized for a 10 percent decrease in response, where frequency response is otherwise sufficient amongst its surrounding balancing authorities and the reliability of the Interconnection as a whole is not in jeopardy. IRC asserts that, in contrast, a 10 percent decrease in frequency response within the Interconnection as a whole clearly would signal a reliability issue. IRC contends that, by suggesting that the VSLs for Requirement R1 be modified to remove references to performance by other entities, the Commission essentially suggested that a small deficiency within a single balancing authority is equivalent to deficient frequency response within an Interconnection, and should be equivalently penalized as such.
95. As proposed in the NOPR, we direct NERC to remove from its violation severity level assignments for Requirement R1 any references to performance of that requirement by other entities. No commenter has questioned the Commission's analysis in the NOPR that NERC's Sanction Guidelines define violation severity levels as a violator's deviation from required performance, not as the risk the violation is expected to pose to reliability or performance by other entities, and that a particular responsible entity's compliance with Requirement R1 is not controlled by performance of the requirement by other responsible entities in an Interconnection. Nor has any commenter suggested any rationale sufficient to support a departure from the Sanction Guidelines in this regard. While we agree with IRC that frequency response is an Interconnection-wide service, a failure by each responsible entity in an Interconnection to comply with Requirement R1 will result in a failure to meet the Interconnection-wide annual Frequency Response Measure, to the detriment of reliability across the Interconnection. We believe that violation severity levels for this requirement should be set so as to discourage particular responsible entities from “leaning on” other entities to provide sufficient frequency response collectively to meet the relevant Interconnection Frequency Response Obligation.
96. We leave it to NERC to consider how its violation severity level assignments for Requirement R1 should be changed in response to our concerns, including consideration of APS's suggestions. However, we note that APS did not provide in its comments any rationale for its suggested severity level assignments.
97. In the NOPR, the Commission explained that Reliability Standard BAL-003-1 has several supporting or associated documents. For example, Attachment A, appended to the Reliability Standard, is explicitly referenced in Requirements R1 and R2.
98. In the NOPR, the Commission stated that “[t]hese associated and supporting documents are explicitly referenced in the Requirements of the Reliability Standard. Thus, failure of a Balancing Authority to comply with such associated and supporting documents could result in non-compliance with the underlying Requirement.”
99. No entity submitted comments on this matter. Accordingly, the Commission affirms its NOPR statement that the failure of a balancing authority to comply with the associated and supporting documents that are referenced in the Requirements of BAL-003-1 could result in non-compliance with the underlying Requirement.
100. NERC, in its Reply Comments, states that “the values in Table 1 of Attachment A are not static. As explained in Attachment A to the proposed Reliability Standard and the
101. The following collection of information contained in this Final Rule is subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).
102.
103. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email:
104. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.
105. The Regulatory Flexibility Act of 1980 (RFA)
106. As noted above, the Commission estimates the annual regulatory burden for compliance with the Reliability Standard to be $13,560 per balancing authority. This estimate for all balancing authorities was established using 28 events per year, but smaller entities may have fewer events which qualify for analysis,
107. In addition to publishing the full text of this document in the
108. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
109. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at
110. These regulations are effective March 24, 2014. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.
By the Commission.
Food and Drug Administration, HHS.
Final rule, correcting amendment.
The Food and Drug Administration (FDA) is amending the regulations for good manufacturing practice of animal feeds containing a new animal drug to correctly cite the applicable section of the Federal Food, Drug, and Cosmetic Act (FD&C Act). This action is being taken to improve the accuracy of the regulations.
This rule is effective January 23, 2014.
George K. Haibel, Center for Veterinary
FDA has noticed the regulations for good manufacturing practice of animal feeds containing a new animal drug do not correctly cite the applicable section of the FD&C Act. At this time, FDA is making a correcting amendment in 21 CFR 225.1. This action is being taken to improve the accuracy of the regulations.
Animal drugs, Animal feeds, Labeling, Packaging and containers, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 225 is amended as follows:
21 U.S.C. 351, 352, 360b, 371, 374.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA) is classifying John Cunningham Virus (JCV) serological reagents into class II (special controls). The Agency is classifying the device into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.
This order is effective February 24, 2014. The classification was effective January 20, 2012.
Haja Sittana El Mubarak, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 5519, Silver Spring, MD 20993-0002, 301-796-6193.
In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the regulations.
Section 513(f)(2) of the FD&C Act provided a procedure by which a person may request that FDA classify a device under the criteria set forth in section 513(a)(1). The person submits a premarket notification under section 510(k) of the FD&C Act for a device that has not previously been classified and, within 30 days of receiving an order classifying the device into class III under section 513(f)(1) of the FD&C Act, the person requests a classification under section 513(f)(2). In response to a request to classify a device under the procedure provided by section 513(f)(2) of the FD&C Act, FDA will classify the device by written order within 60 days. This classification will be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the
In accordance with section 513(f)(1) of the FD&C Act, FDA issued an order on December 22, 2011, classifying the STRATIFY JCV
In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the request for de novo classification in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. FDA classifies devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the request, FDA determined that the device can be classified into class II with the establishment of special controls. FDA believes these special controls will provide reasonable assurance of the safety and effectiveness of the device.
The device is assigned the generic name John Cunningham Virus serological reagents, which are devices that consist of antigens and antisera used in serological assays to identify antibodies to JCV in serum and plasma. The identification aids in the risk stratification for the development of progressive multifocal leukoencephalopathy in multiple sclerosis and Crohn's disease patients undergoing natalizumab therapy. These devices are for adjunctive use, in the context of other clinical risk factors for the development of progressive multifocal leukoencephalopathy.
FDA has identified the following risks to health associated with this type of device and the measures required to mitigate these risks:
FDA believes that the measures set forth in the special controls guideline entitled “Class II Special Controls Guideline: John Cunningham Virus Serological Reagents” are necessary, in addition to general controls, to mitigate the risks to health described in table 1.
Therefore, on January 20, 2012, FDA issued an order to the petitioner classifying JCV serological reagents into class II. FDA is codifying this device type by adding 21 CFR 866.3336.
Following the effective date of this final classification order, any firm submitting a 510(k) premarket notification for this device type will need to comply with the special controls.
Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the FD&C Act if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this type of device is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the JCV serological reagents they intend to market.
The Agency has determined under 21 CFR 25.34(b) that this action is of type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final administrative order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions have been approved under OMB control number 0910-0120; and the collections of information in 21 CFR part 801 and 21 CFR 809.10 have been approved under OMB control number 0910-0485.
Biologics, Laboratories, Medical devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
(a)
(b)
Animal and Plant Health Inspection Service, USDA.
Proposed rule; withdrawal.
We are withdrawing a proposed rule that would have added that portion of the Patagonia region of Argentina located south of latitude 42° south (Patagonia South) to the list of regions considered free of rinderpest and foot-and-mouth disease (FMD). The proposed rule would also have added that region to the list of regions that are subject to certain import restrictions on meat and meat products because of their proximity to or trading relationships with rinderpest- or FMD-affected regions. We are taking this action because we have prepared an updated risk analysis relative to Argentina that is being made available in accordance with a newer process for recognizing the animal health status of regions.
The proposed rule published on January 5, 2007 (72 FR 475) is withdrawn, effective January 23, 2014.
Dr. Silvia Kreindel, Senior Staff Veterinarian, Regionalization Evaluation Services, National Import Export Services, VS, APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231; (301) 851-3308.
On January 5, 2007, we published in the
We solicited comments concerning our proposal for 60 days ending March 6, 2007. We received 45 comments by that date. Based on the comments we received and other considerations, we concluded that it was necessary to reexamine the risk analysis. We have completed an updated risk analysis covering the Patagonia South region, as well as the Patagonia North B region, in Argentina that we will be making available for review and comment. However, as discussed in more detail below, since the publication of the proposed rule, we have changed the process by which we recognize the animal health status of regions. Therefore, we are withdrawing the January 5, 2007, proposed rule and will make the new risk analysis available in accordance with the current process.
In a final rule
The regulations in 9 CFR 92.2 contain requirements for requesting the recognition of the animal health status of a foreign region or for the approval of the export of a particular type of animal or animal product to the United States from a foreign region. If, after review and evaluation of the information submitted in support of the request, the Animal and Plant Health Inspection Service (APHIS) believes the request can be safely granted, APHIS will make the evaluation available for public comment through a notice published in the
In accordance with this process, we are announcing the availability of an evaluation of the FMD status of a region of Patagonia, Argentina, in a notice published today in the
7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Extension of public comment period.
This document announces an extension of the public comment period for submitting comments on the framework document regarding energy conservation standards for general service lamps (GSLs). The comment period is extended to February 7, 2014.
The comment period for the framework document regarding energy conservation standards for GSLs published on December 9, 2013 (78 FR 73737) is extended to February 7, 2014.
Any comments submitted must identify the framework for standards for general service lamps and provide docket number EERE-2013-BT-STD-0051 and/or Regulation Identification Number (RIN) 1904-AD09 by any of the following methods:
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•
•
•
The rulemaking Web page can be found at:
Ms. Lucy deButts, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-1604. Email:
Ms. Celia Sher, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-6122. Email:
On December 9, 2013, DOE published a notice of public meeting and availability of framework document in the
Based on NEMA's request, DOE believes that extending the comment period to allow additional time for interested parties to submit comments is appropriate. Therefore, DOE is extending the comment period until February 7, 2014 to provide interested parties additional time to prepare and submit comments. Accordingly, DOE will consider any comments received by February 7, 2014 to be timely submitted.
Food and Drug Administration, HHS.
Proposed rule.
In accordance with the National Environmental Policy Act of 1969 (NEPA) and the Council on Environmental Quality (CEQ) Regulations Implementing NEPA (CEQ Regulations), the Food and Drug Administration (FDA) is proposing to revise its NEPA implementing regulations to provide categorical exclusions for certain actions related to substantial equivalence (SE) reports, SE exemption requests, and tobacco product applications, and the rescission (order withdrawing an order) or suspension of orders regarding the marketing of tobacco products under the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act). FDA is also proposing to amend its NEPA implementing regulations to include tobacco products, where appropriate, in light of its new authority under the Tobacco Control Act.
Submit either electronic or written comments on the proposed rule by April 8, 2014.
You may submit comments, identified by Docket No. FDA-2013-N-1282, by any of the following methods:
Submit electronic comments in the following way:
• Federal eRulemaking Portal:
Submit written submissions in the following ways:
• Mail/Hand delivery/Courier (for paper, disk, or CD-ROM submissions):
Gerie A. Voss, Center for Tobacco Products, Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 1-877-287-1373,
NEPA and the CEQ Regulations require each Federal Agency to assess, as an integral part of its decisionmaking process, the environmental impacts of any proposed Federal action to ascertain the environmental consequences of that action on the quality of the human environment and to ensure that the interested and affected public is appropriately informed (42 U.S.C. 4332(2); 40 CFR 1506.6). The CEQ is responsible for the CEQ Regulations and for overseeing Federal efforts to comply with NEPA. Both FDA and CEQ have issued regulations governing Agency obligations and responsibilities under NEPA. The FDA regulations are included at 21 CFR part 25 and the CEQ regulations are at 40 CFR parts 1500 to 1508.
The CEQ regulations, which are binding on all Federal executive Agencies, establish procedures for implementing NEPA. Agencies may adopt procedures to supplement CEQ's regulations. In adopting NEPA-implementing procedures, Federal Agencies are directed by CEQ to reduce paperwork (40 CFR 1500.4 and 1500.2(b)) and to reduce delay (40 CFR 1500.5) by using several means, including the use of categorical exclusions. The CEQ regulations also state that Agencies shall continue to review their policies and procedures and, in consultation with CEQ, revise them as necessary to ensure full compliance with the purpose and provisions of NEPA (40 CFR 1507.3).
The FDA regulations state that for major Federal actions that may “significantly affect the quality of the human environment,” FDA must prepare an environmental impact statement (EIS) (21 CFR 25.22; see also 40 CFR 1501.4). The term “significantly,” as used in NEPA, requires considerations of both “context” (i.e., analyzed in several contexts) and “intensity” (i.e., severity of impact) (40 CFR 1508.27(a), (b)). If the action
Categorically excluded actions refer to a category of actions that have been found not to individually or cumulatively have a significant effect on the quality of the human environment and which do not ordinarily require the preparation of an EA or EIS (40 CFR 1508.4). However, as required under 21 CFR 25.21 and 40 CFR 1508.4, FDA will require at least an EA for any specific action that ordinarily would be excluded if extraordinary circumstances indicate that the specific proposed action may significantly affect the quality of the human environment.
If a submitter elects to request a categorical exclusion for a proposed action, a claim of categorical exclusion must be submitted in accordance with 21 CFR 25.15. Section 25.15 requires that the claim of categorical exclusion include: (1) A statement of compliance with the categorical exclusion criteria and (2) a statement that, to the submitter's knowledge, no extraordinary circumstances exist.
In November 2010, CEQ issued a final guidance on categorical exclusions including the process Agencies should use to establish new categorical exclusions. The guidance states that Agencies can establish new categorical exclusions to reduce paperwork and delay where the Agency has developed a record illustrating that the proposed categorical exclusion covers a category of action that, on the basis of past experience, does not normally have the potential to cause significant environmental effects (Ref. 1 at pp. 2 and 16). In addition, “[w]hen agencies acquire new responsibilities through legislation or administrative restructuring, they should propose new categorical exclusions after they, or other agencies, gain sufficient experience with the new activities to make a reasoned determination that any resulting environmental impacts are not significant” (Ref. 1 at p. 18).
FDA is proposing new categorical exclusions in accordance with NEPA, FDA, and CEQ regulations, and the CEQ November 2010 categorical exclusion guidance.
Since FDA's NEPA policies and supplemental procedures were published in 1985 and prior to Congress giving FDA authority to regulate tobacco products in 2009, the Agency has prepared EAs for many Agency-initiated actions and has reviewed hundreds of EAs for a variety of industry requests for Agency action on foods, drugs, and medical devices for human consumption and use, and foods and drugs given to animals. In accordance with § 25.40(a) (21 CFR 25.40(a)), these EAs have focused on the potential environmental effects related to the use and disposal from use of the FDA-regulated articles. Based on FDA's experience reviewing EAs for actions involving foods, drugs, and medical devices for human consumption and use, and food and drugs given to animals, and its evaluation and knowledge of other relevant environmental science, FDA has determined that certain classes of
FDA is proposing that the following classes of tobacco product-related actions qualify for categorical exclusions: (1) Issuance of an order finding a tobacco product substantially equivalent to a tobacco product commercially marketed in the United States as of February 15, 2007, under section 910(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 387j(a)(2)(B)); (2) issuance of an order finding a tobacco product not substantially equivalent under section 910(a) of the FD&C Act, an order under section 910(c) of the FD&C Act that a new tobacco product may not be introduced or delivered for introduction into interstate commerce, or an order under section 911 of the FD&C Act (21 U.S.C. 387k) that a modified risk tobacco product (MRTP) may not be introduced or delivered for introduction into interstate commerce (a modified risk tobacco product is any tobacco product that is sold or distributed for use to reduce harm or the risk of tobacco-related disease associated with commercially marketed tobacco products); (3) rescission (order withdrawing an order) or temporary suspension of an order authorizing the marketing of a new tobacco product under section 910 of the FD&C Act; (4) rescission of an order authorizing the marketing of a MRTP under section 911 of the FD&C Act; and (5) rescission of an order granting an exemption request under 21 CFR 1107.1.
For each proposed categorical exclusion, the environmental effect from the use and disposal from use of the tobacco product is negligible, if any, and would not individually or cumulatively have a significant effect on the quality of the human environment. Therefore, FDA believes that absent extraordinary circumstances, such actions should not require the preparation of any further analysis such as an EIS or an EA, which is intended to focus on “relevant environmental issues relating to the use and disposal from use of FDA-regulated articles” (§ 25.40(a)).
FDA also is proposing to amend several paragraphs of its existing environmental impact regulations in order to include tobacco products, where appropriate, in light of its new authority under the Tobacco Control Act.
FDA proposes that the Agency's issuance of an order finding a product to be substantially equivalent under section 910(a)(2)(B) of the FD&C Act qualifies for a categorical exclusion. Section 910(a)(2)(B) allows manufacturers of tobacco products that were first introduced or delivered for introduction into interstate commerce after February 15, 2007, and before March 22, 2011, and who submit a report by March 22, 2011, to continue to market the tobacco product unless the Agency issues an order that the tobacco product is not substantially equivalent and therefore must be removed from the market.
The estimated environmental effects that encompass all FDA-regulated tobacco products on the market, including products marketed after February 15, 2007, and before March 22, 2011, and grandfathered products (defined here as those products on the market as of February 15, 2007), are as follows:
a.
According to the 2011 Toxics Release Inventory (TRI) National Analysis, FDA estimates that 46,308 pounds of toxic chemicals (ammonia) were released to the land in the United States in 2011 without recycle and treatment; 3,702 pounds of toxic chemicals (including ammonia, nicotine and salts, and nitrate compounds) to the water; 719,451 pounds of toxic chemicals (including ammonia, chlorine, lead compounds, as well as nicotine and salts) to the air; 252,931 pounds of toxic chemicals (including ammonia, lead compounds, as well as nicotine and salts) recycled; and 1,563,193 pounds of toxic chemicals (including ammonia, nitrate compounds, as well as nicotine and salts) treated (Ref. 3). Compared to toxic waste released due to other manufacture activities estimated by the Environmental Protection Agency (EPA) using the same EPA database, the amount of waste released, recycled, and treated due to the manufacture of all tobacco products on the market is a fraction of the total toxic waste released from and managed in industrial facilities in the United States (as reported in 2011 TRI National Analysis Report).
b.
As reported in the U.S. Department of Agriculture's 2007 Tobacco Outlook, the United States consumed 2.9 pounds of cigarettes per capita and 0.38 pounds of snuff per capita (adults age 18 and over) (Ref. 4). From 1996 to 2006, tobacco product consumption dropped by about 24 percent, chewing tobacco use decreased 41 percent, snuff use increased 23 percent, and cigarette smoking decreased 29 percent (Ref. 4).
The existing environmental impact resulting from cigarette and roll-your-own use is tobacco smoke, which is one of the causes of poor indoor air quality (Ref. 5). Environmental Tobacco Smoke (secondhand smoke) is classified as a Class A carcinogen by EPA (Ref. 6). Studies on outdoor tobacco smoke have shown that during periods of active smoking, peak and average outdoor tobacco smoke levels near smokers are equivalent to indoor tobacco smoke concentrations levels. However, outdoor tobacco smoke levels approached zero at distances greater than approximately 2 meters from a single cigarette and dropped almost instantly after smoking activity ceased (Ref. 7). The existing environmental impact resulting from use of smokeless tobacco products is not as substantial as that for cigarettes or roll-your-own tobacco. FDA expects that any new tobacco products that receive marketing authorization through the available pathways would have less or no more environmental impact than that of tobacco products currently on the market.
c.
The existing environmental consequence resulting from disposal from use of cigarettes is from the discarded cigarette filters. Cigarette filters are primarily composed of cellulose acetate (Ref. 8) and may persist under normal environmental conditions for 18 months to 10 years (Ref. 9). As much as 766,571 metric tons of cigarette filters are discarded as litter worldwide each year (Ref. 10). Discarded cigarette filters are carried as runoff from streets to drains and rivers and, ultimately, to the ocean and its beaches and are found to be the most collected item in beach clean-ups and litter surveys (Ref. 10). Evidence has shown that cigarette butts are the most prevalent items discarded in urban areas (Ref. 11). Cigarette filters were found to be a point source for metal contamination litter, based on a study performed to assess the gradual release of multiple metals from the cigarette filter over the 34-day study period (Ref. 12). Scientists evaluating the ecotoxicity of discarded cigarette filters also have shown the potential existing environmental consequences that result from disposal of cigarette filters. Scientists found that the solution made as a result of soaking smoked cigarette butts (smoked filter + tobacco) in water was toxic to both marine and fresh water fish used in the study (Ref. 13).
The existing environmental consequence resulting from disposal from use of smokeless tobacco is the impact on landfills. About 126 million pounds of smokeless tobacco were consumed in the United States in 2006, which resulted in an approximately equal amount of spent smokeless tobacco in the country's landfills (Ref. 14).
The Agency estimates that there are currently about 5,000 brands and subbrands of tobacco products on the market that are subject to FDA's tobacco product authorities. The majority of them are on the market under section 910(a)(2)(B) of the FD&C Act. The effects of keeping tobacco products on the market are individually and cumulatively trivial compared to the existing environmental effects due to toxic waste released from and managed
FDA proposes that the Agency's issuance of any of the following orders qualifies for a categorical exclusion: (1) An order finding a tobacco product not substantially equivalent under section 910(a) of the FD&C Act; (2) an order finding that a new tobacco product may not be introduced or delivered for introduction into interstate commerce under section 910(c) of the FD&C Act; or (3) an order finding that a modified risk tobacco product may not be introduced or delivered for introduction into interstate commerce under section 911. No use or disposal from use exists as a result of these actions. Generally, the effect of a denial for a new product application is to prevent the entry or continued entry of a product into the market. With regard to products that entered the market after February 15, 2007, and before March 22, 2011, and for which a report was submitted by March 22, 2011, the effect of a finding of not substantially equivalent would be to remove that product from the market. Such a removal would not result in the production or distribution of any substances and, therefore, would not result in the introduction of any substance into the environment. Therefore, FDA believes these actions would not individually or cumulatively have an effect on the quality of the human environment and should qualify for categorical exclusions under proposed § 25.35(b).
FDA proposes that the Agency's rescission or temporary suspension of an order authorizing the marketing of a new tobacco product under section 910 of the FD&C Act qualifies for a categorical exclusion. This action stops or suspends the use of a new tobacco product under section 910. The Agency is proposing that these rescissions or temporary suspensions of authorization, whether requested by industry or initiated by the Agency, be categorically excluded because these types of actions would not result in the production or distribution of any substances and, therefore, would not result in the introduction of any substance into the environment. Furthermore, assuming that users of the product continued to use tobacco, they would be expected to continue use by changing their use to products already on the market. These products would have been part of the baseline market that existed prior to passage of the Tobacco Control Act or would have already been subject to a categorical exclusion or an EA. The discontinuation of use and disposal from use of the tobacco product would not individually or cumulatively have a significant impact on the quality of the human environment. Therefore, the action should qualify for a categorical exclusion under proposed § 25.35(c).
FDA proposes that the Agency's rescission of an order authorizing the marketing of an MRTP under section 911 of the FD&C Act qualifies for a categorical exclusion. This action would prohibit a tobacco product manufacturer from the use of advertisements, labels, or labeling indicating that the product somehow reduces harm or the risk of tobacco-related diseases associated with other tobacco products. The Agency is proposing that these rescissions of authorization, whether requested by industry or initiated by the Agency, be categorically excluded because these types of actions would not result in the production or distribution of any substances and, therefore, would not result in the introduction of any substance into the environment. Accordingly, FDA believes the action would not individually or cumulatively have a significant effect on the quality of the human environment and should qualify for a categorical exclusion under proposed § 25.35(d).
FDA proposes that the Agency's rescission of an order authorizing the marketing of a new tobacco product under section 905(j)(1)(A)(ii) of the FD&C Act (21 U.S.C. 387e(j)(1)(A)(ii)) and § 1107.1 qualifies for a categorical exclusion. Section 1107.1 allows the Agency to rescind an exemption from the requirements relating to the demonstration of substantial equivalence where the tobacco product is modified by adding or deleting a tobacco additive, or increasing or decreasing the quantity of an existing tobacco additive, if it finds that the exemption is not appropriate for the protection of public health (§ 1107.1(d)). The action stops the use of a new tobacco product under these provisions. The Agency is proposing that these rescissions of authorization, whether requested by industry or initiated by the Agency, be categorically excluded because these types of actions would not result in the production or distribution of any substances and, therefore, would not result in the introduction of any substance into the environment. The discontinuation of use and disposal from use of the tobacco product would not individually or cumulatively have a significant effect on the quality of the human environment. Therefore, the action should qualify for a categorical exclusion under proposed § 25.35(e).
The current regulations state that FDA will require further analysis, at least an EA, for any specific action that ordinarily would be categorically excluded if extraordinary circumstances indicate that the specific proposed action may significantly affect the quality of the human environment (§ 25.21). The regulations also state that examples of actions where extraordinary circumstances would preclude using a categorical exclusion include “[a]ctions for which available data establish that, at the expected level of exposure, there is the potential for serious harm to the environment” and “[a]ctions that adversely affect a species or the critical habitat of a [protected] species” (§ 25.21(a) and (b)).
These examples are applicable to tobacco products. If any tobacco product submission indicates that the action could result in the exposure of substances harmful to some biological mechanisms or systems in the environment or that the action may cause harm to a protected or endangered species, this would be considered an extraordinary circumstance that would warrant at least the preparation of an EA. FDA will continue to rely upon considerations of the intensity and context as set out at 40 CFR 1508.27 for determining whether an extraordinary circumstance will result in the potential for a proposed action to significantly affect the environment.
FDA believes that this proposal would benefit FDA, regulated industry, and the public as a whole. The proposal would substantially reduce the numbers of EAs required to be submitted by industry and reviewed by FDA and, consequently, reduce the number of FONSIs the Agency would be required to prepare for such applications. This would enable FDA to focus its
FDA proposes to amend Title 21 of the Code of Federal Regulations in order to:
• Clarify that part 25 applies to tobacco products subject to FDA's authority under Chapter IX of the FD&C Act (U.S.C. 387 through U.S.C. 387u); and
• Establish categorical exclusions specific to tobacco products.
Specifically, the proposed regulations would: (1) Amend § 25.15(a), (c), and (d) to indicate the availability of categorical exclusions under § 25.35; (2) amend § 25.20 by adding language to the introductory paragraph and adding paragraphs (p) and (q) to identify the tobacco-related actions that normally would require at least the preparation of an EA, unless the specific classes of actions are categorically excluded by the proposed exclusions in § 25.35; (3) revise the introductory paragraph of § 25.30 to reflect the new proposed categorical exclusions in § 25.35; (4) add § 25.35 to outline the categorical exclusions that apply solely to certain actions on tobacco product applications; (5) amend § 25.40(a) to indicate the availability of categorical exclusions under § 25.35; and (6) amend §§ 25.50(b) and 25.52(a), (b), and (c) to ensure that the public has an opportunity to participate in the development of environmental documents regarding tobacco products and that it receives notification of these documents.
The proposed rule would revise paragraphs (a), (c), and (d) of § 25.15 to add a reference to new proposed § 25.35, which would provide categorical exclusions for actions associated with various tobacco product submissions. Specifically, the addition to § 25.15(a) would explain that failure to submit an adequate EA with a tobacco application constitutes sufficient grounds for FDA to refuse to file or approve the application or petition, unless the action qualifies for a categorical exclusion under proposed § 25.35. The addition to § 25.15(c) would add the categorical exclusions under proposed § 25.35 to the classes of actions that qualify for categorical exclusions. Finally, the addition to § 25.15(d) would provide that a person submitting a tobacco application or petition identified in proposed § 25.35 would not be required to submit an EA if the person's application states that: (1) The action requested qualifies for a categorical exclusion and (2) no extraordinary circumstances exist that would prevent the use of the categorical exclusion. For the purposes of tobacco products, the term “application” includes any application or submission to FDA (including SE reports and exemption requests) related to the marketing of tobacco products.
FDA proposes to revise § 25.20 to change the introductory paragraph to indicate the existence of tobacco-specific categorical exclusions under proposed § 25.35. In addition, FDA proposes to add to § 25.20 paragraphs (p) and (q) to state that the following Agency actions on tobacco applications require the preparation of an EA unless it is an action in a specific class that is categorically excluded: (1) Issuance of an order finding a tobacco product to be substantially equivalent under the FD&C Act, unless categorically excluded in § 25.35 and (2) issuance of an order authorizing the marketing of a new tobacco product under section 910 or an MRTP under section 911 of the FD&C Act, unless categorically excluded in § 25.35.
These revisions are necessary to make clear that certain types of actions on tobacco-related submissions could result in the requirement to prepare an EA, but manufacturers may be exempted from this requirement for certain classes of actions if the action qualifies for the use of a categorical exclusion.
The proposed rule would revise the introductory sentence to reflect the fact that we are proposing to add categorical exclusions in § 25.35. Therefore, those actions listed in § 25.30 and in §§ 25.30 through 25.35 would not ordinarily require the preparation of an EA or EIS.
The proposed rule would add new § 25.35, which would provide additional categorical exclusions from the requirement to prepare at least an EA for certain actions on tobacco product submissions.
Specifically, proposed § 25.35(a) would provide for a categorical exclusion from preparing an EA for the issuance of an order finding that a product is substantially equivalent to a predicate product under section 910(a)(2)(B) of the FD&C Act.
Proposed § 25.35(b) would provide for a categorical exclusion regarding FDA's issuance of orders stating that: (1) A tobacco product is not substantially equivalent under section 910(a) of the FD&C Act; (2) a new tobacco product may not be introduced or delivered for introduction into interstate commerce under section 910(c) of the FD&C Act; or (3) a modified risk tobacco product may not be introduced or delivered into interstate commerce under section 911 of the FD&C Act.
Proposed § 25.35(c) would allow for a categorical exclusion where FDA rescinds or temporarily suspends an order authorizing the marketing of a new tobacco product under section 910 of the FD&C Act. Proposed § 25.35(d) would provide a categorical exclusion where FDA rescinds an order authorizing the marketing of a modified risk tobacco product under section 911 of the FD&C Act. Similarly, proposed § 25.35(e) would provide a categorical exclusion where FDA rescinds an order authorizing the marketing of a new tobacco product under section 905(j)(1)(A)(ii) of the FD&C Act and under § 1107.1. The term “new tobacco product” is defined in section 910(a)(1)(A) and (a)(1)(B) of the FD&C Act.
The proposed rule would amend § 25.40(a), which currently indicates that an EA shall be prepared for each action not categorically excluded in § 25.30, 25.31, 25.32, 25.33, or 25.34.
The proposed rule would amend § 25.50(b), which relates to information protected from disclosure by law. By adding tobacco products to this regulation, FDA seeks to make clear that any environmental impact documentation regarding tobacco product applications (including SE reports and requests for exemptions from the requirements to demonstrate substantial equivalence) would not be released prior to issuance of an FDA order, unless the existence of such application has been made publicly available.
Section 25.52 explains the process and requirements for public participation and notification regarding the preparation of an EIS for FDA-regulated products. Similar to other FDA-regulated products, FDA may determine that forthcoming actions involving tobacco products should require the preparation of an EIS. Therefore, the proposed rule would add “tobacco products” to paragraphs (a), (b), and (c) of § 25.52, where the regulation refers to actions on other FDA-regulated products that may require preparation of an EIS.
Specifically, the proposed rule would amend § 25.52(a) to explain that if an EIS is necessary for an action involving tobacco products, it would become available for review by the public only at the time of the issuance of an order authorizing commercial marketing of the product in the United States. In addition, the proposed rule would amend § 25.52(b) to indicate that comments on the EIS may be submitted after the issuance of an order authorizing commercial marketing of the tobacco product in the United States and that these comments can form the basis for beginning the process of rescinding the marketing authorization. The proposed rule also would amend § 25.52(c) to state that where the existence of an application for a tobacco product has been disclosed before the Agency action, FDA will involve the public in preparing an EA or an EIS while continuing to adhere to the Agency's disclosure regulations with regard to confidential commercial information that has not been disclosed.
Further, the proposed rule would amend § 25.52(a) and (b) to add references to “market authorizations.” As currently written, § 25.52(a) and (b) do not identify all the types of actions that could be taken with regard to tobacco products, including market authorizations. Not only can FDA engage in review and assessment of investigations with respect to tobacco products, but the Agency also may provide market authorizations in response to applications regarding tobacco products (see, e.g., section 911(g)(1) of the FD&C Act).
FDA tentatively concludes that this proposed rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule, if finalized, would not contain policies that would have substantial direct effects 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. Accordingly, the Agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement is not required.
The proposed amendment of the FDA NEPA Regulations (21 CFR part 25) concerns NEPA documentation for certain actions on tobacco product submission. CEQ does not direct Agencies to prepare a NEPA analysis or document before establishing Agency procedures that supplement the CEQ regulations for implementing NEPA. Agencies are required to adopt NEPA procedures that establish specific criteria for, and identification of, three classes of actions: Those that require preparation of an EIS; those that require preparation of an EA; and those that are categorically excluded from further NEPA review (40 CFR 1507.3(b)). Categorical exclusions are one part of those Agency procedures, and therefore establishing categorical exclusions does not require preparation of a NEPA analysis or document. Agency NEPA procedures, such as the FDA NEPA regulations assist FDA in the fulfillment of Agency responsibilities under NEPA, but are not FDA's final determination of what level of NEPA analysis is required for a particular proposed action on a tobacco product submission. The requirements for establishing Agency NEPA procedures are set forth at 40 CFR 1505.1 and 1507.3. Furthermore, the Agency has also determined under 21 CFR 25.30(h) that this rulemaking does not individually or cumulatively have a significant effect on the quality of the human environment.
The analysis of economic impacts is available as Reference 15 in Docket No. FDA-2013-N-1282 and at
Interested persons may submit either electronic comments regarding this document to
The following references have been placed on display in the Division of Dockets Management (see
1. Council on Environmental Quality, “Final Guidance for Federal Departments and Agencies on Establishing, Applying, and Revising Categorical Exclusions Under the National Environmental Policy Act,” 76 FR 3843, January 21, 2011.
2. Statement of RADM David Ashley, Ph.D. and Hoshing Chang, Ph.D., “Impact of Tobacco Products on the Environment.”
3. 2011 Toxic Release Inventory (TRI) National Analysis. Available at
4. U.S. Department of Agriculture. “Tobacco Outlook Report,” Economic Research Service, 2007.
5. Poor Air Quality, available at
6. U.S. Environmental Protection Agency, “Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders,” EPA/600/6-90/006F, December 1992.
7. Klepeis, NE., W.R. Ott, and P. Switzer, “Real-Time Measurement of Outdoor Tobacco Smoke Particles,”
8. U.S. Department of Health and Human Services, “Reducing the Health Consequences of Smoking: 25 Years of Progress.” A Report of the Surgeon General, 1989. Rockville, MD: Public Health Service, Centers for Disease Control, Office on Smoking and Health, 1989. (DHHS Publication No (CDC) 89-8411.)
9. Ach, A. Biodegradable Plastics Based on Cellulose Acetate.
10. Smith, E.A. and T.E. Novotny, “Whose Butt Is It? Tobacco Industry Research About Smokers and Cigarette Butt Waste.”
11. Department for the Environment, Food and Rural Affairs of the U.K. “Preventing Cigarette Litter in England: Guidelines for Local Authorities,” DEFRA 2007.
12. Moerman, J.W. and G.E. Potts, “Analysis of Metals Leached From Smoked Cigarette Litter.”
13. Slaughter, E.; R.M. Gersberg, K. Watanabe, et al., “Toxicity of Cigarette Butts, and Their Chemical Components, to Marine and Freshwater Fish,”
14. United States Census Bureau, Vintage 2006: National Tables, available at
15. Preliminary Regulatory Impact Analysis.
Environmental impact statements, Foreign relations, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act, and authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR Chapter I be amended as follows:
21 U.S.C. 321-393; 42 U.S.C. 262, 263b-264; 42 U.S.C. 4321, 4332; 40 CFR parts 1500-1508; E.O. 11514, 35 FR 4247, 3 CFR, 1971 Comp., p. 531-533 as amended by E.O. 11991, 42 FR 26967, 3 CFR, 1978 Comp., p. 123-124 and E.O. 12114, 44 FR 1957, 3 CFR, 1980 Comp., p. 356-360.
Any proposed action of a type specified in this section ordinarily requires at least the preparation of an EA, unless it is an action in a specific class that qualifies for exclusion under §§ 25.30, 25.31, 25.32, 25.33, 25.34, or 25.35:
(p) Issuance of an order finding a tobacco product substantially equivalent under Federal Food, Drug, and Cosmetic Act, unless categorically excluded under § 25.35.
(q) Issuance of an order authorizing marketing of a new tobacco product under section 910 of the Federal Food, Drug, and Cosmetic Act or an order authorizing marketing of a modified risk tobacco product under section 911 of the Federal Food, Drug, and Cosmetic Act, unless categorically excluded under § 25.35.
The classes of actions listed in this section are categorically excluded and, therefore, ordinarily do not require the preparation of an EA or an EIS:
(a) Issuance of an order finding a tobacco product substantially equivalent under section 910(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act;
(b) Issuance of an order finding a tobacco product not substantially equivalent under section 910(a) of the Federal Food, Drug, and Cosmetic Act, issuance of an order under section 910(c) of the Federal Food, Drug, and Cosmetic Act that a new tobacco product may not be introduced or delivered for introduction into interstate commerce, or issuance of an order under section 911 of the Federal Food, Drug, and Cosmetic Act that a modified risk tobacco product may not be introduced or delivered for introduction into interstate commerce;
(c) Rescission or temporary suspension of an order authorizing the marketing of a new tobacco product under section 910 of the Federal Food, Drug, and Cosmetic Act;
(d) Rescission of an order authorizing the marketing of a modified risk tobacco product under section 911 of the Federal Food, Drug, and Cosmetic Act; and
(e) Rescission of an order granting an exemption request under § 1107.1 of this chapter.
(b) Many FDA actions involving investigations, review, and approval or market authorization of applications, and premarket notifications for human drugs, animal drugs, biologic products, devices, and tobacco products are protected from disclosure under the Trade Secret Act, 18 U.S.C. 1905, and section 301(j) of the Federal Food, Drug, and Cosmetic Act. * * * Even the existence of applications for human drugs, animal drugs, biologic products, devices, and tobacco products is protected from disclosure under these regulations. Therefore, unless the existence of applications for human drugs, animal drugs, biologic products, tobacco products, or premarket notification for devices has been made publicly available, the release of the environmental document before approval or authorization of human drugs, animal drugs, biologic products, devices and tobacco products is inconsistent with statutory requirements imposed on FDA. Appropriate environmental documents, comments, and responses will be included in the administrative record to the extent allowed by applicable laws.
(a) If FDA determines that an EIS is necessary for an action involving investigations, approvals, or market authorizations for drugs, animal drugs, biologic products, devices, or tobacco products, an EIS will be prepared but
(b) Comments on the EIS may be submitted after the approval or market authorization of the drug, animal drug, biologic product, device, or tobacco product. Those comments can form the basis for the Agency to consider beginning an action to withdraw the approval or market authorization of applications for a drug, animal drug, biologic product, or tobacco product, or to withdraw premarket notifications or premarket approval applications for devices.
(c) In those cases where the existence of applications and premarket notifications for drugs, animal drugs, biologic products, devices, or tobacco products has already been disclosed before the Agency approves the action, the Agency will ensure appropriate public involvement consistent with 40 CFR 1506.6 and part 1503 in preparing and implementing the NEPA procedures related to preparing EIS's while following its own disclosure requirements including those listed in part 20 and §§ 312.130(b), 314.430(d), 514.11(d), 514.12(b), 601.51(d), 807.95(e), 812.38(b), and 814.9(d) of this chapter.
United States Patent and Trademark Office, Commerce.
Notice of proposed rulemaking.
The United States Patent and Trademark Office (“Office”) proposes to amend the Trademark Rules of Practice and the Rules of Practice in Filings Pursuant to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks to benefit the public by providing greater clarity as to certain requirements relating to representation before the Office, applications for registration, examination procedures, amendment of applications, publication and post publication procedures, appeals, petitions, post registration practice, correspondence in trademark cases, classification of goods and services, and procedures under the Madrid Protocol. For the most part, the proposed rule changes are intended to codify existing practice.
Comments must be received by April 23, 2014 to ensure consideration.
The Office prefers that comments be submitted via electronic mail message to
Cynthia C. Lynch, Office of the Deputy Commissioner for Trademark Examination Policy, by email at
References below to “the Act,” “the Trademark Act,” or “the statute” refer to the Trademark Act of 1946, 15 U.S.C. 1051
The Office proposes to revise § 2.17(d)(1) to remove the reference to the number of powers of attorney that can be filed via the Trademark Electronic Application System (“TEAS”) for existing applications or registrations that have the identical owner and attorney. The TEAS Revocation of Attorney/Domestic Representative and/or Appointment of Attorney/Domestic Representative form currently indicates that up to 300 applications or registrations may be amended per request. The proposed revision is intended to remove outdated information, and will allow more flexibility for future enhancements to TEAS.
The Office proposes to revise § 2.19(b) to require compliance with § 11.116, rather than § 10.40, as part 10 of this chapter has been removed and reserved (78 FR 20180 (April 3, 2013)) and § 11.116 now sets out the requirements for terminating representation.
The Office proposes to revise § 2.22(a)(19) to indicate that if a TEAS Plus applicant owns one or more registrations for the same mark shown in the application, and the last listed owner of the prior registration(s) differs from the owner of the application, the application must include a claim of ownership for the prior registration(s) in order to be entitled to the reduced filing fee under § 2.6(a)(1)(iii). This limits the
The Office proposes to revise § 2.36 to indicate that an applicant is only required to claim ownership of prior registrations for the same or similar marks if the owner listed in the application differs from the owner last listed in the Office's database for such prior registrations. This is consistent with existing practice.
The Office proposes to revise § 2.38(b) to remove the requirement that an application indicate that, if the applied-for mark is not being used by the applicant but is being used by one or more related companies whose use inures to the benefit of the applicant under section 5 of the Act, such fact must be indicated in the application.
The Office further proposes to redesignate § 2.38(c) as § 2.38(b), as the requirement in current § 2.38(b) is being removed.
The Office proposes to add new § 2.62(c) to specify that responses to Office actions must be filed through TEAS, transmitted by facsimile, mailed, or delivered by hand, and that responses sent by email will not be accorded a date of receipt. This is consistent with existing practice.
The Office proposes to amend the title of § 2.63 from “Reexamination” to “Action after response,” as revised § 2.63 incorporates a discussion of reexamination, the filing of petitions and appeals, and abandonments.
The Office proposes to revise § 2.63(a) to clarify that after submission of a response by the applicant, the examining attorney will review all statutory refusal(s) and/or requirement(s) in light of the response. This is consistent with TMEP section 713.
The Office proposes to add § 2.63(a)(1) to clarify that the applicant may respond to a non-final action that maintains any requirement(s) or substantive refusal(s) by filing a timely response to the examiner's action. This is consistent with TMEP section 713.
The Office proposes to add § 2.63(a)(2) to clarify that the applicant may respond to a non-final action that maintains any requirement(s) by filing a petition to the Director under § 2.146 if the subject matter of the requirement(s) is appropriate for petition, that if the petition is denied, the applicant will have six months from the date of the Office action which repeated the requirement(s), or thirty days from the date of the decision on the petition, whichever is later, to comply with the repeated requirement(s), and that a requirement which is the subject of a petition to the Director subsequently may not be the subject of an appeal to the Trademark Trial and Appeal Board (“TTAB”). This is consistent with TMEP sections 713 and 1702.
The Office proposes to revise § 2.63(b) to clarify that the examining attorney may make final a refusal or a requirement upon review of a response or request for reconsideration. This is consistent with current § 2.64(a) and TMEP sections 713 and 714.03.
The Office proposes to add § 2.63(b)(1) to clarify that the applicant may respond to a final action that maintains any substantive refusal(s) under sections 2, 3, 4, 5, 6, or 23 of the Act by filing an appeal to the TTAB under §§ 2.141 and 2.142. This is consistent with TMEP section 1501.01.
The Office proposes to add § 2.63(b)(2) to clarify that the applicant may respond to a final action that withdraws all substantive refusals but maintains any requirement(s) either by filing an appeal to the TTAB under §§ 2.141 and 2.142, or by filing a petition to the Director under § 2.146, if the subject matter of the requirement(s) is procedural, and therefore appropriate for petition. This is consistent with current § 2.63(b) and TMEP sections 1501.01 and 1704.
The Office proposes to add § 2.63(b)(3) to clarify that the applicant may file a request for reconsideration of the final action prior to the expiration of the time for filing an appeal to the TTAB or a petition to the Director, that the request must be signed by a party authorized under § 2.193(e)(2), and that the request does not stay or extend the time for filing an appeal or petition. This is consistent with current § 2.64(b) and TMEP section 715.03.
The Office proposes to add § 2.63(b)(4) to clarify that the filing of a request for reconsideration that does not result in the withdrawal of all refusals and requirements, without the filing of a timely appeal or petition, will result in abandonment of the application for incomplete response. This is consistent with section 12(b) of the Act and current § 2.65(a).
The Office proposes to add § 2.63(c) to clarify both that if a petition to the Director under § 2.146 is denied, the applicant will have until six months from the date of issuance of the Office action that repeated the requirement(s), or made it final, or thirty days from the date of the decision on the petition, whichever date is later, to comply with the requirement(s), and that a requirement that is the subject of a petition decided by the Director subsequently may not be the subject of an appeal to the TTAB. This is consistent with current § 2.63(b) and TMEP section 1702.
The Office proposes to add § 2.63(d) to clarify that if an amendment to allege use is filed during the six-month response period after issuance of a final action, the examining attorney will examine the amendment, but the filing of the amendment does not stay or extend the time for filing an appeal to the TTAB or a petition to the Director. This is consistent with current § 2.64(c)(1) and TMEP sections 711 and 1104.
The Office proposes to remove and reserve § 2.64 and incorporate updated final action procedures into proposed revised § 2.63.
The Office proposes to revise § 2.65(a) both to clarify that an application will be deemed abandoned if an applicant fails to respond, or respond completely, to an Office action within six months of the issuance date, but a timely petition to the Director or notice of appeal to the TTAB, if appropriate, is considered to be a response that avoids abandonment, and to revise the reference to § 2.63(b) so as to reference § 2.63(a) and (b). The clarification is consistent with TMEP section 718.03 and the revision to the reference accounts for the proposed amendment to § 2.63 which sets out the conditions for a petition under § 2.146 in § 2.63(a) and (b) instead of only § 2.63(b).
The Office proposes to add § 2.65(a)(1) to clarify that if an applicant fails to timely respond to an Office action, but all refusals or requirements are expressly limited to certain goods or services, the application will be abandoned only as to those goods or services. This is consistent with current § 2.65(a) and TMEP section 718.02(a).
The Office proposes to add § 2.65(a)(2) to clarify that an applicant may, in certain situations, be granted thirty days, or to the end of the response period set forth in the action, whichever is longer, to provide information omitted from a response before the examining attorney considers the issue of abandonment. This is consistent with current § 2.65(b) and TMEP section 718.03(b).
The Office proposes to revise § 2.65(b) to clarify that an application will be abandoned if an applicant expressly abandons the application pursuant to § 2.68. This is consistent with TMEP section 718.01.
The Office proposes to revise § 2.65(c) to clarify that an application under section 1(b) of the Act will be abandoned if the applicant fails to file a timely statement of use under § 2.88 or a request for an extension of time for filing a statement of use under § 2.89. This is consistent with section 1(d)(4) of the Act and TMEP sections 1108.01 and 1109.04.
The Office proposes to revise § 2.68(a) to indicate that a request for abandonment or withdrawal may not subsequently be withdrawn. This is consistent with TMEP section 718.01, and is intended to provide applicants, registration owners, and the public assurance of the accuracy of the status of applications or registrations after filings are received by the Office.
The Office proposes to revise § 2.68(b) for clarity by moving the “in any proceeding before the Office” clause to the end of the sentence.
The Office proposes to revise § 2.77(b) to indicate that amendments not listed in § 2.77(a) may be entered in the application in the time period between issuance of the notice of allowance and submission of a statement of use only with the express permission of the Director, after consideration on petition under § 2.146. This is consistent with TMEP sections 1107 and 1505.01(d), which currently require a waiver of § 2.77 on petition.
The Office proposes to revise § 2.81(b) to remove the list of items that will be included on the notice of allowance. The proposed change allows greater flexibility in the format of notices of allowance, to allow for changes that may occur in conjunction with the Office's “Trademarks Next Generation” information technology initiative. As a matter of practice, at this time, the Office plans to continue to maintain the current format of the notice of allowance.
The Office proposes to revise § 2.84(b) to clarify that an application that is not the subject of an inter partes proceeding before the TTAB may be amended after the mark has been published for opposition, but before the certificate of registration has been issued under section 1(a), 44, or 66(a) of the Act, or before the notice of allowance has been issued in an application under section 1(b) of the Act, if the amendment meets the requirements of §§ 2.71, 2.72, and 2.74. This is consistent with existing practice.
The Office proposes to revise § 2.142(f)(3) and (f)(6) to remove the references to § 2.64, as the Office is proposing to remove and reserve § 2.64, with the sections of § 2.64 relevant to § 2.142(f)(3) and (f)(6) incorporated into proposed revised § 2.63.
The Office proposes to revise § 2.145(a) to add registrants who have filed an affidavit or declaration under section 71 of the Act and are dissatisfied with a decision of the Director to the list of parties eligible to appeal to the U.S. Court of Appeals for the Federal Circuit. This is consistent with TMEP section 1613.18(d).
The Office proposes to revise § 2.146(a)(1) and (g) to replace references to § 2.63(b) with references to § 2.63(a) and (b), as the Office is proposing to list conditions for a petition under § 2.146 in § 2.63(a) and (b) instead of only § 2.63(b).
The Office proposes to revise § 2.172 to clarify that a surrender for cancellation may not subsequently be withdrawn. This is consistent with existing practice.
The Office proposes to revise § 2.185(a) to indicate that deficiencies in renewal applications may be corrected after notification from the Office. This is consistent with existing practice.
The Office proposes to amend § 2.198(a)(1) by adding § 2.198(a)(1)(viii) to include affidavits under section 71 of the Act in the list of documents excluded from the Office's Express Mail procedure. This is consistent with the handling of corresponding affidavits under section 8 of the Act. In connection with this addition, the Office proposes to revise § 2.198(a)(1)(vi) and § 2.198(a)(1)(vii) for clarity.
The Office proposes to revise § 6.1(5) to add the wording “or veterinary” to the entry “dietetic food and substances adapted for medical use” in the listing of goods for International Class 5. This is consistent with the current heading for the international class as established by the Committee of Experts of the Nice Union and set forth in the
The Office proposes to revise § 7.11(a)(3)(ii) to clarify that if the mark in the basic application or registration is depicted in black-and-white and includes a color claim, an international application filed on paper must include both black-and-white and color reproductions of the mark, and an international application filed electronically must include a color reproduction of the mark. This is consistent with existing practice as the WIPO paper application form requires the applicant to submit both black-and-white and color reproductions of the mark, while the Office's electronic application form requires only that the applicant submit a color reproduction of the mark.
The Office proposes to revise § 7.23(a)(5) to require that a request to record an assignment of an international registration submitted through the Office include a statement that, after making a good faith effort, the assignee could not obtain the assignor's signature for the request to record the assignment and be signed and verified or supported by declaration under § 2.20. This revision is intended to ensure that assignees make a good-faith effort to obtain the assignor's signature before invoking this rule and requesting the Office to forward the assignment document to the International Bureau (“IB”) of WIPO.
The Office proposes to revise § 7.23(a)(6) to indicate that a request to record an assignment of an international registration submitted through the Office must include an indication that the assignment applies to the designation to the United States or an international registration that was originally based on a United States application or registration. This revision is intended to ensure that an assignee of an international registration based on a U.S. registration or application is treated the same as an assignee of a designation to the U.S. Current practice is that the owner of the international registration based on a U.S. registration or application must file a petition to waive this subsection of the rule.
The Office proposes to revise § 7.24(b)(5)(ii) to require that a request, submitted through the Office, to record a restriction, or the release of a restriction, that is the result of an agreement between the holder of the international registration and the party restricting the holder's right of disposal must include a statement indicating that, after making a good faith effort, the signature of the holder of the international registration could not be
The Office proposes to revise § 7.24(b)(7) to indicate that a request to record a restriction, or the release of a restriction, must include an indication that the restriction, or the release of the restriction, of the holder's right of disposal of the international registration applies to the designation to the United States or an international registration that was originally based on a United States application or registration. This revision is intended to ensure that an assignee of an international registration based on a U.S. registration or application is treated the same as an assignee of a designation to the U.S. Current practice is that the owner of the international registration based on a U.S. registration or application must file a petition to waive this subsection of the rule.
The Office proposes to revise § 7.25(a) to add §§ 2.21, 2.76, 2.88, and 2.89 to the list of sections in part 2 not applicable to an extension of protection. This is consistent with existing practice as the section relates to procedures only applicable to applications under sections 1 or 44 of the Act.
The Office proposes to amend § 7.31 by revising the introductory text and § 7.31(a)(3) to require that a request to transform an extension of protection to the United States into a U.S. application specify the goods and/or services to be transformed. This revision is intended to ensure that the Office transforms an accurate listing of goods and/or services.
The Office further proposes to redesignate current § 7.31(a)(3) as § 7.31(a)(4) and current § 7.31(a)(4) as new § 7.31(a)(5) because current § 7.31(a)(3) is being revised to require that a request to transform an extension of protection to the United States into a U.S. application specify the goods and/or services to be transformed.
Accordingly, prior notice and opportunity for public comment for the proposed rule changes are not required pursuant to 5 U.S.C. 553(b) or (c), or any other law.
In addition, for the reasons set forth herein, the Deputy General Counsel for General Law of the United States Patent and Trademark Office has certified to the Chief Counsel for Advocacy of the Small Business Administration that rule changes proposed in this notice will not have a significant economic impact on a substantial number of small entities.
The Office is soliciting comments 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, including the validity of the methodology and assumptions used; (3) enhance the quality, utility, and clarity of the information to be collected; and (4) minimize the burden of 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,
Interested persons are requested to send comments regarding this information collection by April 23, 2014, to: (1) The Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10202, 725 17th Street NW., Washington, DC 20503, Attention: Nicholas A. Fraser, the Desk Officer for the United States Patent and Trademark Office; and (2) by mail to Commissioner for Trademarks, P.O. Box 1451, Alexandria, VA 22313-1451, attention Cynthia C. Lynch; by hand delivery to the Trademark Assistance Center, Concourse Level, James Madison Building—East Wing, 600 Dulany Street, Alexandria, Virginia, attention Cynthia C. Lynch; or by electronic mail message via the Federal eRulemaking Portal. All comments submitted directly to the Office or provided on the Federal eRulemaking Portal should include the docket number (PTO-T-2013-0026).
Notwithstanding any other provision of law, no person is required to respond to, nor shall a person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.
Administrative practice and procedure, Trademarks.
Administrative practice and procedure, Classification, Trademarks.
Administrative practice and procedure, International registration, Trademarks.
For the reasons given in the preamble and under the authority contained in 15 U.S.C. 1123 and 35 U.S.C. 2, as amended, the Office proposes to amend parts 2, 6, and 7 of title 37 as follows:
15 U.S.C. 1123, 35 U.S.C. 2, unless otherwise noted.
(d) * * *
(1) The owner of an application or registration may appoint a practitioner(s) qualified to practice under § 11.14 of this chapter to represent the owner for all existing applications or registrations that have the identical owner name and attorney through TEAS.
(b)
(a) * * *
(19) If the applicant owns one or more registrations for the same mark, and the owner(s) last listed in Office records of the prior registration(s) for the same mark differs from the owner(s) listed in the application, a claim of ownership of the registration(s) identified by the registration number(s), pursuant to § 2.36; and
Prior registrations of the same or similar marks owned by the applicant should be identified in the application if the owner(s) last listed in Office records of the prior registrations differs from the owner(s) listed in the application.
(b) The Office may require such details concerning the nature of the relationship and such proofs as may be necessary and appropriate for the purpose of showing that the use by related companies inures to the benefit of the applicant and does not affect the validity of the mark.
(c)
(a)
(1) If, after review of the applicant's response, the examining attorney issues
(2) If, after review of the applicant's response, the examining attorney issues a non-final action that contains no substantive refusals to register, but maintains any requirement(s), the applicant may respond to such repeated requirement(s) by filing a timely petition to the Director for relief from the repeated requirement(s) if the subject matter of the repeated requirement(s) is appropriate for petition to the Director (see § 2.146(b)). If the petition is denied, the applicant shall have until six months from the date of the Office action which repeated the requirement(s) or thirty days from the date of the decision on the petition, whichever date is later, to comply with the repeated requirement(s). A requirement which is the subject of a petition decided by the Director subsequently may not be the subject of an appeal to the Trademark Trial and Appeal Board.
(b)
(1) If the examining attorney issues a final action that maintains any substantive refusal(s) to register, the applicant may respond by filing a timely appeal to the Trademark Trial and Appeal Board under §§ 2.141 and 2.142.
(2) If the examining attorney issues a final action that contains no substantive refusals to register, but maintains any requirement(s), the applicant may respond by filing: (i) A timely appeal of the requirement(s) to the Trademark Trial and Appeal Board under §§ 2.141 and 2.142; or (ii) a timely petition to the Director under § 2.146 to review the requirement(s), if the subject matter of the requirement(s) is procedural, and therefore appropriate for petition.
(3) Prior to the expiration of the time for filing an appeal or a petition, the applicant may file a request for reconsideration of the final action. The request must be signed by the applicant, someone with legal authority to bind the applicant, or a practitioner qualified to practice under § 11.14, in accordance with the requirements of § 2.193(e)(2). Filing a request for reconsideration does not stay or extend the time for filing an appeal or petition.
(4) Filing a request for reconsideration that does not result in the withdrawal of all refusals and requirements, without the filing of a timely appeal or petition, will result in abandonment of the application for incomplete response, pursuant to § 2.65(a).
(c) If a petition to the Director under § 2.146 is denied, the applicant will have until six months from the date of issuance of the Office action that repeated the requirement(s), or made it final, or thirty days from the date of the decision on the petition, whichever date is later, to comply with the requirement(s). A requirement that is the subject of a petition decided by the Director subsequently may not be the subject of an appeal to the Trademark Trial and Appeal Board.
(d) If an applicant in an application under section 1(b) of the Act files an amendment to allege use under § 2.76 during the six-month response period after issuance of a final action, the examining attorney will examine the amendment. The filing of such an amendment does not stay or extend the time for filing an appeal or petition.
(a) An application will be abandoned if an applicant fails to respond to an Office action, or to respond completely, within six months from the date of issuance. A timely petition to the Director pursuant to §§ 2.63(a) and (b) and 2.146 or notice of appeal to the Trademark Trial and Appeal Board pursuant to § 2.142, if appropriate, is a response that avoids abandonment.
(1) If all refusals and/or requirements are expressly limited to certain goods and/or services, the application will be abandoned only as to those goods and/or services.
(2) When a timely response by the applicant is a bona fide attempt to advance the examination of the application and is a substantially complete response to the examining attorney's action, but consideration of some matter or compliance with a requirement has been omitted, the applicant may be granted thirty days, or to the end of the response period set forth in the action to which the substantially complete response was submitted, whichever is longer, to explain and supply the omission before considering the question of abandonment.
(b) An application will be abandoned if an applicant expressly abandons the application pursuant to § 2.68.
(c) An application will be abandoned if an applicant in an application under section 1(b) of the Act fails to timely file either a statement of use under § 2.88 or a request for an extension of time for filing a statement of use under § 2.89.
(a)
(b)
(b) Other amendments may be entered during this period only with the express permission of the Director, after consideration on petition under § 2.146. If the Director determines that the amendment requires review by the examining attorney, the petition will be denied and the amendment may be resubmitted with the statement of use in order for the applicant to preserve its right for review.
(b) In an application under section 1(b) of the Act for which no amendment to allege use under § 2.76 has been submitted and accepted, if no opposition is filed within the time permitted or all oppositions filed are dismissed, and if no interference is declared, a notice of allowance will issue. Thereafter, the applicant must submit a statement of use as provided in § 2.88.
(b) After publication, but before the certificate of registration is issued in an application under section 1(a), 44, or 66(a) of the Act, or before the notice of allowance is issued in an application under section 1(b) of the Act, an application that is not the subject of an inter partes proceeding before the
(f) * * *
(3) If the further examination does result in an additional ground for refusal of registration, the examiner and appellant shall proceed as provided by §§ 2.61, 2.62, and 2.63. If the ground for refusal is made final, the examiner shall return the application to the Board, which shall thereupon issue an order allowing the appellant sixty days from the date of the order to file a supplemental brief limited to the additional ground for the refusal of registration. If the supplemental brief is not filed by the appellant within the time allowed, the appeal may be dismissed.
(6) If, during an appeal from a refusal of registration, it appears to the examiner that an issue not involved in the appeal may render the mark of the appellant unregistrable, the examiner may, by written request, ask the Board to suspend the appeal and to remand the application to the examiner for further examination. If the request is granted, the examiner and appellant shall proceed as provided by §§ 2.61, 2.62, and 2.63. After the additional ground for refusal of registration has been withdrawn or made final, the examiner shall return the application to the Board, which shall resume proceedings in the appeal and take further appropriate action with respect thereto.
(a)
(a) * * *
(1) From any repeated or final formal requirement of the examiner in the ex parte prosecution of an application if permitted by § 2.63(a) and (b);
(g) The mere filing of a petition to the Director will not act as a stay in any appeal or inter partes proceeding that is pending before the Trademark Trial and Appeal Board nor stay the period for replying to an Office action in an application except when a stay is specifically requested and is granted or when §§ 2.63(a) and (b) and 2.65 are applicable to an ex parte application.
Upon application by the owner, the Director may permit any registration to be surrendered for cancellation. The application for surrender must be signed by the owner of the registration, someone with legal authority to bind the owner (
(a) If the renewal application is filed within the time periods set forth in section 9(a) of the Act, deficiencies may be corrected after notification from the Office, as follows:
(a)(1) * * *
(vi) Renewal requests under section 9 of the Act;
(vii) Requests to change or correct addresses; and
(viii) Affidavits of use under section 71 of the Act.
15 U.S.C. 1123, 35 U.S.C. 2, unless otherwise noted.
5. Pharmaceutical and veterinary preparations; sanitary preparations for medical purposes; dietetic food and substances adapted for medical or veterinary use, food for babies; dietary supplements for humans and animals; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides.
15 U.S.C. 1123, 35 U.S.C. 2, unless otherwise noted.
(a) * * *
(3) * * *
(ii) If the mark in the basic application or registration is depicted in black-and-white and includes a color claim, an international application filed on paper must include both a black-and-white reproduction of the mark and a color reproduction of the mark, and an international application filed
(a) * * *
(5) A statement that, after a good faith effort, the assignee could not obtain the assignor's signature for the request to record the assignment, signed and verified (sworn to) or supported by a declaration under § 2.20 of this chapter;
(6) An indication that the assignment applies to the designation to the United States or an international registration that is based on a U.S. application or registration;
(b) * * *
(5) * * *
(ii) Where the restriction is the result of an agreement between the holder of the international registration and the party restricting the holder's right of disposal, a statement that after a good faith effort, the signature of the holder of the international registration could not be obtained for the request to record the restriction, or release of the restriction, signed and verified (sworn to) or supported by a declaration under § 2.20 of this chapter;
(7) An indication that the restriction, or the release of the restriction, of the holder's right of disposal of the international registration applies to the designation to the United States or an international registration that is based on a U.S. application or registration; and
(a) Except for §§ 2.21-2.23, 2.76, 2.88, 2.89, 2.130-2.131, 2.160-2.166, 2.168, 2.173, 2.175, 2.181-2.186 and 2.197, all sections in part 2 and all sections in part 11 of this chapter shall apply to an extension of protection of an international registration to the United States, including sections related to proceedings before the Trademark Trial and Appeal Board, unless otherwise stated.
If the International Bureau cancels an international registration in whole or in part, under Article 6(4) of the Madrid Protocol, the holder of that international registration may file a request to transform the goods and/or services to which the cancellation applies in the corresponding pending or registered extension of protection to the United States into an application under section 1 or 44 of the Act.
(a) * * *
(3) Identify the goods and/or services to be transformed, if other than all the goods and/or services that have been cancelled;
(4) The application filing fee for at least one class of goods or services required by § 2.6(a)(1) of this chapter; and
(5) An email address for receipt of correspondence from the Office.
Environmental Protection Agency (EPA).
Proposed rule.
On June 21, 2012, the Georgia Department of Natural Resources, through Georgia Environmental Protection Division (GA EPD), submitted a request to redesignate the Rome, Georgia, fine particulate matter (PM
Comments must be received on or before February 24, 2014.
Submit your comments, identified by Docket ID No. EPA-R04-OAR-2012-0893, by one of the following methods:
1.
2.
3.
4.
5.
Joydeb Majumder or Joel Huey of the Regulatory Development Section, in the Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Joydeb Majumder may be reached by phone at (404) 562-9121, or via electronic mail at
In this action, EPA is proposing to make a determination that Rome Area is continuing to attain the 1997 annual PM
First, EPA proposes to determine that the Rome Area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. In this action, EPA is proposing to approve a request to change the legal designation of Floyd County from nonattainment to attainment for the 1997 annual PM
Second, EPA is proposing to approve Georgia's 1997 annual PM
Further, EPA proposes to make the determination that the Rome Area is continuing to attain the 1997 annual PM
EPA is also notifying the public of an update of the status of EPA's adequacy process for the 2023 direct MVEBs for PM
Today's notice of proposed rulemaking is in response to Georgia's June 21, 2012, SIP submittal, which requests redesignation of the Rome Area to attainment for the 1997 annual PM
Fine particle pollution can be emitted directly or formed secondarily in the atmosphere. The main precursors of secondary PM
On July 18, 1997, EPA promulgated the first air quality standards for PM
On January 5, 2005, at 70 FR 944, and supplemented on April 14, 2005, at 70 FR 19844, EPA designated the Rome Area as nonattainment for the 1997 PM
All 1997 PM
The 3-year ambient air quality data for 2007-2009 indicated no violations of the 1997 PM
The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation provided the following criteria are met: (1) The Administrator determines that the area has attained the applicable NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k); (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable federal air pollutant control regulations and other permanent and enforceable reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A; and (5) the state containing such area has met all requirements applicable to the area under section 110 and part D of title I of the CAA.
EPA has provided guidance on redesignation in the General Preamble for the Implementation of title I of the CAA Amendments of 1990 (April 16, 1992, 57 FR 13498, and supplemented on April 28, 1992, 57 FR 18070) and has provided further guidance on processing redesignation requests in the following documents:
1. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the “Calcagni Memorandum”);
2. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;
3. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and
4. “Next Steps for Pending Redesignation Requests and State Implementation Plan Actions Affected by the Recent Court Decision Vacating the 2011 Cross-State Air Pollution Rule,” Memorandum from Gina McCarthy, Assistant Administrator, November 19, 2012.
On June 21, 2012, GA EPD requested the redesignation of the Rome Area to attainment for the 1997 annual PM
As stated above, in accordance with the CAA, EPA proposes in today's action to: (1) Redesignate the Rome Area to attainment for the 1997 annual PM
For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). EPA is proposing to determine that the Rome Area continues to attain the 1997 annual PM
On April 5, 2011, at 76 FR 18650, EPA determined that the Rome Area was attaining the 1997 annual PM
As discussed above, the design value for an area is the highest 3-year average annual mean concentration recorded at any monitor in the area for a 3-year period. Therefore, the 3-year design value for the period on which Georgia based its redesignation request (2007-2009) for the Rome Area is 13.3 μg/m
For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (CAA section 107(d)(3)(E)(v)) and that the state has a fully approved SIP under section 110(k) for the area (CAA section 107(d)(3)(E)(ii)). EPA proposes to find that Georgia has met all applicable SIP requirements for the Rome Area under section 110 of the CAA (general SIP requirements) for purposes of redesignation. Additionally, EPA proposes to find that the Georgia SIP satisfies the criterion that it meet applicable SIP requirements for purposes of redesignation under part D of title I of the CAA (requirements specific to 1997 annual PM
Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address the interstate transport of air pollutants. The section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classifications are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, EPA does not believe that the CAA's interstate transport requirements should be construed to be applicable requirements for purposes of redesignation. However, as discussed later in this notice, addressing pollutant transport from other states is an important part of an area's maintenance demonstration.
In addition, EPA believes other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements.
On June 15, 2012 (77 FR 35909) and February 20, 2013 (78 FR 11805), EPA proposed approval on a submittal from Georgia, addressing “infrastructure SIP” elements required under the CAA section 110(a)(2) for the 1997 annual PM
The General Preamble for Implementation of Title I (57 FR 13498, April 16, 1992) also discusses the evaluation of the section 172 requirements in the context of EPA's consideration of a redesignation request. The General Preamble sets forth EPA's view of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard.
Because attainment has been reached in the Rome Area, no additional measures are needed to provide for attainment, and section 172(c)(1) requirements for an attainment demonstration and RACM are no longer considered to be applicable for purposes of redesignation as long as the Area continues to attain the standard until redesignation.
Pursuant to section 172(c)(2), nonattainment plans must contain provisions that require reasonable further progress toward attainment. This requirement is not relevant for purposes of redesignation because EPA has determined that the Rome Area has monitored attainment of the 1997 annual PM
Section 172(c)(3) requires submission and approval of a comprehensive, accurate, and current inventory of actual emissions. On January 12, 2012, EPA approved Georgia's 2002 base-year emissions inventory for the Rome Area as part of the SIP revision submitted by GA EPD to provide for attainment of the 1997 PM
Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources to be allowed in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Georgia has demonstrated that the Rome Area will be able to maintain the NAAQS without part D NSR in effect, and therefore, Georgia need not have fully approved part D NSR programs prior to approval of the redesignation request. Georgia's PSD program will become effective in the Rome Area upon redesignation to attainment.
Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.
Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, EPA believes the Georgia SIP meets the requirements of section 110(a)(2) applicable for purposes of redesignation.
EPA believes that it is reasonable to interpret the conformity SIP requirements
EPA has fully approved the applicable Georgia SIP for the Rome Area for the 1997 annual PM
As indicated above, EPA believes that the section 110 elements not connected with nonattainment plan submissions and not linked to the area's nonattainment status are not applicable requirements for purposes of redesignation. In addition, EPA believes that since the part D subpart 1 requirements did not become due prior to submission of the redesignation request, they are also not applicable requirements for purposes of redesignation.
For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the air quality improvement in the area is due to permanentF and enforceable reductions in emissions resulting from implementation of the SIP and applicable federal air pollution control regulations and other permanent and enforceable reductions (CAA section 107(d)(3)(E)(iii)). EPA believes that Georgia has demonstrated that the observed air quality improvement in the Rome Area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, federal measures, and other state adopted measures.
Fine particulate matter, or PM
State and federal measures enacted in recent years have resulted in permanent emission reductions in particulate matter and its precursors. Most of these emission reductions are enforceable through regulations. A few non-regulatory measures also result in emission reductions. The federal measures that have been implemented include:
When all of the nonroad spark-ignition and recreational engine standards are fully implemented, an overall 72 percent reduction in hydrocarbons, 80 percent reduction in NO
On December 30, 2011, the DC Circuit issued an order addressing the status of CSAPR and CAIR in response to motions filed by numerous parties seeking a stay of CSAPR pending judicial review. In that order, the Court stayed CSAPR pending resolution of the petitions for review of that rule in
On August 21, 2012, the DC Circuit issued a decision to vacate CSAPR. In that decision, it also ordered EPA to continue administering CAIR “pending . . . development of a valid replacement.”
In light of these unique circumstances and for the reasons explained below, EPA proposes to approve the redesignation request and the related SIP revision for Floyd County in Georgia, including Georgia's plan for maintaining attainment of the 1997 annual PM
In addition, as directed by the DC Circuit, CAIR remains in place and enforceable until substituted by a valid replacement rule. EPA approved a modification to Georgia's SIP on October 9, 2007, that addressed the requirements of CAIR for the purpose of reducing SO
To the extent that Georgia is relying on CAIR in its maintenance plan, the recent directive from the DC Circuit in
Further, in vacating CSAPR and requiring EPA to continue administering CAIR, the DC Circuit emphasized that the consequences of vacating CAIR “might be more severe now in light of the reliance interests accumulated over the intervening four years.”
For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA (CAA section 107(d)(3)(E)(iv)). In conjunction with its request to redesignate the Rome Area to attainment for the 1997 annual PM
Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, GA EPD must submit a revised maintenance plan demonstrating that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, as EPA deems necessary, to assure prompt correction of any future 1997 annual PM
The Rome Area attained the 1997 annual PM
The emissions inventories are composed of four major types of sources: point, area, on-road mobile and non-road mobile. The 2007 inventory, with the exception of on-road emissions, was prepared for Georgia by the contractor for the Southeastern Modeling, Analysis, and Planning (SEMAP) project. Under the SEMAP project, emissions estimates are reported by county and source classification code (SCC). The SEMAP emissions inventories were developed using data from a number of sources, including state and local agencies and EPA's National Emissions Inventory (NEI). GA EPD utilized the State's own resources to develop the 2007 inventory of on-road mobile emissions.
The 2007 SO
Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the Area “for at least 10 years after the redesignation.” EPA has interpreted this as a showing of maintenance “for a period of ten years following redesignation.” Calcagni Memorandum, p. 9. Where the emissions inventory method of showing maintenance is used, the purpose is to show that emissions during the maintenance period will not increase over the attainment year inventory. Calcagni Memorandum, pp. 9-10.
As discussed in detail in the subsection below, Georgia's maintenance plan submission expressly documents that the Area's emissions inventories will remain below the attainment year inventories through 2023. Projected emissions inventory levels in 2023 are well below the attainment year inventory levels, and it is highly improbable that they will suddenly increase and exceed attainment year inventory levels in 2024. In addition, for the reasons set forth below, EPA believes that the Georgia's submission, in conjunction with additional supporting information, further demonstrates that the Area will continue to maintain the 1997 Annual PM
The June 21, 2012, final submittal includes a maintenance plan for the Rome Area. This demonstration:
(i) Shows compliance with and maintenance of the annual PM
(ii) Uses 2007 as the attainment year and includes future emission inventory projections for 2017 and 2023.
(iii) Identifies an “out year” at least 10 years after EPA review and potential approval of the maintenance plan. Per 40 CFR part 93, NO
(iv) Provides, as shown in Tables 2, 3, 4, 5, and 6 below, the actual and projected missions inventories, in tpy, for the Rome Area.
The State's submittal credits Georgia Rule 391-3-1-.02(2)(sss) as requiring flue gas desulfurization (FGD) and selective catalytic reduction (SCR) controls on the majority of coal-fired EGUs in the State. The submittal also credits Georgia Rule 391-3-1-.02(2)(uuu) as requiring a 95 percent reduction in SO
EPA has not approved Georgia Rules 391-3-1-.02(2)(sss) and 391-3-1-.02(2)(uuu) into Georgia's SIP, and therefore, these rules are not federally enforceable. However, CAIR was one measure that led to air quality improvement in the Rome Area. As discussed above, EPA is interpreting CAA section 107(d)(3)(E)(iii)'s requirement that emission reductions be due to permanent and federally enforceable measures to include CAIR, because of the D.C. Circuit's directive to leave CAIR in place until it is replaced by a new rule. Although modeling completed as part of the CSAPR rulemaking showed that the Area would continue to maintain the standard even in the absence of CAIR or CSAPR, to the extent that the Area's maintenance of the standard relies on CAIR, EPA is proposing to find CAIR may be relied upon under CAA section 175A as well. Unlike the state-only rules discussed above, CAIR was approved into Georgia's SIP. Although the state-only rules have more specific unit control requirements than the provisions of CAIR, the State implemented them in response to CAIR and they require emissions reductions in NO
As reflected in Table 6, future emissions for the relevant pollutants and precursors are expected to be below the “attainment level” emissions in 2007, thus illustrating that the Macon Area is expected to continue to attain the 1997 annual PM
A maintenance plan requires the state to show that projected future year emissions will not exceed the level of emissions which led the Area to attain the NAAQS. Georgia has projected emissions as described previously and determined that emissions in the Macon Area will remain below those in the attainment year inventory for the duration of the maintenance plan.
As noted above, EPA believes that several pertinent factors demonstrate that the Rome Area will continue to maintain the 1997 Annual PM
There is currently one monitor measuring PM
GA EPD has the legal authority to enforce and implement the requirements of the Rome Area 1997 annual PM
GA EPD will track the progress of the maintenance plan by performing future reviews of triennial emission inventories for the Rome Area as required in the Air Emissions Reporting Rule (AERR) and Consolidated Emissions Reporting Rule (CERR). For these periodic inventories, GA EPD will review the assumptions made for the purpose of the maintenance demonstration concerning projected growth of activity levels. If any of these assumptions appear to have changed substantially, then GA EPD will re-project emissions for the Rome Area.
Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the contingency measures to be adopted, a schedule and procedure for adoption and implementation, and a time limit for action by GA EPD. A state should also identify specific indicators to be used to determine when the contingency measures need to be implemented. The maintenance plan must include a requirement that a state will implement all measures with respect to control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d).
The contingency plan included in the submittal includes a triggering mechanism to determine when contingency measures are needed and a process of developing and implementing appropriate control measures. GA EPD will use actual ambient monitoring data as the triggering event to determine when contingency measures should be implemented.
Georgia has identified a Tier I trigger as occurring when any of the following conditions occurs, as described in the State's submittal for the Rome Area.
• The previous calendar year's annual mean PM
• The annual mean PM
• The total maintenance area SO
• The total maintenance area PM
GA EPD will evaluate a Tier I condition, if it occurs, as expeditiously as practicable to determine the causes of the ambient PM
The comprehensive study will be completed and submitted to EPA as expeditiously as practical but no later than nine months after the Tier I or Tier II trigger is activated, and the appropriate corrective measures will be adopted and implemented within 18 to 24 months after the trigger occurs. If the study determines that additional measures are required, the State will adopt rules no later than 18 months following the date that the trigger is activated.
• RACM for sources of SO
• Reasonably Available Control Technologies (RACT) for point sources of SO
• Expansion of RACM/RACT to areas of transport within the State;
• Mobile source measures; and
• Additional SO
In addition to the triggers indicated above, Georgia will monitor regional emissions through the CERR and AERR, and compare them to the projected inventories and the attainment year inventory. In the June 21, 2012, submittal, the State acknowledges that the contingency plan requires the implementation of all measures contained in the SIP for the Area prior to redesignation. The State also notes that these measures are currently in effect and may be evaluated by the State to determine if they are adequate or up-to-date.
EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: attainment emission inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. Therefore, the maintenance plan SIP revision submitted by GA EPD for the Rome Area meets the requirements of section 175A of the CAA and is approvable.
As discussed in Section I of this action, the D.C. Circuit remanded the 1997 PM
In this portion of the proposed redesignation, EPA addresses the effect of the Court's January 4, 2013, ruling on the proposed redesignation. As explained below, EPA is proposing to determine that the Court's January 4, 2013, decision does not prevent EPA from redesignating the Rome Area to attainment. Even in light of the Court's decision, redesignation for this area is appropriate under the CAA and EPA's longstanding interpretations of the CAA's provisions regarding redesignation. EPA first explains its longstanding interpretation that requirements that are imposed, or that become due, after a complete redesignation request is submitted for an area that is attaining the standard, are not applicable for purposes of evaluating a redesignation request. Second, EPA then shows that, even if EPA applies the subpart 4 requirements to the Rome Area redesignation request and disregards the provisions of its 1997 PM
With respect to the 1997 PM
EPA's view that, for purposes of evaluating the Rome Area redesignation, the subpart 4 requirements were not due at the time the State submitted the redesignation request is in keeping with the EPA's interpretation of subpart 2 requirements for subpart 1 ozone areas redesignated subsequent to the DC Circuit's decision in
EPA's interpretation derives from the provisions of CAA Section 107(d)(3). Section 107(d)(3)(E)(v) states that, for an area to be redesignated, a state must meet “all requirements `applicable' to the area under section 110 and part D.” Section 107(d)(3)(E)(ii) provides that the EPA must have fully approved the “applicable” SIP for the area seeking redesignation. These two sections read together support EPA's interpretation of “applicable” as only those requirements that came due prior to submission of a complete redesignation request. First, holding states to an ongoing obligation to adopt new CAA requirements that arose after the state submitted its redesignation request, in order to be redesignated, would make it problematic or impossible for EPA to act on redesignation requests in accordance with the 18-month deadline Congress set for EPA action in section 107(d)(3)(D). If “applicable requirements” were interpreted to be a continuing flow of requirements with no reasonable limitation, states, after submitting a redesignation request, would be forced continuously to make additional SIP submissions that in turn would require EPA to undertake further notice-and-comment rulemaking actions to act on those submissions. This would create a regime of unceasing rulemaking that would delay action on the redesignation request beyond the 18-month timeframe provided by the Act for this purpose.
Second, a fundamental premise for redesignating a nonattainment area to attainment is that the area has attained the relevant NAAQS due to emission reductions from existing controls. Thus, an area for which a redesignation request has been submitted would have already attained the NAAQS as a result of satisfying statutory requirements that came due prior to the submission of the request. Absent a showing that unadopted and unimplemented requirements are necessary for future maintenance, it is reasonable to view the requirements applicable for purposes of evaluating the redesignation request as including only those SIP requirements that have already come due. These are the requirements that led to attainment of the NAAQS. To require, for redesignation approval, that a state also satisfy additional SIP requirements coming due after the state submits its complete redesignation request, and while EPA is reviewing it, would compel the state to do more than is necessary to attain the NAAQS, without a showing that the additional requirements are necessary for maintenance.
In the context of this redesignation, the timing and nature of the Court's January 4, 2013, decision in
To require the State's fully-completed and pending redesignation request to comply now with requirements of subpart 4 that the Court announced only in January 2013 would be to give retroactive effect to such requirements when the State had no notice that it was required to meet them. The D.C. Circuit recognized the inequity of this type of retroactive impact in
Even if EPA were to take the view that the Court's January 4, 2013, decision requires that, in the context of pending redesignations, subpart 4 requirements were due and in effect at the time the State submitted its redesignation request, EPA proposes to determine that the Rome Area still qualifies for redesignation to attainment. As explained below, EPA believes that the redesignation request for the Rome Area, though not expressed in terms of subpart 4 requirements, substantively meets the requirements of that subpart for purposes of redesignating the area to attainment.
With respect to evaluating the relevant substantive requirements of
For the purposes of this redesignation, in order to identify any additional requirements which would apply under subpart 4, we are considering the Rome Area to be a “moderate” PM
The permit requirements of subpart 4, as contained in section 189(a)(1)(A), refer to and apply the subpart 1 permit provisions requirements of sections 172 and 173 to PM
With respect to the specific attainment planning requirements under subpart 4,
The requirements for RFP will not apply in evaluating a request for redesignation to attainment since, at a minimum, the air quality data for the area must show that the area has already attained. Showing that the State will make RFP towards attainment will, therefore, have no meaning at that point.
The General Preamble also explained that
EPA similarly stated in its 1992 Calcagni memorandum that, “The requirements for reasonable further progress and other measures needed for attainment will not apply for redesignations because they only have meaning for areas not attaining the standard.”
It is evident that even if we were to consider the Court's January 4, 2013, decision in
Moreover, even outside the context of redesignations, EPA has viewed the obligations to submit attainment-related SIP planning requirements of subpart 4 as inapplicable for areas that EPA determines are attaining the standard. EPA's prior “Clean Data Policy” rulemakings for the PM
Elsewhere in this notice, EPA proposes to determine that the area has attained the 1997 PM
Thus, EPA is proposing to conclude that the requirements to submit an attainment demonstration under 189(a)(1)(B), a RACM determination under section 172(c)d section 189(a)(1)(c), a RFP demonstration under 189(c)(1), and contingency measure requirements under section 172(c)(9) are satisfied for purposes of evaluating the redesignation request.
The D.C. Circuit in
EPA's 1997 PM
The Court in its January 4, 2013, decision made reference to both section 189(e) and 40 CFR 51.1002, and stated that, “In light of our disposition, we need not address the petitioners' challenge to the presumptions in [40 CFR 51.1002] that volatile organic compounds and ammonia are not PM
Elsewhere in the Court's opinion, however, the Court observed:
Ammonia is a precursor to fine particulate matter, making it a precursor to both PM
For a number of reasons, EPA believes that its proposed redesignation of the Rome Area is consistent with the Court's decision on this aspect of subpart 4. First, while the Court, citing section 189(e), stated that “for a PM
However, even if EPA takes the view that the requirements of subpart 4 were deemed applicable at the time the state submitted the redesignation request, and disregards the implementation rule's rebuttable presumptions regarding ammonia and VOC as PM
Precursors in subpart 4 are specifically regulated under the provisions of section 189(e), which requires, with important exceptions, control requirements for major stationary sources of PM
In the General Preamble, EPA discusses its approach to implementing section 189(e).
EPA notes that its 1997 PM
Although, as EPA has emphasized, its consideration here of precursor requirements under subpart 4 is in the context of a redesignation to attainment, EPA's existing interpretation of subpart 4 requirements with respect to precursors in attainment plans for PM
In sum, even if Georgia were required to address precursors for the Rome Area under subpart 4 rather than under subpart 1, EPA would still conclude that the area had met all applicable requirements for purposes of redesignation in accordance with section 107(d)(3(E)(ii) and (v).
With regard to the redesignation of the Rome Area, in evaluating the effect of the court's remand of EPA's implementation rule, which included presumptions against consideration of VOC and ammonia as PM
EPA proposes to determine that the State's maintenance plan shows continued maintenance of the standard by tracking the levels of the precursors whose control brought about attainment of the 1997 PM
First, as noted above in EPA's discussion of section 189(e), VOC emission levels in this Area have historically been well-controlled under SIP requirements related to ozone and other pollutants. Second, total ammonia emissions throughout the Rome area are very low, estimated to be less than 1,000 tons per year.
Georgia's maintenance plan shows that emissions of SO
In addition, available air quality data and modeling analyses show continued maintenance of the standard during the maintenance period. As noted in section V, above, the Rome Area recorded an annual average PM
Thus, EPA
Under section 176(c) of the CAA, new transportation plans, programs, and projects, such as the construction of new highways, must “conform” to (i.e., be consistent with) the part of the state's air quality plan that addresses pollution from cars and trucks. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS or any interim milestones. If a transportation plan does not conform, most new projects that would expand the capacity of roadways cannot go forward. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of such transportation activities to a SIP. The regional emissions analysis is one, but not the only, requirement for implementing transportation conformity. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS but have since been redesignated to attainment with an approved maintenance plan for that NAAQS.
Under the CAA, states are required to submit, at various times, control strategy SIPs and maintenance plans for nonattainment areas. These control strategy SIPs (including RFP and attainment demonstration) and maintenance plans create MVEB for criteria pollutants and/or their precursors to address pollution from cars and trucks. Per 40 CFR part 93, MVEBs must be established for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEBs is the portion of the total allowable emissions in the maintenance demonstration that is allocated to highway and transit vehicle use and emissions.
After interagency consultation with the transportation partners for the Rome Area, Georgia has elected to develop MVEBs for NOx and PM
In an effort to accommodate future variations in Travel Demand Models (TDM) and the vehicle miles traveled forecast when no change to the network is planned, GA EPD consulted with the interagency consultation group, including U.S. EPA Region 4, to determine a reasonable approach to address this variation. The projected 2023 on-road motor vehicle emissions for direct PM
A safety margin is necessary to accommodate the variabilities, or worst-case scenarios that can occur due to future planning assumptions. The worst-case daily motor vehicle emissions projection for PM
Through this rulemaking, EPA is proposing to approve the MVEBs for NO
When reviewing submitted “control strategy” SIPs or maintenance plans containing MVEB, EPA may affirmatively find the MVEB contained therein adequate for use in determining transportation conformity. Once EPA affirmatively finds that the submitted MVEBs are adequate for transportation conformity purposes, the MVEBs must be used by state and federal agencies in determining whether proposed transportation projects conform to the SIP as required by section 176(c) of the CAA.
EPA's substantive criteria for determining adequacy of a MVEBs are set out in 40 CFR 93.118(e)(4). The process for determining adequacy consists of three basic steps: public notification of a SIP submission, a public comment period, and EPA's adequacy determination. This process for determining the adequacy of submitted MVEBs for transportation conformity purposes was initially outlined in EPA's May 14, 1999, guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” EPA adopted regulations to codify the adequacy process in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM
As discussed earlier, Georgia's maintenance plan submission includes NO
EPA intends to make its determination on the adequacy of the 2023 MVEBs for the Rome Area for transportation conformity purposes in the near future by completing the adequacy process that was started on July 26, 2012. After EPA finds the 2023 MVEBs adequate or takes final action to approve them into the Georgia's SIP, the new MVEBs for NOx and PM
On April 5, 2011, EPA determined that the Rome Area was attaining the 1997 PM
First, EPA is proposing to determine, based on complete, quality-assured and certified monitoring data for the 2007-2009 monitoring period, and after review of all available data in AQS, that the Rome Area continues to attain the 1997 annual PM
Second, EPA is proposing to approve the maintenance plan for the Rome Area, including the PM
If finalized, approval of the redesignation request would change the official designation of Rome Area for the 1997 annual PM
EPA's proposed actions establish the basis upon which EPA may take final action on the issues being proposed for approval today. Approval of Georgia's redesignation request would change the legal designation of the Rome Area for the 1997 annual PM
Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not
• Are not “significant regulatory action[s]” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• are 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
• do 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);
• do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• are not economically significant regulatory actions based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• are 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
• do 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, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Environmental protection, Air pollution control.
42 U.S.C. 7401
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 and other forms of information technology.
Comments regarding this information collection received by February 24, 2014 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW., Washington, DC 20503. Commentors are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that we have determined that a region of Argentina, consisting of the areas of Patagonia South and Patagonia North B, is free of foot-and-mouth disease. We are making that determination, as well as an evaluation we have prepared in connection with this action, available for review and comment. In addition, we have prepared an evaluation assessing the rinderpest status of South America, which includes Argentina, and have determined, based on our evaluation, that rinderpest is not present in the entirety of Argentina. We are also making that determination, as well as our evaluation, available for review and comment.
We will consider all comments that we receive on or before March 24, 2014.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Silvia Kreindel, Senior Staff Veterinarian, Regionalization Evaluation Services, National Import Export Services, VS, APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231; (301) 851-3308.
The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of certain animals and animal products into the United States to prevent the introduction of various animal diseases, including rinderpest and foot-and-mouth disease (FMD). The regulations prohibit or restrict the importation of live ruminants and swine, and products from these animals, from regions where rinderpest or FMD is considered to exist.
Within part 94, § 94.1 contains requirements governing the importation of ruminants and swine from regions where rinderpest or FMD exists and the importation of the meat of any ruminants or swine from regions where rinderpest or FMD exists to prevent the introduction of either disease into the United States. We consider rinderpest and FMD to exist in all regions except those listed in accordance with paragraph (a)(2) of that section as free of rinderpest and FMD.
Section 94.11 of the regulations contains requirements governing the importation of meat of any ruminants or swine from regions that have been determined to be free of rinderpest and FMD, but that are subject to certain restrictions because of their proximity to or trading relationships with rinderpest- or FMD-affected regions. Such regions are listed in accordance with paragraph (a)(2) of that section.
The regulations in 9 CFR part 92, § 92.2, contain requirements for requesting the recognition of the animal health status of a region (as well as for the approval of the export of a particular type of animal or animal product to the United States from a foreign region). If, after review and evaluation of the information submitted in support of the request, the Animal and Plant Health Inspection Service (APHIS) believes the request can be safely granted, APHIS will make its evaluation available for public comment through a notice published in the
In 2003, the Government of Argentina submitted a request to recognize the region located south of latitude 42° south, known as Patagonia South, as free of FMD. In 2008, Argentina expanded its request to include the region immediately north of latitude 42° south, known as Patagonia North B. These two areas are referred to below as the Patagonia Region of Argentina.
In response to this request, APHIS has conducted a qualitative risk assessment to evaluate the FMD status of the Patagonia Region of Argentina. Based on this evaluation, APHIS has found that FMD is not present in the Patagonia Region and that the surveillance, prevention, and control measures implemented by Argentina in the area under consideration as a region free of FMD are sufficient to minimize the likelihood of introducing FMD into the United States via imports of FMD-susceptible species or products. However, because of its proximity to or trading relationships with FMD-affected regions, APHIS has determined that it is necessary to impose certain restrictions on the importation of meat of any ruminants or swine from the Patagonia Region of Argentina.
Rinderpest has never been established in South America. No South American country has ever reported the disease except Brazil, which had an outbreak in 1921 that was limited in scope and quickly eradicated. Furthermore, the global distribution of rinderpest has diminished significantly in recent years as a result of the Food and Agriculture Organization Global Rinderpest Eradication Program. The last known cases of rinderpest worldwide occurred in the southern part of the “Somali pastoral ecosystem” consisting of southern Somalia, eastern Kenya, and southern Ethiopia. In May 2011, the World Organization for Animal Health (OIE) announced its recognition of global rinderpest freedom.
Based on the foregoing conclusions, APHIS has found that the Patagonia Region of Argentina is free of rinderpest and FMD.
Therefore, in accordance with § 92.2(e), we are announcing the availability of our evaluation of the FMD status of the region under consideration, as well as an evaluation assessing the rinderpest status of South America, for public review and comment. We are also announcing the availability of an environmental assessment (EA) entitled “Recognition of Patagonia Region in Argentina as Free of Foot-and-Mouth Disease,” which has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
After reviewing any comments we receive, we will announce our decision regarding the disease status of the region of Argentina under consideration with respect to FMD and rinderpest and the import status of susceptible animals and products of such animals in a subsequent notice.
7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
The Broadcasting Board of Governors.
Proposed information collection reinstatement; comment request.
The Broadcasting Board of Governors (BBG), as part of its continuing effort to reduce paperwork and respondent burden, invites public comment on an information collection titled, “Surveys and Other Audience Research for Radio and TV Marti.” This request for comment is being made pursuant to the Paperwork Reduction Act of 1995 [Pub. L. 104-13; 44 U.S.C. 3506(c)(2)(A)].
The information collection activity involved with this program is conducted pursuant to the mandate given to the BBG to provide for the broadcasting of accurate information to the people of Cuba, and other purposes, under Public Law 98-111, the Radio Broadcasting to Cuba Act, dated October 4, 1983, and Public Law 101-246, dated February 16, 1990.
Comments must be submitted by March 24, 2014.
Mr. Chris Luer, Chief, Office of Administration, BBG, Room 1274, 330 Independence Avenue SW., Washington, DC 20237, telephone (202) 203-4608, email address
Annual estimated collection burden for this proposed collection of information is estimated to average 3 hours per response for 96 Focus Group Studies respondents, 3 hours per response for 30 Audience Panels respondents, and 15 minutes (0.25 of an hour) per response for 300 Structured Surveys respondents, including average estimated time for travel to and from the facility where research activities are conducted. Respondents will be required to respond only one time for Focus Group Studies and Structured Surveys, but 3 times for Audience Panels. Comments are requested on the proposed information collection concerning:
(a) Whether the proposed collection of information is necessary for the proper performance of the agency's functions, including whether the information collection has practical utility;
(b) the accuracy of the Agency's burden estimates;
(c) ways to enhance the quality, utility, and clarity of the information collected; and
(d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Send comments regarding this burden estimate, or any other aspect of this collection of information, to Mr. Chris Luer, the BBG Clearance Officer, IBB/A, Room 1274, 330 Independence Avenue SW., Washington, DC 20237, telephone (202) 203-4595, email address
January 30, 2014, 6:30 p.m.-9:00 p.m. PST.
Brodniak Auditorium, Anacortes High School; 1600 20th St., Anacortes, WA 98221.
Open to the public.
The Chemical Safety and Hazard Investigation Board (CSB) previously announced a public meeting to be held on January 30, 2014 (78 FR 78810), starting at 6:30 p.m. PST at the Brodniak Auditorium, Anacortes High School, 1600 20th St., Anacortes, WA 98221.
The CSB public meeting to consider and vote upon a draft final investigation report is cancelled. In lieu of a Board meeting, the CSB will conduct a community listening session at the time and place stated above, in order to obtain additional stakeholder and community input on a draft final investigation report into the April 2, 2010, explosion and fire that fatally injured seven employees. The CSB's draft investigation found that at the time of the incident a bank of heat exchangers was being brought online in the refinery's naphtha hydrotreater unit when another heat exchanger in a parallel bank catastrophically failed, spewing highly flammable hydrogen and naphtha which ignited. Seven Tesoro workers who were nearby, assisting with the heat exchanger startup, were fatally burned. The accident at Tesoro was the mostly deadly U.S. refinery incident since the 2005 explosion at BP Texas City that killed 15 workers and injured 180 others.
No formal CSB action or recorded votes will be taken at the community listening session. The community listening session will include a presentation to the community of the draft report by the CSB investigative team. The report will then be available on the CSB Web site (
At the community listening session, the CSB will receive additional input and comment from affected stakeholders and the community, and will consider this input in finalizing a report. All presentations made at this listening session are intended to allow the Board to consider any additional issues and factors that may bear upon this case.
The public listening session is free and open to the public. If you require a translator or interpreter, please notify the individual listed below as the “Contact Person for Further Information,” at least five business days prior to the meeting.
The CSB is an independent federal agency charged with investigating
Members of the public are invited to make brief statements to the CSB at the public listening session. The time provided for public comments will depend upon the number of people who wish to speak. Speakers should assume that their presentations will be limited to five minutes or less, and may submit written statements for the record.
Hillary J. Cohen, Communications Manager,
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the City of Mesa, grantee of FTZ 221, requesting subzone status for the facility of Apple, Inc. (Apple), located in Mesa, Arizona. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on January 14, 2014.
The proposed subzone (83.17 acres) is located at 3740 S. Signal Butte Rd, Mesa, Arizona. A notification of proposed production activity has been submitted and will be published separately for public comment. The proposed subzone would be subject to the existing activation limit of FTZ 221.
In accordance with the FTZ Board's regulations, Christopher Kemp of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is March 4, 2014. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to March 19, 2014.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
Christopher Kemp at
Bureau of Industry and Security, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before March 24, 2014.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Larry Hall, BIS ICB Liaison, (202) 482-4895,
These technical data letters of explanation will assure the Bureau of Industry and Security that U.S.-origin technical data will be exported only for authorized end-uses, users and destinations. The information contained in the letters describes the transaction and fixes the scope of technology to be exported, the parties to the transaction, their roles, the purpose for the export, and the methods authorized to be used in exporting the technology. The letters also place the foreign consignee on notice that the technical data is subject to U.S. export controls and may only be re-exported in accordance with U.S. law.
Submitted on paper or electronically.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
Enforcement and Compliance, formerly Import Administration, International Trade Administration, Department of Commerce.
January 23, 2014.
Patrick Edwards or Angelica Mendoza, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-8029 or (202) 482-3019, respectively.
On August 1, 2013, the Department of Commerce (the Department) published in the
The Department stated in its initiation of this review that it intended to rely on U.S. Customs and Border Protection (CBP) data to select respondents.
19 CFR 351.213(d)(1) stipulates that the Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. As the only party that requested a review (Regiopytsa) withdrew its request within 90 days of the date of publication of the notice of initiation of the requested review, we are rescinding this review of the antidumping duty order on light-walled from Mexico pursuant to 19 CFR 351.213(d)(1).
This notice is published in accordance with section 751 of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, formerly Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) is currently conducting an administrative review of the antidumping duty order on hand trucks and certain parts thereof (hand trucks) from the People's Republic of China (PRC) covering the period of review (POR) of December 1, 2011, through November 30, 2012. We preliminarily determine that sales made by New-Tec Integration (Xiamen) Co., Ltd. (New-Tec) were not below normal value (NV). In addition, we preliminarily determine that Yangjiang Shunhe Industrial Co., Ltd. (Shunhe) had no shipments during the POR (
Scott Hoefke, or Robert James, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4947 or (202) 482-0649, respectively.
As explained in the memorandum from the Assistant Secretary for Enforcement and Compliance, the Department exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from October 1, through October 16, 2013.
The merchandise subject to the
On February 26, 2013, we received a certification of no shipments from Shunhe. On May 1, 2013, we placed on the record data from Customs and Border Protection (CBP) and received comments from Shunhe on May 8, 2013. On June 21, 2013, we placed on the record CBP Entry documents and received comments from Shunhe on June 28, 2013. On September 4, 2013, Shunhe requested rescission of the review with respect to Shunhe.
Based on certification from Shunhe, our analysis of CBP information, and information contained in Shunhe's request to rescind the review, we preliminarily find that Shunhe has no reviewable entries during the POR. Moreover, the Department finds that consistent with its announced refinement to its assessment practice in non-market economy (NME) cases, as further discussed below, it is appropriate not to rescind the review, in part, in these circumstances but, rather, to complete the review with respect to this company and issue appropriate instructions to CBP based on the final results of the review.
The Department has conducted this review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (the Act). Export price is calculated in accordance with section 772 of the Act. Because the PRC is a non-market economy within the meaning of section 771(18) of the Act, normal value has been calculated in accordance with section 773(c) of the Act. Specifically, the respondent's factors of production have been valued using Thailand prices (when available) because the Department has preliminarily determined that Thailand is at the PRC's level of economic development and a significant producer of comparable merchandise. For a full discussion of the Department's surrogate country selection, please see the memorandum from Scott Hoefke to the file entitled, “Antidumping Duty Administrative Review of Hand Trucks and Certain Parts Thereof From the People's Republic of China: Selection of a Surrogate Country” (Country Selection Memorandum), dated concurrently with the Preliminary Decision Memorandum. In addition, for a full discussion of the surrogate values selected, please see memorandum entitled “Hand Trucks and Certain Parts Thereof from the People's Republic of China: Surrogate-Value Memorandum,” dated concurrently with the Preliminary Decision Memorandum. Additionally, for a full discussion of the methodology underlying our conclusions in these preliminary results, please see the Preliminary Decision Memorandum. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (IA ACCESS). IA ACCESS is available to registered users at
The Department has determined that the following preliminary dumping margins exist for the period December 1, 2011, through November 30, 2012:
The Department intends to disclose to parties to this proceeding the calculations performed in reaching the preliminary results within five days after the date of publication of these preliminary results.
Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.
Any interested party may request a hearing within 30 days of publication of this notice. Hearing requests should contain the following information: (1) The party's name, address and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations will be limited to issues raised in the case briefs. If a request for a hearing is made, parties will be notified of the date and time for the hearing to be held at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
The Department intends to issue the final results of this administrative review, including the results of our analysis of the issues raised in any briefs, within 120 days after the publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act and 19 CFR 351.213(h)(1).
In accordance with 19 CFR 351.301(c)(3)(ii), the deadline for submission of publicly available information to value FOPs under 19 CFR 351.408(c) is 20 days after the date of publication of these preliminary results. In accordance with 19 CFR 351.301(c)(1), if an interested party submits factual information less than ten days before, on, or after (if the Department has extended the deadline),
In accordance with 19 CFR 351.212(b), upon issuing the final results of the review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of the final results of review. For any individually examined respondents whose weighted-average dumping margin is above
We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review when the importer-specific assessment rate calculated in the final results of this review is above
The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable.
The following cash deposit requirements, when imposed, will apply to all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for New-Tec, which has a separate rate, will be that established in the final results of this review (except, if the rate is zero or
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213.
International Trade Administration, U.S. Department of Commerce.
Notice of an Open Meeting.
The Renewable Energy and Energy Efficiency Advisory Committee (RE&EEAC) will hold a meeting on February 12, 2014. The meeting is open to the public and the room is disabled-accessible. Public seating is limited and available on a first-come, first-served basis.
February 12, 2014, from 1:00 p.m. to 5:00 p.m. Eastern Standard Time (EST). Members of the public wishing to attend the meeting must notify Ryan Mulholland at the contact information below by 5:00 p.m. EST on Wednesday, February 5, in order to pre-register for clearance into the building. Please specify any requests for reasonable accommodation at least five business days in advance of the meeting. Last minute requests will be accepted, but may be impossible to fill.
The meeting will be held at the U.S. Department of Commerce,
Ryan Mulholland, Office of Energy and Environmental Industries (OEEI), International Trade Administration, U.S. Department of Commerce at (202) 482-4693; email:
During the February 12th meeting of the RE&EEAC, committee members will present their initial recommendations on improving the export competitiveness of the RE&EE sector. Recommendations have been developed over the course of 2013 through four subcommittees: finance, U.S. competitiveness, trade policy, and trade promotion.
A limited amount of time, from 3:30 p.m.-3:45 p.m., will be available for pertinent brief oral comments from members of the public attending the meeting. To accommodate as many speakers as possible, the time for public comments will be limited to five minutes per person. Individuals wishing to reserve speaking time during the meeting must contact Mr. Mulholland and submit a brief statement of the general nature of the comments, as well as the name and address of the proposed participant by 5:00 p.m. EST on Wednesday, February 5, 2014. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the International Trade Administration may conduct a lottery to determine the speakers. Speakers are requested to bring at least 20 copies of their oral comments for distribution to the participants and public at the meeting.
Any member of the public may submit pertinent written comments concerning the RE&EEAC's affairs at any time before or after the meeting. Comments may be submitted to the Renewable Energy and Energy Efficiency Advisory Committee, c/o: Ryan Mulholland, Office of Energy and Environmental Industries, U.S. Department of Commerce, Mail Stop: 4053, 1401 Constitution Avenue NW., Washington, DC 20230. To be considered during the meeting, written comments must be received no later than 5:00 p.m. EST on Wednesday, February 5, 2014, to ensure transmission to the Committee prior to the meeting. Comments received after that date will be distributed to the members but may not be considered at the meeting.
Copies of RE&EEAC meeting minutes will be available within 30 days of the meeting.
Enforcement and Compliance, formerly Import Administration, International Trade Administration, Department of Commerce.
Stephanie Moore, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave. NW., Washington, DC 20230, telephone: (202) 482-3692.
Section 702 of the Trade Agreements Act of 1979 (as amended) (the Act) requires the Department of Commerce (the Department) to determine, in consultation with the Secretary of Agriculture, whether any foreign government is providing a subsidy with respect to any article of cheese subject to an in-quota rate of duty, as defined in section 702(h) of the Act, and to publish quarterly updates to the type and amount of those subsidies. We hereby provide the Department's quarterly update of subsidies on articles of cheese that were imported during the periods April 1, 2013, through June 30, 2013.
The Department has developed, in consultation with the Secretary of Agriculture, information on subsidies, as defined in section 702(h) of the Act, being provided either directly or indirectly by foreign governments on articles of cheese subject to an in-quota rate of duty. The appendix to this notice lists the country, the subsidy program or programs, and the gross and net amounts of each subsidy for which information is currently available. The Department will incorporate additional programs which are found to constitute subsidies, and additional information on the subsidy programs listed, as the information is developed.
The Department encourages any person having information on foreign government subsidy programs which benefit articles of cheese subject to an in-quota rate of duty to submit such information in writing to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Ave. NW., Washington, DC 20230.
This
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability of a Management Strategy Evaluation; request for comments.
The Pacific Fishery Management Council (Council) has requested that the National Marine Fisheries Service (NMFS) take into consideration alternative harvest control rules for Sacramento River winter Chinook salmon (winter-run), a species listed as endangered under the Endangered Species Act (ESA) and impacted by ocean salmon fisheries that the Council and NMFS manage. The Council is concerned that the existing control rule may be unnecessarily restrictive in years of low winter-run abundance, particularly when the 3-year average escapement drops below 500 fish. The current control rule specifies zero fishery impacts at this level of abundance rather than the
Information and comments on the alternative control rules described in this notice must be received at the appropriate address (see
You may submit comments on this document, identified by NOAA-NMFS-2013-0154, by any of the following methods:
•
•
Heidi Taylor, NMFS WCR, 562-980-4039.
Sacramento River winter Chinook salmon were first listed as threatened under the Endangered Species Act in 1989 (54 FR 32085) and their status was changed to endangered in 1994 (59 FR 440). Under section 7 of the Endangered Species Act, NMFS consulted with itself on the effects of the federally-managed ocean salmon fishery on the winter-run stock and, in April 2010, completed the Biological Opinion on the Authorization of Ocean Salmon Fisheries Pursuant to the Pacific Coast Salmon Fishery Management Plan (Salmon FMP) and Additional Protective Measures as it affects the Sacramento River Winter Chinook Salmon (winter-run) Evolutionary Significant Unit (ESU) (NMFS 2010) (2010 Opinion). In the 2010 Opinion, NMFS found that, given the current management structure of the fishery and the measures in place to protect winter-run, it was expected that adult spawning returns of winter-run cohorts would be reduced 10 to 25 percent as a result of impacts associated with incidental harvest in the ocean salmon fishery. These impacts occur primarily as a result of removal of age-3 winter-run, almost exclusively south of Point Arena, CA, when fishing activity is permitted in those areas, and in conjunction with the seasonal and size restrictions previously adopted to minimize impacts to winter-run consistent with the proposed action for ocean salmon fisheries management under the salmon FMP (NMFS 2010). The results from the O'Farrell
Over the last decade, this winter-run population (and consequently the entire ESU) has had years of positive growth (cohort replacement rates greater than 1.0) while sustaining ocean fishery impacts. The population increased to as many as 17,000 spawners in 2006. Therefore, NMFS concluded that the anticipated impacts of the fishery, based on past performance of both the fishery
However, NMFS identified that the proposed action analyzed in the 2010 Opinion did not include measures that would avoid or constrain the fishery's impacts on winter-run during periods of decline or increased extinction risk. Without any explicit means to further constrain impacts after consideration of winter-run abundance in the fishery management process, the potential exists for total spawner reduction rates associated with the ocean salmon fishery to approach, or exceed, 25 percent during periods of time when risks of extinction are significantly increased. Therefore, NMFS concluded that the proposed operation of the fishery without consideration of additional protective measures that would be implemented when winter-run are at low abundance was not sufficient to ensure that the fishery was not likely to appreciably reduce the likelihood of survival and recovery of winter-run.
The ESA requires that, where NMFS concludes through consultation that a proposed action is likely to jeopardize the continued existence of a listed species, NMFS identify one or more RPAs to such action. By regulation, an RPA is defined as “alternative actions identified during formal consultation that can be implemented in a manner consistent with the intended purpose of the action, that can be implemented consistent with the scope of the Federal agency's legal authority and jurisdiction, that is economically and technologically feasible, and that the Director [NMFS] believes would avoid the likelihood of jeopardizing the continued existence of listed species or resulting in the destruction or adverse modification of critical habitat” (50 CFR 402.02).
NMFS' approach when developing the RPA in the 2010 Opinion was to address the foundation of the jeopardy conclusion, which is the lack of explicit controls in the ocean salmon fishery management process to constrain and reduce impacts when the abundance of winter-run is depressed and the extinction risk is increased. Specifically, the purpose of the RPA was to establish a long-term management framework that accounts each year for the abundance of winter-run and specifies a level of fishery impact that is responsive to that abundance and consistent with the requirement to avoid jeopardy. However, at the time of the 2010 Opinion, the information and analyses required to establish specific management objectives or acceptable impact targets given various conditions, and the tools needed to incorporate those criteria into the fishery management process were not available. Additional analytical effort was required before this framework could be developed and implemented. Therefore, the RPA required NMFS to develop a winter-run management framework that (1) meets the objective of the RPA, (2) is practical given the ocean salmon fishery management process as described in the Salmon FMP, and (3) that the framework be available for consideration in time for implementation as the consultation standard for the ocean salmon fishery for winter-run for the 2012 fishing season.
For the interim between issuance of the 2010 Opinion and implementation of the new framework, NMFS determined that the winter-run population had been in significant decline since 2006, and concluded that conservative management measures should be taken and fishery impacts reduced pending completion of the new management framework. The 2010 Opinion provided options to the Council and NMFS to either increase size limits or reduce fishing effort (seasonal closures) in the recreational fishery in 2010 and 2011 to produce a qualitative constraint and reduction in winter-run impacts (see NMFS 2010 for explanation of interim RPA rationale).
In order to develop the management framework required by the 2010 RPA, the NMFS Southwest Fisheries Science Center Salmon Assessment Team (Team) engaged in an effort to develop the analytical tools required to evaluate various fishery exploitation control rule alternatives in a formal Management Strategy Evaluation (MSE) process. The term “Management Strategy Evaluation” is being used to represent all aspects of the analytical work developed to support the decision-making process. The purpose of the MSE was to simulate winter-run population dynamics as well as monitoring, assessment, and implementation of the fishery management system under a variety of prospective fishery management control rules. The control rules specify the allowable level of incidental take of winter-run (age-3 impact rate south of Point Arena, CA) for ocean fisheries in a given year. For example, a control rule which allows a fixed annual fishing impact rate could be simulated and compared to other control rules that specify reduced allowable impact rates when population abundance is low. The goal of this simulation work was to evaluate the relative performance of various control rules in terms of conservation and fishery criteria.
In order to perform the simulations, the Team developed a model for winter-run such that the prescribed fishing impact rate under a control rule could be directly input as a source of mortality (with its attendant uncertainty). This mortality affected spawning abundance, leading directly to the generation of the next cohort, and on throughout the population simulation (Winship
NMFS seeks input from the public on the control rules analyzed in the MSE as described in Winship et al. 2012 (“the MSE report”), particularly on whether commenters prefer one of those control rules over the others, and the reasons for such preference. The comment period will conclude at 5:00 p.m. on April 23, 2014, NMFS will consider all comments received by the end of the comment period as we move forward to consider potential changes to the management approach. The MSE report (Winship
Department of the Navy, DoD.
Notice of Open 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 Board of Advisors (BOA) to the Presidents of the Naval Postgraduate School (NPS) and the Naval War College (NWC) and its two subcommittees will be held. This meeting will be open to the public.
The meeting will be held on Wednesday, February 19, 2014, from 8:00 a.m. to 4:00 p.m. and on Thursday, February 20, from 8:00 a.m. to 4:00 p.m. Eastern Time Zone.
The meeting will be held at 900 N. Glebe Road, Arlington, VA.
Ms. Jaye Panza, Naval Postgraduate School, Monterey, CA, 93943-5001, telephone number 831-656-2514.
The Committee examines the effectiveness with which the NPS and the NWC are accomplishing its missions. The agenda is as follows:
(1) February 19, 2014: General deliberations and inquiry by the NWC BOA Subcommittee and its parent committee NPS/NWC BOA into its programs and mission priorities; re-accreditation preparedness; administration; state of morale of the student body, faculty, and staff; fiscal affairs; and any other matters relating to the operations of the NWC as the board considers pertinent.
(2) February 20, 2014: The purpose of the meeting is to elicit the advice of the NPS BOA subcommittee on the Naval Service's Postgraduate Education Program and the collaborative exchange and partnership between the NPS and the Air Force Institute of Technology. With its parent committee NPS/NWC BOA, the board will inquire into programs and curricula; instruction; administration; state of morale of the student body, faculty, and staff; fiscal affairs; as well as reviewing the updates on recommendations cited in the 2012 Navy Inspector General's report. The committee will review any other matters relating to the operations of the NPS as the board considers pertinent.
Individuals without a DoD Government Common Access Card require an escort at the meeting location. For access, information, or to send written statements for consideration at the committee meeting must contact Ms. Jaye Panza, Naval Postgraduate School, 1 University Circle, Monterey, CA 93943-5001 or by fax 831-656-3145 by February 7, 2014.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Decision and order.
The U.S. Department of Energy (DOE) gives notice of the
This Decision and Order is effective January 23, 2014.
In accordance with Title 10 of the Code of Federal Regulations (10 CFR), Section 430.27(l), DOE gives notice of the issuance of its decision and order as set forth below. The decision and order grants Indesit a waiver from the applicable residential clothes dryer test procedure at 10 CFR part 430 subpart B, appendix D, for the three models of condensing clothes dryer specified it its petition.
DOE notes that it has promulgated a final test procedure for clothes dryers that provides a mechanism for testing condensing clothes dryers. (76 FR 972, Jan. 6, 2011). Use of this test procedure will be required on the compliance date of DOE's amended standards for clothes dryers, established by direct final rule in 2011. (76 FR 22454, April 21, 2011). The compliance date of these standards is January 1, 2015. (76 FR 26656, May 9, 2011).
Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94-163 (42 U.S.C. 6291-6309, as codified) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, which includes the residential clothes washers that are the focus of this notice.
DOE's regulations contain provisions allowing a person to seek a waiver from the test procedure requirements for covered consumer products if at least one of the following conditions is met: (1) the petitioner's basic model contains one or more design characteristics that prevent testing according to the prescribed test procedure, or (2) when the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data. (10 CFR 430.27(a)(1)) Petitioners must include in their petition any alternate test procedures known to the petitioner to evaluate the basic model in a manner representative of its energy consumption characteristics.
The Assistant Secretary for Energy Efficiency and Renewable Energy (the Assistant Secretary) may grant a waiver subject to conditions, including adherence to alternate test procedures. (10 CFR 430.27(l)) Waivers remain in effect pursuant to the provisions of 10 CFR 430.27(m).
On October 22, 2013, Indesit filed a petition for waiver and an application for interim waiver from the test procedure applicable to residential clothes dryers set forth in 10 CFR Part 430, subpart B, appendix D. Indesit seeks a waiver from the applicable test procedure for its Ariston TCL73XNA and TCL73XSNA condensing clothes dryers because, Indesit asserts, design characteristics of these models prevent testing in accordance with the currently prescribed test procedure, as described in greater detail in the following paragraph.
In support of its petition, Indesit claims that the current clothes dryer test procedure applies only to vented clothes dryers because the test procedure requires the use of an exhaust restrictor on the exhaust port of the clothes dryer during testing. Because condensing clothes dryers operate by blowing air through the wet clothes, condensing the water vapor in the airstream, and pumping the collected water into either a drain line or an in-unit container, these products do not use an exhaust port like a vented dryer does. Indesit plans to market its condensing clothes dryers for situations in which a conventional vented clothes dryer cannot be used, such as high-rise apartments and other buildings where exhaust venting is not practical or is cost prohibitive.
The Indesit petition requests that DOE grant a waiver from the existing test procedure to allow for the sale of two models (TCL73XNA and TCL73XSNA) until DOE prescribes final test procedures and minimum energy conservation standards appropriate to condensing clothes dryers. Similar to the other manufacturers of condensing clothes dryers, Indesit did not include an alternate test procedure in its petition.
On October 22, 2013, Indesit filed a petition for waiver from the test procedure applicable to residential clothes dryers set forth in 10 CFR part 430, subpart B, appendix D for particular models of condensing clothes dryer. On November 13, 2013, DOE published in the
Therefore, for the reasons discussed above, and in light of the previous waivers to other manufacturers, DOE grants Indesit's petition for waiver from testing of its Ariston TCL73XNA and TCL73XSNA condenser clothes dryers.
DOE consulted with the Federal Trade Commission (FTC) staff concerning the Indesit petition for waiver. The FTC staff did not have any objections to granting a waiver to Indesit.
After careful consideration of all the material that was submitted by Indesit and consultation with the FTC staff, it is ordered that:
(1) The petition for waiver submitted by Indesit Company (Case No. CD-009) is hereby granted as set forth in the paragraphs below.
(2) Indesit shall not be required to test or rate its Ariston TCL73XNA and TCL73XSNA condensing clothes dryer models on the basis of the test procedures at 10 CFR part 430, subpart B, appendix D.
(3) This waiver shall remain in effect from the date this decision and order consistent with the provisions of 10 CFR 430.27(m).
(4) This waiver is issued on the condition that the statements, representations, and documentary materials provided by the petitioner are valid. DOE may revoke or modify this waiver at any time if it determines the factual basis underlying the petition for waiver is incorrect.
(5) This waiver applies to only those models specifically set out in Indesit's petition. Indesit may submit a new or amended petition for waiver and request for grant of interim waiver, as appropriate, for additional models of clothes dryers for which it seeks a waiver from the DOE test procedure. Grant of this petition for waiver also does not release a petitioner from any applicable certification requirements set forth at 10 CFR Part 429.
Issued in Washington, DC, on January 16, 2014.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of petition for waiver, notice of grant of interim waiver, and request for comments.
This notice announces receipt of a petition for waiver from Samsung Electronics America, Inc. (Samsung) regarding specified portions of the U.S. Department of Energy (DOE) test procedure for determining the energy consumption of electric refrigerators and refrigerator-freezers. In its petition, Samsung provides an alternate test procedure identical to the test procedure DOE published in a final rule setting out testing requirements for manufacturers to follow starting in 2014. DOE solicits comments, data, and information concerning Samsung's petition and the suggested alternate test procedure. Today's notice also grants Samsung an interim waiver from the electric refrigerator and refrigerator-freezer test procedure, subject to use of the alternative test procedure set forth in this notice.
DOE will accept comments, data, and information with respect to the Samsung Petition until February 24, 2014.
You may submit comments, identified by case number “RF-036,” by any of the following methods:
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Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, which includes the electric refrigerator-freezers that are the focus of this notice.
The regulations set forth in 10 CFR 430.27 contain provisions that enable a
The waiver process also allows the Assistant Secretary to grant an interim waiver from test procedure requirements to manufacturers that have petitioned DOE for a waiver of such prescribed test procedures. 10 CFR 430.27(g). An interim waiver remains in effect for 180 days or until DOE issues its determination on the petition for waiver, whichever occurs earlier. DOE may extend an interim waiver for an additional 180 days. 10 CFR 430.27(h).
On November 26, 2013, Samsung submitted a petition for waiver from the test procedure applicable to residential electric refrigerators and refrigerator-freezers set forth in 10 CFR part 430, subpart B, appendix A1. Samsung is designing new refrigerator-freezers that incorporate multiple defrost cycles. In its petition, Samsung seeks a waiver from the existing DOE test procedure applicable to refrigerators and refrigerator-freezers under 10 CFR part 430 because the existing test procedure does not account for multiple defrost cycles. Therefore, Samsung has asked to use an alternate test procedure that is the same as the test procedure provisions for products with long time or variable defrost DOE published in a final rule. See 77 FR 3559, 3564-3565 (January 25, 2012). These provisions were placed in appendix A, which is not required for use until September 15, 2014, and are not contained in the current appendix A1 test procedure. Samsung has previously submitted similar petitions for waiver and requests for interim waiver for other basic models of refrigerator-freezers that incorporate multiple defrost cycles. DOE subsequently granted Samsung's waiver requests in each case. See 77 FR 1474 (Jan. 10, 2012), 77 FR 75428 (Dec. 20, 2012), 78 FR 35901 (June 14, 2013), and 78 FR 35898 (June 14, 2013).
Samsung also requests an interim waiver from the existing DOE test procedure. An interim waiver may be granted if it is determined that the applicant will experience economic hardship if the application for interim waiver is denied, if it appears likely that the petition for waiver will be granted, and/or the Assistant Secretary determines that it would be desirable for public policy reasons to grant immediate relief pending a determination of the petition for waiver. 10 CFR 430.27(g).
DOE has determined that Samsung's application for interim waiver does not provide sufficient market, equipment price, shipments and other manufacturer impact information to permit DOE to evaluate the economic hardship Samsung might experience absent a favorable determination on its application for interim waiver. DOE has determined, however, that it is likely Samsung's petition will be granted, and that it is desirable for public policy reasons to grant Samsung relief pending a determination on the petition. Previously, DOE granted a waiver to Samsung for other basic models incorporating multiple defrost technology and DOE has determined that it is desirable to have similar basic models tested in a consistent manner. See 77 FR 1474 (Jan. 10, 2012) (Case Nos. RF-018, 019); 77 FR 75428 (Dec. 20, 2012) (Case No. RF-021); 78 FR 35901 (June 14, 2013) (Case No. RF-026); and 78 FR 35898 (June 14, 2013) (Case No. RF-027).
Samsung's petition included an alternate test procedure to account for the energy consumption of its refrigerator-freezer models with multiple defrost cycles. The alternate test procedure specified by Samsung is the same as the test procedure published in the final rule referenced above. The alternate test procedure specified in this interim waiver (as well as the previous waiver granted to Samsung) is identical to the test procedure provisions for products with long time or variable defrost adopted in the final test procedure rule that manufacturers of these products are required to use in 2014.
For the reasons stated above, DOE grants Samsung's application for interim waiver from the testing requirements under 10 CFR Part 430, Appendix A-1 for those specific refrigerator-freezer product lines containing multiple defrost cycles identified below. Therefore,
The application for interim waiver filed by Samsung is hereby granted for the specified Samsung refrigerator-freezer basic model that incorporates multiple defrost cycles, subject to the specifications and conditions below. Samsung shall be required to test and rate the specified refrigerator-freezer product according to the alternate test procedure as set forth in section III, “Alternate Test Procedure.”
The interim waiver applies to the following basic models:
DOE makes decisions on waivers and interim waivers for only the models specifically set out in the petition, not future models that may be manufactured by the petitioner. Samsung may submit a subsequent petition for waiver and request for grant of interim waiver, as appropriate, for additional models of refrigerator-freezers for which it seeks a waiver from the DOE test procedure. In addition, DOE notes that the grant of an interim waiver or waiver does not release a petitioner from the certification requirements set forth at 10 CFR part 429.
Further, this interim waiver is conditioned upon the presumed validity of statements, representations, and documents provided by the petitioner. DOE may revoke or modify this interim waiver at any time upon a determination that the factual basis underlying the petition for waiver is incorrect, or upon a determination that the results from the alternate test procedure are unrepresentative of the basic models' true energy consumption characteristics.
EPCA requires that manufacturers use DOE test procedures to make representations about the energy consumption and energy consumption costs of products covered by the statute. (42 U.S.C. 6293(c)) Consistent representations are important for manufacturers to use in making representations about the energy efficiency of their products and to demonstrate compliance with applicable DOE energy conservation standards. Pursuant to its regulations at 10 CFR 430.27, DOE will consider setting an alternate test procedure for Samsung in a subsequent Decision and Order.
During the period of the interim waiver granted in this notice, Samsung shall test the products listed above according to the test procedures for residential electric refrigerator-freezers prescribed by DOE at 10 CFR part 430, subpart B, appendix A1, except that, for the Samsung products listed above only, Samsung shall include the following:
1. In section 1, Definitions, the following definition:
“Defrost cycle type” means a distinct sequence of control whose function is to remove frost and/or ice from a refrigerated surface. There may be variations in the defrost control sequence such as the number of defrost heaters energized. Each such variation establishes a separate distinct defrost cycle type. However, defrost achieved regularly during the compressor “off” cycles by warming of the evaporator without active heat addition is not a defrost cycle type.
2. In section 4, Test Period, the following:
4.2.1 Long-time Automatic Defrost. If the model being tested has a long-time automatic defrost system, the two-part test described in this section may be used. The first part is a stable period of compressor operation that includes no portions of the defrost cycle, such as precooling or recovery, that is otherwise the same as the test for a unit having no defrost provisions (section 4.1). The second part is designed to capture the energy consumed during all of the events occurring with the defrost control sequence that are outside of stable operation.
4.2.1.1 Cycling Compressor System. For a system with a cycling compressor, the second part of the test starts at the termination of the last regular compressor “on” cycle. The average temperatures of the fresh food and freezer compartments measured from the termination of the previous compressor “on” cycle to the termination of the last regular compressor “on” cycle must both be within 0.5 °F (0.3 °C) of their average temperatures measured for the first part of the test. If any compressor cycles occur prior to the defrost heater being energized that cause the average temperature in either compartment to deviate from its average temperature for the first part of the test by more than 0.5 °F (0.3 °C), these compressor cycles are not considered regular compressor cycles and must be included in the second part of the test. As an example, a “precooling” cycle, which is an extended compressor cycle that lowers the temperature(s) of one or both compartments prior to energizing the defrost heater, must be included in the second part of the test. The test period for the second part of the test ends at the termination of the first regular compressor “on” cycle after both compartment temperatures have fully recovered to their stable conditions. The average temperatures of the compartments measured from this termination of the first regular compressor “on” cycle until the termination of the next regular compressor “on” cycle must both be within 0.5 °F (0.3 °C) of their average temperatures measured for the first part of the test. See Figure 1.
4.2.4 Systems with Multiple Defrost Frequencies. This section applies to models with long-time automatic or variable defrost control with multiple defrost cycle types, such as models with single compressors and multiple evaporators in which the evaporators have different defrost frequencies. The two-part method in 4.2.1 shall be used. The second part of the method will be conducted separately for each distinct defrost cycle type.
3. In section 5, Test Measurements, the following:
5.2.1.5 Long-time or Variable Defrost Control for Systems with Multiple Defrost cycle Types. The energy consumption in kilowatt-hours per day shall be calculated equivalent to:
(CT
Through today's notice, DOE announces receipt of Samsung's petition for waiver from certain parts of the test procedure applicable to refrigerator-freezers and grants an interim waiver to Samsung. DOE is publishing Samsung's petition for waiver in its entirety. The petition contains no confidential information. The petition includes a suggested alternate test procedure to measure the energy consumption of refrigerator-freezer basic models that incorporate multiple defrost cycles.
DOE solicits comments from interested parties on all aspects of the petition. Any person submitting written comments to DOE must also send a copy of such comments to the petitioner. The contact information for the petitioner is: Michael Moss, Director of Corporate Environmental Affairs, Samsung Electronics America, Inc., 19 Chapin Road, Building D, Pine Brook, NJ 07058. All submissions received must include the agency name and case number for this proceeding. Submit electronic comments in WordPerfect, Microsoft Word, Portable Document Format (PDF), or text (American Standard Code for Information Interchange (ASCII)) file format and avoid the use of special characters or any form of encryption. Wherever possible, include the electronic signature of the author. DOE does not accept telefacsimiles (faxes).
Samsung Electronics America, Inc. (“Samsung”) respectfully submits this Application for Interim Waiver and Petition for Waiver to the Department of Energy (“DOE” or “the Department”) for Samsung's compressor refrigerator-freezers with multiple defrost cycles.
10 CFR Part 430.27(a)(1) allows a person to submit a petition to waive for a particular basic model any requirements of § 430.23 upon the grounds that the basic model contains one or more design characteristics which either prevent testing of the basic model according to the prescribed test procedures, or the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data.
Current test procedures as prescribed in Appendix A1 to Subpart B of Part 430 (“Appendix A1”) do not adequately provide a way for Samsung to accurately represent the energy consumption of its refrigerator-freezers with multiple defrost cycles. DOE concurred with Samsung's understanding in the interim waiver granted to Samsung in 76 FR 16760 and subsequently granted the waiver on January 10, 2012 (77 FR 1474). Additionally, DOE communicated that all manufacturers planning on marketing refrigerator-freezers with multiple defrost cycles must seek a waiver from the Department.
For the reasons that DOE described in its granting of waiver (77 FR 1474) for Samsung refrigerator freezers with multiple defrost cycles, Samsung believes that the granting of Interim Waiver and Waiver for the models listed below are warranted.
Samsung requests that the alternate test procedure for refrigerators with multiple defrost cycles, as prescribed in the waiver (77 FR 1474) and in the interim waiver (77 FR 13109) granted to Samsung, be granted for the following basic Samsung refrigerator-freezers with multiple defrost cycles models:
Please feel free to contact me if you have any questions regarding this Petition for Waiver and Application for Interim Waiver. I will be happy to discuss should any questions arise.
Sincerely,
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of petition for waiver, notice of grant of interim waiver, and request for comments.
This notice announces receipt of a petition for waiver and application for interim waiver (hereafter, “petition”) from Liebherr Canada Ltd. (Liefherr) regarding specified portions of the U.S. Department of Energy (DOE) test procedure for determining the energy consumption of residential electric refrigerators and refrigerator-freezers. In its petition, Liebherr proposes to use an alternate test procedure that would permit the testing of its all-refrigerator model while physically connected to Liebherr's companion upright freezer model, which is necessary for the refrigerator to function properly. DOE solicits comments, data, and information concerning Liebherr's petition and the suggested modifications. Today's notice also grants Liebherr an interim waiver from the residential electric refrigerator and refrigerator-freezer test procedure, subject to use of the alternate test procedure set forth in this notice.
DOE will accept comments, data, and information with respect to the Liebherr Petition until February 24, 2014.
You may submit comments, identified by case number “RF-035,” by any of the following methods:
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Mr. Bryan Berringer, U.S. Department of Energy, Building Technologies Program, Mail Stop EE-5B, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-0371. Email:
Mr. Michael Kido, U.S. Department of Energy, Office of the General Counsel, Mail Stop GC-71, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585-0103. Telephone: (202) 586-8145. Email:
Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, which includes the electric refrigerators that are the focus of this notice.
The regulations set forth in 10 CFR 430.27 contain provisions that enable a person to seek a waiver from the test procedure requirements for covered products. The Assistant Secretary for Energy Efficiency and Renewable Energy (the Assistant Secretary) will grant a waiver if it is determined that the basic model for which the petition for waiver was submitted contains one or more design characteristics that prevents testing of the basic model according to the prescribed test procedures, or if the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data. 10 CFR 430.27(l). A petitioner must include in its petition any alternate test procedures known to the petitioner to evaluate the basic model in a manner representative of its energy consumption. The Assistant Secretary may grant the waiver subject to conditions, including adherence to alternate test procedures. 10 CFR 430.27(l). Waivers remain in effect pursuant to the provisions of 10 CFR 430.27(m).
The waiver process also allows the Assistant Secretary to grant an interim waiver from test procedure requirements to manufacturers that have petitioned DOE for a waiver of such prescribed test procedures. 10 CFR 430.27(g). An interim waiver remains in effect for 180 days or until DOE issues its determination on the petition for waiver, whichever occurs earlier. DOE may extend an interim waiver for an additional 180 days. 10 CFR 430.27(h).
On September 27, 2013, Liebherr filed a petition for waiver and an application for interim waiver from the test procedure applicable to residential electric refrigerators and refrigerator-freezers set forth in 10 CFR part 430, subpart B, appendix A. The subject of the waiver petition is Liebherr 's all-refrigerator model, which shares a control panel with an accompanying freezer. Testing to the procedures in Title 10 of the Code of Federal Regulations (10 CFR), part 430, subpart B, appendix A, section 3 Test Control Settings requires that refrigerators with a user operable temperature control be tested with the control set in a prescribed manor according TABLE 1—TEMPERATURE SETTINGS FOR ALL-REFRIGERATORS. According to Liebherr, this is not possible for this model unless the refrigerator is connected to the accompanying freezer which has the control panel for both
In its petition Liebherr proposes to use an alternate test procedure to test these products. Specifically Liebherr proposes to place the refrigerator in position for testing, locate the freezer close enough to attach the low voltage connection (approximately 18”) but not in a location where the freezer interferes with the ambient air flow or other testing conditions, connect the refrigerator's low voltage cable to the freezer, plug in the freezer, turn the freezer off on the control panel, and use the refrigerator portion of the control panel to set the appropriate temperatures for the refrigerator test.
Liebherr also requests an interim waiver from the existing DOE test procedure. An interim waiver may be granted if it is determined that the applicant will experience economic hardship if the application for interim waiver is denied, if it appears likely that the petition for waiver will be granted, and/or the Assistant Secretary determines that it would be desirable for public policy reasons to grant immediate relief pending a determination of the petition for waiver. 10 CFR 430.27(g).
DOE has determined that Liebherr's application for interim waiver does not provide sufficient market, equipment price, shipments and other manufacturer impact information to permit DOE to evaluate the economic hardship Liebherr might experience absent a favorable determination on its application for interim waiver. DOE has determined, however, that it is likely Liebherr's petition will be granted, and that it is desirable for public policy reasons to grant Liebherr relief pending a determination on the petition. DOE has determined that it is desirable to have similar basic models tested in a consistent manner.
For the reasons stated above, DOE grants Liebherr's application for interim waiver from testing of its all-refrigerator that shares a control panel with an accompanying freezer. Therefore,
The application for interim waiver filed by Liebherr is hereby granted for the specified Liebherr refrigerator-freezer basic models that share a control panel with an accompanying freezer, subject to the specifications and conditions below. Liebherr shall be required to test or rate the specified refrigerator-freezer products according to the alternate test procedure as set forth in section III, “Alternate Test Procedure.”
The interim waiver applies to the following basic model groups:
DOE makes decisions on waivers and interim waivers for only those models specifically set out in the petition, not future models that may be manufactured by the petitioner. Liebherr may submit a subsequent petition for waiver and request for grant of interim waiver, as appropriate, for additional models of refrigerator-freezers for which it seeks a waiver from the DOE test procedure. In addition, DOE notes that a grant of an interim waiver or waiver does not release a petitioner from the certification requirements set forth at 10 CFR part 429.
Further, this interim waiver is conditioned upon the presumed validity of statements, representations, and documents provided by the petitioner. DOE may revoke or modify this interim waiver at any time upon a determination that the factual basis underlying the petition for waiver is incorrect, or upon a determination that the results from the alternate test procedure are unrepresentative of the basic models' true energy consumption characteristics.
EPCA requires that manufacturers use DOE test procedures to make representations about the energy consumption and energy consumption costs of products covered by the statute. (42 U.S.C. 6293(c)) Consistent representations are important for manufacturers to use in making representations about the energy efficiency of their products and to demonstrate compliance with applicable DOE energy conservation standards. Pursuant to its regulations applicable to waivers and interim waivers from applicable test procedures at 10 CFR 430.27, DOE will consider setting an alternate test procedure for Liebherr in a subsequent Decision and Order.
In its petition, Liebherr proposes to use an alternate test procedure. The DOE test procedure for residential refrigerators and refrigerator-freezers in Title 10 of the Code of Federal Regulations (10 CFR), part 430, subpart B, appendix A, section 3 Test Control Settings requires that refrigerators with a user operable temperature control be tested with the control set a prescribed manor according TABLE 1—TEMPERATURE SETTINGS FOR ALL-REFRIGERATORS. As described by Liebherr, these models are physically two separate cabinets, but are designed to be installed immediately adjacent, or in close proximity, to each other. In addition, the freezer model contains the control panel that controls the compartment temperatures of both appliances. Liebherr states that, because of this design feature, it is not possible to test the refrigerator model using the existing Appendix A test procedure unless the refrigerator is connected to the accompanying freezer; no provision in Appendix A allows for such an arrangement.
Liebherr proposes to use the test method of appendix A to subpart B of 10 CFR part 430 to test its refrigerator models, with a modification to address the connection of the refrigerator to the freezer. For the purposes of granting the interim waiver, DOE has modified slightly the language of Liebherr's proposal to be more consistent with the language of the DOE test procedure. For the purposes of testing the models addressed in this interim waiver, the following shall be treated as an additional requirement in Section 2 of Appendix A addressing test condition:
2.11 Connection of refrigerator cabinet to separate freezer cabinet: The refrigerator shall be positioned for testing in accordance with this section, with the freezer positioned close enough to the refrigerator to allow attachment of the low voltage connection (approximately 18”), but not in a location in which the freezer interferes with the ambient air flow or other testing conditions specified in this section. The refrigerator's low voltage cable shall be connected to the freezer prior to testing. The freezer must be plugged in in during testing, but shall be placed in the “off” position on the control panel. The refrigerator portion of the control panel shall then be used to set the appropriate temperatures for the refrigerator test as required by Section 3. Test Control Settings and perform the remainder of the test as prescribed by this Appendix.
DOE notes that Liebherr has not petitioned for a test procedure waiver nor requested an interim waiver for its accompanying freezer models. Thus, the freezer models shall be tested according to the applicable test procedure in appendix B to subpart B of 10 CFR part 430 without modification.
Through today's notice, DOE announces receipt of Liebherr's petition for waiver from certain parts of the test procedure in 10 CFR Part 430, subpart B, appendix A and grants an interim
DOE solicits comments from interested parties on all aspects of the petition. Any person submitting written comments to DOE must also send a copy of such comments to the petitioner. 10 CFR 430.27(d). The contact information for the petitioner is: Gordon Tosh, Technical Advisor, Refrigerator and Freezer Division, Liebherr Canada Ltd., 1015 Sutton Drive, Burlington, Ontario, Canada, N0B 2K0. All submissions received must include the agency name and case number for this proceeding. Submit electronic comments in WordPerfect, Microsoft Word, Portable Document Format (PDF), or text (American Standard Code for Information Interchange (ASCII)) file format and avoid the use of special characters or any form of encryption. Wherever possible, include the electronic signature of the author. DOE does not accept telefacsimiles (faxes).
Liebherr Canada Ltd. (Liebherr) respectfully summits an Application for Petition of Waiver and Application for Interim Waiver to the Department of Energy (DOE) with regard to Liebherr's all-refrigerator that shares a control panel with an accompanying freezer.
10 CFR 430.27, Petitions for waiver and applications for interim waiver, allows any interested person to submit a petition to waive for a particular basic model any requirements of § 430.23, or of any appendix to this subpart, upon the grounds that the basic model contains one or more design characteristics which prevent testing of the basic model according to the prescribed test procedures.
APPENDIX A TO SUBPART B OF PART 430—UNIFORM TEST METHOD FOR MEASURING THE ENERGY CONSUMPTION OF ELECTRIC REFRIGERATORS AND ELECTRIC REFRIGERATOR-FREEZERS, SEC. 3 TEST CONTROL SETTINGS: Requires that refrigerators with a user operable temperature control be tested with the control set a prescribed manor according TABLE 1—TEMPERATURE SETTINGS FOR ALL-REFRIGERATORS. This is not possible unless the refrigerator is connected to the accompanying freezer which has the control panel for both appliances.
Liebherr petitions for waiver for a refrigerator that due to a design characteristic prevents testing of the basic model according to the prescribed test procedures because its control panel is located in an accompanying freezer. The petition for waiver is to allow a freezer, with the appropriate connection and control panel, to be connected to the refrigerator for the sole purpose of changing the control settings in the refrigerator under test.
Alternate test procedure.
When the refrigerator is in position for testing, locate the freezer close enough to attach the low voltage connection (approximately 18″) but not in a location where the freezer interferes with the ambient air flow or other testing conditions. Connect the refrigerator's low voltage cable to the freezer. Plug in the freezer. Turn the freezer off on the control panel. Use the refrigerator portion of the control panel to set the appropriate temperatures for the refrigerator test.
Liebherr Petitions for Waiver and application for Interim Waiver to allow the use of the control panel in an accompanying freezer to set the temperature of a refrigerator under test.
The effected models are RB 1420 and R 1420.
Please feel free to contact me if we have any questions regarding this Petition for Waiver and application for Interim Waiver. I will be happy to provide any other information or discuss any questions.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notice of Petition for Waiver, Notice of Granting Application for Interim Waiver, and Request for Public Comments.
This notice announces receipt of petitions for waiver from Samsung Electronics America, Inc. (Samsung) seeking an exemption from specified portions of the U.S. Department of Energy (DOE) test procedure for determining the energy consumption of electric refrigerators and refrigerator-freezers. Samsung asks that it be permitted to use an alternate test procedure that is intended to address difficulties in testing dual compressor systems using the currently applicable DOE test procedure. DOE solicits comments, data, and information concerning Samsung's petitions and the suggested alternate test procedure. Today's notice also grants Samsung an interim waiver from the electric refrigerator-freezer test procedure, subject to use of the alternative test procedure set forth in this notice. The waiver request pertains to the basic models set forth in Samsung's petitions that incorporate dual compressors.
DOE will accept comments, data, and information with respect to the Samsung Petition until February 24, 2014.
You may submit comments, identified by case number “RF-037,” by any of the following methods:
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Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-163 (42 U.S.C. 6291-6309, as codified, established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, which includes the electric refrigerators and refrigerator-freezers that are the focus of this notice.
The regulations set forth in 10 CFR 430.27 contain provisions that enable a person to seek a waiver from the test procedure requirements for covered products. The Assistant Secretary for Energy Efficiency and Renewable Energy (the Assistant Secretary) will grant a waiver if it is determined that the basic model for which the petition for waiver was submitted contains one or more design characteristics that prevents testing of the basic model according to the prescribed test procedures, or if the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data. 10 CFR 430.27(l). Petitioners must include in their petition any alternate test procedures known to the petitioner to evaluate the basic model in a manner representative of its energy consumption. The Assistant Secretary may grant the waiver subject to conditions, including adherence to alternate test procedures. 10 CFR 430.27(l). Waivers remain in effect pursuant to the provisions of 10 CFR 430.27(m).
The waiver process also allows the Assistant Secretary to grant an interim waiver from test procedure requirements to manufacturers that have petitioned DOE for a waiver of such prescribed test procedures. 10 CFR 430.27(g). An interim waiver remains in effect for 180 days or until DOE issues its determination on the petition for waiver, whichever occurs earlier. DOE may extend an interim waiver for an additional 180 days. 10 CFR 430.27(h).
On December 13 and 26, 2013, Samsung submitted petitions for waiver from the test procedure applicable to residential electric refrigerators and refrigerator-freezers set forth in 10 CFR part 430, subpart B, appendix A1. Samsung is seeking a waiver because it is developing new refrigerator-freezers that incorporate a dual-compressor design that is not contemplated under DOE's test procedure. In its petitions, Samsung seeks a waiver from the existing DOE test procedure applicable to refrigerators and refrigerator-freezers under 10 CFR part 430 for the company's dual-compressor products. In its petitions, Samsung has set forth an alternate test procedure and notes in support of its petition that DOE has already granted Sub-Zero a similar waiver pertaining to the use of dual compressor-equipped refrigerators. See 76 FR 71335 (November 17, 2011) (interim waiver) and 77 FR 5784 (February 6, 2012) (Decision and Order). DOE has also granted an interim waiver for products of this type to LG. See 77 FR 44603 (July 30, 2012). While Samsung has acknowledged that its products have some differences from the ones addressed by the Sub-Zero waiver, Samsung asserts that the procedure outlined in that waiver will be compatible with its product. In addition, Samsung requests that it be permitted to use the alternate test procedure that DOE has already permitted Sub-Zero and LG to use in response to similar waiver requests pertaining to the testing of refrigerator-freezers that use shared dual compressors, with minor modification suggested below:
Samsung also requests an interim waiver from the existing DOE test procedure. An interim waiver may be granted if it is determined that the applicant will experience economic hardship if the application for interim waiver is denied, if it appears likely that the petition for waiver will be granted, and/or the Assistant Secretary determines that it would be desirable for public policy reasons to grant immediate relief pending a determination of the petition for waiver. See 10 CFR 430.27(g).
DOE has determined that Samsung's application for interim waiver does not provide sufficient market, equipment price, shipments and other manufacturer impact information to permit DOE to evaluate the economic hardship Samsung might experience absent a favorable determination on its application for interim waiver. DOE recognizes, however, that the DOE test procedure for dual compressor systems primarily addresses independent, sealed systems, which differ from the shared system used by the models listed in Samsung's petition. As a result, it is not possible to test these products using the DOE test procedure, and use of the test procedure would provide test results so unrepresentative as to provide materially inaccurate comparative data. DOE reviewed the alternate procedure and determined that it will alleviate the
For the reasons stated above, DOE grants Samsung's application for interim waiver from testing of its refrigerator-freezer product line containing dual compressors. Therefore,
The application for interim waiver filed by Samsung is hereby granted for Samsung's refrigerator-freezer product lines that incorporate dual compressors subject to the following specifications and conditions below. Samsung shall be required to test and rate its refrigerator-freezer product line containing dual compressors according to the alternate test procedure as set forth in section III, “Alternate test procedure.”
The interim waiver applies to the following basic models group:
DOE makes decisions on waivers and interim waivers for only those models specifically set out in the petition, not future models that may be manufactured by the petitioner. Samsung may submit a new or amended petition for waiver and request for grant of interim waiver, as appropriate, for additional models of refrigerator-freezers for which it seeks a waiver from the DOE test procedure. In addition, DOE notes that granting of an interim waiver or waiver does not release a petitioner from the certification requirements set forth at 10 CFR part 429.
Further, this interim waiver is conditioned upon the presumed validity of statements, representations, and documents provided by the petitioner. DOE may revoke or modify this interim waiver at any time upon a determination that the factual basis underlying the petition for waiver is incorrect, or upon a determination that the results from the alternate test procedure are unrepresentative of the basic models' true energy consumption characteristics.
EPCA requires that manufacturers use DOE test procedures to make representations about the energy consumption and energy consumption costs of products covered by the statute. (42 U.S.C. 6293(c)) Consistent representations are important for manufacturers to use in making representations about the energy efficiency of their products and to demonstrate compliance with applicable DOE energy conservation standards. Pursuant to its regulations applicable to waivers and interim waivers from applicable test procedures at 10 CFR 430.27, DOE will consider setting an alternate test procedure for Samsung in a subsequent Decision and Order.
During the period of the interim waiver granted in this notice, Samsung shall test the products listed above according to the test procedures for residential electric refrigerator-freezers prescribed by DOE at 10 CFR part 430, subpart B, appendix A1, except that, for the Samsung products listed above only, include:
5.2.1.4 Dual Compressor Systems with Automatic Defrost (i=1 is mono, i=2 is dual). The two-part test method in section 4.2.1 must be used, and the energy consumption in kilowatt-hours per day shall be calculated equivalent to:
Stabilization:
The test shall start after a minimum 24 hours stabilization run for each temperature control setting.
Steady State for EP1:
The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the test period temperature average for each compartment. Make this determination for the fresh food compartment for the fresh food compressor cycles closest to the start and end of the test period. If multiple segments are used for test period 1, each segment must comply with above requirement.
Steady State for EP2i:
The second (defrost) part of the test must be preceded and followed by regular compressor cycles. The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the EP1 test period temperature average for each compartment.
Test Period for EP2i, T2i:
EP2i includes precool, defrost, and recovery time for compartment i, as well as sufficient dual compressor steady state run cycles to allow T2i to be at least 24 hours. The test period shall start at the end of a regular freezer compressor on-cycle after the previous defrost occurrence (refrigerator or freezer). The test period also includes the target defrost and following regular freezer compressor cycles, ending at the end of a regular freezer compressor on cycle before the next defrost occurrence (refrigerator or freezer). If the previous condition does not meet 24 hours time, additional EP1 steady state segment data could be included. Steady state run cycle data can be utilized in EP1 and EP2i.
Test Measurement Frequency:
Measurements shall be taken at regular interval not exceeding 1 minute.
Through today's notice, DOE grants Samsung an interim waiver from the specified portions of the test procedure applicable to Samsung's line of refrigerator-freezers with dual compressors and announces receipt of Samsung's petitions for waiver from those same portions of the test procedure. DOE publishes Samsung's petitions for waiver in its entirety. The
DOE solicits comments from interested parties on all aspects of the petitions, including the suggested alternate test procedure and calculation methodology. Any person submitting written comments to DOE must also send a copy of such comments to the petitioner. The contact information for the petitioner is: Michael Moss, Director of Corporate Environmental Affairs, Samsung Electronics America, Inc., 19 Chapin Road, Building D, Pine Brook, NJ 07058. All submissions received must include the agency name and case number for this proceeding. Submit electronic comments in WordPerfect, Microsoft Word, Portable Document Format (PDF), or text (American Standard Code for Information Interchange (ASCII)) file format and avoid the use of special characters or any form of encryption. Wherever possible, include the electronic signature of the author. DOE does not accept telefacsimiles (faxes).
Samsung Electronics America, Inc. (“Samsung”) respectfully submits the Application for Petition for Waiver and Application for Interim Waiver to the Department of Energy (“DOE” or “the Department”) regards to Samsung's residential refrigerator-freezers that use shared dual compressors.
10 CFR Part 430.27(a)(1) allows a person to submit a petition to waive for a particular basic model any requirements of § 430.23 when (1) the basic model contains one or more design characteristics which either prevent testing of the basic model according to the prescribed test procedures, or (2) the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data.
Current test procedures as prescribed in Appendix A1 to Subpart B of 10 Part 430 do not adequately provide a way for Samsung to accurately represent the energy consumption of its refrigerator-freezers that use shared dual compressors. Meanwhile, based on similar situations, DOE has already granted a waiver to Sub-Zero in 77 FR 5784 on February 6, 2012, and similarly, an interim waiver to LG in 77 FR 44603 on July 30, 2012.
However, unlike Subzero's design which features two compressors, two evaporators, and two defrost heaters, Samsung's design features two compressors, four evaporators, and three defrost heaters.
Samsung's design features four compartments that have their own evaporators. Three compartments, freezer/convertible/fresh food compartment, are accessible with an exterior door and the fourth ice room compartment is a sub compartment and located inside of the fresh food compartment. Defrost heaters are adopted at three evaporators (freezer/convertible/ice room) except the fresh food compartment evaporator and those heaters operate all together at the same time according to the control logic. So essentially, there is only one defrost type. Despite these differences of the composition, Samsung believes that the test procedure, as prescribed in the waiver granted to Subzero and in the interim waiver granted to LG, is equally applicable and appropriate.
More specifically, Samsung's residential refrigerator-freezers that use shared dual compressors can be tested and calculate to a reasonable result with same test procedure granted to Subzero's waiver because the test procedure of Subzero's waiver adopt a multiple defrost system of 1, 2 or more compartment with distinct defrost system and Samsung's dual units have one defrost system despite of having four compartments and three defrost heaters as explained above.
Therefore, Samsung respectfully requests a waiver and an interim waiver for the alternate test procedure that DOE has already granted Sub-Zero and LG pertaining to the refrigerator-freezers that use shared dual compressors, with minor modification suggested below:
Replace the multiple defrost system section 5.2.1.4 of Appendix A1 with the following:
5.2.1.4 Dual Compressor Systems with Automatic Defrost. The two-part test method in section 4.2.1 must be used, and the energy consumption in kilowatt-hours per day shall be calculated equivalent to:
• CTi is the compressor on time between defrosts for only compartment i. CTi for compartment i with long time automatic defrost system is calculated as per 10 CFR part 430 subpart B appendix A1 clause 5.2.1.2. CTi for compartment i with variable defrost system is calculated as per 10 CFR part 430 subpart B appendix A1 clause 5.2.1.3. (hours rounded to the nearest tenth of an hour).
Stabilization:
The test shall start after a minimum 24 hours stabilization run for each temperature control setting.
Steady State for EP1:
The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the test period temperature average for each compartment. Make this determination for the fresh food compartment for the fresh food compressor cycles closest to the start and end of the test period. If multiple segments are used for test period 1, each segment must comply with above requirement.
Steady State for EP2i:
The second (defrost) part of the test must be preceded and followed by regular compressor cycles. The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the EP1 test period temperature average for each compartment.
Test Period for EP2i, T2i:
EP2i includes precool, defrost, and recovery time for compartment i, as well as sufficient dual compressor steady state run cycles to allow T2i to be at least 24 hours. The test period shall start at the end of a regular freezer compressor on-cycle after the previous defrost occurrence (refrigerator or freezer). The test period also includes the target defrost and following regular freezer compressor cycles, ending at the end of a regular freezer compressor oncycle before the next defrost occurrence (refrigerator or freezer). If the previous condition does not meet 24 hours time, additional EP1 steady state segment data could be included. Steady state run cycle data can be utilized in EP1 and EP2i.
Test Measurement Frequency:
Measurements shall be taken at regular interval not exceeding 1 minute.
For the reasons that DOE described in its granting of waiver and interim waiver for Sub-Zero and LG for refrigerator-freezers with shared dual compressors, Samsung believes that the expeditious granting of Waiver and Interim Waiver for the model listed below is warranted:
Please feel free to contact me if you have any questions regarding this Application for Petition for Waiver and Application for Interim Waiver. I will be happy to discuss should any questions arise.
Samsung Electronics America, Inc. (“Samsung”) respectfully submits the Application for Petition for Waiver and Application for Interim Waiver to the Department of Energy (“DOE” or “the Department”) regards to Samsung's residential refrigerator-freezers that use shared dual compressors.
10 CFR Part 430.27(a)(1) allows a person to submit a petition to waive for a particular basic model any requirements of § 430.23 when (1) the basic model contains one or more design characteristics which either prevent testing of the basic model according to the prescribed test procedures, or (2) the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data.
Current test procedures as prescribed in Appendix A1 to Subpart B of 10 Part 430 do not adequately provide a way for Samsung to accurately represent the energy consumption of its refrigerator-freezers that use shared dual compressors. Meanwhile, based on similar situations, DOE has already granted a waiver to Sub-Zero in 77 FR 5784 on February 6, 2012, and similarly, an interim waiver to LG in 77 FR 44603 on July 30, 2012.
However, unlike Subzero's design which features two compressors, two evaporators, and two defrost heaters, Samsung's design features two compressors, four evaporators, and three defrost heaters.
Samsung's design features four compartments that have their own evaporators. Three compartments, freezer/convertible/fresh food compartment, are accessible with an exterior door and the fourth ice room compartment is a sub compartment and located inside of the fresh food compartment. Defrost heaters are adopted at three evaporators (freezer/convertible/ice room) except the fresh food compartment evaporator and those heaters operate all together at the same time according to the control logic. So essentially, there is only one defrost type. Despite these differences of the composition, Samsung believes that the test procedure, as prescribed in the waiver granted to Subzero and in the interim waiver granted to LG, is equally applicable and appropriate.
More specifically, Samsung's residential refrigerator-freezers that use shared dual compressors can be tested and calculate to a reasonable result with same test procedure granted to Subzero's waiver because the test procedure of Subzero's waiver adopt a multiple defrost system of 1, 2 or more compartment with distinct defrost system and Samsung's dual units have one defrost system despite of having four compartments and three defrost heaters as explained above.
Therefore, Samsung respectfully requests a waiver and an interim waiver for the alternate test procedure that DOE has already granted Sub-Zero and LG pertaining to the refrigerator-freezers that use shared dual compressors, with minor modification suggested below:
Replace the multiple defrost system section 5.2.1.4 of Appendix A1 with the following:
5.2.1.4 Dual Compressor Systems with Automatic Defrost. The two-part test method in section 4.2.1 must be used, and the energy consumption in kilowatt-hours per day shall be calculated equivalent to:
Stabilization:
The test shall start after a minimum 24 hours stabilization run for each temperature control setting.
Steady State for EP1:
The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the test period temperature average for each compartment. Make this determination for the fresh food compartment for the fresh food compressor cycles closest to the start and end of the test period. If multiple segments are used for test period 1, each segment must comply with above requirement.
Steady State for EP2i:
The second (defrost) part of the test must be preceded and followed by regular compressor cycles. The temperature average for the first and last compressor cycle of the test period must be within 1.0 °F (0.6 °C) of the EP1 test period temperature average for each compartment.
Test Period for EP2i, T2i:
EP2i includes precool, defrost, and recovery time for compartment i, as well as sufficient dual compressor steady state run cycles to allow T2i to be at least 24 hours. The test period shall start at the end of a regular freezer compressor on-cycle after the previous defrost occurrence (refrigerator or
Test Measurement Frequency:
Measurements shall be taken at regular interval not exceeding 1 minute.
For the reasons that DOE described in its granting of waiver and interim waiver for Sub-Zero and LG for refrigerator-freezers with shared dual compressors, Samsung believes that the expeditious granting of Waiver and Interim Waiver for the model listed below is warranted:
RF33H99****
Please feel free to contact me if you have any questions regarding this Application for Petition for Waiver and Application for Interim Waiver. I will be happy to discuss should any questions arise.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
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All documents may be filed electronically via the Internet. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web site at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
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m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency is planning to submit an information collection request (ICR), “National Volatile Organic Compound Emission Standards for Consumer Products, CFR 40 Part 59, Subpart C (Renewal),” (EPA ICR Number 1764.06, OMB Control number 2060-0348) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
Comments must be submitted on or before March 24, 2014.
Submit your comments, referencing Docket ID No. EPA-HQ-OAR-2007-0563, online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Ms. Kim Teal, Office of Air and Radiation, Office of Air Quality Planning and Standards, Mail Code D243-04, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-5580; fax number: (919) 541-5450; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting comments and information to enable it to: (i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval. At that time, EPA will issue another
Environmental Protection Agency (EPA).
Notice; request for public comment.
In accordance with the Prospective Purchaser Agreement, notice is hereby given of a proposed administrative settlement concerning the PCC Validation Site in Pontiac, Oakland County, Michigan with the following settling party: M1 Concourse, LLC. The settlement requires the Settling Party to execute and record a Declaration of Restrictive Covenant; provide access to the Property and exercise due care with respect to existing contamination. The settlement includes a covenant not to sue the Settling Party pursuant to Comprehensive Environmental
For thirty (30) days following the date of publication of this notice, the Agency will receive written comments relating to the settlement. The Agency will consider all comments received and may modify or withdraw its consent to the settlement if comments received disclose facts or considerations which indicate that the settlement is inappropriate, improper, or inadequate. The Agency's response to any comments received will be available for public inspection at the EPA, Region 5, Records Center, 77 W. Jackson Blvd., 7th Fl., Chicago, Illinois 60604.
Comments must be submitted on or before February 24, 2014.
The proposed settlement is available for public inspection at the EPA, Region 5, Records Center, 77 W. Jackson Blvd., 7th Fl., Chicago, Illinois 60604. A copy of the proposed settlement may be obtained from Peter Felitti, Assoc. Regional Counsel, EPA, Office of Regional Counsel, Region 5, 77 W. Jackson Blvd., mail code: C-14J, Chicago, Illinois 60604. Comments should reference the PCC Validation Site, Pontiac, Michigan and EPA Docket No. and should be addressed to Peter Felitti, Assoc. Regional Counsel, EPA, Office of Regional Counsel, Region 5, 77 W. Jackson Blvd., mail code: C-14J, Chicago, Illinois 60604.
Peter Felitti, Assoc. Regional Counsel, EPA, Office of Regional Counsel, Region 5, 77 w. Jackson Blvd., mail code: C-14J, Chicago, Illinois 60604.
The Settling Party proposes to acquire ownership of a former General Motors Corporation North American operation, at 200 South Boulevard West, Pontiac, Michigan. The EPA identification number for the Site is # MID980568836. The Site is one of the 89 sites that were placed into an Environmental Response Trust (the “Trust”) as a result of the resolution of the 2009 GM bankruptcy. The Trust is administrated by Revitalizing Auto Communities Environmental Response.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC 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.
Written PRA comments should be submitted on or before March 24, 2014. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
47 CFR 76.990(b)(1) requires that a small cable operator may certify in writing to its franchise authority at any time that it meets all criteria necessary to qualify as a small operator. Upon request of the local franchising authority, the operator shall identify in writing all of its affiliates that provide cable service, the total subscriber base of itself and each affiliate, and the aggregate gross revenues of its cable and non-cable affiliates. Within 90 days of receiving the original certification, the local franchising authority shall determine whether the operator qualifies for deregulation and shall notify the operator in writing of its decision, although this 90-day period shall be tolled for so long as it takes the
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than February 6, 2014.
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The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than February 14, 2014.
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Federal Trade Commission.
Proposed Consent Agreement.
The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis of Proposed Consent Order to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before February 14, 2014.
Interested parties may file a comment at
Duane Pozza, Bureau of Consumer Protection, (202-326-2042), 600 Pennsylvania Avenue NW, Washington, DC 20580.
Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent order to cease and desist, having been filed with and accepted, subject to final
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before February 14, 2014. Write “Apple Inc.—Consent Agreement; File No. 112 3108” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not 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 does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed 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, do not 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. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “Apple Inc.—Consent Agreement; File No. 112 3108” 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 D), 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
The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an agreement containing a consent order from Apple Inc. (“Apple”).
The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement and take appropriate action or make final the agreement's proposed order.
Apple bills consumers for charges related to activity within software applications (“apps”) that consumers download to their iPhone, iPod Touch, or iPad devices from Apple's App Store. This matter concerns Apple's billing for charges incurred by children in apps that are likely to be used by children without having obtained the account holders' express informed consent.
The Commission's proposed complaint alleges that Apple offers thousands of apps, including games that children are likely to play, and that in many instances, children can obtain virtual items within a game app that cost money. Apple bills parents and other adult account holders for items that cost money within an app—“in-app charges.” In connection with billing for children's in-app charges, Apple sometimes requests a parent's iTunes password. In many instances, Apple “caches” (that is, stores) the iTunes password for fifteen minutes after it is entered. During this process, Apple in many instances has not informed account holders that password entry will approve a charge or initiate a fifteen-minute window during which children using the app can incur charges without further action by the account holder. The Commission's proposed complaint alleges that, through these practices, Apple often fails to obtain parents' informed consent to charges incurred by children, which constitutes an unfair practice under Section 5 of the FTC Act.
The proposed order contains provisions designed to prevent Apple from engaging in the same or similar acts or practices in the future. Part I of the proposed order requires Apple to obtain express, informed consent to in-app charges before billing for such charges, and to allow consumers to revoke consent to prospective in-app charges at any time. As defined in the proposed order, express, informed consent requires an affirmative act communicating authorization of an in-app charge (such as entering a password), made proximate to both an in-app activity for which Apple is billing a charge and a clear and conspicuous disclosure of material information about the charge. Under the definition, the act and disclosure must be reasonably calculated to ensure that the person providing consent is the account holder (as opposed to the child). The proposed order would require the disclosure to appear at least once per mobile device. Apple must come into compliance with the Part I requirements by March 31, 2014.
Part II of the proposed order requires Apple to provide full refunds to Apple account holders who have been billed by Apple for unauthorized in-app charges incurred by minors. Apple will refund no less than $32.5 million for these in-app charges in the year following entry of the order, and if such refunds total less than $32.5 million, Apple will remit any remaining balance to the Commission to be used for informational remedies, further redress, or payment to the U.S. Treasury as equitable disgorgement. To effectuate refunds, Apple must send an electronic notice to its consumers that clearly and conspicuously discloses the availability of refunds and instructions on how to obtain such refunds. Within 30 days of the end of the one-year redress period, Apple must provide the Commission with records of refund requests, refunds paid, and any refunds denied.
Parts III through VII of the proposed order are reporting and compliance provisions. Part III of the proposed order requires Apple to maintain and upon request make available certain compliance-related records, including certain consumer complaints and refund requests, for a period of five years. Part IV is an order distribution provision that requires Apple to provide the order to current and future principals, officers, and corporate directors, as well as current and future managers, employees, agents, and representatives who participate in certain duties related to the subject matter of the proposed complaint and order, and to secure statements acknowledging receipt of the order.
Part V requires Apple to notify the Commission of corporate changes that may affect compliance obligations within 14 days of such a change. Part VI requires Apple to submit a compliance report 90 days after March 31, 2014, the date by which Apple is required to come into full compliance with Part I of the order. It also requires Apple to submit additional compliance reports within 10 business days of a written request by the Commission. Part VII is a provision “sunsetting” the order after twenty (20) years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or proposed order, or to modify in any way the proposed order's terms.
By direction of the Commission, Commissioner Wright dissenting.
The Commission has issued a complaint and proposed consent order to resolve allegations that Apple Inc. unfairly failed to obtain informed consent for charges incurred by children in connection with their use of mobile apps on Apple devices in violation of Section 5 of the Federal Trade Commission Act. Consistent with prior application of the Commission's unfairness authority, our action today reaffirms that companies may not charge consumers for purchases that are unauthorized—a principle that applies regardless of whether consumers are in a retail store, on a Web site accessed from a desktop computer, or in a digital store using a mobile device.
As alleged in the Commission's complaint, Apple violated this basic principle by failing to inform parents that, by entering a password, they were permitting a charge for virtual goods or currency to be used by their child in playing a children's app and at the same time triggering a 15-minute window during which their child could make unlimited additional purchases without further parental action. As a consequence, at least tens of thousands of parents have incurred millions of dollars in unauthorized charges that they could not readily have avoided. Apple, however, could have prevented these unwanted purchases by including a few words on an existing prompt, without disrupting the in-app user experience. As explained below, we believe the Commission's allegations are more than sufficient to satisfy the standard governing the FTC Act's prohibition against “unfair acts or practices.”
Apple distributes apps, including games, that are likely to be used by children on Apple mobile devices through its iTunes App Store. While playing these games, kids may incur charges for the purchase of virtual items such as digital goods or currency (known as “in-app charges”) at prices ranging from $.99 to $99.99. These in-app charges are billed to their parents' iTunes accounts. Apple retains thirty percent of the revenues from in-app charges. As part of the in-app purchasing process, Apple displays a general prompt that calls for entry of the password for the iTunes account associated with the mobile device. Apple treats this password entry as authorizing a specific transaction and simultaneously allowing additional in-app purchases for 15 minutes.
While key aspects of the in-app purchasing sequence have changed over time, as described in the Commission's complaint, one constant has been that Apple does not explain to parents that entry of their password authorizes an in-app purchase and also opens a 15-minute window during which children are free to incur unlimited additional charges. We allege that, since at least March 2011, tens of thousands of consumers have complained about millions of dollars in unauthorized in-app purchases by children, with many of them individually reporting hundreds to thousands of dollars in such charges. As a result, we have reason to believe, and have alleged in our complaint, that Apple's failure to disclose the 15-minute window is an unfair practice that violates Section 5 because it has caused or is likely to cause substantial consumer injury that is neither reasonably avoidable by consumers nor outweighed by countervailing benefits to consumers or competition.
The proposed consent order resolves these allegations by requiring Apple to obtain informed consent to in-app charges. The order also requires Apple to provide full refunds, an amount no less than $32.5 million, to all of its account holders who have been billed for unauthorized in-app charges incurred by minors.
Importantly, the Commission does not challenge Apple's use of a 15-minute purchasing window in apps used by kids. Rather, our charge is that, even after receiving at least tens of thousands of complaints about unauthorized charges relating to in-app purchases by kids, Apple continued to fail to disclose to parents and other Apple account holders that entry of a password in a children's app meant they were approving a single in-app charge plus 15 minutes of further, unlimited charges.
In asserting that Apple violated Section 5's prohibition against unfair practices by failing to obtain express informed consent for in-app charges incurred by kids, we follow a long line of FTC cases establishing that the imposition of unauthorized charges is
Our task here, as in all instances in which we assert jurisdiction over unfair acts or practices, is to determine whether the alleged unlawful conduct causes or is likely to cause substantial injury that is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumers or competition. After a full investigation, we have reason to believe that Apple's conduct constitutes an unfair practice.
We begin by addressing the issue of harm. It is well established that substantial injury may be demonstrated by a showing of either small harm to a large number of people or large harm in the aggregate.
In his dissent, Commissioner Wright expresses the view that the harm alleged by the Commission involves “a miniscule percentage of consumers” and is therefore insubstantial.
It is also incorrect that “in order to qualify as substantial, the harm must be large compared to any offsetting benefits.”
We also have reason to believe that consumers could not reasonably avoid the alleged injury. An injury is not reasonably preventable by consumers unless they had an opportunity to make a “free and informed choice” to avoid the harm.
Over time, through experience, some parents may infer that entry of a password opens a 15-minute window during which unlimited purchases can be made. The receipt of an invoice with unauthorized charges may be sufficient to alert some parents about the unwanted charges. But that does not relieve Apple of the obligation to take reasonable steps to inform consumers of the 15-minute window before the user opens that window and before Apple places charges on a bill. In light of Apple's failure to disclose the 15-minute purchasing window, it was reasonable for parents not to expect that when they input their iTunes password they were authorizing 15 minutes of unlimited purchases without the child having to ask the parent to input the password again. There was nothing to suggest this and thus no “obligation for them to investigate further” as Commissioner Wright suggests.
Finally, we also have reason to believe that the harm alleged outweighs any countervailing benefits to consumers or competition from Apple's practices. This is not a case about Apple's “choice to integrate the fifteen-minute window into Apple users' experience on the platform,” as Commissioner Wright implies.
Under the proposed consent order, Apple is permitted to bill for multiple charges within a 15-minute window upon password entry provided it informs consumers what they are authorizing, allowing consumers to make an informed choice about whether to open a period during which additional charges can be incurred without further entry of a password.
Moreover, we are confident that our action today fully preserves the incentive to innovate and develop digital platforms that are user-friendly and beneficial for consumers. In this respect, we emphasize that we do not expect companies “to anticipate
The extent and duration of the unauthorized in-app charges alleged in the complaint support our conclusion that, while Apple has strong incentives to cultivate customer goodwill in order to encourage the purchase of in-app goods and currency and promote the sale of its mobile devices, these incentives may not be sufficient to produce the necessary disclosures. Because customers are often unaware of the way in-app charges work, let alone the possibility of Apple disclosing its practices, we do not think that Commissioner Wright's belief that Apple “has more than enough incentives to disclose”
We applaud the innovation that is occurring in the mobile arena. Today, parents have access to an enormous number and variety of apps for use by their children. We firmly believe that technological innovation and fundamental consumer protections can coexist and, in fact, are mutually beneficial. Such innovation is enhanced, and will only reach its full potential, if all marketplace participants abide by the basic principle that they must obtain consumers' informed consent to charges before they are imposed.
I voted to accept for public comment the accompanying proposed administrative complaint and consent order, settling allegations that Apple Inc. engaged in unfair acts or practices by billing iTunes account holders for charges incurred by children in apps that are likely to be used by children without the account holders' express informed consent.
In his dissent, Commissioner Wright lauds the iterative software design process of rapid prototyping, release, and revision based on market feedback; this approach has proven to be one of the most successful methods for balancing design tradeoffs. He also notes that it can be difficult to forecast problems that may arise with complicated products across millions of users and expresses concern that our decision today requires companies to anticipate and fix all such problems in advance.
I agree with Commissioner Wright that we should avoid actions that would chill an iterative approach to software development or that would unduly burden the creation of complex products by imposing an obligation to foresee all problems that may arise in a
Commissioner Wright also argues that under our unfairness authority “substantiality is analyzed relative to the magnitude of any offsetting benefits,”
Today, through the issuance of an administrative complaint, the Commission alleges that Apple, Inc. (“Apple”) has engaged in “unfair acts or practices” by billing parents and other iTunes account holders for the activities of children who were engaging with software applications (“apps”) likely to be used by children that had been downloaded onto Apple mobile devices.
Today's action has been characterized as nothing more than a reaffirmance of the concept that “companies may not charge consumers for purchases that are unauthorized.”
Section 5 of the FTC Act prohibits, in part, “unfair . . . acts or practices in or affecting commerce.”
The test the Commission uses to evaluate whether an unfair act or practice is unfair used to be different. Previously the Commission considered: whether the practice injured consumers; whether it violated established public policy; and whether it was unethical or unscrupulous.
As set forth in more detail below, I do not believe the Commission has met its burden to satisfy all three requirements in the unfairness analysis. In particular, although Apple's allegedly unfair act or practice has harmed some consumers, I do not believe the Commission has demonstrated the injury is substantial. More importantly, any injury to consumers flowing from Apple's choice of disclosure and billing practices is outweighed considerably by the benefits to competition and to consumers that flow from the same practice. Accordingly, I respectfully dissent from the issuance of this administrative complaint and consent order.
This case requires the Commission to analyze consumer injury under the unfairness theory in a novel context: an allegation of a failure to disclose a product feature to consumers that results in some injury to one group of consumers but that generates benefits for another group.
The circumstances surrounding Apple's decision to forgo disclosing during the transaction the fifteen-minute window to its users—and according to the Commission's complaint, thereby failing to obtain express informed consent—are distinguishable from any other prior Commission case alleging unfairness. The economic consequences of the allegedly unfair act or practice in this case—a product design decision that benefits some consumers and harms others—also differ significantly from those in the Commission's previous unfairness cases.
The Commission commonly brings unfairness cases alleging failure to obtain express informed consent. These cases invariably involve conduct where the defendant has intentionally obscured the fact that consumers would be billed. Many of these cases involve unauthorized billing or cramming—the outright fraudulent use of payment information.
However, the particular facts of this case differ in several respects from the above scenario. First, there is no evidence Apple intended to harm consumers by not disclosing the fifteen-minute window.
Second, rather than an unscrupulous or questionable practice, the nature of Apple's disclosures on its platform is an important attribute of Apple's platform that affects the demand for and consumer benefits derived from Apple devices and services. Disclosures made on the screen while consumers interact with mobile devices are a fundamental part of the user experience for products like mobile computing devices. It is well known that Apple invests considerable resources in its product design and functionality.
The Commission has long recognized that in utilizing its authority to deem an act or practice as “unfair” it must undertake a much more rigorous
Apple's choice to include the fifteen-minute window in its platform design, and its decision on how to disclose this window, resulted in harm to a small fraction of consumers. Any consumer harm is limited to parents who incurred in-app charges that would have been avoided had Apple instead designed its platform to provide specific disclosures about the fifteen-minute window for apps with in-app purchasing capability that are likely to be used by children. That harm to some consumers results from a design choice for a platform used by millions of users with disparate preferences is not surprising. The failure to provide perfect information to consumers will always result in “some” injury to consumers. The relevant inquiry is whether the injury to the subset of consumers is “substantial” as contemplated by the Commission's unfairness analysis. Consumer injury may be established by demonstrating the allegedly unfair act or practice causes “a very severe harm to a small number”
By reasonable measures of the potential harms and benefits available to the Commission, the injury is relatively small and not necessarily substantial in this case. The complaint alleges Apple has received “at least tens of thousands of complaints related to unauthorized in-app charges by children”
In addition, the complaint presents a few examples in which children made unauthorized in-app purchases that were relatively large, some greater than $500, and one bill as high as $2,600.
The relevant economic context required to understand substantiality of injury in this case includes the proportions of populations potentially harmed and benefitted by the failure to disclose product features in this case. A measure of harm that gives weight to both the number of consumers harmed and the size of the individual harms is the ratio of the value of unauthorized purchases to the total sales affected by the practice. We can construct such a measure as follows. The $32.5 million in consumer refunds required by the consent decree presumably relates in some way to the harm arising from Apple's disclosure practices. Recognizing that monetary amounts emerging from consent decrees are a product of compromise and an assessment of litigation risk, suppose that the value of unauthorized purchases is ten times higher than the negotiated settlement amount. This assumption gives a conservatively high estimate of $325 million in unauthorized purchases since the inception of the App Store. The total sales affected by Apple's disclosure practices likely include not only the sale of apps and in-app purchases, but also the sale of iDevices. This is likely because the benefits from using apps and making in-app purchases are components of the stream of benefits generated by iDevices, and a customer's decision to purchase an iDevice will depend upon the stream of benefits derived from the device. Indeed, the degree of integration across all components of Apple's platform is remarkably high, suggesting that Apple's disclosure practices may affect all Apple's sales. For completeness, Charts 1 and 2 below measure the estimated harm as a fraction of all three variants of Apple's sales—App Store sales, iDevice sales, and total sales. These data are available from Apple's Annual Reports and press releases.
Chart 1 shows that the estimated value of the harm is a miniscule fraction of both Apple total sales (about six one-hundredths of one percent) and iDevice sales (about eight one-hundredths of one percent) over the five-year period from the inception of the App Store to September 2013. This measure of harm, a conservatively high estimate, is also a relatively small fraction of App Store sales (about 4.6 percent).
Chart 2 illustrates the same relationship with respect to Apple sales growth over the last 13 years.
Taking into account the full economic context of Apple's choice of disclosures relating to the fifteen-minute window undermines the conclusion that any consumer injury is substantial.
The Unfairness Statement provides that the “injury must be one which consumers could not reasonably have avoided.”
The harm to consumers contemplated in the complaint involves app functionality that changed over time. In the earliest timeframe, the harm occurred when a parent typed in their Apple password to download an app with in-app purchase capability, handed the Apple device to their child, and then unbeknownst to the parent, the child was able to make in-app purchases by pressing the “buy” button during the fifteen-minute window in which the password was cached. This was apparently an oversight on Apple's part. When it came to the company's attention, Apple implemented a password prompt for the first in-app purchase after download.
During the later timeframe, after being handed the Apple device, a child again would press the “buy” button to make an in-app purchase. At this point, the child would have needed to turn the device back over to the parent for entry of the password. Alternatively, some children may have known their parent's password and entered it themselves. In either case, the fifteen-minute window was opened and additional in-app purchases could be made without further password prompts.
Under the first scenario, account holders received no password prompt for the first in-app purchase and thus
Irrespective of the existence of the fifteen-minute window, a user can only make an in-app purchase by pressing a “buy” button while engaging with the app. In other words, the user must decide to make an in-app purchase. To execute the first in-app purchase, the user must enter a password. The fifteen-minute window eliminates the second step of verification—entering a password—only
By entering their password into the Apple device—an action that is performed in response to a request for permission—parents were effectively put on notice that they were authorizing a transaction.
Assuming for the moment there is at least some harm that consumers cannot reasonably avoid, the question turns to whether the harms are substantial relative to any benefits to competition or consumers attributable to the conduct. In performing this balancing, the Commission must also take “account of the various costs that a remedy would entail. These include not only the costs to the parties directly before the agency, but also the burdens on society in general in the form of increased paperwork, increased regulatory burdens on the flow of information, reduced incentives to innovation and capital formation, and similar matters.”
Unfairness analysis requires an evaluation and comparison of the benefits and costs of Apple's decision not to increase or enhance its disclosure of how Apple's platform works, including the fifteen-minute window. The fifteen-minute window is a
In deciding what guidance to provide and how to provide it, firms face two important issues. First, since it is generally not possible to customize guidance for every individual customer, the optimal guidance inevitably balances the needs of different customers. In drawing this balance, the potential for harm from misinterpretation is likely important in deciding which customer on the sophistication spectrum might represent the least common denominator for directing the guidance. For any given degree of guidance, some customers will get it immediately, while others will have to work harder. If the potential for harm is very large, e.g., harm from a drug overdose, then both the firm and consumers want obvious, strong disclosures about dosage, and perhaps other steps like childproof caps. If the potential for harm is small, then strong guidance (or caps that are hard to open in the drug context) may make it more costly for consumers to use the product. Platform designers clearly face such tradeoffs in their decision-making regarding guidance and disclosures. Apple clearly faces the same tradeoff with respect to its decisions concerning the fifteen-minute window. This tradeoff is relevant for evaluating the benefit-cost test at the core of unfairness analysis.
Second, because it is difficult to anticipate the full set of issues that might benefit from guidance of various types, the firm must decide how much time to spend researching, discovering, and potentially fixing possible issues
Apple presumably weighs the costs and benefits to Apple of different ways to provide guidance. In doing so, Apple must consider: (i) The benefit to Apple of greater sales of mobile devices, music, books, apps, and in-app components to customers who benefit from the additional guidance and make more purchases; (ii) the cost to Apple of fewer sales of mobile devices, music, books, apps, and in-app components by customers who find that more real-time guidance hampers their experience; and (iii) the cost to Apple of developing and implementing more guidance. In weighing (i) and (ii), Apple is particularly concerned about the effects on the sales of mobile devices that use Apple's platform, as they constitute the bulk of Apple's business, as indicated in Charts 1 and 2.
The relevant universe for assessing unfairness of Apple's guidance provision, including disclosures relating to the fifteen-minute window, is the set of users to whom the guidance is directed. This includes all users of Apple's platform who might make online purchases through the platform.
The ratio of estimated unauthorized purchases in this case to all purchases made by users of Apple's platform is miniscule, as Charts 1 and 2 illustrate. This fact, by itself, does not establish that the benefits of Apple's decision to forgo additional guidance of the type required by the consent order outweigh its costs. However, the remarkably low ratio does provide perspective on the following question: How much would the average non-cancelling customer need to be harmed by a requirement of additional guidance in order to outweigh the benefit of preventing harm to other consumers? Suppose the fraction of customers that would benefit from additional guidance is approximated by the ratio of estimated unauthorized purchases to total sales of iDevices. The analysis in Charts 1 and 2 indicates that estimated unauthorized purchases have been about 0.08 percent of iDevice-related sales since the App Store was launched. Suppose that customers that make unauthorized purchases cancel them and seek a refund. Suppose also that the time cost involved in seeking a refund return is $11.95.
To be clear, the sales of iDevices are not an estimate of consumer benefits but rather they approximate the total universe of economic activity implicated by the Commission's consent order. Similarly, estimated unauthorized purchases merely approximate the total universe of consumers potentially harmed by Apple's practices. The harm from Apple's disclosure policy is limited to users that actually make unauthorized purchases. However, the potential benefits from Apple's disclosure choices are available to the entire set of iDevice users because these are the consumers capable of purchasing apps and making in-app purchases. The disparity in the relative magnitudes of these universes of potential harms and benefits suggests, at a minimum, that further analysis is required before the Commission can conclude that it has satisfied its burden of demonstrating that any consumer injury arising from Apple's allegedly unfair acts or practices exceeds the countervailing benefits to consumers and competition.
Nonetheless, the Commission effectively rejects an analysis of tradeoffs between the benefits of additional guidance and potential harm to some consumers or to competition from mandating guidance by assuming that “the burden, if any, to users who have never had unauthorized charges for in-app purchases, or to Apple, from the provision of this additional information is
To justify a finding of unfairness, the Commission must demonstrate the allegedly unlawful conduct results in net consumer injury. This requirement, in turn, logically implies the Commission must demonstrate Apple's chosen levels of guidance are less than optimal because consumers would benefit from additional disclosure. There is a considerable economic literature on this subject that sheds light upon the conditions under which one might reasonably expect private disclosure levels to result in net consumer harm.
To support the complaint and consent order the Commission issues today requires evidence sufficient to support a reason to believe that Apple will undersupply guidance about its platform relative to the socially optimal level. Economic theory teaches that such a showing would require evidence that “marginal” customers—the marginal consumer is the customer that is just indifferent between making the purchase or not at the current price—would benefit
Staff has not conducted a survey or any other analysis that might ascertain the effects of the consent order upon consumers. The Commission should not support a case that alleges that Apple has underprovided disclosure without establishing this through rigorous analysis demonstrating—whether qualitatively or quantitatively—that the costs to consumers from Apple's disclosure decisions have outweighed benefits to consumers and the competitive process. The absence of this sort of rigorous analysis is made more troublesome in the context of a platform with countless product attributes and where significant consumer benefits are intuitively obvious and borne out by data available to the Commission. We cannot say with certainty whether the average consumer would benefit more or less than the marginal consumer from additional disclosure without empirical evidence. This evidence might come
Unfairness analysis also requires the Commission to consider the impact of contemplated remedies or changes in the incentives to innovate new product features upon consumers and competition.
For complicated products—for example, a web-based platform for purchasing and interacting with potentially millions of items using a mobile device—there are many things that can negatively impact user experience. The number of potential issues for products that involve hardware, software, and a human interface is large. This is the nature of technology. When designing a complex product, it is prohibitively costly to try to anticipate
The relevant analysis of benefits and costs for allegedly unfair omissions requires weighing of the benefits and costs of discovering and fixing the issue that arose
Here, Apple did not anticipate the problems customers would have with children making in-app purchases that parents did not expect. When the problem arose in late 2010, press reports indicate that Apple developed a strategy for addressing the problem in a way that it believed made sense, and it also refunded customers that reported unintended purchases.
This investigation began largely because of complaints that arose when in-app purchases were first introduced into the marketplace and Apple had not had enough experience with the platform to recognize how parents and children would use the App Store. In late 2010, complaints began to emerge. In March 2011, Apple first altered its platform to address complaints about unauthorized in-app purchases. It is not unreasonable to surmise that as Apple has modified its policies based on experience, and customers have learned more about how to use the platform, unauthorized in-app purchases by children have most likely steadily declined.
The Commission has no foundation upon which to base a reasonable belief that consumers would be made better off if Apple modified its disclosures to confirm to the parameters of the consent order. Given the absence of such evidence, enforcement action here is neither warranted nor in consumers' best interest.
Federal Trade Commission.
Notice.
The Federal Trade Commission announces the revised thresholds for interlocking directorates required by the 1990 amendment of Section 8 of the Clayton Act. Section 8 prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if two thresholds are met. Competitor corporations are covered by Section 8 if each one has capital, surplus, and undivided profits aggregating more than $10,000,000, with the exception that no corporation is covered if the competitive sales of either corporation are less than $1,000,000. Section 8(a)(5) requires the Federal Trade Commission to revise those thresholds annually, based on the change in gross national product. The new thresholds, which take effect immediately, are $29,945,000 for Section 8(a)(1), and $2,994,500 for Section 8(a)(2)(A).
Effective January 23, 2014.
James F. Mongoven, Bureau of Competition, Office of Policy and Coordination, (202) 326-2879.
15 U.S.C. 19(a)(5).
By direction of the Commission.
Federal Trade Commission.
Notice.
The Federal Trade Commission announces the revised thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 required by the 2000 amendment of Section 7A of the Clayton Act.
Effective February 24, 2014.
Kathryn E. Walsh, Federal Trade Commission, Bureau of Competition, Premerger Notification Office, 600 Pennsylvania Avenue NW., Room 301, Washington, DC 20580, Phone (202) 326-3100.
Section 7A of the Clayton Act, 15 U.S.C. 18a, as added by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Public Law 94-435, 90 Stat. 1390 (“the Act”), requires all persons contemplating certain mergers or acquisitions, which meet or exceed the jurisdictional thresholds in the Act, to file notification with the Commission and the Assistant Attorney General and to wait a designated period of time before consummating such transactions. Section 7A(a)(2) requires the Federal Trade Commission to revise those thresholds annually, based on the change in gross national product, in accordance with Section 8(a)(5). Note that while the filing fee thresholds are revised annually, the actual filing fees are not similarly indexed and, as a result, have not been adjusted for inflation in over a decade. The new thresholds, which take effect on February 24, 2014, are as follows:
Any
By direction of the Commission.
U.S. Government Accountability Office.
Notice of Comment Period Extension.
The U.S. Government Accountability Office (GAO) is extending the comment period for the proposed revisions to the Standards for Internal Control in the Federal Government, known as the “Green Book,” to February 18, 2014. We are requesting public comments on the proposed revisions in the exposure draft. The proposed changes contained in the 2013 Exposure Draft update to the Standards for Internal Control in the Federal Government reflect major developments in the accountability and financial management profession and emphasize specific considerations applicable to the government environment.
The draft of the proposed changes to Standards for Internal Control in the Federal Government, 2013 Exposure Draft, is available and can be downloaded from GAO's Web page at
The exposure period will be from September 2, 2013 to February 18, 2014.
Comment letters should be emailed to
For information on the Standards for Internal Control in the Federal Government please contact Kristen Kociolek, Assistant Director, Financial Management and Assurance telephone 202-512-2989, 441 G Street NW., Washington, DC 20548-0001.
31 U.S.C. 3512 (c), (d).
Agency for Healthcare Research and Quality (AHRQ), HHS.
Notice of public meeting.
The Patient Safety and Quality Improvement Act of 2005, 42 U.S.C. 299b-21 to b-26, (Patient Safety Act) provides for the formation of Patient Safety Organizations (PSOs), which collect, aggregate, and analyze confidential information regarding the quality and safety of health care delivery. The Patient Safety Act (at 42 U.S.C. 299b-23) authorizes the collection of this information in a standardized manner, as explained in the related Patient Safety and Quality Improvement Final Rule, 42 CFR part 3 (Patient Safety Rule), published in the
The purpose of this notice is to announce a meeting to discuss the Common Formats. This meeting is designed as an interactive forum where PSOs and software developers can provide input on the formats. AHRQ especially requests participation by and input from those entities which have used AHRQ's technical specifications and implemented, or plan to implement, the formats electronically.
The meeting will be held from 10:00 a.m. to 3:30 p.m. on Friday, April 25, 2014.
The meeting will be held at the John M. Eisenberg Conference Center, Agency for Healthcare Research and Quality, 540 Gaither Road, Rockville, MD 20850.
Glenn Egelman, M.D., Center for Quality Improvement and Patient Safety, AHRQ, 540 Gaither Road, Rockville, MD 20850; Telephone (toll free): (866) 403-3697; Telephone (local): (301) 427-1111; TTY (toll free): (866) 438-7231; TTY (local): (301) 427-1130; Email:
The Patient Safety Act and Patient Safety Rule establish a framework by which doctors, hospitals, skilled nursing facilities, and other health care providers may voluntarily report information regarding patient safety events and quality of care. Information that is assembled and developed by providers for reporting to PSOs and the information received and analyzed by PSOs—called patient safety work product—is privileged and confidential. Patient safety work product is used to identify events, patterns of care, and unsafe conditions that increase risks and hazards to patients. Definitions and other details about PSOs and patient safety work product are included in the Patient Safety Rule.
The Patient Safety Act and Patient Safety Rule require PSOs, to the extent practicable and appropriate, to collect patient safety work product from providers in a standardized manner in order to permit valid comparisons of similar cases among similar providers. The collection of patient safety work product allows the aggregation of sufficient data to identify and address underlying causal factors of patient safety problems. Both the Patient Safety Act and Patient Safety Rule, including any relevant guidance, can be accessed electronically at:
In collaboration with the interagency Federal Patient Safety Workgroup (PSWG), the National Quality Forum (NQF) and the public, AHRQ has developed Common Formats for two settings of care — acute care hospitals and skilled nursing facilities — in order to facilitate standardized data collection. The term Common Formats refers to the common definitions and reporting formats that allow health care providers to collect and submit standardized information regarding patient safety events. AHRQ's Common Formats include:
• Event descriptions (descriptions of patient safety events and unsafe conditions to be reported),
• Specifications for patient safety aggregate reports and individual event summaries,
• Delineation of data elements to be collected for different types of events to populate the reports,
• A user's guide and quick guide, and
• Technical specifications for electronic data collection and reporting.
AHRQ convenes the PSWG to assist AHRQ with developing and maintaining the Common Formats. The PSWG includes major health agencies within the Department of Health and Human Services (HHS)—the Centers for Disease Control and Prevention, Centers for Medicare and Medicaid Services, Food and Drug Administration, Health Resources and Services Administration, Indian Health Service, National Institutes of Health, National Library of Medicine, Office of the National Coordinator for Health Information Technology, Office of Public Health and Science, and Substance Abuse and Mental Health Services Administration—as well as the Department of Defense and Department of Veterans Affairs.
When developing Common Formats, AHRQ first reviews existing patient safety event reporting systems from a variety of health care organizations. In collaboration with the PSWG and Federal subject matter experts, AHRQ drafts and releases beta versions of the Common Formats for public review and comment.
Through a contract with AHRQ, NQF solicits feedback on the beta (and subsequent) versions of the Common Formats from private sector organizations and individuals. The NQF, a nonprofit organization that focuses on health care quality, then convenes an expert panel to review the comments received and provide feedback to AHRQ. Based upon the expert panel's feedback, AHRQ, in conjunction with the PSWG, further revises the Common Formats.
The technical specifications promote standardization of collected patient safety event information by specifying rules for data collection and submission, as well as by providing guidance for how and when to create data elements, their valid values, conditional and go-to logic, and reports. These specifications will ensure that data collected by PSOs and other entities have comparable clinical meaning.
The technical specifications also provide direction to software developers, so that the Common Formats can be implemented electronically, and to PSOs, so that the Common Formats can be submitted electronically to the PSO Privacy Protection Center (PSOPPC) for data de-identification and transmission to the
The Software Developer's meeting will focus on discussion of the implementation and use of Common Formats for Event Reporting—Hospital 1.1 and 1.2; the technical specifications, which provide direction to software developers that plan to implement the Common Formats electronically; and future development plans for the Common Formats. The technical specifications are a critical component that allow for the aggregation of patient safety event data.
The technical specifications consist of the following:
○ data dictionary—defines data elements and their attributes (data element name, answer values, field length, guide for use, etc.) included in Common Formats;
○ clinical document architecture (CDA) implementation guide—provides instructions for developing a file to transmit the Common Formats Patient Safety data from the PSO to the PSO PPC using the Common Formats;
○ validation rules and errors document—specifies and defines the validation rules that will be applied to the Common Formats data elements submitted to the PSO PPC;
○ Common Formats flow charts—diagrams the valid paths to complete generic and event specific formats (a complete event report);
○ local specifications—provides specifications for processing, linking and reporting on events and details specifications for reports; and
○ metadata registry—includes descriptive facts about information contained in the data dictionary to illustrate how such data corresponds with similar data elements used by other Federal agencies and standards development organizations [e.g., HL—7, International Standards Organization (ISO)].
The 2014 meeting will be an interactive forum designed to allow meeting participants not only to provide input, but also to respond to the input provided by others. The meeting agenda will include: an overview of Federal efforts related to the Common Formats; presentations and discussion of implementations of Common Formats Event Reporting—Hospital Version 1.1 and 1.2; discussion of next steps for upcoming Common Formats releases; and a review of data submission both by PSOs and by vendors on behalf of PSOs.
AHRQ requests that interested persons send an email to the PSO PPC at
Presidential Commission for the Study of Bioethical Issues, Office of the Assistant Secretary for Health, Office of the Secretary, Department of Health and Human Services.
Notice of meeting.
The Presidential Commission for the Study of Bioethical Issues (the Commission) will conduct its sixteenth meeting on February 10-11, 2014. At this meeting, the Commission will discuss the BRAIN Initiative and ongoing work in neuroscience.
The meeting will take place Monday, February 10, 2014, from 9 a.m. to approximately 5 p.m. and Tuesday, February 11, 2014, from 9 a.m. to approximately 5 p.m.
Washington Marriott, 1221 22nd St. NW., Washington, DC 20037. Telephone (202) 872-1500.
Hillary Wicai Viers, Communications Director, Presidential Commission for the Study of Bioethical Issues, 1425 New York Avenue NW., Suite C-100, Washington, DC 20005. Telephone: 202-233-3960. Email:
Pursuant to the Federal Advisory Committee Act of 1972, Public Law 92-463, 5 U.S.C. app. 2, notice is hereby given of the sixteenth meeting of the Commission. The meeting will be open to the public with attendance limited to space available. The meeting will also be webcast at
Under authority of Executive Order 13521, dated November 24, 2009, the President established the Commission. The Commission is an expert panel of not more than 13 members who are drawn from the fields of bioethics, science, medicine, technology, engineering, law, philosophy, theology, or other areas of the humanities or social sciences. The Commission advises the President on bioethical issues arising from advances in biomedicine and related areas of science and technology. The Commission seeks to identify and promote policies and practices that ensure scientific research, health care delivery, and technological innovation are conducted in a socially and ethically responsible manner.
The main agenda item for the Commission's sixteenth meeting is to discuss the BRAIN Initiative and ongoing work in neuroscience.
The draft meeting agenda and other information about the Commission, including information about access to the webcast, will be available at
The Commission welcomes input from anyone wishing to provide public comment on any issue before it. Respectful debate of opposing views and active participation by citizens in public exchange of ideas enhances overall public understanding of the issues at hand and conclusions reached by the Commission. The Commission is particularly interested in receiving comments and questions during the meeting that are responsive to specific sessions. Written comments will be accepted at the registration desk and comment forms will be provided to members of the public in order to write down questions and comments for the Commission as they arise. To accommodate as many individuals as possible, the time for each question or comment may be limited. If the number of individuals wishing to pose a question or make a comment is greater than can reasonably be accommodated during the scheduled meeting, the Commission may make a random selection.
Written comments will also be accepted in advance of the meeting and are especially welcome. Please address written comments by email to
Anyone planning to attend the meeting who needs special assistance,
Agency for Healthcare Research and Quality (AHRQ), HHS.
Request for Scientific Information Submissions.
The Agency for Healthcare Research and Quality (AHRQ) is seeking scientific information submissions from the public on medical devices used for the diagnosis of right lower quadrant pain (suspected acute appendicitis), for example: Magnetic resonance imaging (MRI), computed tomography (CT), ultrasound (US), laparoscopic equipment, or assays. Scientific information is being solicited to inform our review of
Mailing Address: Portland VA Research Foundation, Scientific Resource Center, ATTN: Scientific Information Packet Coordinator, PO Box 69539, Portland, OR 97239.
Shipping Address (FedEx, UPS, etc.): Portland VA Research Foundation, Scientific Resource Center, ATTN: Scientific Information Packet Coordinator, 3710 SW U.S. Veterans Hospital Road, Mail Code: R&D 71, Portland, OR 97239.
Robin Paynter, Research Librarian, Telephone: 503-220-8262 ext. 58652 or Email:
The Agency for Healthcare Research and Quality has commissioned the Effective Health Care (EHC) Program Evidence-based Practice Centers to complete a review of the evidence for
The EHC Program is dedicated to identifying as many studies as possible that are relevant to the questions for each of its reviews. In order to do so, we are supplementing the usual manual and electronic database searches of the literature by requesting information from the public (e.g., details of studies conducted). We are looking for studies that report on the
This notice is to notify the public that the EHC program would find the following information on devices for the
A list of completed studies your company has sponsored for this indication. In the list,
Description of whether the above studies constitute
Your contribution is very beneficial to the Program. The contents of all submissions will be made available to the public upon request. Materials submitted must be publicly available or can be made public. Materials that are considered confidential; marketing materials; study types not included in the review; or information on indications not included in the review cannot be used by the Effective Health Care Program. This is a voluntary request for information, and all costs for complying with this request must be borne by the submitter.
The draft of this review will be posted on AHRQ's EHC program Web site and available for public comment for a period of 4 weeks. If you would like to be notified when the draft is posted, please sign up for the email list at:
What is the performance of alternative diagnostic tests, alone or in combination, for patients with right lower quadrant (RLQ) pain and suspected acute appendicitis?
I. What is the performance and comparative performance of alternative diagnostic tests in the following patient populations:
A. Children
B. Adults
C. Non pregnant women of reproductive age
D. Pregnant women
E. The elderly (age greater than or equal to 65 years)
II. What factors modify the test performance and comparative test performance of available diagnostic tests in these populations?
What is the comparative effectiveness of alternative diagnostic tests, alone or in combination, for patients with RLQ pain and suspected acute appendicitis?
I. For the populations listed under Key Question 1a, what is the effect of alternative testing strategies on diagnostic thinking, therapeutic decision making, clinical outcomes, and resource utilization?
II. What factors modify the comparative effectiveness of testing for patients with RLQ pain and suspected acute appendicitis?
What are the harms of diagnostic tests per se, and what are the treatment-related harms of test-directed treatment for tests used to diagnose RLQ pain and suspected acute appendicitis?
I. Patients with acute RLQ abdominal pain (less than or equal to 7 days duration) for whom appendicitis is considered in the differential diagnosis
II. Separate analyses will be performed for the following populations:
A. Children (age less than 18 years); additional analyses will be performed for younger children (less than 2 years and 2-5 years of age)
B. Adults (age greater than or equal to 18 years)
C. Non pregnant women of reproductive age
D. Pregnant women
E. Elderly (age greater than or equal to 65 years)
I. Diagnostic tests (alone or in combination) for diagnosing appendicitis
A. Clinical signs (e.g., psoas sign, obturator sign, Rovsing sign, McBurney sign)
B. Clinical symptoms (e.g., fever, migrating pain, guarding)
C. Laboratory tests (e.g., white blood cell count, C-reactive protein concentration, left shift)
D. Clinical prediction or decision rules (e.g., Alvarado score, Pediatric Appendicitis Score, other predictive models)
E. Imaging tests (e.g., US; multidetector or helical CT with or without contrast administered orally, rectally, or intravenously; MRI with or without contrast; abdominal X-ray)
F. Nuclear imaging studies
G. Diagnostic laparoscopy
Alternative tests or test combinations (as listed above), clinical observation
I. Test performance (e.g., sensitivity, specificity, accuracy, proportion of “negative” appendectomies) using pathology or clinical followup as the reference standard
II. Intermediate outcomes
A. Impact on diagnostic thinking (e.g., change in diagnosis after testing; change in subsequent diagnostic approach after obtaining initial test results)
B. Impact on therapeutic decision making (e.g., change in treatment plan after testing; time from admission to surgery)
III. Final health or patient-centered outcomes
A. Bowel perforation (ruptured appendix)
B. Fistula formation
C. Infectious complications (abscess formation, peritonitis, sepsis, stump appendicitis)
D. Delay in diagnosis (time from presentation to definitive diagnosis; time from presentation to initiation of treatment; time from presentation to resolution of pain)
E. Length of hospital stay
F. Fetal/maternal outcomes (for pregnant women; including premature labor, pregnancy loss, fetal morbidity, fetal mortality, maternal morbidity, maternal mortality)
G. Mortality
IV. Adverse effects of intervention(s)
A. Direct harms of testing (e.g., harms from exposure to ionizing radiation, allergic reactions/kidney injury caused by contrast agents)
B. Harms of test-directed treatment (indirect)
Studies will be considered regardless of duration of followup.
All health care settings will be considered.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by February 24, 2014.
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions:
OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395-5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number,
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
2.
For the original demonstration, the MMA required a Report to Congress six months after the end of the demonstration, a requirement unchanged by the ACA. An initial evaluation was conducted between 2007 and 2011 toward preparing for a Report to Congress and focused on the 17 hospitals that had participated at some point between October 2004 and March 2011. Findings from this evaluation were reported to the Centers for Medicare and Medicaid Services (CMS) in the
The current five-year evaluation of the RCHD will extend and build on the prior evaluation and produce the Report to Congress required by the MMA. It will assess the impact of the RCHD in meeting its goals: to enable hospitals to achieve community benefits such as improved services for their communities (especially Medicare beneficiaries), meet their individual strategic goals, and improve the financial solvency and viability of the participating hospitals. In addition, the evaluation will determine if it is feasible and advisable to create a new payment category of rural hospitals. To achieve this objective, the evaluation will examine how RCHD hospitals responded to payment options and assess how the costs to Medicare under RCHD compare to existing alternative payment options.
The evaluation will also summarize the characteristics of the markets served by RCHD hospitals, including beneficiaries' proximity to inpatient providers and competition among providers in the area. The information will be used to assess the implications of expanding the RCHD payment system to hospitals in various market environments. In addition, the evaluation will examine the potential costs of expanding the RCHD payment methodology, accounting for alternative approaches to targeting rural hospitals.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by February 24, 2014.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX:
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Sections 1104, 1302, 3301, 3304, 3320, 3361, 3393, and 3394 of Title 5 of the United States Code authorize Federal Agencies to rate applicants for Federal jobs. Collecting applications for the Medical Device Fellowship Program will allow FDA's Center for Devices and Radiological Health (CDRH) to easily and efficiently elicit and review information from students and health care professionals who are interested in becoming involved in CDRH activities. The process will reduce the time and cost of submitting written documentation to the Agency and lessen the likelihood of applications being misrouted within the Agency mail system. It will assist the Agency in promoting and protecting the public health by encouraging outside persons to share their expertise with CDRH.
In the
FDA based these estimates on the number of inquiries that have been received concerning the program and the number of requests for application forms over the past 3 years.
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled “Tobacco Health Document Submission” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
On August 28, 2013, the Agency submitted a proposed collection of information entitled “Tobacco Health Document Submission” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0654. The approval expires on December 31, 2016. A copy of the supporting statement for this information collection is available on the Internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by February 24, 2014.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, Fax: 202-395-7285, or emailed to
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 502 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 352), among other things, establishes requirements for the label or labeling of a medical device so that it is not misbranded. Section 351 of the Public Health Service Act (the PHS Act) (42 U.S.C. 262) establishes requirements that manufacturers of biological products must submit a license application for FDA review and approval prior to marketing a biological product for introduction into interstate commerce.
In the
The guidance document recommends that a glossary of terms accompany each IVD to define the symbols used on that device's labels and/or labeling. Furthermore, the guidance recommends an educational outreach effort to enhance the understanding of newly introduced symbols. Both the glossary and educational outreach information help to ensure that IVD users have enough general familiarity with the symbols used, as well as provide a quick reference for available materials, thereby further ensuring that such labeling satisfies the labeling requirements under section 502(c) of the FD&C Act and section 351 of the PHS Act.
The likely respondents for this collection of information are IVD manufacturers who plan to use the selected symbols in place of text on the labels and/or labeling of their IVDs.
The glossary activity is inclusive of both domestic and foreign IVD manufacturers. FDA receives submissions from approximately 689 IVD manufacturers annually. The 4-hour estimate for a glossary is based on the average time necessary for a manufacturer to modify the glossary for the specific symbols used in labels or labeling for the IVDs manufactured.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled “Requests for Feedback on Medical Device Submissions” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
On November 08, 2013, the Agency submitted a proposed collection of information entitled “Requests for Feedback on Medical Device Submissions” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0756. The approval expires on December 31, 2016. A copy of the supporting statement for this information collection is available on the Internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled “Biologics License Application, Changes to an Approved Application, Labeling, Revocation and Suspension, Postmarketing Studies Status Reports, and Forms FDA 356h and 2567” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
On November 13, 2013, the Agency submitted a proposed collection of information entitled “Biologics License Application, Changes to an Approved Application, Labeling, Revocation and Suspension, Postmarketing Studies Status Reports, and Forms FDA 356h and 2567” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0338. The approval expires on January 31, 2017. A copy of the supporting statement for this information collection is available on the Internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by February 24, 2014.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Under section 361 of the Public Health Service Act (the PHS Act) (42 U.S.C. 264), FDA may issue and enforce regulations necessary to prevent the introduction, transmission, or spread of communicable diseases between the States or possessions or from foreign countries into the States. As derivatives of the human body, all Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) pose some risk of carrying pathogens that could potentially infect recipients or handlers. FDA has issued regulations related to HCT/Ps involving establishment registration and listing using Form FDA 3356, eligibility determination for donors, and Current Good Tissue Practice (CGTP).
The regulations in part 1271 (21 CFR part 1271) require domestic and foreign establishments that recover, process, store, label, package, or distribute an HCT/P described in § 1271.10(a), or that perform screening or testing of the cell or tissue donor to register with FDA (§ 1271.10(b)(1)) and submit a list of each HCT/P manufactured (§ 1271.10(b)(2)). Section 1271.21(a) requires an establishment to follow certain procedures for initial registration and listing of HCT/Ps, and § 1271.25(a) and (b) identifies the required initial registration and HCT/P listing information. Section 1271.21(b), in brief, requires an annual update of the establishment registration. Section 1271.21(c)(ii) requires establishments to submit HCT/P listing updates if a change as described in § 1271.25(c) has occurred. Section 1271.25(c) identifies the required HCT/P listing update information. Section 1271.26 requires establishments to submit an amendment if ownership or location of the establishment changes. FDA requires the use of a registration and listing form (Form FDA 3356: Establishment Registration and Listing for Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps)) to submit the required information (§§ 1271.10, 1271.21, 1271.25, and 1271.26). To further facilitate the ease and speed of submissions, electronic submission is accepted at (
In brief, FDA requires certain HCT/P establishments described in § 1271.1(b) to determine donor eligibility based on donor screening and testing for relevant communicable disease agents and diseases except as provided under § 1271.90. The documented determination of a donor's eligibility is made by a responsible person as defined in § 1271.3(t) and is based on the results of required donor screening, which includes a donor medical history interview (defined in § 1271.3(n)), and testing (§ 1271.50(a)). Certain records must accompany an HCT/P once the donor-eligibility determination has been made (§ 1271.55(a)). This requirement applies both to an HCT/P from a donor who is determined to be eligible as well as to an HCT/P from a donor who is determined to be ineligible or where the donor-eligibility determination is not complete if there is a documented urgent medical need, as defined in § 1271.3(u) (§ 1271.60). Once the donor-eligibility determination has been made, the HCT/P must be accompanied by a summary of records used to make the donor-eligibility determination (§ 1271.55(b)), and a statement whether,
When a product is shipped in quarantine, as defined in § 1271.3(q), before completion of screening and testing, the HCT/P must be accompanied by records identifying the donor stating that the donor-eligibility determination has not been completed and stating that the product must not be implanted, transplanted, infused, or transferred until completion of the donor-eligibility determination, except in cases of urgent medical need, as defined in § 1271.3(u) (§ 1271.60(c)). When an HCT/P is used in cases of documented urgent medical need, the results of any completed donor screening and testing, and a list of any required screening and testing that has not yet been completed also must accompany the HCT/P (§ 1271.60(d)(2)). When an HCT/P is used in cases of urgent medical need or from a donor who has been determined to be ineligible (as permitted under § 1271.65), documentation by the HCT/P establishment is required showing that the recipient's physician received notification that the testing and screening were not complete (in cases of urgent medical need), and upon the completion of the donor-eligibility determination, of the results of the determination (§§ 1271.60(d)(3) and (d)(4), and 1271.65(b)(3).
An HCT/P establishment is also required to establish and maintain procedures for all steps that are performed in determining eligibility (§ 1271.47(a)), including the use of a product from a donor of viable, leukocyte-rich cells or tissue testing reactive for cytomegalovirus (§ 1271.85(b)(2)). The HCT/P establishment must record and justify any departure from a procedure relevant to preventing risks of communicable disease transmission at the time of its occurrence (§ 1271.47(d)).
FDA requires HCT/P establishments to follow CGTP (§ 1271.1(b)). Section 1271.155(a) permits the submission of a request for FDA approval of an exemption from or an alternative to any requirement in subpart C or D of part 1271. Section 1271.290(c) requires establishments to affix a distinct identification code to each HCT/P that they manufacture that relates the HCT/P to the donor and to all records pertaining to the HCT/P. Whenever an establishment distributes an HCT/P to a consignee, § 1271.290(f) requires the establishment to inform the consignee, in writing, of the product tracking requirements and the methods the establishment uses to fulfill these requirements. Non-reproductive HCT/P establishments described in § 1271.10 are required under § 1271.350(a)(1) and (a)(3) to investigate and report to FDA adverse reactions (defined in § 1271.3(y)) using Form FDA-3500A (§ 1271.350(a)(2)). Form FDA-3500A is approved under OMB control number 0910-0291. Section 1271.370(b) and (c) requires establishments to include specific information either on the HCT/P label or with the HCT/P.
The standard operating procedures (SOPs) provisions under part 1271 include the following: (1) Section 1271.160(b)(2) (receiving, investigating, evaluating, and documenting information relating to core CGTP requirements, including complaints, and for sharing information with consignees and other establishments); (2) § 1271.180(a) (to meet core CGTP requirements for all steps performed in the manufacture of HCT/Ps); (3) § 1271.190(d)(1) (facility cleaning and sanitization); (4) § 1271.200(b) (cleaning, sanitizing, and maintenance of equipment); (5) § 1271.200(c) (calibration of equipment); (6) § 1271.230(a) and (c) (validation of a process and review and evaluation of changes to a validated process); (7) § 1271.250(a) (controls for labeling HCT/Ps); (8) § 1271.265(e) (receipt, predistribution shipment, availability for distribution, and packaging and shipping of HCT/Ps); (9) § 1271.265(f) (suitable for return to inventory); (10) § 1271.270(b) and (d) (records management system); (11) § 1271.290(b)(1) (system of HCT/P tracking); and (12) § 1271.320(a) (review, evaluation, and documentation of complaints as defined in § 1271.3(aa)).
Section 1271.155(f) requires an establishment operating under the terms of an exemption or alternative to maintain documentation of FDA's grant of the exemption or approval and the date on which it began operating under the terms of the exemption or alternative. Section 1271.160(b)(3) requires the quality program of an establishment that performs any step in the manufacture of HCT/Ps to document corrective actions relating to core CGTP requirements. Section 1271.160(b)(6) requires documentation of HCT/P deviations. Section 1271.160(d) requires, in brief, documentation of validation of computer software if the establishment relies upon it to comply with core CGTP requirements. Section 1271.190(d)(2) requires documentation of all cleaning and sanitation activities performed to prevent contamination of HCT/Ps. Section 1271.195(d) requires documentation of environmental control and monitoring activities. Section 1271.200(e) requires documentation of all equipment maintenance, cleaning, sanitizing, calibration, and other activities. Section 1271.210(d) requires, in brief, documentation of the receipt, verification, and use of each supply or reagent. Section 1271.230(a) requires documentation of validation activities and results when the results of processing described in § 1271.220 cannot be fully verified by subsequent inspection and tests. Section 1271.230(c) requires that when changes to a validated process subject to § 1271.230(a) occur, documentation of the review and evaluation of the process and revalidation, if necessary, must occur. Section 1271.260(d) and (e) requires documentation of any corrective action taken when proper storage conditions are not met and documentation of the storage temperature for HCT/Ps. Section 1271.265(c)(1) requires documentation that all release criteria have been met before distribution of an HCT/P. Section 1271.265(c)(3) requires documentation of any departure from a procedure relevant to preventing risks of communicable disease transmission at the time of occurrence. Section 1271.265(e) requires documentation of the activities in paragraphs (a) through (d) of this section, which must include identification of the HCT/P and the establishment that supplied the HCT/P, activities performed and the results of each activity, date(s) of activity, quantity of HCT/P subject to the
Respondents to this information collection are establishments that recover, process, store, label, package or distribute any HCT/P, or perform donor screening or testing. The estimates provided below are based on most recent available information from FDA's database system and trade organizations. The hours per response and hours per record are based on data provided by the Eastern Research Group, or FDA experience with similar recordkeeping or reporting requirements.
There are an estimated 2,706 HCT/P establishments (conventional tissue, eye tissue, peripheral blood stem cell, stem cell products from cord blood, reproductive tissue, and sperm banks), including 741 manufacturers of HCT/P products regulated under the Federal Food, Drug, and Cosmetic Act and section 351 of the PHS Act (42 U.S.C 262), that have registered and listed with FDA. In addition, we estimate that 218 new establishments have registered with FDA (§§ 1271.10(b)(1) and (b)(2) and 1271.25(a) and (b)). There are an estimated 3,737 listing updates (§§ 1271.10(b)(2), 1271.21(c)(ii), and 1271.25(c)) and 1,222 location/ownership amendments (§ 1271.26).
Under § 1271.55(a), an estimated total of 2,167, 396 HCT/Ps (which include conventional tissues, eye tissues, hematopoetic stem cells/progenitor cells, and reproductive cells and tissues), and an estimated total of 2,026,861 non-reproductive cells and tissues (total HCT/Ps minus reproductive cells and tissues) are distributed per year by an estimated 1,965 establishments (2,706−741 = 1,965) with approved applications.
Under § 1271.60(c) and (d)(2), FDA estimates that 1,375 establishments shipped an estimated 286,000 HCT/Ps under quarantine, and that an estimated 26 establishments requested 40 exemptions from or alternative to any requirement under part 1271, subpart C or D, specifically under § 1271.155(a).
Under §§ 1271.290(c) and 1271.370(b) and (c), the estimated 1,694 non-reproductive HCT/P establishments label each of their 2,026,861 HCT/Ps with certain information. These establishments are also required to inform their consignees in writing of the requirements for tracking and of their established tracking system under § 1271.290(f).
FDA estimates 24 HCT/P establishments submitted 206 adverse reaction reports with 167 involving a communicable disease (§ 1271.350(a)(1)).
FDA estimates that 218 new establishments will create SOPs, and that 2,706 establishments will review and revise existing SOPs annually.
FDA estimates that 1,353 HCT/P establishments (2,706 × 50 percent = 1,353) and 847 non-reproductive HCT/P establishments (1,694 × 50 percent = 847) record and justify a departure from the procedures (§§ 1271.47(d) and 1271.265(c)(3)).
Under § 1271.50(a), HCT/P establishments are required to have a documented medical history interview about the donor's medical history and relevant social behavior as part of the donor's relevant medical records for each of the estimated total of 91,756 donors (which include conventional tissue donors, eye tissue donors, peripheral and cord blood stem cell donors, and reproductive cell and tissue donors), and the estimated total of 86,156 non-reproductive cells and tissue donors (total donors minus reproductive cell and tissue donors).
FDA estimates that 812 HCT/P establishments (2,706 × 30 percent = 812) document an urgent medical need of the product to notify the physician using the HCT/P (§§ 1271.60(d)(3) and 1271.65(b)(3)).
FDA also estimates that 2,165 HCT/P establishments (2,706 × 80 percent = 2,165) have to maintain records for an average of 2 contract establishments to perform their manufacturing process (§ 1271.270(e) and 1,353 HCT/P establishments maintain an average of 5 complaint records annually (§ 1271.320(b)).
In some cases, the estimated burden may appear to be lower or higher than the burden experienced by individual establishments. The estimated burden in these charts is an estimated average burden, taking into account the range of impact each regulation may have.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled “Protection of Human Subjects: Informed Consent; Institutional Review Boards” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
On July 30, 2013, the Agency submitted a proposed collection of information entitled “Protection of Human Subjects: Informed Consent; Institutional Review Boards” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0755. The approval expires on December 31, 2016. A copy of the supporting statement for this information collection is available on the Internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a collection of information entitled “Investigational New Drug Safety Reporting Requirements for Human Drug and Biological Products and Safety Reporting Requirements for Bioavailability and Bioequivalence Studies in Humans” has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850,
On November 13, 2013, the Agency submitted a proposed collection of information entitled “Investigational New Drug Safety Reporting Requirements for Human Drug and Biological Products and Safety Reporting Requirements for Bioavailability and Bioequivalence Studies in Humans” to OMB for review and clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has now approved the information collection and has assigned OMB control number 0910-0672. The approval expires on December 31, 2016. A copy of the supporting statement for this information collection is available on the Internet at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the draft guidance entitled “Medical Devices Containing Materials Derived From Animal Sources (Except for In Vitro Diagnostic Devices).” FDA is issuing this draft guidance to update the policy regarding the use of animal-derived material in medical device manufacturing. These animal-derived materials may carry a risk of transmitting infectious disease when improperly collected, stored, or manufactured. The guidance describes the information you should document at the manufacturing facility and include in any premarket submissions. This draft guidance is not final nor is it in effect at this time.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by April 23, 2014.
Submit written requests for single copies of the draft guidance document entitled “Medical Devices Containing Materials Derived From Animal Sources (Except for In Vitro Diagnostic Devices)” to the Division of Small Manufacturers, International and Consumer Assistance, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 4613, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your request, or fax your request to 301-847-8149. See the
Submit electronic comments on the draft guidance to
Scott McNamee, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 3416, Silver Spring, MD 20993-0002, 301-796-5523; or Charles Durfor, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. G424, Silver Spring, MD 20993-0002, 301-796-6970.
This draft guidance entitled “Medical Devices Containing Materials Derived From Animal Sources (Except for In Vitro Diagnostic Devices)” is intended to update the 1998 guidance of the same name regarding the use of animal-derived material in medical device manufacturing. The 1998 guidance addressed ways to reduce the potential for exposure to bovine spongiform encephalopathy. The draft guidance continues to focus on the control of transmissible disease, and contains recommendations for documenting the source of animal tissue, conducting viral inactivation validation studies, as well as recommendations about the role of careful animal husbandry in ensuring safe tissue sources.
The information in this guidance is applicable to all medical devices that contain or are exposed to animal-derived materials (e.g., bovine, ovine, porcine, avian materials) with the exception of in vitro diagnostic devices. The guidance describes the information you should document at the manufacturing facility and include in any premarket submissions. Consideration of these issues should aid in reducing the risk of infectious disease transmission by medical devices.
This draft guidance, when finalized, will supersede the guidance entitled “Medical Devices Containing Materials Derived from Animal Sources (Except for In Vitro Diagnostic Devices)”, announced in the
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the Agency's current thinking on medical devices containing materials derived from animal sources (except for in vitro diagnostic devices). It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statute and regulations.
Persons interested in obtaining a copy of the draft guidance may do so by using the Internet. A search capability for all CDRH guidance documents is available at
This draft guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 807 subpart E have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 812 have been approved under OMB control number 0910-0078; the collections of information in 21 CFR part 814 have been approved under OMB control number 0910-0231; the collections of information in 21 CFR part 814 subpart H have been approved under OMB control number 0910-0332; and the collections of information in 21 CFR part 820 have been approved under OMB control number 0910-0073.
Interested persons may submit either electronic comments regarding this document to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a guidance for industry and FDA staff entitled “Dear Health Care Provider Letters: Improving Communication of Important Safety Information.” This guidance offers specific recommendations to industry on the content and format of Dear Health Care Provider (DHCP) letters. These letters are sent by manufacturers or distributors to health care providers to communicate an important drug warning, a change in prescribing information, or a correction of misinformation in prescription drug promotional labeling or advertising. This guidance provides recommendations on when to use a DHCP letter, the types of information to include in the DHCP letter, how to organize the information so that it is communicated effectively to health care providers, and formatting techniques to make the information more accessible. This guidance finalizes the draft guidance issued in November 2010.
Submit either electronic or written comments on Agency guidances at any time.
Submit written requests for single copies of this guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 2201, Silver Spring, MD 20993-0002; or the Office of Communication, Outreach and Development (HFM-40), Center for Biologics Evaluation and Research, Food and Drug Administration, 1401 Rockville Pike, suite 200N, Rockville, MD 20852-1448. Send one self-addressed adhesive label to assist that
Submit electronic comments on the guidance to
Lori A. Bickel, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6353, Silver Spring, MD 20993, 301-796-0210; or Stephen Ripley, Center for Biologics Evaluation and Research (HFM-17), Food and Drug Administration, 1401 Rockville Pike, suite 200N, Rockville, MD 20852-1448, 301-827-6210.
FDA is announcing the availability of a guidance for industry and FDA staff entitled “Dear Health Care Provider Letters: Improving Communication of Important Safety Information.” This document offers specific guidance to industry and FDA staff on the content and format of DHCP letters. These letters are sent by manufacturers or distributors to health care providers to communicate an important drug warning, a change in prescribing information, or a correction of misinformation in prescription drug promotional labeling or advertising. This guidance gives specific instruction on what should and should not be included in DHCP letters. To date, some DHCP letters have been too long, have contained promotional material, or otherwise have not met the goals set forth in the applicable regulation (21 CFR 200.5). In some cases, health care providers have not been aware of important new information, and have been unable to communicate it to patients, because the letters' content and length have made it difficult to find the relevant information. In addition, letters have sometimes been sent for the wrong reasons.
In addition to content and format recommendations for each type of DHCP letter, the guidance also includes advice on consulting with FDA to develop a DHCP letter, when to send a letter, what type of letter to send, and conducting an assessment of the letter's impact.
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the Agency's current thinking on “Dear Health Care Provider Letters: Improving Communication of Important Safety Information.” It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.
This guidance contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in this guidance were approved under OMB control number 0910-0754.
Interested persons may submit either electronic comments regarding this document to
Persons with access to the Internet may obtain the document at either
Food and Drug Administration, HHS.
Notice; establishment of docket; request for comments.
The Food and Drug Administration (FDA) is establishing a public docket to receive input and suggestions from the public on ways to improve the quality of abbreviated new drug applications (ANDAs) and associated amendments and supplements to FDA's Office of Generic Drugs (OGD). Specifically, FDA is interested in hearing about any difficulties sponsors are having developing and preparing their ANDA submissions that FDA could help address, for example by providing more or better information to industry. This action is intended to solicit suggestions that will improve the completeness and quality of ANDA submissions to FDA. FDA is also seeking input on how to best share suggestions for improving the quality of ANDAs with the generic drug industry. More complete, higher quality ANDA submissions will positively affect the availability of low-cost, high-quality generic drugs to the public.
Although FDA welcomes comments at any time, to help FDA address issues related to ANDA submission quality in a timely fashion, we encourage submission of electronic or written comments by March 24, 2014.
Submit electronic comments to
Elizabeth Giaquinto, Center for Drug Evaluation and Research (HFD-600), Food and Drug Administration, 7519
On July 9, 2012, the President signed the Generic Drug User Fee Amendments (GDUFA) (Pub. L. 112-144, Title III) into law. With the enactment of GDUFA, OGD committed to expedite the availability of high-quality, lower cost generic drugs by bringing greater predictability to the review times for ANDAs and associated amendments and supplements. OGD agreed to specific performance review metrics to reduce the time needed to bring a generic drug to market compared to typical pre-GDUFA review times. However, OGD's review is often hindered by the quality of the ANDA submissions.
As part of efforts to fulfill its GDUFA commitments, OGD is soliciting input and suggestions from all interested stakeholders on how to improve the completeness and quality of ANDA submissions to OGD. FDA is interested in hearing about any difficulties sponsors are having developing and preparing their applications for submission that FDA could help address (please see specific questions for comment listed in this section of the document). FDA is also seeking input on how to best share suggestions for improving the quality of ANDA submissions with industry. To receive comments and suggestions from the public, FDA is establishing a public docket. Improving the quality of ANDA submissions will result in more submissions accepted for filing, fewer amendments, and easily correctable deficiencies, and ultimately, more generic drug approvals.
FDA review staff routinely note common, recurring deficiencies found in ANDA submissions to OGD and try to communicate these deficiencies to industry in guidance documents and during presentations. Common, recurring deficiencies include, but are not limited to:
•
•
•
•
•
•
As noted previously, this list provides examples of common, recurring deficiencies FDA has identified. FDA is particularly interested to learn what steps it can take to help reduce these deficiencies and enhance the completeness and quality of ANDA submissions. Comments submitted to this docket are encouraged to address one or more of the following points, as well as any others that the commenter thinks are important:
1. What aspects of the ANDA application process are confusing or not well defined?
2. What problems do ANDA applicants encounter when developing a submission that FDA could help address?
3. Prior to GDUFA, were ANDA submissions consistently slowed or stalled at certain recurring review points post-filing? If so, why?
4. How should FDA share suggestions for improving ANDA submissions with industry, beyond issuing regulatory guidance?
Interested persons may submit either electronic comments regarding this document to
Food and Drug Administration, HHS.
Notice of public workshop.
The Food and Drug Administration (FDA) is announcing an educational conference co-sponsored with the Society of Clinical Research Associates (SoCRA). The public workshop regarding FDA's clinical trial requirements is designed to aid the clinical research professional's understanding of the mission, responsibilities, and authority of FDA, and to facilitate interaction with FDA representatives. The program will focus on the relationships among FDA and
If you need special accommodations due to a disability, please contact SoCRA, 800-762-7292 or 215-822-8644, FAX: 215-822-8633, or email:
Extended periods of question and answer and discussion have been included in the program schedule. SoCRA designates this education activity for a maximum of 13.3 Continuing Education (CE) credits for SoCRA CE and continuing nurse education (CNE). SoCRA designates this live activity for a maximum of 13.3 American Medical Association Physicians Recognition Award Category 1 Credit(s)
Payment by major credit card is accepted (Visa/MasterCard/AMEX only). For more information on the meeting registration, or for questions on the public workshop, contact SoCRA, 800-762-7292 or 215-822-8644, FAX: 215-822-8633, or email:
The public workshop helps fulfill the Department of Health and Human Services' and FDA's important mission to protect the public health. The public workshop will provide those engaged in FDA-regulated (human) clinical trials with information on a number of topics concerning FDA requirements related to informed consent, clinical investigation requirements, IRB inspections, electronic record requirements, and investigator initiated research. Topics for discussion include the following: (1) The Role of the FDA District Office Relative to the Bioresearch Monitoring Program (BIMO); (2) Modernizing FDA's Clinical Trials/BIMO Programs; (3) What FDA Expects in a Pharmaceutical Clinical Trial; (4) Medical Device Aspects of Clinical Research; (5) Adverse Event Reporting—Science, Regulation, Error, and Safety; (6) Working with FDA's Center for Biologics Evaluation and Research; (7) Ethical Issues in Subject Enrollment; (8) Keeping Informed and Working Together; (9) FDA Conduct of Clinical Investigator Inspections; (10) Investigator Initiated Research; (11) Meetings with FDA—Why, When, and How; (12) Part 11 Compliance—Electronic Signatures; (13) IRB Regulations and FDA Inspections; (14) Informed Consent Regulations; (15) The Inspection is Over—What Happens Next? Possible FDA Compliance Actions; and (16) Question and Answer Session/Panel Discussion.
FDA has made education of the drug and device manufacturing community a high priority to help ensure the safety and effectiveness of FDA-regulated drugs and devices. The public workshop helps to achieve objectives set forth in section 406 of the FDA Modernization Act of 1997 (21 U.S.C. 393) which includes working closely with stakeholders and maximizing the availability and clarity of information to stakeholders and the public. The public workshop also is consistent with the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), as outreach activities by Government Agencies to small businesses.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is postponing the meeting of the Risk Communication Advisory Committee scheduled for February 3 and 4, 2014. The meeting was announced in the
Luis G. Bravo, Office of Planning, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 3274, Silver Spring, MD 20993, 240-402-5274, or email:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing an amendment to the notice of meeting of the Science Board to the Food and Drug Administration. This meeting was announced in the
Martha Monser, Office of the Chief Scientist, Office of the Commissioner, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 4286, Silver Spring, MD 20993, 301-796-4627,
In the
1. On page 1645, in the second column, the
2. On page 1645, in the second column, under
The Office of Women's Health (OWH) will seek input from the Board on the development of the OWH Research Roadmap.
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. app. 2) and 21 CFR part 14, relating to the advisory committees.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for DALIRESP and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of Patents and Trademarks, Department of Commerce, for the extension of a patent which claims that human drug product.
Submit electronic comments to
Beverly Friedman, Office of Management, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6284, Silver Spring, MD 20993-0002, 301-796-7900.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of Patents and Trademarks may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA recently approved for marketing the human drug product DALIRESP (roflumilast). DALIRESP is indicated as a treatment to reduce the risk of chronic obstructive pulmonary disease (COPD) exacerbations in patients with severe COPD associated with chronic bronchitis and a history of exacerbations. Subsequent to this approval, the U.S. Patent and Trademark Office received a patent term restoration application for DALIRESP (U.S. Patent No. 5,712,298) from Nycomed GmbH, and the U.S. Patent and Trademark Office requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated August 7, 2012, FDA advised the U.S. Patent and Trademark Office that this human drug product had undergone a regulatory review period and that the approval of DALIRESP represented the first permitted commercial marketing or use of the product. Thereafter, the U.S. Patent and Trademark Office requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for DALIRESP is 4,237 days. Of this time, 3,645 days occurred during the testing phase of the regulatory review period, while 592 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the U.S. Patent and Trademark Office applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,826 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit to the Division of Dockets Management (see
Interested persons may submit to the Division of Dockets Management (see
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for GADAVIST and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of Patents and Trademarks, Department of Commerce, for the extension of a patent which claims that human drug product.
Submit electronic comments to
Beverly Friedman, Office of Management, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, rm. 6284, Silver Spring, MD 20993-0002, 301-796-7900.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of Patents and Trademarks may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA recently approved for marketing the human drug product GADAVIST (gadobutrol). GADAVIST is indicated for intravenous use in diagnostic magnetic resonance imaging in adults and children (2 years of age and older) to detect and visualize areas with disrupted blood brain barrier and/or abnormal vascularity of the central nervous system. Subsequent to this approval, the Patent and Trademark Office received a patent term restoration application for GADAVIST (U.S. Patent No. 5,980,864) from Bayer Schering Pharma Aktiengesellschaft and the Patent and Trademark Office requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated July 10, 2012, FDA advised the Patent and Trademark Office that this human drug product had undergone a regulatory review period and that the approval of GADAVIST represented the first permitted commercial marketing or use of the product. Thereafter, the Patent and Trademark Office requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for GADAVIST is 4,269 days. Of this time, 3,964 days occurred during the testing phase of the regulatory review period, while 305 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the U.S. Patent and Trademark Office applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,470 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit to the Division of Dockets Management (see
Interested persons may submit to the Division of Dockets Management (see
Under the provisions of Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the National Institutes of Health Clinical Center (CC) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below. This proposed information collection was previously published in the
To obtain a copy of the data collection plans and instruments, or request more information on the proposed project, contact Dr. David K. Henderson, Deputy Director for Clinical Care, National Institutes of Health Clinical Center, Building 10, Room 6-1480, 10 Center Drive, Bethesda, Maryland 20892, or call non-toll free: 301-496-3515, or email your request or comments, including your address to: <
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 4,900.
National Institutes of Health, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Licensing information and copies of the U.S. patent applications listed below may be obtained by writing to the indicated licensing contact at the Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804; telephone: 301-496-7057; fax: 301-402-0220. A signed Confidential Disclosure Agreement will be required to receive copies of the patent applications.
• Essential payload component of immunotoxins
• Treatment of any disease associated with increased or preferential expression of a specific cell surface receptor
• Specific diseases include hematological cancers, lung cancer, ovarian cancer, breast cancer, and head and neck cancers
• New modifications allow for the reduction of immunogenicity with less loss of activity
• Less immunogenic immunotoxins with greater activity results in improved therapeutic efficacy by permitting multiple rounds of administration in humans
• Targeted therapy decreases non-specific killing of healthy, essential cells, resulting in fewer non-specific side-effects and healthier patients
• Early-stage
• In vitro data available
• In vivo data available (animal)
• HHS Reference No. E-771-2013/0—U.S. Provisional Patent Application No. 61/887,418 filed 06 October 2013
• HHS Reference No. E-771-2013/1—U.S. Provisional Patent Application No. 61/908,464 filed 25 November 2013
• HHS Reference No. E-117-2011/0—PCT Patent Publication WO 2012/154530
• HHS Reference No. E-174-2011/0—PCT Patent Publication WO 2012/170617
• HHS Reference No. E-263-2011/0—PCT Patent Publication WO 2012/032022
• HHS Reference No. E-269-2009/0—US Patent Publication 20120263674 A1
• HHS Reference No. E-292-2007/0—US Patent Publication US 20100215656 A1
• HHS Reference No. E-262-2005/0—US Patent Publication US 20090142341 A1
• Multiple additional patent families
• Vaccine
• Childhood vaccines
• Early-stage
• In vitro data available
This invention concerns novel small molecules that can inhibit Wip1 activity. The particular structure of the small molecules allows for specific targeting to Wip1. Specifically, the structure is a derivative of a pyrrole ring having five (5) points of substitution. These small molecules have the ability to significantly inhibit Wip1 phosphatase activity at the micromolar level, with substitutions of biphenyl groups having the highest level of inhibition. Based on their potential ability to restore the activity of a tumor suppressor protein and activate apoptosis, these small molecules may be useful in the treatment of cancers that overexpress Wip1.
• Treatment of cancer, including but not limited to breast cancer, ovarian cancer and neuroblastoma
• Can be used either alone or in combination with other known anti-cancer therapeutics
• Structure of the inhibitor allows specific targeting of Wip1, possibly leading to fewer undesired effects during treatment
• The molecules are designed to be more stable and effectively penetrate mammalian cells
• The current lack of Wip1 inhibitors can lead the occupation of a significant position in the cancer therapeutic market with a first-in-class drug
• Therapeutics for preventing or treating pruritis/itching.
• Screening of novel Nppb blocking agents.
• Early-stage
• In vitro data available
NIH researchers have engineered pre F to expose an antigenic site 0, which is targeted by extremely potent RSV neutralizing antibodies. Structure-based design yielded several stabilized variants of pre F that maintained exposure of antigenic site 0 when subjected to extremes of pH, osmolality and temperature.
Preclinical in vivo data on stabilized pre F is available. Immunization of mice and macaques with antigenic site 0 stabilized pre F variants elicited high levels of RSV specific neutralizing activity.
• Vaccine stably exposes antigenic site in RSV F that permits generation of potent RSV neutralizing antibodies.
• There is currently no RSV vaccine on the market.
• Pre-clinical
• In vivo data available (animal)
1. McLellan JS, et al. Structure of RSV fusion glycoprotein trimer bound to a prefusion-specific neutralizing antibody. Science 2013 May 31;340(6136):1113-7. [PMID 23618766]
2. McLellan JS, et al. Structure-based design of a fusion glycoprotein vaccine for respiratory syncytial virus. Science 2013 Nov 1:342 (6158)592-8. [PMID 24179220]
• HHS Reference No. E-081-2013/0—U.S. Application No. 61/780,910 filed 13 March 2013
• HHS Reference No. E-081-2013/1—U.S. Application No. 61/798,389 filed 15 March 2013
• HHS Reference No. E-081-2013/2—U.S. Application No. 61/857,613 filed 23 July 2013
• HHS Reference No. E-081-2013/3—U.S. Application No. 61/863,909 filed 09 August 2013
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 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 contract proposals 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 or contract proposals, 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 Center for Scientific Review Special Emphasis Panel, January 23, 2014, 09:00 a.m. to January 24, 2015, 04:00 p.m., National Institutes of Health, 6701 Rockledge Drive, Bethesda, MD, 20892 which was published in the
The meeting will be held on January 23, 2014 to January 24, 2014. The meeting location and time 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 materials, 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 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.
Contact Person: Karin F Helmers, Ph.D., Scientific Review Officer, Center for Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 3144, MSC 7770, Bethesda, MD 20892, (301) 254-9975,
The National Children's Study (NCS) is soliciting comments and suggestions from the public on the proposed Study content framework. The questions solicited in this Request for Information (RFI) focus on the validity and acceptability of the using a composite outcome for the higher-level functions of a healthy 21-year-old person as an important operational construct to help frame data collection throughout the duration of the study. Responses to this RFI will be used to inform Study protocol development.
The National Children's Study Request for Information is open for public comment for a period of 30 days. Comments must be received by February 24, 2014 to ensure consideration. After the public comment period has closed, the comments received by the NCS will be considered in a timely manner by the
Questions about this request for information should be directed to Kate Winseck, MSW, The National Children's Study, Eunice Kennedy Shriver National Institute of Child Health and Human Development, National Institutes of Health, 6100 Executive Blvd., Rm. 5C01, Bethesda, MD 20891,
The National Children's Study is a congressionally-mandated longitudinal birth cohort study intended to examine the effects of environmental exposures on the growth, development, and wellbeing of children. The NCS was mandated by the Children's Health Act of 2000 (Pub. L. 106-310).
The primary objective of the NCS is to conduct a national longitudinal study of environmental influences (including physical, chemical, biological, and psychosocial) on children's health and development. These factors include environmental exposures (with a broad definition of environment) and biological/genetic contexts. The Study objectives stated in the Children's Health Act of 2000 include: (1) Evaluate the effects of both chronic and intermittent exposures on child health and human development; (2) investigate basic mechanisms of developmental disorders and environmental factors; (3) incorporate behavioral, emotional, educational, and contextual consequences to enable a complete assessment of the physical, chemical, biological and psychosocial environmental influences on children's well-being; (4) gather data from diverse populations of children including prenatal exposures; and (5) consider health disparities among children.
The NCS proposes to organize data collection priorities to support measurement of health and healthy development at critical stages. This requires understanding and identifying
The NCS intends to follow all children from birth until they reach age 21, an endpoint consistent with the Food and Drug Administration Amendments Act of 2007 that defines “pediatric patients” as “those who are 21 years of age or younger at the time of diagnosis or treatment (FDA Amendments Act of 2007).” As such it is important to identify the characteristics of a healthy 21-year-old person. Reaching age 21 is one of many important developmental milestones and it serves as a useful life stage for illustration of how the NCS data collection framework can be organized.
To ensure the Study content framework is comprehensive, the NCS is working with subject matter experts to characterize health. As developmental trajectories are multi-dimensional, multi-directional, and multi-level, this effort not only helps characterize the distal end of the childhood developmental trajectory, but also identifies potential antecedent factors that could be measured earlier in life in assessing exposures that may contribute to later outcomes. For example, supportive family relationships during adolescence has been associated with positive outcomes ranging from reduced risk of poor mental health to higher levels of interpersonal and occupational functioning; these outcomes being independent of any effect of gender, socioeconomic status, or family disruption, for example death or divorce (Child Adolescent Mental Health 16(1): 30-37).
At 21 years old, the thriving individual is a manifestation of complex, dynamic, non-linear developmental processes that are products of personal characteristics (including genetics), person-to-person, and person-to-environment interactions in the broadest sense. This characterization is consistent with the World Health Organization (WHO) construct (
• The social and economic environment
• The physical environment
• The person's individual characteristics and behaviors
A healthy 21-year-old person may possess such attributes as a BMI between 19 and 25, blood pressure about 120/80 mm mercury, sound mental health, and the ability to develop and maintain relationships with other people. A healthy 21-year-old person may be able to obtain employment if desired or circumstances warrant. A healthy 21-year-old person should be able to provide food, clothing, and shelter for themselves and, if desired or if circumstances warrant, for others. One would expect that a 21-year-old person would possess a solid foundation in literacy (including written and oral communication skills), numeracy, and problem solving skills. As young adults, they may have positive relationships with friends or family, a network of peers, and feel that they are part of a community. Furthermore, a healthy 21-year-old person is not defined on the basis of an individual who is free of disease or disability. If an individual has a limitation, she or he may still be able to function well, and even thrive, in society with the proper access to care, social support, and adaptations.
The NCS will measure health as well as the presence or absence of disease-related signs, symptoms, and limitations. This requires a data collection protocol that captures a full description of an individual—a health profile—rather than just known determinants of disease and subsequent outcomes. This is consistent with the Life Course Health Development model which “not only measures an individual's deficits but also calculates his or her health assets (The Millbank Quarterly 80(3): 433).”
As an organizing principle, the construction of a data collection approach around the characteristics of a healthy 21-year-old person allows the NCS to identify and measure the full range of experiences that may later influence individual outcomes. Measures must address the range of potential influences, from individuals, family, peers, the environment, communities or the larger society. This collection will supplement the conventional measurement of known or theorized antecedents of disease-related outcomes. The NCS does not intend to evaluate each participant using a particular paradigm as a preferred outcome, but rather to ensure that generally accepted health characteristics can be captured across the spectrum of the NCS. The NCS is not and cannot be a national screening program for various conditions but should be able to identify a wide range of phenotypic characteristics. The NCS will emphasize recording primary signs and symptoms, capacities and limitations, and a description of the whole person rather than diagnosing individuals as having particular diseases or conditions. Nonetheless, all relevant information from medical records, therapeutic interventions, and descriptions from participants and care takers will be captured and become part of the analytic data sets.
In such a model, however, the linking of a particular participant with a particular disease or condition may not offer all the necessary or even accurate information about either that individual or the population at large. By maintaining a focus on primary signs and symptoms, performance, any limitations, trends, developmental progress, experience, adaptation to changes in environment and context and relationships to the people and world around each participant, the NCS intends to maintain flexibility and precision for future analyses.
Health disparities will be addressed using a definition from the Centers for Disease Control and Prevention that notes disease burden, injury, violence, and health potential as key parameters (CDC, HHS, 2008). Each participant in the NCS will be evaluated for each of these parameters, regardless of any other demographic or socioeconomic characteristics. Through this approach, the NCS can maintain continuity of purpose through the ever-present changes in a dynamic society.
In sum, the NCS is proposing the use of a framework of distal outcomes, health determinants, primary signs and symptoms, phenotypic and environmental descriptions, and capture
This RFI invites the scientific community, health professionals, and the general public to provide comments and suggestions on the proposed framework of using the characteristics of a healthy, functional 21-year-old person, plus the other principles and factors noted, above for developing Study content and protocols. Given the requirements as stated in the Children's Health Act of 2000, please include in responses to the questions below whether the Study proposed content framework balances the complex requirements.
1. Please comment on the validity and acceptability of using a composite outcome—the higher-level functions of a healthy 21-year-old person—as an operational construct to help frame data collection.
2. Are there additional outcomes or developmental endpoints that should be considered?
3. What factors should the NCS use to prioritize assessments? Some examples of factors to consider are:
This RFI is for planning purposes only and should not be construed as a solicitation for applications or proposals, or as an obligation in any way on the part of the United States Federal government. The Federal government will not pay for the preparation of any information submitted or for the government's use. Additionally, the government cannot guarantee the confidentiality of the information provided.
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day Notice and request for comments; Extension of an existing collection of information: 1651-0036.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act: Declaration of the Ultimate Consignee That Articles Were Exported for Temporary Scientific or Educational Purposes. This is a proposed extension of an information collection that was previously approved. CBP is proposing that this information collection be extended with no change to the burden hours. This document is published to obtain comments from the public and affected agencies. This proposed information collection was previously published in the
Written comments should be received on or before February 24, 2014 to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, at 202-325-0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L.104-13; 44 U.S.C. 3507). The comments should address: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimates of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP request for Office of Management and Budget (OMB) approval. All comments will become a matter of public record. In this document CBP is soliciting comments concerning the following information collection:
U.S. Customs and Border Protection (CBP), Department of Homeland Security.
60-day notice and request for comments; extension of an existing collection of information: 1651-0028.
As part of its continuing effort to reduce paperwork and respondent burden, CBP invites the general public and other Federal agencies to comment on an information collection requirement concerning: Cost Submission. This request for comment is being made pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13; 44 U.S.C. 3507).
Written comments should be received on or before March 24, 2014, to be assured of consideration.
Direct all written comments to U.S. Customs and Border Protection, Attn: Tracey Denning, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177.
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, at 202-325-0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13; 44 U.S.C. 3507). The comments should address: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimates of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP request for Office of Management and Budget (OMB) approval. All comments will become a matter of public record. In this document CBP is soliciting comments concerning the following information collection:
U.S. Customs and Border Protection (CBP), Department of Homeland Security.
60-Day Notice and request for comments; Extension of an existing collection of information: 1651-0131.
As part of its continuing effort to reduce paperwork and respondent burden, CBP invites the general public and other Federal agencies to comment on an information collection requirement concerning the e-Allegations Submission. This request for comment is being made pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13; 44 U.S.C. 3507).
Written comments should be received on or before March 24, 2014 to be assured of consideration.
Direct all written comments to U.S. Customs and Border Protection, Attn: Tracey Denning, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177.
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, at 202-325-0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13; 44 U.S.C. 3507). The comments should address: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimates of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of Community Planning and Development, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
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: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
Eva Fontheim, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410; email,
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
Preparer of this notice may substitute the chart for everything beginning with estimated number of respondents above:
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
Any person who claims to have been injured by a discriminatory housing practice, or any person who believes that he or she will be injured by a discriminatory housing practice that is about to occur, may file a complaint with HUD not later than one year after the alleged discriminatory housing practice occurs or terminates. The Form promotes consistency in the collection of information necessary to contact persons who file housing discrimination complaints with HUD. It also aids in the collection of information necessary for initial assessments of HUD's authority to investigate alleged discriminatory housing practices under the Fair Housing Act.
This information may subsequently be provided to persons against whom complaints are filed [“respondents”], as required under section 810(a)(1)(B)(ii) of the Fair Housing Act.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following: (1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Comments Due Date: February 24, 2014.
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: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following: (1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
This notice announces changes in the interest rates to be paid on debentures issued with respect to a loan or mortgage insured by the Federal Housing Administration under the provisions of the National Housing Act (the Act). The interest rate for
Yong Sun, Department of Housing and Urban Development, 451 Seventh Street SW., Room 5148, Washington, DC 20410-8000; telephone (202) 402-4778 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at (800) 877-8339.
Section 224 of the National Housing Act (12 U.S.C. 1715o) provides that debentures issued under the Act with respect to an insured loan or mortgage (except for debentures issued pursuant to section 221(g)(4) of the Act) will bear interest at the rate in effect on the date the commitment to insure the loan or mortgage was issued, or the date the loan or mortgage was endorsed (or initially endorsed if there are two or more endorsements) for insurance, whichever rate is higher. This provision is implemented in HUD's regulations at 24 CFR 203.405, 203.479, 207.259(e)(6), and 220.830. These regulatory provisions state that the applicable rates of interest will be published twice each year as a notice in the
Section 224 further provides that the interest rate on these debentures will be set from time to time by the Secretary of HUD, with the approval of the Secretary of the Treasury, in an amount not in excess of the annual interest rate determined by the Secretary of the Treasury pursuant to a statutory formula based on the average yield of all outstanding marketable Treasury obligations of maturities of 15 or more years.
The Secretary of the Treasury (1) has determined, in accordance with the provisions of section 224, that the statutory maximum interest rate for the period beginning January 1, 2014, is 3
For convenience of reference, HUD is publishing the following chart of debenture interest rates applicable to mortgages committed or endorsed since January 1, 1980:
Section 215 of Division G, Title II of Public Law 108-199, enacted January 23, 2004 (HUD's 2004 Appropriations Act) amended section 224 of the Act, to change the debenture interest rate for purposes of calculating certain insurance claim payments made in cash. Therefore, for all claims paid in cash on mortgages insured under section 203 or 234 of the National Housing Act and endorsed for insurance after January 23, 2004, the debenture interest rate will be the monthly average yield, for the month in which the default on the mortgage occurred, on United States Treasury Securities adjusted to a constant maturity of 10 years, as found in Federal Reserve Statistical Release H-15. The Federal Housing Administration has codified this provision in HUD regulations at 24 CFR 203.405(b) and 24 CFR 203.479(b).
Section 221(g)(4) of the Act provides that debentures issued pursuant to that paragraph (with respect to the assignment of an insured mortgage to the Secretary) will bear interest at the “going Federal rate” in effect at the time the debentures are issued. The term “going Federal rate” is defined to mean the interest rate that the Secretary of the Treasury determines, pursuant to a statutory formula based on the average yield on all outstanding marketable Treasury obligations of 8- to 12-year maturities, for the 6-month periods of January through June and July through December of each year. Section 221(g)(4) is implemented in the HUD regulations at 24 CFR 221.255 and 24 CFR 221.790.
The Secretary of the Treasury has determined that the interest rate to be
The subject matter of this notice falls within the categorical exemption from HUD's environmental clearance procedures set forth in 24 CFR 50.19(c)(6). For that reason, no environmental finding has been prepared for this notice.
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Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following application for a recovery permit to conduct activities with the purpose of enhancing the survival of an endangered species. The Endangered Species Act of 1973, as amended (Act), prohibits certain activities with endangered species unless a Federal permit allows such activity. The Act also requires that we invite public comment before issuing such permits.
To ensure consideration, please send your written comments by February 24, 2014.
Program Manager for Restoration and Endangered Species Classification, Ecological Services, U.S. Fish and Wildlife Service, Pacific Regional Office, 911 NE 11th Avenue, Portland, OR 97232-4181. Please refer to the permit number for the application when submitting comments.
Colleen Henson, Fish and Wildlife Biologist, at the above address or by telephone (503-231-6131) or fax (503-231-6243).
The Act (16 U.S.C. 1531
A permit granted by us under section 10(a)(1)(A) of the Act authorizes the permittee to conduct activities (including take or interstate commerce) with respect to U.S. endangered or threatened species for scientific purposes or enhancement of propagation or survival. Our regulations implementing section 10(a)(1)(A) of the Act for these permits are found at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
We invite local, State, and Federal agencies, and the public to comment on the following application. Please refer to the appropriate permit number for the application when submitting comments.
Documents and other information submitted with this application are available for review by request from the Program Manager for Restoration and Endangered Species Classification at the address listed in the
The applicant requests a new recovery permit to take (survey) the Snake River physa (
All comments and materials we receive in response to this request will be available for public inspection, by appointment, during normal business hours at the address listed in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
We provide this notice under section 10 of the Act (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of availability of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service (USFWS), invite the public to comment on the following applications to conduct certain activities with endangered species. With some exceptions, the Endangered Species Act (Act) prohibits activities with endangered and threatened species unless a Federal permit allows such activity. The Act requires that we invite public comment before issuing these permits.
We must receive any written comments on or before February 24, 2014.
Send written comments by U.S. mail to the Regional Director, Attn: Karl Tinsley, U.S. Fish and Wildlife Service, Ecological Services, 5600 American Blvd. West, Suite 990, Bloomington, MN 55437-1458; or by electronic mail to
Karl Tinsley, (612) 713-5330.
We invite public comment on the following permit applications for certain activities with endangered species authorized by section 10(a)(1)(A) of the Act (16 U.S.C. 1531
The applicant requests a permit renewal to take (capture and release; non-destructive sampling) scaleshell (
The applicant requests a permit renewal to take (capture and release) Indiana bats (
The applicant requests a permit renewal to take (capture and release) Indiana bats and American burying beetle (
The applicant requests a permit renewal, with amendments, to take (capture and release) Indiana bats, gray bats, Virginia big-eared bats, and northern long-eared bats (
The applicant requests a permit renewal to take (capture and release) Indiana bats, gray bats, Ozark big-eared bats, and Virginia big-eared bats within the States of Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, and Wisconsin. Proposed activities are for the enhancement of survival of the species in the wild.
The applicant requests a permit renewal to take (capture and release) Indiana bats throughout the species' range within the States of Illinois, Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and West Virginia. Proposed activities are for the enhancement of survival of the species in the wild.
The applicant requests a permit renewal, with amendments, to take (capture and release) the Indiana bat, gray bat, Virginia big-eared bat, Ozark big-eared bat, American burying beetle, and the following Federally listed fish and mussel species:
Activities are proposed throughout the range of the species within the States of Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Mississippi, Missouri, North Carolina, Ohio, South Carolina, and Tennessee. Proposed activities are for the enhancement of survival of the species in the wild through surveys to document presence/absence of the species, population monitoring, and
The applicant requests a permit renewal, with amendments, to take (capture and release) Indiana bats within the States of Alabama, Arkansas, Connecticut, Georgia, Illinois, Indiana, Kentucky, Michigan, Missouri, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia. Proposed activities are for the enhancement of survival of the species in the wild.
The applicant requests a permit renewal, with amendments, to take (capture and release) Indiana bats and gray bats within the States of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. Proposed activities are for the enhancement of survival and recovery of the species in the wild.
The applicant requests a permit renewal, with amendments, to take (capture and release) Indiana bats, gray bats, Virginia big-eared bats, Ozark big-eared bats, northern long-eared bats, Running buffalo clover (
Proposed work would take place in the States of Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, and Wisconsin. Proposed activities include presence/absence surveys, habitat evaluation, and other activity designed to enhance the survival of the species in the wild.
The applicant requests a permit renewal to take (capture and release) clubshell, Northern riffleshell, orange-footed pimpleback pearlymussel, pink mucket pearlymussel, rough pigtoe, purple cat's paw pearlymussel, white cat's paw pearlymussel, fanshell, fat pocketbook, Higgins' eye pearlymussel (
The applicant requests a permit renewal, with amendments, to take (capture and release) Indiana bats within the States of Ohio and Kentucky. Proposed activities are for the enhancement of survival of the species in the wild.
The applicant requests a permit to take (capture and release) Indiana bats within the State of Ohio. Proposed activities are for the enhancement of survival of the species in the wild.
We seek public review and comments on these permit applications. Please refer to the permit number when you submit comments. Comments and materials we receive are available for public inspection, by appointment, during normal business hours at the address shown in the
Fish and Wildlife Service, Interior.
Notice of availability of final revised marine mammal stock assessment reports; response to comments.
In accordance with the Marine Mammal Protection Act of 1972, as amended (MMPA), and its implementing regulations, we, the U.S. Fish and Wildlife Service (Service), announce that we have revised our stock assessment reports (SAR) for two West Indian manatee stocks: the Florida manatee stock and the Puerto Rico stock of Antillean manatees (
You may view both revised SARs on
For information on the methods, data, and results of the Florida manatee stock assessment, contact Jim Valade by phone at 904-731-3116 or by email at
Under the MMPA (16 U.S.C. 1361
To help accomplish the goal of maintaining marine mammal stocks at their OSPs, section 117 of the MMPA requires the Service and the National Marine Fisheries Service (NMFS) to prepare a SAR for each marine mammal stock that occurs in waters under U.S. jurisdiction. Each SAR must include:
1. A description of the stock and its geographic range;
2. A minimum population estimate, maximum net productivity rate, and current population trend;
3. An estimate of human-caused mortality and serious injury;
4. A description of commercial fishery interactions;
5. A categorization of the status of the stock; and
6. An estimate of the
The MMPA defines the PBR as “the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its OSP” (16 U.S.C. 1362(20)). The PBR is the product of the minimum population estimate of the stock (N
PBR = (N
Section 117 of the MMPA also requires the Service and NMFS to review the SARs: (a) At least annually for stocks that are specified as strategic stocks; (b) at least annually for stocks for which significant new information is available; and (c) at least once every 3 years for all other stocks. If our review of the status of a stock indicates that it has changed or may be more accurately determined, then the SAR must be revised accordingly.
A
SARs for both the Puerto Rico stock of Antillean manatees and the Florida manatee were last revised in December of 2009. Both are classified as strategic stocks by virtue of their listing as an endangered species under the ESA. The Service reviewed the SARs in 2010 and concluded that a revision of these SARs was not warranted at that time because the status of these stocks had not changed since 2009, nor could they be more accurately determined. Upon subsequent review in 2011, the Service determined that revision was warranted for both stocks in light of recent elevated Florida manatee mortality levels that could affect the status of this stock and the development of new methods that could more accurately determine the number of Antillean manatees in Puerto Rico. Before releasing our draft SARs for public review and comment, we reviewed the drafts with the Atlantic Scientific Review Group and submitted them for an internal technical review.
In a March 28, 2013 (78 FR 19002)
The following table summarizes the information we are now making available in the final revised SARs for both stocks of the West Indian manatees, which lists the stock's N
We received three comment submissions on the draft revised SARs (78 FR 19002). Commenters included the Atlantic Scientific Review Group, the Marine Mammal Commission, and the Humane Society of the United States. We present substantive issues raised in those comments, along with our responses, below.
The Service's obligation to revise a SAR is contingent upon whether or not a review indicates that the status of the stock has changed or can be more accurately determined. If a review indicates that the status of a stock has changed or can be more accurately determined, the Service revises the SAR in accordance with section 117(b), which includes a public review and comment period. However, section
In addition, section 117 of the MMPA requires the Service to prepare an assessment for each marine mammal “stock,” and the term “stock” is defined under section 3(11) of the MMPA as “a group of marine mammals of the same species or smaller taxa in a common spatial arrangement, that interbreed when mature.” Thus, although the SAR has been revised to include a discussion describing the four management units identified within Florida, the Service recognizes the Florida manatee population as a single “stock” within the meaning of that term as defined under the MMPA.
In accordance with section 117(b)(1) of the MMPA, we include in this notice a list of the sources of information or published reports upon which we based the revised SAR. The Service consulted technical reports, conference proceedings, refereed journal publications, and scientific studies prepared or issued by Federal agencies, nongovernmental organizations, and individuals with expertise in the fields of marine mammal biology and ecology, population dynamics, modeling, and commercial fishing practices.
These agencies and organizations include: the Service, the U.S. Geological Survey, the National Oceanic and Atmospheric Administration, the Puerto Rico Department of Natural and Environmental Resources, the Georgia Department of Natural Resources, the Florida Fish and Wildlife Conservation Commission, Hubbs Sea World Research Institute, the Gulf and Caribbean Fisheries Institute, the Caribbean Stranding Network, and Mote Marine Laboratory. In addition, the Service consulted publications such as the Journal of Wildlife Management, Marine Mammal Science, Marine Pollution Bulletin, Marine Technology Society Journal, Wildlife Monographs, Gulf and Caribbean Research, Journal of Zoo and Wildlife Medicine, Molecular Ecology, and Molecular Ecology Notes, as well as other refereed journal literature,
A complete list of citations to the scientific literature relied on for each of these SARs is available on the Federal eRulemaking portal (
The authority for this action is the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361
Bureau of Indian Affairs, Interior.
Notice of proposed finding.
The Department of the Interior (Department) gives notice that the Assistant Secretary—Indian Affairs (AS-IA) proposes to determine that the petitioner known as the “Meherrin Indian Tribe” (MTB), Petitioner #119b, is not an Indian tribe within the meaning of Federal law. This notice is based on an investigation which determined that the petitioner does not satisfy criterion 83.7(e) as set forth in the applicable regulations, and therefore, does not meet the requirements for a government-to-government relationship with the United States.
Comments on this proposed finding (PF) are due on or before July 22, 2014. The petitioner then has a minimum of 60 days to respond to those comments. See the
Comments on the PF and requests for a copy of the summary evaluation which summarizes the evidence, reasoning, and analysis that are the basis for the PF should be addressed to the Office of Federal Acknowledgment, 1951 Constitution Avenue NW., MS 34B-SIB, Washington, DC 20240. The
R. Lee Fleming, Director, Office of Federal Acknowledgment, (202) 513-7650.
The Department publishes this notice in the exercise of authority that the Secretary of the Interior delegated to the Assistant Secretary—Indian Affairs (AS-IA) by 209 DM 8.
A Meherrin Indian Tribe organization formed in 1976 and obtained State recognition from North Carolina in 1986. In 1990, the group submitted to the AS-IA a letter of intent to petition for Federal acknowledgment as an Indian tribe. The Department received the letter of intent on August 2, 1990, and designated the group as Petitioner #119. A part of Petitioner #119 submitted a separate letter of intent and partial petition documentation that the Department received on June 27, 1995. The Department designated the original petitioner as #119a and the subsequent petitioner as #119b. This PF evaluates Petitioner #119b (MTB).
Petitioner #119b initially claimed to constitute the descendants of Sallie M. (Smith) Lewis (b.ca.1844-d.1904) of Hertford County, NC. The petitioner identified her as “the last full-blooded Meherrin Indian” or “Susquehanna” Indian who migrated as an adult from Pennsylvania to North Carolina. The petitioner's 2011 submission of petition documentation identified a 1994 master's thesis as its official history. The thesis does not describe the modern-day members as descendants of Sallie M. (Smith) Lewis but as descendants of the Iroquois-speaking historical Meherrin Indian tribe that, it claims, in the mid-1700s left its reservation adjoining the Meherrin and Chowan Rivers in what is now Hertford County, NC, and continued to reside nearby on Potecasi Creek.
For the purposes of this PF, the historical Indian tribe is the Meherrin Indian tribe that was last identified in North Carolina about 1763. The Assistant Secretary has directed that, if an Indian tribe existed in 1789, the petitioner needs to demonstrate its “continuous tribal existence” from such a historical Indian tribe only for the period since 1789 (AS-IA 5/23/2008). The evidence in the petition record, however, does not demonstrate that the Meherrin Indian tribe, or a group that evolved from it, existed in 1789. In response to this PF, the petitioner may submit evidence to show it has evolved as a group from the Meherrin Indian tribe whose existence was last noted about 1763. Alternatively, the petitioner may provide evidence that a historical Meherrin Indian tribe, or another historical Indian tribe, existed in 1789, and that since 1789 the petitioner has continued the existence of that historical Indian tribe or has evolved as a group from that historical Indian tribe.
The Department conducted a technical assistance review of the partial petition and issued Petitioner #119b a letter on March 15, 1996, describing the petition's lack of evidence under all seven of the mandatory criteria. The petitioner provided additional petition documentation on August 22, 1997. The OFA advised the MTB that its continued lack of evidence demonstrating descent from the historical tribe—required under criterion 83.7(e)—meant that the Department could proceed to conduct an expedited review under 83.10(e) that would result in a finding against Federal acknowledgment. However, since the MTB governing body advised that its petition was complete, the Department placed Petitioner #119b on the “ready, waiting for active consideration” list on October 6, 1997. An OFA genealogist made a field visit in February 1998.
The OFA conducted informal technical assistance with MTB representatives in Washington, DC, in February 2008. The Department placed the MTB petitioner on active consideration on November 1, 2010. The AS-IA's March 31, 2005, guidance directive provides for a 60-day period after notification that a petitioner will be placed on active consideration during which a petitioner may update and supplement its documented petition. The MTB petitioner submitted additional petition documentation within the extended 60-day period, which ended February 14, 2011. On June 21, 2013, the AS-IA announced a “preliminary discussion draft of potential revisions to Part 83.” By letter dated May 31, 2013, the Department provided the petitioner the option to request a suspension of consideration of its petition during the process of revising the regulations or to continue under the existing Part 83 regulations. By letter dated July 13, 2013, received at OFA on July 22, Petitioner #119b requested to proceed with a FD under the existing regulations.
The acknowledgment process is based on the regulations at 25 CFR part 83. Under these regulations, the petitioner
The petitioner submitted a membership list, separately certified by its governing body in February 2011, identifying 203 adult and minor members. As required under criterion 83.7(e), the membership list furnished each member's full name (including maiden name), date of birth, and residential address, with minor omissions. The current members represent part of the larger group to which North Carolina provided recognition as a tribe in 1986. The evidence does not demonstrate that Sallie M. (Smith) Lewis or the historical landowners allegedly near Potecasi Creek were Indian, Meherrin Indian, or members of a Meherrin Indian or other Indian tribe. The petitioner has not documented, nor has the OFA identified, a historical Indian tribe, or tribes that combined, from which its members descend. The petitioner also has not provided sufficient evidence to verify descent from those individuals it asserted were Meherrin. The evidence in the record does not demonstrate that any of the petitioner's members descend from a historical Indian tribe. Therefore, the petitioner does not meet the requirements of criterion 83.7(e).
Based on this preliminary factual determination, the Department proposes not to extend Federal acknowledgment as an Indian tribe to Petitioner #119b known as the Meherrin Indian Tribe. A report summarizing the evidence, reasoning, and analyses that are the basis for the PF will be provided to the petitioner and interested parties, and is available to other parties upon written request as provided by 25 CFR 83.10(h). Requests for a copy of the summary evaluation should be addressed to the Federal Government as instructed in the
Publication of this notice of the PF in the
Commenters should be aware that personal identifying information in their comments—such as address, telephone number, or email address—may be made publicly available at any time. Commenters may request that the Department withhold any personal identifying information from public review, but the Department cannot guarantee that it can do so.
During the comment period, the Meherrin petitioner and the interested parties may request in writing that the AS-IA hold a formal, on-the-record technical assistance meeting as provided by the acknowledgment regulations at 25 CFR 83.10(j)(2). Such requests must include a proposed agenda of topics and must be received by the Department within 60 calendar days of the publication of this
The regulations, 25 CFR 83.10(k), provide the petitioner a minimum of 60 days to respond to any submissions on the PF received from interested and informed parties during the comment period. After the expiration of the comment and response periods described above, the Department will consult with the petitioner concerning establishment of a schedule for preparation of the final determination (FD). The AS-IA will publish the FD of the petitioner's status in the
Bureau of Indian Affairs, Interior.
Notice of Proposed Finding.
The Department of the Interior (Department) gives notice that the Assistant Secretary—Indian Affairs (AS-IA) proposes to determine that the petitioner known as the Pamunkey Indian Tribe (Petitioner #323), 331 Pocket Road, King William, VA 23086, c/o Mr. Kevin M. Brown, is an Indian tribe within the meaning of Federal law. This notice is based on a proposed finding (PF) that the petitioner satisfies the seven mandatory criteria for acknowledgment set forth in the applicable regulations, and thus, meets the requirements for a government-to-government relationship with the United States.
Comments on this PF are due on or before July 22, 2014. The petitioner then has until September 22, 2014 to respond to those comments. The Department must receive requests for a formal, on-the-record technical assistance meeting by February 20, 2014. See the
Comments on the PF and/or requests for a copy of the report of the summary evaluation of the evidence should be addressed to the Office of the Assistant Secretary—Indian Affairs, Attention: Office of Federal Acknowledgment, 1951 Constitution Avenue NW., Mail Stop 34B-SIB, Washington, DC 20240. Interested and informed parties who make submissions to the Assistant Secretary—Indian Affairs (AS-IA) must also provide copies of their comments to the petitioner at Pamunkey Indian Tribe, c/o Mr. Kevin M. Brown, 331 Pocket Road, King William, VA 23086.
R. Lee Fleming, Director, Office of Federal Acknowledgment, (202) 513-7650.
Under 25 CFR 83.10(h), the Department gives notice the AS-IA proposes to determine that the Pamunkey Indian Tribe is an Indian tribe within the meaning of Federal law. This notice is based on a determination that the petitioner satisfies all seven mandatory criteria set forth in part 83 of 25 CFR 83(a) through
The Department publishes this notice in the exercise of authority that the Secretary of the Interior delegated to the AS-IA by 209 DM 8.
A group known as the Pamunkey Indian Tribe submitted a letter of intent to petition for Federal acknowledgment as an Indian tribe to the AS-IA. The Department received the letter of intent on June 29, 2009. The Department designated this group as Petitioner #323. The Pamunkey petitioner submitted its first documentation that included a narrative as well as some documents outlined in the petitioner's narrative. The Department received this material on October 14, 2010, and received an additional petition submission on December 7, 2011. The group claimed to descend from the historical Pamunkey Indian tribe of the Commonwealth of Virginia. The historical Pamunkey Indian tribe occupied a land base in King William County, VA, formally defined during the Colonial Era in the 1600s and shown as “Indian Town” on a 1770 map, which still exists today as a state reservation in the same location.
The Department conducted an initial review of the petition, determined the petitioner was ready for consideration and placed the Pamunkey petitioner on the “ready, waiting for active consideration list” on January 3, 2012. In response to the petitioner's request for expedited processing on July 5, 2011, the Department began a review for expedited processing on January 16, 2012, and recommended a waiver of the priority provisions of the regulations for the Pamunkey petitioner. On July 20, 2012, the Acting AS-IA approved the waiver under the May 23, 2008, directive (73 FR 30147) and moved the petitioner to the top of the ready list. Thereafter, OFA received three additional petition submissions from the Pamunkey petitioner on March 28, April 12, and July 11, 2012.
The Department placed the Pamunkey petitioner on active consideration for the PF on August 21, 2012, and received a submission of additional petitioner documents from the group during the 60 days following (on October 19, 2012), as allowed by the directive of March 31, 2005 (70 FR 16513). The Department will consider any additional material that it received after the submission deadline of October 21, 2012, for the final determination (FD), pursuant to that 2005 directive.
The acknowledgment process is based on the regulations at 25 CFR part 83. Under these regulations, the petitioner has the burden to present evidence that it meets the seven mandatory criteria in section 83.7. The PF finds that the Pamunkey petitioner satisfies all seven mandatory criteria for acknowledgment: 83.7(a), 83.7(b), 83.7(c), 83.7(d), 83.7(e), 83.7(f), and 83.7(g).
If “substantial evidence” demonstrates the petitioner had “unambiguous” previous Federal acknowledgment as an Indian tribe, then the requirements of some of the acknowledgment criteria in section 83.7 are modified by the provisions of section 83.8(d). The Pamunkey petitioner has not claimed, and the Department has not located evidence, that the Federal Government took any action clearly premised on identification of the petitioner as a tribal political entity and recognition of a relationship between that entity and the United States. Therefore, the Department did not evaluate the petitioner under 25 CFR 83.8.
Criterion 83.7(a) requires that external observers have identified the petitioner as an American Indian entity on a substantially continuous basis since 1900. External observers consistently identified the petitioning group during these years as the “Pamunkey Indian Tribe,” or as a “tribe,” a “band,” a “group,” or a “settlement” of Pamunkey Indians. They usually associated the identified group with a state Indian reservation in Virginia. As such identifications of the petitioning group were made in almost all of the years since 1900, the petitioner meets criterion 83.7(a).
Criterion 83.7(b) requires that a predominant portion of the petitioning group has comprised a distinct community since historical times. The evidence in the record demonstrates that a predominant portion of the Pamunkey petitioner has maintained interaction and significant social relationships through history. From 1789 until 1899, the petitioner satisfies the requirements with a combination of evidence under criterion 83.7(b)(1). Such evidence includes the group's concern about maintaining the exclusivity of the settlement, its assertion of a collective Indian identity that lasts for more than 50 years, and members joining the Colosse Baptist Church as a group. Additional evidence includes the knowledge of people across kin groups, communication and interaction among members, and significant rates of marriage within the group. Combined, this evidence meets criterion 83.7(b) before 1900. From 1900 until the present, the petitioner satisfies the requirements via the “cross-over” provision of criterion 83.7(b)(2)(v), as the petitioner demonstrated criterion 83.7(c) using evidence described in 83.7(c)(2).
Criterion 83.7(c) requires that the petitioning group has maintained political influence over its members as an autonomous entity since historical times. The evidence for 1789 to 1899 shows the Pamunkey Indians had a functioning decision-making process. The Pamunkey group used this political process to represent its interests to outsiders, approved any actions taken by the trustees appointed by the state to supervise the tribe, had a code of laws that dealt with issues of importance to the group, such as legal residency on the reservation, and mobilized to protect its resources. For the period 1900 to the present, the group demonstrated control over residence rights on the reservation, imposition of sanctions to control individuals' behavior, and control and allocation of group resources. This evidence in the record for 1900 until the present is specified in 83.7(c)(2), which also satisfies criterion 83.7(b) for that time.
Criterion 83.7(d) requires that the petitioner provide a copy of its governing document including its membership criteria. The petitioner submitted a copy of its governing document which includes it membership criteria. Therefore, the Pamunkey petitioner meets criterion 83.7(d).
Criterion 83.7(e) requires that the petitioner's members descend from a historical Indian tribe or from historical Indian tribes which combined and functioned as a single autonomous political entity. For this PF, the Department defines the historical Pamunkey Indian tribe as 81 Indian individuals named on any one of six King William County, Virginia, tax lists of personal property owners at Indian Town between 1787 and 1802; three Pamunkey petitions to the Virginia state legislature dated 1798, 1812, and 1836; and one Colosse Baptist Church record of “descendants of an Indian tribe on Indian Island” circa 1835. The October 18, 2012, Pamunkey membership list includes 203 living members, both adults and minors. The evidence in the record shows that 162 of these members, or 80 percent, demonstrated descent from members of the historical Pamunkey Indian tribe. Therefore, the Pamunkey petitioner meets criterion 83.7(e).
Criterion 83.7(f) requires that the petitioner's membership be composed principally of persons who are not members of another federally recognized Indian tribe. The Department found no evidence that any of the petitioner's current members are
Criterion 83.7(g) requires that the petitioner not be subject to congressional legislation that has terminated or forbidden the Federal relationship. The Department found no record that the petitioner was subject of legislation terminating or forbidding the Federal relationship. Therefore, the Pamunkey petitioner meets criterion 83.7(g).
Based on this PF, the Department proposes to acknowledge as an Indian tribe the petitioner known as the Pamunkey Indian Tribe.
A report summarizing the evidence, reasoning, and analyses that are the basis for the PF will be provided to the petitioner and interested parties, and is available to other parties upon written request as provided by 25 CFR 83.10(h) or available on the Department of the Interior's Web site at
Publication of this notice of the PF in the
The regulations, 25 CFR 83.10(k), provide the petitioner a minimum of 60 days to respond to any submissions on the PF received from interested and informed parties during the comment period. After the expiration of the comment and response periods described above, the Department will consult with the petitioner concerning establishment of a schedule for preparation of the FD. The AS-IA will publish the FD of the petitioner's status in the
Bureau of Indian Affairs, Interior.
Notice of rate adjustments.
The Bureau of Indian Affairs (BIA) owns, or has an interest in, irrigation projects located on or associated with various Indian reservations throughout the United States. We are required to establish irrigation assessment rates to recover the costs to administer, operate, maintain, and rehabilitate these projects. We are notifying you that we have adjusted the irrigation assessment rates at several of our irrigation projects and facilities to reflect current costs of administration, operation, maintenance, and rehabilitation.
For details about a particular BIA irrigation project or facility, please use the tables in the
A Notice of Proposed Rate Adjustment was published in the
No.
Written comments were received related to the proposed rate adjustment for the San Carlos Irrigation Project for 2014 and the Wind River Irrigation Project for 2013.
One commenter raised concerns specific to the San Carlos Irrigation Project on the proposed rates about the following issues: (1) The methodology for the O&M rate setting; and (2) the timely receipt of information for commenting, budget formulation and accounting, items related to staffing, contract payments, cylinder gate replacement, permits and leasing, reserve account, and reservoir area capacity.
One commenter raised concerns specific to the Wind River Irrigation Project on the proposed rates about the following issues: (1) Opposing a rate increase based on the project's asserted inability to deliver water to many portions of the system as well as to maintain equitable access to paying users; and (2) postponing a rate increase while a cooperative agreement is considered by an irrigator's group.
Written comments relating to the FY 2014 proposed O&M rate for the San Carlos Irrigation Project-Joint Works (SCIP-JW) were received by letter dated December 17, 2012, from the San Carlos Irrigation and Drainage District (District). The District raised several issues in its letter. The BIA's summary of the District's issues and the BIA's responses are provided below.
The BIA has provided the District with draft budget and supporting
Furthermore, SCIP-JW uses its best effort to conform to budget and data templates suggested by the water users during the meetings. These templates are susceptible to adjustment from year to year based on the water user meetings. In response to water user concerns about O&M expenditures, SCIP-JW currently uses the services of the Accountant employed by the Office of Trust Services, Division of Water and Power to complete a detailed annual reconciliation of the O&M funds. This service involves reviewing thousands of accounting lines in the BIA's official financial system. The Accountant's reconciliation for FY 2011 was completed and presented to the District and the other water users on January 5, 2012. None of the water users has provided any information that would undermine the accuracy and completeness of the reconciliation.
SCIP-JW has utilized the most up-to-date budget figures available for FY 2012 and 2013 in the proposed FY 2014 budget accompanying SCIP-JW's recommended O&M rate for FY 2014.
After careful consideration of the District's comments in the rate setting meetings for FY 2014, SCIP-JW removed the contribution to the Coolidge Dam cylinder gate replacement sinking fund from the recommended rate submitted to this office for the FY 2014 budget. This action allowed the proposed FY 2014 O&M rate to remain at $30/acre rather than increasing to $35/acre. However, the 2008 cost estimate exceeds the funds currently set aside for this project. Consequently, SCIP-JW proposes to set aside an additional $300,000 in FY 2015 for the project. This proposed sinking fund contribution was a major factor influencing the decision of the SCIP-JW to recommend to this office an O&M rate of $35/acre for FY 2015. The SCIP-JW recommendation for the 2015 O&M rate is under consideration by this office. As planning and design proceeds for replacement of the cylinder gates, SCIP-JW will continue to refine and update cost estimates for final design and implementation of the cylinder gate replacement project. Any additional funding requirements will be considered during the rate setting process for FY 2016. SCIP-JW will continue to update the O&M budgets with the best available information as this matter develops and will keep the water users informed when the federal procurement processes are triggered.
• Other water income for FY 2014 has been estimated and is included in the current projected budget spreadsheet.
• Excess pumping is highly dependent on the amount of stored water available in San Carlos Reservoir, which is impossible to predict two years in advance. In many years no income is derived from excess pumping.
• The recent administrative practice of the District is to pay its assessment one year late, and incur penalty charges under the Repayment Contract. However, SCIP-JW is reluctant to memorialize the District's recent contract breaches into the annual O&M budget process.
• The combined effect on the assessment rate of income derived from encroachment permits, wood permits, and grazing leases is projected to be approximately one cent per acre. Consequently, no effort will be made to include estimates for these sources of income in the projected budgets.
As a consequence of the current practice of water users to pay their assessments a year or more late, SCIP-JW has realized the need to maintain a sufficient reserve fund that can be used to sustain operations until payments are received. In addition, SCIP-JW has recently become aware of the need to increase the amount held in reserve for unanticipated expenses. Several expense items in FY 2012 were either not anticipated or much higher than anticipated when the FY 2012 irrigation assessment rate was determined in 2010. For example, the $117,969 charge on principle and the costs to repair wells not in the original well rehabilitation schedule were not foreseen; and the electrical charges associated with higher than normal groundwater pumping and the annual river commissioner assessment were both significantly higher than expected. All of these factors combined resulted in more than $400,000 in unanticipated expenses. Consequently, the reserve fund for the SCIP-JW will be increased to $550,000 for FY 2014.
A written comment relating to the FY 2013 proposed O&M rate for the Wind River Irrigation Project was received by an undated letter from a project water user. The commenter was opposed to any O&M rate increases, based on their concerns about the project's ability to deliver water to portions of the project and the potential formation of water user groups that might impact project funding opportunities.
This notice affects you if you own or lease land within the assessable acreage of one of our irrigation projects or if you have a carriage agreement with one of our irrigation projects.
You can contact the appropriate office(s) stated in the tables for the irrigation project that serves you, or you can use the Internet site for the Government Printing Office at
Our authority to issue this notice is vested in the Secretary of the Interior by 5 U.S.C. 301 and the Act of August 14, 1914 (38 Stat. 583; 25 U.S.C. 385). The Secretary has in turn delegated this authority to the Assistant Secretary—Indian Affairs under Part 209, Chapter 8.1A, of the Department of the Interior's Departmental Manual.
The following tables are the regional and project/agency contacts for our irrigation facilities.
The rate table below contains the current rates for all irrigation projects where we recover costs of administering, operating, maintaining, and rehabilitating them. The table also contains the final rates for the 2013 season and subsequent years where applicable. An asterisk immediately following the name of the project notes the irrigation projects where 2013 are different from the 2012 rates.
To fulfill its consultation responsibility to tribes and tribal organizations, BIA communicates, coordinates, and consults on a continuing basis with these entities on issues of water delivery, water availability, and costs of administration, operation, maintenance, and rehabilitation of projects that concern them. This is accomplished at the individual irrigation project by Project, Agency, and Regional representatives, as appropriate, in accordance with local protocol and procedures. This notice is one component of our overall coordination and consultation process to provide notice to, and request comments from, these entities when we adjust irrigation assessment rates.
The rate adjustments will have no adverse effects on energy supply, distribution, or use (including a shortfall in supply, price increases, and increase use of foreign supplies) should the proposed rate adjustments be implemented. This is a notice for rate adjustments at BIA-owned and operated irrigation projects, except for the Fort Yuma Irrigation Project. The Fort Yuma Irrigation Project is owned and operated by the Bureau of Reclamation with a portion serving the Fort Yuma Reservation.
These rate adjustments are not a significant regulatory action and do not need to be reviewed by the Office of Management and Budget under Executive Order 12866.
These rate adjustments are not a rule for the purposes of the Regulatory Flexibility Act because they establish “a rule of particular applicability relating to rates.” 5 U.S.C. 601(2).
These rate adjustments do not impose an unfunded mandate on State, local, or tribal governments in the aggregate, or on the private sector, of more than $130 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. Therefore, the Department is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.).
The Department has determined that these rate adjustments do not have significant “takings” implications. The rate adjustments do not deprive the public, state, or local governments of rights or property. Federalism (Executive Order 13132)
The Department has determined that these rate adjustments do not have significant Federalism effects because they will not affect the States, the relationship between the national government and the States, or the distribution of power and responsibilities among various levels of government.
In issuing this rule, the Department has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988.
These rate adjustments do not affect the collections of information which have been approved by the Office of Information and Regulatory Affairs, Office of Management and Budget, under the Paperwork Reduction Act of 1995. The OMB Control Number is 1076-0141 and expires March 31, 2016.
The Department has determined that these rate adjustments do not constitute
In developing this notice, we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106-554).
Bureau of Land Management, Interior.
Notice.
The United States Forest Service (USFS) has filed an application with the Bureau of Land Management (BLM) requesting that the Secretary of the Interior extend the duration of Public Land Order (PLO) No. 7133 for an additional 20-year term. PLO No. 7133 withdrew approximately 496.22 acres of National Forest System land from location and entry under the mining laws in order to protect the Brown Mountain, Pal Moore Meadows, Teepee, Cedar Creek, and Flowery Trail Seed Orchards. The withdrawal created by PLO No. 7133 will expire on April 12, 2015, unless it is extended. This notice also gives the public an opportunity to comment on the proposed application and action and to request a public meeting.
Comments and requests for a public meeting must be received by April 23, 2014.
Comments and meeting requests should be sent to the Oregon/Washington State Director, BLM, P.O. Box 2965, Portland, OR 97208-2965 or 1220 SW 3rd Avenue, Portland, OR 97204.
Sara Copp, BLM Oregon/Washington State Office, 503-808-6189, or Candice Polisky, USFS Pacific Northwest Region, 503-808-2479.
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 individuals. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individuals. You will receive a reply during normal business hours.
The USFS has filed an application requesting that the Secretary of the Interior extend PLO No. 7133 (60 FR 18777 (1995)), which withdrew approximately 496.22 acres in Ferry, Stevens, and Pend Oreille Counties, Washington, from location and entry under the United States mining laws (30 U.S.C. Ch. 2 (1988)), for an additional 20-year term, subject to valid existing rights. PLO No. 7133 is incorporated herein by reference.
The purpose of the proposed withdrawal extension is to continue the protection of the integrity and functionality of the seed orchards, along with the investment of Federal funds at the Brown Mountain, Pal Moore Meadows, Teepee, Cedar Creek, and Flowery Trail Seed Orchards.
The use of a right-of-way, interagency agreement, or cooperative agreement would not provide adequate protection because these instruments do not provide the ability to preclude all forms of location and entry under the mining laws.
The USFS would not need to acquire water rights to fulfill the purpose of the requested withdrawal extension.
Records related to the application may be examined by contacting Sara Copp at the above address or phone number.
For a period until April 23, 2014, all persons who wish to submit comments, suggestions, or objections in connection with the proposed withdrawal extension may present their views in writing to the BLM State Director at the address indicated above.
Comments, including names and street addresses of respondents, will be available for public review at the address indicated above during regular business hours. Before including your address, phone number, email address, or other personal identifying information in your comment, be advised that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold from public review your personal identifying information, we cannot guarantee that we will be able to do so.
Notice is hereby given that an opportunity for a public meeting is afforded in connection with the proposed withdrawal extension. All interested parties who desire a public meeting for the purpose of being heard on the proposed withdrawal extension must submit a written request to the BLM State Director at the address indicated above by April 23, 2014. Upon determination by the authorized officer that a public meeting will be held, a notice of the time and place will be published in the
The application will be processed in accordance with the regulations set forth in 43 CFR 2300.4.
Bureau of Land Management, Interior.
Notice of realty action.
The Bureau of Land Management (BLM) has examined and found suitable for classification for lease and conveyance under the Recreation and Public Purposes (R&PP) Act, as amended, 61.81 acres of public land in Inyo County, California. The public land contains a solid waste landfill that has been closed to public use. The County of Inyo proposes to use the land to implement a long-term monitoring and closure plan for the landfill.
Comments of interested persons must be received in the BLM Barstow Field Office at the address below on or before March 10, 2014. Only written comments will be accepted.
Bureau of Land Management, Barstow Field Office, 2601 Barstow Road, Barstow, CA 92311.
Birgit Hoover, Realty Specialist, BLM Barstow Field Office, 760-252-6035. Detailed information concerning this action including, but not limited to, documentation related to compliance with applicable environmental and cultural resource laws, is available for review at the BLM Barstow Field Office at the address above.
The following described public land in Inyo County, California has been examined and found suitable for classification for lease and conveyance under Section 7 of the Taylor Grazing Act, 43 U.S.C. 315f, and the provisions of the R&PP Act as amended, 43 U.S.C. 869
The area described contains 61.81 acres in Inyo County.
The land is not needed for any Federal purpose. The County of Inyo previously leased a portion of the land described above for landfill purposes beginning in 1972. The County of Inyo has applied to purchase the land described to implement a long term closure and monitoring plan for the landfill. The land described above includes the landfill footprint and additional adjacent public land not within the original lease area, but now considered necessary for access, monitoring wells and slope stabilization. The conveyance is consistent with current BLM land use planning and would be in the public interest. The patent, if issued, would be subject to the provisions of the R&PP Act and applicable regulations of the Secretary of the Interior, in particular, but not limited to 43 CFR 2743.3-1, and would contain the following additional reservations, terms, and conditions:
1. A right-of-way thereon for ditches or canals constructed by the authority of the United States pursuant to the Act of August 30, 1890, 43 U.S.C. 945.
2. All minerals shall be reserved to the United States, together with the right to prospect for, mine, and remove the minerals under applicable laws and such regulations as the Secretary of the Interior may prescribe, including all necessary access and exit rights.
3. The patent, if issued, will be subject to all valid existing rights.
4. The patentee shall comply with all Federal and State laws applicable to the disposal, placement, or release of hazardous substances and shall indemnify and hold harmless the United States against any legal liability or future costs that may arise out of any violation of such laws.
5. Except as provided in provision 7 below, the land conveyed shall revert to the United States unless substantially used in accordance with an approved plan and schedule of development on or before the date 5 years after the date of conveyance.
6. If, at any time, the patentee transfers to another party ownership of any portion of the land not used for the purpose(s) specified in the application and the approved plan of development, the patentee shall pay the BLM the fair market value, as determined by the authorized officer, of the transferred portion as of the date of transfer, including the value of any improvements thereon.
7. No portion of the land used for solid waste disposal or for any other purpose that may have resulted in the disposal, placement, or release of any hazardous substance shall under any circumstance revert to the United States.
8. Portions of the above described land have been used for solid waste disposal. Records regarding the solid waste disposal on the land are maintained by the County. Solid waste commonly includes small quantities of commercial hazardous waste and household hazardous waste as determined in the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. 6901), and defined in 40 CFR 261.4 and 261.5. Although there is no indication that these materials pose any significant risk to human health or the environment, future land uses should be limited to those which do not penetrate the liner or final cover of the landfill unless excavation is conducted subject to applicable State and Federal requirements.
On March 24, 2014, the public land described above will be segregated from all forms of appropriation under the public land laws, including the general mining laws, except for lease or conveyance under the R&PP Act.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
43 CFR 2741.5.
Bureau of Land Management, Interior.
Notice.
The Bureau of Land Management (BLM) requests public nominations for seven people to serve on the Steens Mountain Advisory Council (SMAC). Citizens who serve on this group provide advice and recommendations to the BLM on land use planning and management of the Steens Mountain Cooperative Management and Protection Area. The BLM will accept public nominations for 30 days after the publication of this notice.
All nominations must be received no later than February 24, 2014.
Send completed Advisory Council nominations to BLM Burns District Office; 28910 Highway 20 West; Hines, OR 97738-9424. Nomination forms are available at the BLM Burns District Office, or online at
Tara Martinak, Public Affairs Specialist, BLM Burns District Office, 28910 Highway 20 West, Hines, OR 97738-9424, 541-573-4519, or email
Any individual may nominate himself/herself or others to serve on the Council. Positions currently open or with terms expiring in 2014 include a representative of the State government to serve as a liaison to the advisory council, a representative of a State environmental organization, a representative of a local environmental organization, a person interested in mechanized and consumptive recreation in the Steens Mountain Cooperative Management and Protection Area (CMPA), a person with a grazing permit within the the CMPA, a private landowner within the CMPA, and a person with no financial intersest in the CMPA. All nomination applications should include letters of reference and/or recommendations from the represented interests or organizations and any other information explaining the nominee's qualifications (
The BLM initiated the SMAC on August 14, 2001, pursuant to the Steens Mountain Cooperative Management and Protection Act of 2000 (Pub. L. 106-399). The SMAC provides representative counsel and advice to the BLM regarding new and unique approaches to management of the land within the bounds of the Steens Mountain CMPA; recommending cooperative programs and incentives for landscape management that meet human needs, and the maintenance and improvement of the ecological and economic integrity of the area. The BLM is publishing this notice under Section 9(a)(2) of the Federal Advisory Committee Act (FACA), to seek public nominations for membership on the SMAC. Applicants must be qualified through education, training, knowledge, or experience to give informed advice regarding an industry, discipline, or interest to be represented. Nominees must also demonstrate a commitment to collaborative resource decision-making. The Obama Administration prohibits individuals who are currently federally registered lobbyists from serving on all FACA and non-FACA boards, committees or councils.
Before including your address, phone number, email address, or other personal identifying information in your comments, please be aware that your nomination-including your personal identifying information-may be made publicly available at any time. While you can ask us to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Bureau of Reclamation, Interior.
Notice of public meeting.
The Glen Canyon Dam Adaptive Management Work Group (AMWG) makes recommendations to the Secretary of the Interior concerning Glen Canyon Dam operations and other management actions to protect resources downstream of Glen Canyon Dam, consistent with the Grand Canyon Protection Act. The AMWG meets two to three times a year.
The meeting will be held on Wednesday, February 19, 2014, from approximately 9:30 a.m. to approximately 5:30 p.m., and Thursday, February 20, 2014, from approximately 8:00 a.m. to approximately 4:00 p.m.
The meeting will be held at the Embassy Suites Hotel, 4400 S. Rural Road, Tempe, Arizona, 85282.
Glen Knowles, Bureau of Reclamation, telephone (801) 524-3781; facsimile (801) 524-3858; email at
The Glen Canyon Dam Adaptive Management Program (GCDAMP) was implemented as a result of the Record of Decision on the Operation of Glen Canyon Dam Final Environmental Impact Statement to comply with consultation requirements of the Grand Canyon Protection Act (Pub. L. 102-575) of 1992. The GCDAMP includes a Federal advisory committee, the AMWG, a technical work group (TWG), a Grand Canyon Monitoring and Research Center, and independent review panels. The TWG is a subcommittee of the AMWG and provides technical advice and recommendations to the AMWG.
To view a copy of the agenda and documents related to the above meeting, please visit Reclamation's Web site at
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
60-Day Notice.
The Department of Justice (DOJ), Civil Rights Division, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for “sixty days” until March 24, 2014. This process is conducted in accordance with 5 CFR 1320.10.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Deeana L. Jang, Chief, USDOJ-CRT-FCS, 950 Pennsylvania Avenue NW-NWB, Washington, DC 20530.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Overview of this information collection:
(1)
(2)
(3)
(4)
Information is used to find jurisdiction to investigate the alleged discrimination, to seek whether a referral to another agency is necessary and to provide information needed to initiate investigation of the complaint. Respondents are individuals.
(5)
(6)
If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, Room 3W-1407B, 145 N Street, NE., Washington, DC 20530.
On January 16, 2014, the Department of Justice lodged a proposed consent decree with the United States District Court for the Northern District of California, San Jose Division, in the lawsuit entitled
The United States filed this lawsuit under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The United States' complaint names CTS Printex, Inc. and ADN Corporation as defendants. The complaint requests recovery of costs that the United States incurred responding to releases of hazardous substances at the CTS Printex Superfund Site in the city of Mountain View, Santa Clara County, California. The complaint also seeks injunctive relief. Under the proposed consent decree, the defendants agree to pay $850,000 of the United States' response costs, and to perform the remedial action that EPA selected for the site. In return, the United States agrees not to sue the defendants under sections 106 and 107 of CERCLA.
The publication of this notice opens a period for public comment on the consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the consent decree may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $53.75 (25 cents per page reproduction cost) payable to the United States Treasury. For a paper copy without the exhibits and signature pages, the cost is $17.25.
Bureau of International Labor Affairs, Labor.
Notice of charter renewal.
On September 30, 2013, President Obama continued the President's Committee on the International Labor Organization (ILO) for two years through September 30, 2015 (E.O. 13652, 78 FR 61817 (September 30, 2013)). In response, and pursuant to the Federal Advisory Committee Act (FACA), as amended (5 U.S.C. App. 2), the Secretary of Labor approved on January 14, 2014, renewal of the committee's charter.
The committee is comprised of seven members: The Secretary of Labor (chair), the Secretary of State, the Secretary of Commerce, the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and one representative each from organized labor and the business community, designated by the Secretary. The labor and business members are the presidents of the most representative organizations of U.S. workers and employers engaged in ILO matters.
The authority for this notice is granted by the Federal Advisory Committee Act (5 U.S.C. App. 2) and Executive Order No. 13652 of September 20, 2013.
Robert B. Shepard, Director, Office of International Relations, Bureau of International Labor Affairs, U.S. Department of Labor, telephone (202) 693-4808.
Occupational Safety and Health Administration (OSHA), Labor.
Announcement of a meeting of the Whistleblower Protection Advisory Committee (WPAC).
WPAC will meet March 11, 2014, in Washington, DC.
OSHA will post comments, requests to speak, and speaker presentations, including any personal information you provide, without change, at
WPAC will meet Tuesday, March 11, 2014, in Washington, DC. WPAC meetings are open to the public.
The tentative agenda of the WPAC meeting includes:
Remarks from the Assistant Secretary of Labor for Occupational Safety and Health (OSHA);
WPAC work group reports and discussion;
WPAC and WPAC Work Group administrative business; and Public comments.
OSHA transcribes WPAC meetings and prepares detailed minutes of the meetings. OSHA places the meeting transcripts and minutes in the public record of the WPAC meeting. The public record also includes Work Group reports, speaker presentations,
The WPAC work group meetings (11(c), Transportation Industry, and Best Practices and Corporate Culture) on March 10, 2014, are open to the public. The purpose of the work groups is to provide recommendations to the full WPAC committee on their subject matters. The work groups will report to WPAC at the March 11, 2014, meeting for discussion by the full committee.
For additional information on WPAC work group meetings or participating in them, please contact Ms. Smith or look on the WPAC page on OSHA's Web page at
Individuals needing special accommodations to attend the WPAC meeting should contact to Ms. Owens as well.
Because of security-related procedures, submissions by regular mail may experience significant delays. For information about security procedures for submitting materials by hand delivery, express mail, and messenger or courier service, please contact the OSHA Docket Office (see
Requests to speak and speaker presentations: If you want to address WPAC at the meeting you must submit your request to speak, as well as any written or electronic presentation, by February 21, 2014, using one of the methods listed in the
• The amount of time requested to speak;
• The interest you represent (e.g., business, organization, affiliation), if any; and
• A brief outline of your presentation.
PowerPoint presentations and other electronic materials must be compatible with PowerPoint 2010 and other Microsoft Office 2010 formats.
The WPAC Chair may grant requests to address WPAC as time and circumstances permit.
OSHA also places in the public docket the meeting transcript, meeting minutes, documents presented at the WPAC meeting, and other documents pertaining to the WPAC meeting. These documents are available online at
Electronic copies of this
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, authorized the preparation of this notice under the authority granted by the Federal Advisory Committee Act (FACA), as amended (5 U.S.C. App. 2), its implementing regulations (41 CFR part 102-3), chapter 1600 of Department of Labor Management Series 3 (Mar. 17, 2008), Secretary of Labor's Order 1-2012 (Jan. 18, 2012), 77 FR 3912 (Jan. 25, 2012), and the Secretary of Labor's authority to administer the whistleblower provisions found in Section 11(c) of the Occupational Safety and Health Act, 29 U.S.C. 660(c); the Surface Transportation Assistance Act, 49 U.S.C. 31105; the Asbestos Hazard Emergency Response Act, 15 U.S.C. 2651; the International Safe Container Act, 46 U.S.C. 80507; the Safe Drinking Water Act, 42 U.S.C. 300j-9(i); the Federal Water Pollution Control Act, 33 U.S.C. 1367; the Toxic Substances Control Act, 15 U.S.C. 2622; the Solid Waste Disposal Act, 42 U.S.C. 6971; the Clean Air Act, 42 U.S.C. 7622; the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9610; the Energy Reorganization Act, 42 U.S.C. 5851; the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. 42121; the Sarbanes-Oxley Act, 18 U.S.C. 1514A; the Pipeline Safety Improvement Act, 49 U.S.C. 60129; the Federal Railroad Safety Act, 49 U.S.C. 20109; the National Transit Systems Security Act, 6 U.S.C. 1142; the Consumer Product Safety Improvement Act, 15 U.S.C. 2087; Section 1558 of the Affordable Care Act, Public Law 111-148; the Consumer Financial Protection Act of 2010, 12 U.S.C.A. 5567; the Seaman's Protection Act, 46 U.S.C. 2114; Section 402 of the FDA Food Safety Modernization Act, Public Law 111-353; and Section 31307 of the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141.
U.S. Office of Personnel Management.
30-Day Notice and request for comments.
The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206-0218, Death Benefit Payment
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until February 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
RI 94-7 provides Federal Employees Retirement System (FERS) surviving spouses and former spouses with the means to elect payment of FERS rollover-eligible benefits directly or to an Individual Retirement Arrangement.
U.S. Office of Personnel Management.
30-Day Notice and request for comments.
The Office of Personnel Management's (OPM) Retirement Services offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206-0216, We Need Important Information About Your Eligibility for Social Security Disability Benefits, RI 98-7. As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106) OPM is soliciting comments for this collection. The information collection was previously published in the
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until February 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
RI 98-7 is used by OPM to verify receipt of Social Security Administration (SSA) disability benefits, to lessen or avoid overpayment to Federal Employees Retirement System (FERS) disability retirees. It notifies the annuitant of the responsibility to notify OPM if SSA awards disability benefits and the subsequent overpayment that will occur with the receipt of both benefits.
U.S. Office of Personnel Management.
30-Day Notice and request for comments.
The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206-0032, Self-Certification of Full-Time School Attendance For The School Year, RI 25-14 and Information and Instructions for Completing the Self-Certification of Full-Time School Attendance For The School Year, RI 25-14A. As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. The information collection was previously published in the
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until February 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
RI 25-14 is used to survey survivor annuitants who are between the ages of 18 and 22 to determine if they meet the requirements of Section 8341(a)(4)(C), and Section 8441, title 5, U.S. Code, to receive benefits as a student. RI 25-14A provides instructions for completing the Self-Certification of Full-Time School Attendance For The School Year survey form.
U.S. Office of Personnel Management.
30-day notice and request for comments.
The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206-0190, Application for Deferred or Postponed Retirement: Federal Employees Retirement System, RI 92-19. As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. The information collection was previously published in the
The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments are encouraged and will be accepted until February 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
RI 92-19 is used by separated employees to apply for either a deferred or a postponed FERS annuity benefit.
Office of Personnel Management.
30-Day Notice and request for comments.
The Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on a revised information collection request (ICR) 3206-0219, USAJOBS. As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection.
The information collection was previously published in the
In particular, we invite comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until March 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to the U.S. Office of Personnel Management, Chief Information Officer, USAJOBS, 1900 E Street NW., Washington, DC 20415, Attention: John Still or send them by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the U.S. Office of Personnel Management, Chief Information Officer, USAJOBS, 1900 E Street NW., Washington, DC 20415, Attention: John Still, or by sending a request by email to
USAJOBS is the Federal Government's centralized source for most Federal jobs and employment information, including both positions that are required by law to be posted at that location and positions that can be posted there at an agency's discretion. The Applicant Profile and Resume Builder are two components of the USAJOBS application system. USAJOBS reflects the minimal critical elements collected across the Federal Government to assess an applicant's qualifications for Federal jobs under the authority of sections 1104, 1302, 3301, 3304, 3320, 3361, 3393, and 3394 of title 5, United States Code. This revision proposes to:
(A.) Acknowledge the newest revision to the USAJOBS 3.0 system as USAJOBS.
(B.) Make changes to the USAJOBS Applicant Profile to make the section more concise and easier for the applicant to understand and complete. Changes to the Applicant Profile include adding a new question for Willingness to relocate. New fields will be added for Telephone Extension and Name prefix and Suffix. The “Current Goal” field will be removed. In addition we will add and edit help language and make text and format and User Interface changes which will make the pages easier for applicants to navigate.
(C.) Make changes to the USAJOBS Resume Builder that will improve navigation, make the builder both concise and easier for the applicant to complete. Changes include adding check boxes that read, “I do not wish to provide work experience”, “I do not wish to provide education” and “References available upon request”. We will also make text and user interface changes throughout the resume builder, also designed to make the pages easier for the applicant to navigate, understand and complete. “Pursuant to a separate submission, we recently modified “Do you claim Veterans' Preference” to include a new option for 0-point Sole Survivorship Preference; to replace “wife” with spouse in the option for derived preference; and to add mother to the option for derived preference. In addition, we modified the Document Upload section to instruct current service members how to claim veterans' preference under the VOW (Veterans Opportunity to Work) to Hire Heroes Act of 2011.”
U.S. Office of Personnel Management.
60-Day Notice and request for comments.
The Office of Personnel Management's (OPM) Retirement Services offers the general public and other Federal agencies the opportunity to comment on an existing information collection request (ICR) 3206-0204, Court Orders Affecting Retirement Benefits. As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until March 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to the U.S. Office of Personnel Management, Retirement Services, Union Square Room 370, 1900 E Street, NW., Washington, DC 20415-3500, Attention: Alberta Butler, or sent by email to
A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street, NW., Room 3316-AC, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to
Court Orders Affecting Retirement Benefits, 5 CFR 838.221, 838.421, and 838.721, describe how a former spouse gives us written notice of a court order requiring us to pay benefits to the former spouse. Specific information is needed before OPM can make court-ordered benefit payments.
U.S. Office of Personnel Management.
30-Day Notice and request for comments.
The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206-0254, Request for Case Review for Enhanced Disability Annuity Benefit, RI 20-123. As required by the Paperwork Reduction Act of 1995, (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. This information collection was previously published in the
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until February 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent by email to
RI 20-123 is available only on the OPM Web site. It is used by retirees separated for disability and the survivors of retirees
U.S. Office of Personnel Management.
60-Day Notice and request for comments.
The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request, (ICR) 3206-0235, Letter Reply to Request for Information, RI 20-64 and Information on Electing a Survivor Annuity for Your Former Spouse, RI 20-64A. As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection. The Office of Management and Budget is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility;
2. Evaluate the accuracy of OPM's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
Comments are encouraged and will be accepted until March 24, 2014. This process is conducted in accordance with 5 CFR 1320.1.
Interested persons are invited to submit written comments on the proposed information collection to the U.S. Office of Personnel Management, Retirement Services, Union Square Room 370, 1900 E Street, NW., Washington, DC 20415-3500, Attention: Alberta Butler or sent by email to
A copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street, NW., Room 3316-AC, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to
RI 20-64, Letter Reply to Request for Information, is used by the Civil Service Retirement System (CSRS) to provide information about the amount of annuity payable after a survivor reduction, to explain the annuity reductions required to pay for the survivor benefit, and to give the beginning rate of survivor annuity. RI 20-64A, Former Spouse Survivor Annuity Election, is used by the CSRS to obtain a survivor benefits election from annuitants who are eligible to elect to provide survivor benefits for a former spouse. RI 20-64B, Information on Electing a Survivor Annuity for Your Former Spouse, is a pamphlet that provides important information to retirees under the CSRS who want to provide a survivor annuity for a former spouse.
Postal Service
Notice of modification to existing systems of records.
The United States Postal Service® (Postal Service) is proposing to modify a Customer Privacy Act System of Records (SOR) to permit the collection and retrieval of additional categories of information from customers who register on usps.com. These changes will enable the Postal Service to verify a customer's identity online. Additionally, the Postal Service is amending this SOR to permit information in this system to be used to identify, prevent, or mitigate the effects of fraudulent transactions.
These revisions will become effective without further notice on February 24, 2014 unless comments received on or before that date result in a contrary determination.
Comments may be mailed or delivered to the Privacy and Records Office, United States Postal Service, 475 L'Enfant Plaza SW., Room 9517, Washington, DC 20260-1101. Copies of all written comments will be available at this address for public inspection and photocopying between 8 a.m. and 4 p.m., Monday through Friday.
Matthew J. Connolly, Chief Privacy Officer, Privacy and Records Office, 202-268-8582.
This notice is in accordance with the Privacy Act requirement that agencies publish their amended systems of records in the
The Postal Service Customer Registration application enables individual and corporate customers to conduct business online with the Postal Service. To date, approximately 20 million users have registered through the Customer Registration application. The Postal Service is modifying the system of records associated with this application to enable the Postal Service to validate the email and text message numbers of customers who register on usps.com. Additionally, the proposed modifications will enable customer-supplied information to be analyzed for the purposes of detecting, preventing, and mitigating fraudulent activity.
Currently, to register on usps.com, a customer is asked to supply several types of personal information, including his or her name, address information, phone number(s), and email address(es). Customers must also create a username and password which are used to authenticate the customer when the customer accesses his or her account. Additionally, customers must provide answers to two security questions which will be used to verify the identity of returning customers who have forgotten their passwords, thereby enabling them to regain access to their accounts.
Customer Registration is making changes to the customer registration process to enhance the identity verification portion of the process and to provide customers with an additional option for accessing their accounts in the event that a customer forgets, or is otherwise unable to supply, his or her password. The Postal Service intends to ask each new and existing usps.com registrant to verify the email address that he or she used to create his or her account by responding to a communication that will be sent to the email that was previously supplied by the user. Customers who complete this verification process will be allowed to use their verified email address to reset their account passwords. Accordingly, the Postal Service is modifying the purpose of this SOR to account for these new uses of customer-supplied information. Because the Postal Service intends to establish the same verification process for text message numbers, the Postal Service is also modifying this SOR to include “text message number(s)” among the categories of information it currently collects during the customer registration process.
To protect the Postal Service and its customers from fraudulent activities, the Postal Service intends to analyze information received from the user for the purpose of detecting, preventing, and mitigating fraud within the Customer Registration application. Specifically, the Postal Service will use commercially available software to analyze user-supplied information for the purpose of identifying patterns of suspected fraudulent activity. In so doing, the Postal Service will obscure the original information supplied by customers when such information is analyzed. If the Postal Service determines that such activity warrants a formal criminal investigation by the Postal Inspection Service, then any potentially relevant information will be provided to the Inspection Service in its original format. Accordingly, amendments are being made to the purpose(s) and retrievability sections of the SOR.
The Postal Service is also proposing to partner with a consumer credit rating company for the purpose of securely validating the identities of customers online, a process known as “identity proofing.” Accordingly, the Postal Service is amending this SOR to enable the organization to implement identity proofing for personal (non-business) customers who select this option. Individual (non-business) customers who wish to validate their identities in this manner, and who select this option, would be required to answer questions submitted by a consumer credit reporting company. These questions would relate to the customer's history, such as past residences, employment, and credit data. Any answers provided by the customer would be sent directly to the credit reporting company. That company would then issue a pass/fail rating which would be sent to the Postal Service. The Postal Service would then store this rating in association with the customer's account. The pass/fail rating is the only information the Postal Service would store in the identity-proofing process. Accordingly, the Postal Service is modifying this SOR to indicate that results of identity proofing validation would be stored as a record category. Identity verification using this process would only be a requirement for certain products and services to be determined by postal management.
Pursuant to 5 U.S.C. 552a(e)(11), interested persons are invited to submit written data, views, or arguments on this proposal. A report of the proposed modifications has been sent to Congress and to the Office of Management and Budget for their evaluations. The Postal Service does not expect this amended system of records to have any adverse effect on individual privacy rights. The affected systems are as follows:
Accordingly, for the reasons stated, the Postal Service proposes changes in the existing system of records as follows:
1.
2.
6. To verify a customer's identity when the customer establishes, or attempts to access, his or her account.
7. To identify, prevent, and mitigate the effects of fraudulent transactions.
By customer name, customer ID(s), phone number, mail, email address, IP address, text message number, and any customer information or online user information.
Securities and Exchange Commission (“Commission”).
Notice of an application under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 19(b) of the Act and rule 19b-1 under the Act.
Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants, 333 West Wacker Drive, Chicago, IL 60606.
Deepak T. Pai, Senior Counsel, at (202) 551-6876, or Mary Kay Frech, Branch Chief, at (202) 551-6814 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. JRS is registered as a non-diversified, closed-end management investment company organized as a Massachusetts business trust.
2. NFA, a Delaware limited liability company, is registered under the Investment Advisers Act of 1940 (the “Advisers Act”) as an investment adviser. NFA provides investment advisory services to JRS. Security Capital Research & Management Incorporated (“SCRM”), a Delaware corporation, is a registered investment adviser under the Advisers Act and is the sub-adviser to JRS. Any sub-adviser to a Fund will be registered as an investment adviser under the Advisers Act or not subject to registration.
3. Applicants state that prior to a Fund's implementing a distribution policy (“Distribution Policy”) in reliance on the order, the board of directors or trustees (the “Board”) of each Fund, including a majority of the directors or trustees who are not “interested persons” of the Fund, as defined in section 2(a)(19) of the Act (the “Independent Trustees”), will request, and the Adviser will provide, such information as is reasonably necessary to make an informed determination of whether the Board should adopt a proposed Distribution Policy. In particular, the Board and the Independent Trustees will review information regarding the purpose and terms of the Distribution Policy; the likely effects of the policy on the Fund's long-term total return (in relation to market price and its net asset value per share of common stock (“NAV”)); the expected relationship between the Fund's distribution rate on its common stock under the policy and the Fund's total return (in relation to NAV); whether the rate of distribution would exceed such Fund's expected total return in relation to its NAV; and any foreseeable material effects of the policy on the Fund's long-term total return (in relation to market price and NAV). The Independent Trustees also will consider what conflicts of interest the Adviser and the affiliated persons of the Adviser and the Fund might have with respect to the adoption or implementation of the Distribution Policy. Applicants state that, only after considering such information will the Board, including the Independent Trustees, of each Fund approve a Distribution Policy and in connection with such approval will determine that the Distribution Policy is consistent with a Fund's investment objectives and in the best interests of the holders of the Fund's common stock.
4. Applicants state that the purpose of a Distribution Policy, generally, would be to permit a Fund to distribute over the course of each year, through periodic distributions in relatively equal amounts (plus any required special distributions) that are composed of payments received from portfolio companies (REITs), supplemental amounts generally representing capital gains or, possibly, returns of capital that may represent unrealized capital gains. The Fund seeks to establish a distribution rate that approximates the Fund's projected total return that can reasonably be expected to be generated by the Fund over an extended period of time, although the distribution rate will not be solely dependent on the amount of income earned or capital gains realized by the Fund. Under the Distribution Policy of a Fund, such Fund would distribute to its respective
5. Applicants state that prior to the implementation of a Distribution Policy for any Fund in reliance on the order, the Board of such Fund will have adopted policies and procedures under rule 38a-1 under the Act that: (i) are reasonably designed to ensure that all notices required to be sent to the Fund's stockholders pursuant to section 19(a) of the Act, rule 19a-1 thereunder and condition 4 below (each a “19(a) Notice”) include the disclosure required by rule 19a-1 under the Act and by condition 2(a) below, and that all other written communications by the Fund or its agents regarding distributions under the Distribution Policy include the disclosure required by condition 3(a) below; and (ii) require the Fund to keep records that demonstrate its compliance with all of the conditions of the order and that are necessary for such Fund to form the basis for, or demonstrate the calculation of, the amounts disclosed in its 19(a) Notices.
1. Section 19(b) of the Act generally makes it unlawful for any registered investment company to make long-term capital gains distributions more than once every twelve months. Rule 19b-1 limits the number of capital gains dividends, as defined in section 852(b)(3)(C) of the Code (“distributions”), that a fund may make with respect to any one taxable year to one, plus a supplemental distribution made pursuant to section 855 of the Code not exceeding 10% of the total amount distributed for the year, plus one additional capital gain dividend made in whole or in part to avoid the excise tax under section 4982 of the Code.
2. Section 6(c) of the Act provides, in relevant part, that the Commission may exempt any person or transaction from any provision of the Act 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.
3. Applicants state that one of the concerns leading to the enactment of section 19(b) and adoption of rule 19b-1 was that stockholders might be unable to distinguish between frequent distributions of capital gains and dividends from investment income. Applicants state, however, that rule 19a-1 effectively addresses this concern by requiring that distributions (or the confirmation of the reinvestment thereof) estimated to be sourced in part from capital gains or capital be accompanied by a separate statement showing the sources of the distribution (
4. Applicants further state that each Fund will make the additional disclosures required by the conditions set forth below, and each Fund will adopt compliance policies and procedures in accordance with rule 38a-1 under the Act to ensure that all required 19(a) Notices and disclosures are sent to stockholders. Applicants state that the information required by section 19(a), rule 19a-1, the Distribution Policy, the policies and procedures under rule 38a-1 noted above, and the conditions listed below will help ensure that each Fund's stockholders are provided sufficient information to understand that their periodic distributions are not tied to a Fund's net investment income (which for this purpose is the Fund's taxable income other than from capital gains) and realized capital gains to date, and may not represent yield or investment return. Accordingly, applicants assert that continuing to subject the Funds to section 19(b) and rule 19b-1 would afford stockholders no extra protection.
5. Applicants note that section 19(b) and rule 19b-1 also were intended to prevent certain improper sales practices, including, in particular, the practice of urging an investor to purchase shares of a fund on the basis of an upcoming capital gains dividend (“selling the dividend”), where the dividend would result in an immediate corresponding reduction in NAV and would be in effect a taxable return of the investor's capital. Applicants submit that the “selling the dividend” concern should not apply to closed-end investment companies, such as the Funds.
6. Applicants also note that the common stock of closed-end funds often trades in the marketplace at a discount to its NAV. Applicants believe that this discount may be reduced if the Funds are permitted to pay relatively frequent dividends on their common stock at a consistent rate, whether or not those dividends contain an element of long-term capital gains.
7. Applicants assert that the application of rule 19b-1 to a Distribution Policy actually could have an inappropriate influence on portfolio management decisions. Applicants state that, in the absence of an exemption from rule 19b-1, the adoption of a periodic distribution plan imposes pressure on management (i) not to realize any net long-term capital gains until the point in the year that the fund can pay all of its remaining distributions in accordance with rule 19b-1, and (ii) not to realize any long-term capital gains during any particular year in excess of the amount of the aggregate pay-out for the year (since as a practical matter excess gains must be distributed and accordingly would not be available to satisfy pay-out requirements in following years), notwithstanding that purely investment considerations might favor realization of long-term gains at different times or in different amounts. Applicants assert that by limiting the number of long-term capital gain dividends that a Fund may make with respect to any one year, rule 19b-1 may prevent the normal and efficient
8. Applicants also assert that rule 19b-1 may force fixed regular periodic distributions under a periodic distribution plan to be funded with returns of capital
9. Applicants state that Revenue Ruling 89-81 under the Code requires that a fund that seeks to qualify as a regulated investment company under the Code and that has both common stock and preferred stock outstanding designate the types of income,
10. Applicants assert that the potential abuses addressed by section 19(b) and rule 19b-1 do not arise with respect to preferred stock issued by a closed-end fund. Applicants assert that such distributions are either fixed or determined in periodic auctions by reference to short-term interest rates rather than by reference to performance of the issuer, and Revenue Ruling 89-81 determines the proportion of such distributions that are comprised of long-term capital gains.
11. Applicants also submit that the “selling the dividend” concern is not applicable to preferred stock, which entitles a holder to no more than a specified periodic dividend at a fixed rate or the rate determined by the market, and, like a debt security, is priced based upon its liquidation preference, dividend rate, credit quality, and frequency of payment. Applicants state that investors buy preferred stock for the purpose of receiving payments at the frequency bargained for, and any application of rule 19b-1 to preferred stock would be contrary to the expectation of investors.
12. Applicants request an order under section 6(c) of the Act granting an exemption from the provisions of section 19(b) of the Act and rule 19b-1 thereunder to permit each Fund to distribute periodic capital gain dividends (as defined in section 852(b)(3)(C) of the Code) as frequently as monthly in any one taxable year in respect of its common stock and as often as specified by, or determined in accordance with the terms of, any preferred stock issued by the Fund.
Applicants agree that, with respect to each Fund seeking to rely on the order, the order will be subject to the following conditions:
The Fund's chief compliance officer will: (a) report to the Fund's Board, no less frequently than once every three months or at the next regularly scheduled quarterly Board meeting, whether (i) the Fund and its Adviser have complied with the conditions of the order, and (ii) a material compliance matter (as defined in rule 38a-1(e)(2) under the Act) has occurred with respect to such conditions; and (b) review the adequacy of the policies and procedures adopted by the Board no less frequently than annually.
(a) Each 19(a) Notice disseminated to the holders of the Fund's common stock, in addition to the information required by section19(a) and rule 19a-1:
(i) Will provide, in a tabular or graphical format:
(1) the amount of the distribution, on a per share of common stock basis, together with the amounts of such distribution amount, on a per share of common stock basis and as a percentage of such distribution amount, from estimated: (A) Net investment income; (B) net realized short-term capital gains; (C) net realized long-term capital gains; and (D) return of capital or other capital source;
(2) the fiscal year-to-date cumulative amount of distributions, on a per share of common stock basis, together with the amounts of such cumulative amount, on a per share of common stock basis and as a percentage of such cumulative amount of distributions, from estimated: (A) Net investment income; (B) net realized short-term capital gains; (C) net realized long-term capital gains; and (D) return of capital or other capital source;
(3) the average annual total return in relation to the change in NAV for the 5-year period (or, if the Fund's history of operations is less than five years, the time period commencing immediately following the Fund's first public offering) ending on the last day of the month ended immediately prior to the most recent distribution record date compared to the current fiscal period's annualized distribution rate expressed as a percentage of NAV as of the last day of the month prior to the most recent distribution record date; and
(4) the cumulative total return in relation to the change in NAV from the last completed fiscal year to the last day of the month prior to the most recent distribution record date compared to the fiscal year-to-date cumulative distribution rate expressed as a percentage of NAV as of the last day of the month prior to the most recent distribution record date. Such disclosure shall be made in a type size at least as large and as prominent as the estimate of the sources of the current distribution; and
(ii) Will include the following disclosure:
(1) “You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Applicants' Distribution Policy”;
(2) “The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment
(3) “The amounts and sources of distributions reported in this 19(a) Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.”
Such disclosure shall be made in a type size at least as large as and as prominent as any other information in the 19(a) Notice and placed on the same page in close proximity to the amount and the sources of the distribution.
(b) On the inside front cover of each report to stockholders under rule 30e-1 under the Act, the Fund will:
(i) describe the terms of the Distribution Policy (including the fixed amount or fixed percentage of the distributions and the frequency of the distributions);
(ii) include the disclosure required by condition 2(a)(ii)(1) above;
(iii) state, if applicable, that the Distribution Policy provides that the Board may amend or terminate the Distribution Policy at any time without prior notice to Fund stockholders; and
(iv) describe any reasonably foreseeable circumstances that might cause the Fund to terminate the Distribution Policy and any reasonably foreseeable consequences of such termination.
(c) Each report provided to stockholders under rule 30e-1 under the Act and each prospectus filed with the Commission on Form N-2 under the Act, will provide the Fund's total return in relation to changes in NAV in the financial highlights table and in any discussion about the Fund's total return.
(a) The Fund will include the information contained in the relevant 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, in any written communication (other than a communication on Form 1099) about the Distribution Policy or distributions under the Distribution Policy by the Fund, or agents that the Fund has authorized to make such communication on the Fund's behalf, to any Fund stockholder, prospective stockholder or third-party information provider;
(b) The Fund will issue, contemporaneously with the issuance of any 19(a) Notice, a press release containing the information in the 19(a) Notice and will file with the Commission the information contained in such 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, as an exhibit to its next filed Form N-CSR; and
(c) The Fund will post prominently a statement on its (or the Adviser's) Web site containing the information in each 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, and will maintain such information on such Web site for at least 24 months.
If a broker, dealer, bank or other person (“financial intermediary”) holds common stock issued by the Fund in nominee name, or otherwise, on behalf of a beneficial owner, the Fund: (a) Will request that the financial intermediary, or its agent, forward the 19(a) Notice to all beneficial owners of the Fund's stock held through such financial intermediary; (b) will provide, in a timely manner, to the financial intermediary, or its agent, enough copies of the 19(a) Notice assembled in the form and at the place that the financial intermediary, or its agent, reasonably requests to facilitate the financial intermediary's sending of the 19(a) Notice to each beneficial owner of the Fund's stock; and (c) upon the request of any financial intermediary, or its agent, that receives copies of the 19(a) Notice, will pay the financial intermediary, or its agent, the reasonable expenses of sending the 19(a) Notice to such beneficial owners.
If:
(a) The Fund's common stock has traded on the stock exchange that they primarily trade on at the time in question at an average premium to NAV equal to or greater than 10%, as determined on the basis of the average of the discount or premium to NAV of the Fund's shares of common stock as of the close of each trading day over a 12-week rolling period (each such 12-week rolling period ending on the last trading day of each week); and
(b) The Fund's annualized distribution rate for such 12-week rolling period, expressed as a percentage of NAV as of the ending date of such 12-week rolling period, is greater than the Fund's average annual total return in relation to the change in NAV over the 2-year period ending on the last day of such 12-week rolling period; then:
(i) At the earlier of the next regularly scheduled meeting or within four months of the last day of such 12-week rolling period, the Board, including a majority of the Independent Trustees:
(1) will request and evaluate, and the Fund's Adviser will furnish, such information as may be reasonably necessary to make an informed determination of whether the Distribution Policy should be continued or continued after amendment;
(2) will determine whether continuation, or continuation after amendment, of the Distribution Policy is consistent with the Fund's investment objective(s) and policies and is in the best interests of the Fund and its stockholders, after considering the information in condition 5(b)(i)(1) above; including, without limitation:
(A) whether the Distribution Policy is accomplishing its purpose(s);
(B) the reasonably foreseeable material effects of the Distribution Policy on the Fund's long-term total return in relation to the market price and NAV of the Fund's common stock; and
(C) the Fund's current distribution rate, as described in condition 5(b) above, compared with the Fund's average annual taxable income or total return over the 2-year period, as described in condition 5(b), or such longer period as the Board deems appropriate; and
(3) based upon that determination, will approve or disapprove the continuation, or continuation after amendment, of the Distribution Policy; and
(ii) The Board will record the information considered by it, including its consideration of the factors listed in condition 5(b)(i)(2) above, and the basis for its approval or disapproval of the continuation, or continuation after amendment, of the Distribution Policy in its meeting minutes, which must be made and preserved for a period of not less than six years from the date of such meeting, the first two years in an easily accessible place.
The Fund will not make a public offering of the Fund's common stock other than:
(a) a rights offering below NAV to holders of the Fund's common stock;
(b) an offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the Fund; or
(c) an offering other than an offering described in conditions 6(a) and 6(b) above, provided that, with respect to such other offering:
(i) the Fund's annualized distribution rate for the six months ending on the last day of the month ended immediately prior to the most recent distribution record date,
(ii) the transmittal letter accompanying any registration statement filed with the Commission in connection with such offering discloses that the Fund has received an order under section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its shares of common stock as frequently as twelve times each year, and as frequently as distributions are specified by or determined in accordance with the terms of any outstanding shares of preferred stock as such Fund may issue.
The requested order will expire on the effective date of any amendment to rule 19b-1 that provides relief permitting certain closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as twelve times each year.
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 15(a) of the Act and rule 18f-2 under the Act, as well as from certain disclosure requirements.
Applicants request an order that would permit them to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements.
Cornerstone Advisors Inc. (the “Adviser”) and The Advisors' Inner Circle Fund (the “Trust”).
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 February 10, 2014, 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.
Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: Cornerstone Advisors, Inc., c/o SEI Corporation, One Freedom Valley Drive, Oaks, PA 19456.
Jean E. Minarick, Senior Counsel, at (202) 551-6811, or Daniele Marchesani, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The Trust is organized as a Massachusetts business trust and is registered under the Act as an open-end management investment company. The Trust is composed of multiple series of shares, each with its own distinct investment objectives, policies and restrictions.
2. The Adviser is, and any other Adviser will be, registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”). The Adviser serves as the investment adviser to series of the Trust pursuant to an investment advisory agreement with the Trust (each an “Investment Advisory Agreement” and collectively, the “Investment Advisory Agreements”).
3. Under the terms of the Investment Advisory Agreement, the Adviser, subject to the oversight of the Board, furnishes a continuous investment program for each Subadvised Fund and determines the investments to be purchased, held, sold or exchanged by each Subadvised Fund and the portion, if any, of the assets of the Subadvised Fund to be held uninvested. For its services to each Subadvised Fund, the Adviser receives an investment advisory fee from that Subadvised Fund as specified in the Investment Advisory Agreement calculated based on that Subadvised Fund's average daily net assets. The terms of the Investment Advisory Agreements also permit the Adviser, subject to the approval of the Board, including a majority of the Independent Trustees, and the shareholders of the applicable Subadvised Fund (if required by applicable law), to delegate portfolio management responsibilities of all or a portion of the assets of the Subadvised Fund to one or more subadvisers (“Subadvisers”). The Adviser evaluates, selects and recommends Subadvisers to manage the assets (or portion thereof) of Subadvised Funds, monitors and reviews the Subadvisers and their performance and their compliance with that Subadvised Fund's investment policies and restrictions. The Adviser has entered into subadvisory agreements (“Subadvisory Agreements”) with various Subadvisers to serve as Subadvisers to the Subadvised Funds.
4. Applicants request an order to permit the Adviser, subject to Board approval, to select Subadvisers to manage all or a portion of the assets of a Subadvised Fund pursuant to a Subadvisory Agreement and materially amend Subadvisory Agreements without obtaining shareholder approval. The requested relief will not extend to any Subadviser that is an “affiliated person,” as defined in section 2(a)(3) of the Act, of the Trust or a Subadvised Fund or the Adviser, other than by reason of solely serving as a Subadviser to a Subadvised Fund or as an investment adviser or subadviser to any series of the Trust other than the series of the Trust advised by the Adviser (“Affiliated Subadviser”).
5. Applicants also request an order exempting each Subadvised Fund from certain disclosure provisions described below that may require the Subadvised Funds to disclose fees paid to each Subadviser by the Adviser or a Subadvised Fund. Applicants seek an order to permit each Subadvised Fund to disclose (as a dollar amount and a percentage of each Subadvised Fund's net assets) only: (a) the aggregate fees paid to the Adviser and any Affiliated Subadviser; and (b) the aggregate fees paid to Subadvisers other than Affiliated Subadvisers (collectively, the “Aggregate Fee Disclosure”). A Subadvised Fund that employs an Affiliated Subadviser will provide separate disclosure of any fees paid to the Affiliated Subadviser.
6. The Funds will inform shareholders of the hiring of a new Subadviser pursuant to the following procedures (“Modified Notice and Access Procedures”): (a) within 90 days after a new Subadviser is hired for any Subadvised Fund, that Subadvised Fund will send its shareholders either a Multi-manager Notice or a Multi-manager Notice and Multi-manager Information Statement;
1. Section 15(a) of the Act provides, in relevant part, that it is unlawful for any person to act as an investment adviser to a registered investment company except pursuant to a written contract that has been approved by the vote of a majority of the company's outstanding voting securities. Rule 18f-2 under the Act provides that each series or class of stock in a series investment company affected by a matter must approve that matter if the Act requires shareholder approval.
2. Form N-1A is the registration statement used by open-end investment companies. Item 19(a)(3) of Form N-1A requires disclosure of the method and amount of the investment adviser's compensation.
3. Rule 20a-1 under the Act requires proxies solicited with respect to a registered investment company to comply with Schedule 14A under the Exchange Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together, require a proxy statement for a shareholder meeting at which the advisory contract will be voted upon to include the “rate of compensation of the investment adviser,” the “aggregate amount of the investment adviser's fees,” a description of the “terms of the contract to be acted upon,” and, if a change in the advisory fee is proposed, the existing and proposed fees and the difference between the two fees.
4. Regulation S-X sets forth the requirements for financial statements required to be included as part of a registered investment company's registration statement and shareholder reports filed with the Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require a registered investment company to include in its
5. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions from any provision of the Act, or from any rule thereunder, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that the requested relief meets this standard for the reasons discussed below.
6. Applicants assert that the shareholders expect the Adviser, subject to the review and approval of the Board, to select the Subadvisers who are best suited to achieve the Subadvised Fund's investment objective. Applicants assert that, from the perspective of the shareholder, the role of the Subadviser is substantially equivalent to the role of the individual portfolio managers employed by an investment adviser to a traditional investment company. Applicants state that requiring shareholder approval of each Subadvisory Agreement would impose unnecessary delays and expenses on the Subadvised Funds and may preclude the Subadvised Funds from acting promptly when the Board and the Adviser believe that a change would benefit a Fund and its shareholders. Applicants note that the Investment Advisory Agreements and any subadvisory agreement with an Affiliated Subadviser (if any) will continue to be subject to the shareholder approval requirements of section 15(a) of the Act and rule 18f-2 under the Act.
7. Applicants assert that the requested disclosure relief would benefit shareholders of the Subadvised Funds because it would improve the Adviser's ability to negotiate the fees paid to Subadvisers. Applicants state that the Adviser may be able to negotiate rates that are below a Subadviser's “posted” amounts if the Adviser is not required to disclose the Subadvisers' fees to the public. Applicants submit that the requested relief will encourage Subadvisers to negotiate lower subadvisory fees with the Adviser if the lower fees are not required to be made public.
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Before a Subadvised Fund may rely on the order, the operation of the Subadvised Fund in the manner described in the application will be approved by a majority of the Subadvised Fund's outstanding voting securities as defined in the Act or, in the case of a Subadvised Fund whose public shareholders purchase shares on the basis of a prospectus containing the disclosure contemplated by condition 2 below, by the initial shareholder before such Subadvised Fund's shares are offered to the public.
2. The prospectus for each Subadvised Fund will disclose the existence, substance, and effect of any order granted pursuant to the application. In addition, each Subadvised Fund will hold itself out to the public as employing a Manager of Managers Structure. The prospectus will prominently disclose that the Adviser has the ultimate responsibility, subject to oversight by the Board, to oversee the Subadvisers and recommend their hiring, termination, and replacement.
3. A Subadvised Fund will inform shareholders of the hiring of a new Subadviser within 90 days after the hiring of the new Subadviser pursuant to the Modified Notice and Access Procedures.
4. The Adviser will not enter into a Subadvisory Agreement with any Affiliated Subadviser without that agreement, including the compensation to be paid thereunder, being approved by the shareholders of the applicable Subadvised Fund.
5. At all times, at least a majority of the Board will be Independent Trustees, and the selection and nomination of new or additional Independent Trustees will be placed within the discretion of the then-existing Independent Trustees.
6. Independent legal counsel, as defined in rule 0-1(a)(6) under the Act, has been and will continue to be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees.
7. Whenever a Subadviser change is proposed for a Subadvised Fund with an Affiliated Subadviser, the Board, including a majority of the Independent Trustees, will make a separate finding, reflected in the Board minutes, that the change is in the best interests of the Subadvised Fund and its shareholders, and does not involve a conflict of interest from which the Adviser or the Affiliated Subadviser derives an inappropriate advantage.
8. Whenever a Subadviser is hired or terminated, the Adviser will provide the Board with information showing the expected impact on the profitability of the Adviser.
9. The Adviser will provide general management services to each Subadvised Fund, including overall supervisory responsibility for the general management and investment of the Subadvised Fund's assets and, subject to review and approval of the Board, will: (i) set the Subadvised Fund's overall investment strategies; (ii) evaluate, select, and recommend Subadvisers to manage all or a portion of the Subadvised Fund's assets; (iii) allocate and, when appropriate, reallocate the Subadvised Fund's assets among Subadvisers; (iv) monitor and evaluate the Subadvisers' performance; and (v) implement procedures reasonably designed to ensure that Subadvisers comply with the Subadvised Fund's investment objective, policies and restrictions.
10. No Trustee or officer of the Trust or of a Subadvised Fund or director or officer of the Adviser will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person) any interest in a Subadviser except for (i) ownership of interests in the Adviser or any entity that controls, is controlled by or is under common control with the Adviser; or (ii) ownership of less than 1% of the outstanding securities of any class of equity or debt of any publicly traded company that is either a Subadviser or an entity that controls, is controlled by or is under common control with a Subadviser.
11. Each Subadvised Fund will disclose in its registration statement the Aggregate Fee Disclosure.
12. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the Application, the requested order will expire on the effective date of that rule.
13. The Adviser will provide the Board, no less frequently than quarterly, with information about the profitability of the Adviser on a per Subadvised Fund basis. The information will reflect the impact on profitability of the hiring or termination of any Subadviser during the applicable quarter.
14. For Subadvised Funds that pay fees to a Subadviser directly from Fund assets, any changes to a Subadvisory Agreement that would result in an increase in the total management and advisory fees payable by a Subadvised Fund will be required to be approved by the shareholders of the Subadvised Fund.
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the “Act”) for exemptions from sections 12(d)(1)(A), (B), and (C) of the Act, under sections 6(c) and 17(b) of the Act for an exemption from section 17(a) of the Act, and under section 6(c) of the Act for an exemption from rule 12d1-2(a) under the Act.
Applicants request an order that would (a) permit certain registered open-end management investment companies that operate as “funds of funds” to acquire shares of certain registered open-end management investment companies, registered closed-end management investment companies, “business development companies,” as defined by section 2(a)(48) of the Act, and registered unit investment trusts that are within or outside the same group of investment companies as the acquiring investment companies and (b) permit certain registered open-end management investment companies relying on rule 12d1-2 under the Act to invest in certain financial instruments.
American Pension Investors Trust (“Trust”') and Yorktown Management & Research Company, Inc. (“Adviser”).
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 February 10, 2014, and should be accompanied by proof of service on 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.
Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Adviser and Trust, 2303 Yorktown Avenue, Lynchburg, VA 24501.
Jaea F. Hahn, Senior Counsel, (202) 551-6870, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the “Company” name box, at
1. The Trust is an open-end management company registered under the Act and organized as a Massachusetts business trust. The Trust has multiple series which pursue distinct investment objectives and strategies.
2. The Adviser, a Delaware limited liability company, is a registered investment adviser under the Investment Advisers Act of 1940 and serves as the investment adviser to each of the Funds of Funds (as defined below).
3. Applicants request relief to the extent necessary to permit: (a) A Fund that operates as a “fund of funds” (each, a “Fund of Funds,” and collectively, the “Funds of Funds”) to acquire shares of registered open-end management investment companies (each an “Unaffiliated Open-End Investment Company”), registered closed-end management investment companies, “business development companies” as defined by section 2(a)(48) of the Act (“business development companies”) (each registered closed-end management investment company and each business development company, an “Unaffiliated Closed-End Investment Company” and, together with the Unaffiliated Open-End Investment Companies, the “Unaffiliated Investment Companies”), and registered unit investment trusts (“UITs”) (the “Unaffiliated Trusts,” and together with the Unaffiliated Investment Companies, the “Unaffiliated Funds”), in each case, that are not part of the same “group of investment companies” as the Funds of Funds;
4. Applicants also request an exemption under section 6(c) from rule 12d1-2 under the Act to permit any existing or future Fund that relies on section 12(d)(1)(G) of the Act (“Same Group Investing Funds”) and that otherwise complies with rule 12d1-2 under the Act, to also invest, to the extent consistent with its investment objective(s), policies, strategies and limitations, in other financial instruments that may not be securities within the meaning of section 2(a)(36) of the Act (“Other Investments”).
1. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter, and any Broker from selling the investment company's shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally. Section 12(d)(1)(C) prohibits an investment company from acquiring any security issued by a registered closed-end investment company if such acquisition would result in the acquiring company, any other investment companies having the same investment adviser, and companies controlled by such investment companies, collectively, owning more than 10% of the outstanding voting stock of the registered closed-end investment company.
2. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Applicants request an exemption under section 12(d)(1)(J) of the Act from the limitations of sections 12(d)(1)(A), (B) and (C) to the extent necessary to permit: (i) The Funds of Funds to acquire shares of Underlying Funds in excess of the limits set forth in section 12(d)(1)(A) and (C) of the Act; and (ii) the Underlying Funds, their principal underwriters and any Broker to sell shares of the Underlying Funds to the Funds of Funds in excess of the limits set forth in section 12(d)(1)(B) of the Act.
3. Applicants state that the proposed arrangement will not give rise to the policy concerns underlying sections 12(d)(1)(A), (B), and (C), which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors.
4. Applicants submit that the proposed structure will not result in the exercise of undue influence by a Fund or its affiliated persons over the Underlying Funds. To limit the control a Fund of Funds or Fund of Funds Affiliate
5. With respect to closed-end underlying funds, applicants submit that one significant difference from open-end underlying funds is that, whereas open-end underlying funds may be unduly influenced by the threat of large-scale redemptions, closed-end underlying funds cannot be so influenced because they do not issue redeemable securities and, therefore, are not subject to large-scale redemptions. On the other hand, applicants state that closed-end underlying funds may be unduly influenced by a holder's ability to vote a large block of stock. To address this concern, applicants submit that, with respect to a Fund's investment in an Unaffiliated Closed-End Investment Company, (i) each member of the Advisory Group or Subadvisory Group that is an investment company or an issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act will vote its shares of the Unaffiliated Closed-End Investment Company in the manner prescribed by section 12(d)(1)(E) of the Act and (ii) each other member of the Advisory Group or Subadvisory Group will vote its shares of the Unaffiliated Closed-End Investment Company in the same proportion as the vote of all other holders of the same type of such Unaffiliated Closed-End Investment Company's shares. Applicants state that, in this way, an Unaffiliated Closed-End Investment Company will be protected from undue influence by a Fund of Funds through the voting of the Unaffiliated Closed-End Investment Company's shares.
6. Applicants propose other conditions to limit the potential for undue influence over the Unaffiliated Funds, including that no Fund of Funds or Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Unaffiliated Investment Company or sponsor to an Unaffiliated Trust) will cause an Unaffiliated Fund to purchase a security in an offering of securities during the existence of any underwriting or selling
7. To further ensure that an Unaffiliated Investment Company understands the implications of a Fund of Funds' investment under the requested exemptive relief, prior to its investment in the shares of an Unaffiliated Investment Company in excess of the limit of section 12(d)(1)(A)(i) of the Act, a Fund of Funds and the Unaffiliated Investment Company will execute an agreement stating, without limitation, that each of their boards of directors or trustees (each, a “Board”) and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order (the “Participation Agreement”). Applicants note that an Unaffiliated Investment Company (including an ETF or an Unaffiliated Closed-End Investment Company) would also retain its right to reject any initial investment by a Fund of Funds in excess of the limits in section 12(d)(1)(A)(i) of the Act by declining to execute the Participation Agreement with the Fund of Funds. In addition, an Unaffiliated Investment Company (other than an ETF or an Unaffiliated Closed-End Investment Company whose shares are purchased by a Fund of Funds in the secondary market) will retain its right at all times to reject any investment by a Fund of Funds. Finally, subject solely to the giving of notice to a Fund of Funds and the passage of a reasonable notice period, an Unaffiliated Investment Company (including a closed-end fund) could terminate a Participation Agreement with the Fund of Funds.
8. Applicants state that they do not believe that the proposed arrangement will result in excessive layering of fees. The Board of each Fund of Funds, including a majority of the trustees who are not “interested persons” within the meaning of section 2(a)(19) of the Act (the “Independent Trustees”), will find that the advisory fees charged under a Fund of Funds' advisory contract are based on services provided that are in addition to, rather than duplicative of, services provided under the advisory contract(s) of any Underlying Fund in which the Fund of Funds may invest. In addition, the Adviser will waive fees otherwise payable to it by a Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Unaffiliated Investment Company under rule 12b-1 under the Act) received from an Unaffiliated Fund by the Adviser, or an affiliated person of the Adviser, other than any advisory fees paid to the Adviser or an affiliated person of the Adviser by the Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund.
9. Applicants further state that any sales charges and/or service fees charged with respect to shares of a Fund of Funds will not exceed the limits applicable to funds of funds set forth in in rule 2830 of the Conduct Rules of the NASD (“NASD Conduct Rule 2830”).
10. Applicants submit that the proposed arrangement will not create an overly complex fund structure. Applicants note that no Underlying Fund will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except in certain circumstances identified in condition 11 below.
1. Section 17(a) of the Act generally prohibits sales or purchases of securities between a registered investment company and any affiliated person of the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include (a) any person directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of the other person; (b) any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person; and (c) any person directly or indirectly controlling, controlled by, or under common control with the other person.
2. Applicants state that the Funds of Funds and the Affiliated Funds may be deemed to be under the common control of the Adviser and, therefore, affiliated persons of one another. Applicants also state that the Funds of Funds and the Unaffiliated Funds may also be deemed to be affiliated persons of one another if a Fund of Funds acquires 5% or more of an Unaffiliated Fund's outstanding voting securities. Applicants state that the sale of shares by the Underlying Funds to the Funds of Funds and the purchase of those shares from the Funds of Funds by the Underlying Funds (through redemptions) could be deemed to violate section 17(a).
3. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (i) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (ii) the proposed transaction is consistent with the policies of each registered investment company concerned; and (iii) the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
4. Applicants submit that the proposed transactions satisfy the standards for relief under sections 17(b) and 6(c) of the Act. Applicants state that the terms of the transactions are reasonable and fair and do not involve overreaching. Applicants state that the terms upon which an Underlying Open-End Fund will sell its shares to or purchase its shares from a Fund of Funds will be based on the net asset value of each Underlying Open-End Fund.
1. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (i) the acquiring company and acquired company are part of the same “group of investment companies,” as defined in section 12(d)(1)(G)(ii) of the Act; (ii) the acquiring company holds only securities of acquired companies that are part of the same “group of investment companies,” as defined in section 12(d)(1)(G)(ii) of the Act, government securities, and short-term paper; (iii) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the 1934 Act or by the Commission; and (iv) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered UITs in reliance on section 12(d)(1)(F) or (G) of the Act.
2. Rule 12d1-2 under the Act permits a registered open-end investment company or a registered UIT that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (a) securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (b) securities (other than securities issued by an investment company); and (c) securities issued by a money market fund, when the investment is in reliance on rule 12d1-1 under the Act. For the purposes of rule 12d1-2, “securities” means any security as defined in section 2(a)(36) of the Act.
3. Applicants state that the proposed arrangement would comply with rule 12d1-2 under the Act, but for the fact that the Same Group Investing Funds may invest a portion of their assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1-2(a) to allow the Same Group Investing Funds to invest in Other Investments. Applicants assert that permitting Same Group Investing Funds to invest in Other Investments as described in the application would not raise any of the concerns that section 12(d)(1) of the Act was intended to address.
4. Consistent with its fiduciary obligations under the Act, the Board of each Same Group Investing Fund will review the advisory fees charged by the Same Group Investing Funds' investment adviser(s) to ensure that the fees are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to the advisory agreement of any investment company in which the Same Group Investing Funds may invest.
Applicants agree that the order granting the requested relief to permit Funds of Funds to invest in Underlying Funds shall be subject to the following conditions:
1. The members of an Advisory Group will not control (individually or in the aggregate) an Unaffiliated Fund within the meaning of section 2(a)(9) of the Act. The members of a Subadvisory Group will not control (individually or in the aggregate) an Unaffiliated Fund within the meaning of section 2(a)(9) of the Act. With respect to a Fund's investment in an Unaffiliated Closed-End Investment Company, (i) each member of the Advisory Group or Subadvisory Group that is an investment company or an issuer that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act will vote its shares of the Unaffiliated Closed-End Investment Company in the manner prescribed by section 12(d)(1)(E) of the Act and (ii) each other member of the Advisory Group or Subadvisory Group will vote its shares of the Unaffiliated Closed-End Investment Company in the same proportion as the vote of all other holders of the same type of such Unaffiliated Closed-End Investment Company's shares. If, as a result of a decrease in the outstanding voting securities of any Unaffiliated Fund, the Advisory Group or a Subadvisory Group, each in the aggregate, becomes a holder of more than 25 percent of the outstanding voting securities of the Unaffiliated Fund, then the Advisory Group or the Subadvisory Group will vote its shares of the Unaffiliated Fund in the same proportion as the vote of all other holders of the Unaffiliated Fund's shares. This condition will not apply to a Subadvisory Group with respect to an Unaffiliated Fund for which the Subadviser or a person controlling, controlled by or under common control with the Subadviser acts as the investment adviser within the meaning of section 2(a)(20)(A) of the Act (in the case of an Unaffiliated Investment Company) or as the sponsor (in the case of an Unaffiliated Trust).
2. No Fund of Funds or Fund of Funds Affiliate will cause any existing or potential investment by the Fund of Funds in an Unaffiliated Fund to influence the terms of any services or transactions between the Fund of Funds or a Fund of Funds Affiliate and the Unaffiliated Fund or an Unaffiliated Fund Affiliate.
3. The Board of each Fund of Funds, including a majority of the Independent Trustees, will adopt procedures reasonably designed to ensure that its Adviser and any Subadviser(s) to the Fund of Funds are conducting the investment program of the Fund of Funds without taking into account any consideration received by the Fund of Funds or Fund of Funds Affiliate from an Unaffiliated Fund or an Unaffiliated Fund Affiliate in connection with any services or transactions.
4. Once an investment by a Fund of Funds in the securities of an Unaffiliated Investment Company exceeds the limit of section 12(d)(1)(A)(i) of the Act, the Board of the Unaffiliated Investment Company, including a majority of the Independent Trustees, will determine that any consideration paid by the Unaffiliated Investment Company to a Fund of Funds or a Fund of Funds Affiliate in connection with any services or transactions: (a) Is fair and reasonable in relation to the nature and quality of the services and benefits received by the Unaffiliated Investment Company; (b) is within the range of consideration that the Unaffiliated Investment Company would be required to pay to another unaffiliated entity in connection with the same services or transactions; and (c) does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between an Unaffiliated Investment Company and its investment adviser(s), or any person controlling, controlled by, or under common control with such investment adviser(s).
5. No Fund of Funds or Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Unaffiliated Investment
6. The Board of an Unaffiliated Investment Company, including a majority of the Independent Trustees, will adopt procedures reasonably designed to monitor any purchases of securities by the Unaffiliated Investment Company in an Affiliated Underwriting once an investment by a Fund of Funds in the securities of the Unaffiliated Investment Company exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board of the Unaffiliated Investment Company will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Fund of Funds in the Unaffiliated Investment Company. The Board of the Unaffiliated Investment Company will consider, among other things: (a) Whether the purchases were consistent with the investment objectives and policies of the Unaffiliated Investment Company; (b) how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and (c) whether the amount of securities purchased by the Unaffiliated Investment Company in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board of the Unaffiliated Investment Company will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to ensure that purchases of securities in Affiliated Underwritings are in the best interests of shareholders.
7. Each Unaffiliated Investment Company shall maintain and preserve permanently, in an easily accessible place, a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in an Affiliated Underwriting once an investment by a Fund of Funds in the securities of an Unaffiliated Investment Company exceeds the limit of section 12(d)(1)(A)(i) of the Act, setting forth the: (a) party from whom the securities were acquired, (b) identity of the underwriting syndicate's members, (c) terms of the purchase, and (d) information or materials upon which the determinations of the Board of the Unaffiliated Investment Company were made.
8. Prior to its investment in shares of an Unaffiliated Investment Company in excess of the limit set forth in section 12(d)(1)(A)(i) of the Act, the Fund of Funds and the Unaffiliated Investment Company will execute a Participation Agreement stating, without limitation, that their Boards and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order. At the time of its investment in shares of an Unaffiliated Investment Company in excess of the limit set forth in section 12(d)(1)(A)(i), a Fund of Funds will notify the Unaffiliated Investment Company of the investment. At such time, the Fund of Funds will also transmit to the Unaffiliated Investment Company a list of the names of each Fund of Funds Affiliate and Underwriting Affiliate. The Fund of Funds will notify the Unaffiliated Investment Company of any changes to the list as soon as reasonably practicable after a change occurs. The Unaffiliated Investment Company and the Fund of Funds will maintain and preserve a copy of the order, the Participation Agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place.
9. Before approving any advisory contract under section 15 of the Act, the Board of each Fund of Funds, including a majority of the Independent Trustees, shall find that the advisory fees charged under the advisory contract are based on services provided that are in addition to, rather than duplicative of, services provided under the advisory contract(s) of any Underlying Fund in which the Fund of Funds may invest. Such finding, and the basis upon which the finding was made, will be recorded fully in the minute books of the appropriate Fund of Funds.
10. The Adviser will waive fees otherwise payable to it by a Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Unaffiliated Investment Company pursuant to rule 12b-1 under the Act) received from an Unaffiliated Fund by the Adviser, or an affiliated person of the Adviser, other than any advisory fees paid to the Adviser or its affiliated person by the Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund. Any Subadviser will waive fees otherwise payable to the Subadviser, directly or indirectly, by the Fund of Funds in an amount at least equal to any compensation received by the Subadviser, or an affiliated person of the Subadviser, from an Unaffiliated Fund, other than any advisory fees paid to the Subadviser or its affiliated person by the Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund made at the direction of the Subadviser. In the event that the Subadviser waives fees, the benefit of the waiver will be passed through to the Fund of Funds.
11. No Underlying Fund will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act, in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent that such Underlying Fund: (a) acquires such securities in compliance with section 12(d)(1)(E) of the Act and either is an Affiliated Fund or is in the same “group of investment companies” as its corresponding master fund; (b) receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(1) of the Act); or (c) acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund to: (i) acquire securities of one or more investment companies for short-term cash management purposes or (ii) engage in inter-fund borrowing and lending transactions.
12. Any sales charges and/or service fees charged with respect to shares of a Fund of Funds will not exceed the limits applicable to funds of funds set forth in NASD Conduct Rule 2830.
Applicants agree that the order granting the requested relief to permit Same Group Investing Funds to invest in Other Investments shall be subject to the following condition:
1. Applicants will comply with all provisions of rule 12d1-2 under the Act, except for paragraph (a)(2) to the extent that it restricts any Same Group Investing Fund from investing in Other Investments as described in the application.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
On November 18, 2013, New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes the MPL Order as an undisplayed limit order that would automatically execute at the mid-point of the protected best bid (“PBB”) and the protected best offer (“PBO”). An MPL Order could interact with any incoming order, including another MPL Order, and could execute at prices out to four decimal places.
The proposed rule specifies certain limitations on the usage and execution of an MPL Order. First, an MPL Order would not be eligible to trade if it would trade at a price below $1.00 or if the execution price would be out to five decimal places above $1.00. Second, an MPL Order could not be designated as Good Till Cancelled. Finally, an MPL Order would not execute if the market were locked or crossed. When a market that had been locked or crossed becomes no longer locked or crossed, the Exchange would execute all eligible MPL Orders and other hidden interest eligible to execute at the midpoint of the PBBO.
With regards to order allocation, MPL Orders would be allocated on a parity-by-agent basis, consistent with NYSE Rule 72. Moreover, an MPL Order's time priority would be based on its time of entry into Exchange systems and would not reset when an MPL Order's price shifted due to changes in the PBBO.
Under the proposal, an MPL Order could also include a Minimum Triggering Volume (“MTV”), in which case the MPL Order would not be eligible to trade unless the aggregated contra-side quantity of all interest marketable at the midpoint of the PBBO were equal to or greater than the MPL Order's MTV. There would be no guaranteed trade size based on the MTV. Exchange systems would enforce an MTV restriction even if the unexecuted portion of an MPL Order with an MTV were less than the MTV.
An MPL Order that included an MTV would be rejected if it also included a Self Trade Prevention (“STP”) Modifier. As proposed, STP Modifiers could be used with MPL Orders that do not include an MTV. An MPL Order with an STP Modifier, however, might be cancelled depending on the type of order on the contra-side. An MPL Order with an STP Modifier would not execute against another MPL Order or against a non-MPL Order with an STP Modifier with the same market participant identifier (“MPID”).
Further, under the proposal, users could designate an MPL Order with an add-liquidity-only (“ALO”) modifier (“MPL-ALO Order”). An MPL-ALO Order would not execute on arrival, even if marketable, but would remain non-displayed in the book until triggered to trade by arriving contra-side marketable interest. An incoming non-marketable MPL-ALO Order, however, could trigger a discretionary trade.
An MPL Order would not be eligible for manual executions, including openings, re-openings, or closing transactions. As such, MPL Orders would not be available to be designated as Limit “On-the-Open” (“LOO”) or Limit “At-the-Close” (“LOC”) Orders. As fully undisplayed interest, MPL Orders would not be visible to the DMM on the Floor under any circumstances.
Additionally, MPL Orders would not be available to be entered for high-priced securities. High-priced securities are securities with a closing price—or, if the security did not trade, the closing bid price—on the Exchange of $10,000 or more on the previous trading day.
The CCS is a liquidity schedule setting forth various price points at which the DMM is willing to interact with incoming orders. CCS interest will either execute at the price at which the full size of the order can be satisfied (“completion price”) or at the next price that is one minimum price variation (“MPV”) higher (in the case of an order to sell) or lower (in the case of an order to buy). The Exchange has stated that it believes that CCS interest cannot be designated as an MPL Order because MPL Orders are priced at the midpoint of the PBBO and could be priced less than one MPV above or below the completion price.
While, under the proposal, CCS interest cannot be designated as an MPL Order, CCS interest would be eligible to interact with MPL Orders. Currently, CCS interest is eligible to trade inside the Exchange BBO at a price representing (1) the non-displayable reserve interest of Reserve Orders
MPL Orders would not be available for d-Quotes
The Exchange proposes to make a midpoint modifier available for d-Quotes that would have a discretionary range up to the midpoint of the PBBO.
In order to accommodate the use of a midpoint modifier, the Exchange is proposing to amend Rule 70.25(b)(ii), which states that the minimum price range for a d-Quote is the minimum price variation set forth in Exchange Rule 62. Rule 62 sets the minimum price variation at $0.01 for stocks priced greater than $1.00. However, with the midpoint modifier, a d-Quote can have a minimum price variation of $0.005. Therefore, the Exchange is proposing to amend this restriction by excepting d-Quotes with a midpoint modifier.
Retail Orders or Retail Price Improvement Interest, as defined in NYSE Rule 107C, could not be designated as MPL Orders. MPL Orders, however, could interact with incoming Retail Orders.
The Exchange proposed that MPL Orders be available to interact with Retail Orders within the Retail Liquidity Program (“Retail Program”), a pilot program.
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission finds that the proposed rule change is consistent with the requirements of the Act. The Commission believes that the proposed MPL Order is designed to enhance order execution opportunities on the Exchange by providing market participants with an additional order type to interact with other trading interests. The Commission also believes that the proposed MPL Orders is designed to allow for additional opportunities for investors to trade at the midpoint of the PBBO, which may provide price improvement to incoming orders. Additionally, the Commission believes that the proposed introduction of the MPL Order could provide market participants with better control over their execution costs and with a means to offer price improvement opportunities. The Commission notes that other exchanges offer similar functions as the MPL Order.
The Commission believes that it is appropriate for the Exchange not to allow DMMs to enter MPL Orders through CCS, because CCS interest must observe the MPV in certain circumstances, but MPL Orders would be tied to the midpoint of the protected NBBO and could therefore have prices that do not observe the MPV. Further, the Commission believes that it is appropriate not to allow d-Quotes to enter MPL Orders, as d-Quotes would have a mid-point modifier that would provide a functionality similar to MPL Orders.
Therefore, the Commission finds that the proposed rule change is consistent with the requirements of the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend Rule 20.3, entitled “Trading Halts,” Rule 20.4, entitled “Resumption of Trading After a Halt,” and Rule 21.7, entitled “Market Opening Procedures” in order to modify the manner in which the Exchange's equity options trading platform (“BATS Options”) opens trading at the beginning of the day and after trading halts.
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 purpose of the proposed rule changes is to amend Exchange Rules 20.3, 20.4, and 21.7 in order to allow BATS Options to accept orders and quotes in all options series prior to the first transaction in the underlying security on the primary listing market and during a halt, as well as to establish a process for matching such orders immediately prior to the opening of trading in such options series.
Currently, BATS Options does not accept any orders or quotes while trading is not open in an options class. This includes both prior to the first transaction in the underlying security on the primary listing market and during a halt. BATS Options currently opens trading in options: (i) After the first transaction on the primary listing market after 9:30 a.m. Eastern Time in the securities underlying the options as reported on the first print disseminated pursuant to an effective national market system plan; or (ii) any time after 9:30 a.m. Eastern Time where the Exchange determines that the interests of a fair and orderly market are best served by opening trading in the options contracts. With respect to index options, trading opens at 9:30 a.m. Eastern Time. The Exchange may also delay the commencement of trading in any class of options in the interests of a fair and orderly market. Upon a halt, the Exchange currently cancels all orders and quotes and trading does not resume upon the determination by the Exchange that the conditions that led to the halt are no longer present or that the interests of a fair and orderly market are best served by a resumption of trading, as provided under Rule 20.4.
The Exchange is proposing to amend its Rules in order to accept orders and quotes before trading is open for a given options series. Specifically, the Exchange is proposing to begin accepting orders and quotes in all series at 8:00 a.m. Eastern Time and immediately upon a Regulatory Halt
The Exchange is also proposing to amend Rule 20.3(b) such that, upon a halt, all orders will be cancelled unless a User has entered instructions not to cancel its orders, at which point the System would queue such orders as part of the Order Entry Period.
As described above, the Exchange is proposing to accept orders and quotes prior to trading opening for a given series. Where there are no contracts in a particular series that would execute at any price at the time that the Exchange would determine the Opening Price,
A Print, NBBO Midpoint, and Previous Close will be at a Valid Price where: (i) There is no NBB and no NBO; (ii) there is either a NBB and no NBO or a NBO and no NBB and the price is equal to or greater than the NBB or equal to or less than the NBO; or (iii) there is both a NBB and NBO, the price is equal to or within the NBBO, and the price is less than the following Minimum Amount away from the NBB or NBO for the series:
As proposed, the Exchange believes that the thresholds will prevent Obvious Error transactions by ensuring that the Opening Price will always be within the Minimum Amount from either the NBB or NBO. For example, where the NBBO is $1.65 × $2.25, the Opening Price can be from $1.65-$1.90 or from $2.00-$2.25. The NBBO Midpoint would be $1.95, which does not fall within either of those windows, so the Exchange would not use the NBBO Midpoint as the Opening Price. Where the last Print is at $1.75, the Opening Price will be $1.75. Where orders are executed at the Opening Price, the transaction would not qualify as an Obvious Error transaction because it occurred only $0.10 away from the NBB. In effect, this means that where the spread between the NBBO is greater than twice the size of the Minimum Amount, then the NBBO Midpoint cannot be the Opening Price. The Exchange believes that this is the best method to prevent the determination of the Opening Price from being based on an overly wide NBBO. Such protection is necessary where the NBBO is very wide, for instance where the NBBO is $0.01 × $100.00, and thus either the NBB or the NBO is a price more reflective of the market than the NBBO Midpoint, especially when the Opening Price is based on the last sale. In such a situation the price at which the option was previously trading, whether closer to $0.01 or $100.00, is a more appropriate benchmark than to base the Opening Price on the $50.01 NBBO Midpoint. Based on the foregoing, the Exchange believes that creating a threshold that aligns with the standards from Rule 20.6 related to Obvious Error is the most logical threshold in order to prevent an Opening Price based on an overly wide NBBO and to prevent the cancellation of orders participating in the Opening Process as Obvious Errors.
Such thresholds are based on the NBB instead of the NBO so that the Minimum Amount will always be the smaller Minimum Amount where the NBB and NBO would result in different Minimum Amounts. Using the example from above, where the NBBO is $1.65 × $2.25, the Exchange would apply a Minimum Amount of $0.25, meaning that a Valid Price would be between $1.65 and $1.90 or between $2.00 and $2.25. If the Exchange were to use the NBO as the basis for determining a Minimum Amount, the Minimum Amount would be $0.40 and a Valid Price would be any price between $1.65 and $2.25, meaning that the Opening Price could be $1.95, which would provide both the selling party and buying party to an execution with a basis for notifying the Exchange of an Obvious Error transaction.
Where there is no NBBO Midpoint, no Print, and no Previous Close at a Valid Price, the Exchange proposes to have the discretion, depending on the circumstances, to extend the Order Entry Period or open the series for trading. Where the Exchange decides to extend the Order Entry Period, the Order Entry Period will be extended for a period of 30 seconds or less at which point the System will attempt to determine the Opening Price again. Where the Exchange decides to open the series for trading pursuant to this discretion and there is at least one price level at which at least one contract of a limit order could be executed, the Exchange will cancel all orders that are priced equal to or more aggressively than the midpoint of the most aggressively priced bid and the most aggressively priced offer. For example, where the Exchange receives bids of $10.04, $10.06, and $10.07 along with offers of $10.03 and $10.07, but there is no NBBO Midpoint, no Print, and no Previous Close and the Exchange intends to open trading in the series, the Exchange would calculate the midpoint of the most aggressive bid ($10.07) and the most aggressive offer ($10.03), which would be $10.05. The Exchange would then cancel any orders priced equal to or more aggressively than $10.05, which means that the $10.06 and $10.07 bids would be cancelled along with the $10.03 offer. The $10.04 bid and $10.07 offer would then become eligible for trading on BATS Options when the series opens for trading.
After determining an Opening Price that is also a Valid Price, orders and quotes that are priced equal to or more aggressively than the Opening Price will be matched based on price-time priority and in accordance with BATS Rule 21.8. All orders and quotes or portions thereof that are matched pursuant to the Opening Process will be executed at the Opening Price. Where a limit order or any portion thereof that is priced equal to or more aggressively than the Opening Price is not executed during the Opening Process, the unexecuted portion of that order will be cancelled. Similarly, all market orders that are not executed in the Opening Process will be cancelled. Finally, all orders and quotes that have not been executed or cancelled, including where no orders are matched at the Opening Price, shall
The Exchange is proposing to delete existing Rule 21.7(b), as further described below, to replace it with existing language regarding index options from Rule 21.1(a) and to add details about how index options will be reopened after a trading halt. Specifically, the Exchange is proposing to open index options in exactly the manner as they open under the current rule: the Exchange will begin accepting orders in index options when such options open for trading at 9:30 a.m. Eastern Time. Further, the Exchange is proposing to add rule text such that, where trading in index options is halted for any reason, the System shall open such options for trading upon the determination by the Exchange that the conditions which led to the halt are no longer present or that the interests of a fair and orderly market are best served by a resumption of trading, which is identical to the way that index options open after a halt under the current rule. Such language is very similar to existing language in current Rule 20.4 regarding the resumption of trading after a halt and is intended to make clear that trading in index options is not subject to the Opening Process described in Rule 21.7(a) after a trading halt.
The Exchange is proposing to amend Rule 21.7(c) in order to allow the Exchange to retain discretion in deviating from the standard Opening Process where it is necessary in the interests of a fair and orderly market. Currently, Rule 21.7(b) states that in the event the underlying security has not opened within a reasonable time after 9:30 a.m. Eastern Time, the Exchange shall make an inquiry to determine the cause of the delay, which is discussed further below. Rule 21.7(b) also permits the Exchange to open trading in options contracts even if the underlying security has yet to open for trading on the primary listing market for such security if the Exchange determines that the interests of a fair and orderly market are best served by opening trading in the options contracts. In addition, Rule 21.7(c) provides that the Exchange may delay the commencement of trading in any class of options in the interests of a fair and orderly market.
The Exchange is proposing to delete the language in both 21.7(b) and (c) related to moving up or delaying the opening in options contracts based on the interests of a fair and orderly market and, instead, provide that the Exchange may deviate from the standard manner of the Opening Process, including delaying the Opening Process in any option class, when it believes it is necessary in the interests of a fair and orderly market. As proposed, Rule 21.7(c) would allow the Exchange to open trading in options contracts prior to the First Listing Market Transaction and also delay the commencement of trading in any class of options, so long as it is in the interests of a fair and orderly market. Further, proposed Rule 21.7(c) would provide the Exchange with discretion to manage the Opening Process in the event of unanticipated circumstances occurring around 9:30 a.m. Eastern Time or a halt being lifted.
Further, the Exchange is proposing to delete the text from Rule 21.7(b) that states that in the event the underlying security has not opened within a reasonable time after 9:30 a.m. Eastern Time, the Exchange shall make an inquiry to determine the cause of the delay, because the Exchange believes that the language is somewhat unclear and would also be duplicative, as proposed. As written, Rule 21.7(b) appears to require the Exchange to make an inquiry to determine the cause of a delay in a day in which trading has not opened in an underlying security. However, the Exchange believes that, practically, the “reasonable time” standard permits the Exchange to not inquire into all delays. For instance, an underlying security with low trading volume may not have a First Listing Market Transaction for an entire trading day and the Exchange could determine that a reasonable time for the First Listing Market Transaction to occur in such security could be the entire trading day. Further, in the event that the Exchange would begin trading of options contracts for an underlying security for which the First Listing Market Transaction has not occurred, the Exchange would have to make an inquiry of some kind in order to determine that it is necessary in the interests of a fair and orderly market to open trading in options on such underlying security. As such, the Exchange believes that the requirement is without practical effect and the Exchange is proposing to delete the text from Rule 21.7(b).
The rule change proposed in this submission 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 also believes that the proposal is appropriate and reasonable because it offers additional functionality for all Users to enter orders and quotes before 9:30 a.m. Eastern Time and during a Regulatory Halt. Further, the Exchange requires that a price be a Valid Price in order for executions in the Opening Process to occur, which, as described above, ensures that executions in the Opening Process will not meet the standards for Obvious Error.
Offering the Opening Process will also provide Market Makers and other Users with greater control and flexibility with respect to entering orders and quotes, allowing them to enter orders and quotes in all options at the same time, 8:00 a.m. Eastern Time, rather than only after trading has opened for a particular option. This simplifies the process for Market Makers and other Users by providing them certainty as to when orders and quotes can be submitted without having to monitor each options class individually, which removes impediments to a free and open market and benefits all Users of BATS Options. The Exchange also notes that several other options exchanges allow orders and quotes to be entered prior to 9:30 a.m. Eastern Time and during a Regulatory Halt including NASDAQ Options Market (“NOM”), NYSE Arca, Inc. (“NYSE Arca Options”), NYSE Amex Options, Inc. (“NYSE Amex Options”), BOX Options Exchange LLC
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 Exchange's inability to accept orders prior to 9:30 a.m. Eastern Time limits competition in that other exchanges are able to begin accepting orders and quotes before trading in options opens, while the Exchange cannot accept such orders and quotes. Thus, approval of the proposed rule change will promote competition because it will allow the Exchange to offer its Users the ability to enter orders and quotes prior to the opening of trading, functionality which is available at other exchanges, and thus compete with other exchanges for order flow that a User may not have directed to the Exchange if they were not able to enter orders and quotes prior to the open.
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 email 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 “Exchange Act” or “Act ”)
The Exchange is proposing to change its Fee and Rebate Schedule (the “Fee Schedule”) issued pursuant to Exchange Rule 16.1 to: (i) Eliminate separate Pricing Options A and B of Section II. of the Fee Schedule and adopt a single pricing structure for all Exchange Equity Trading Permit (“ETP”) Holders using the Order Delivery mode of interaction
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.
The Exchange is proposing amendments to Sections II. and IV. of the Fee Schedule with respect to certain fees and rebates applicable to Order Delivery Users. The changes are intended to further enhance the Exchange's competitive position by offering pricing that will incentivize current Order Delivery Users to increase their trading volumes while at the same time providing an economically attractive price structure designed to encourage additional electronic communications networks (“ECNs”) to become Order Delivery Users. In order to achieve these goals, the Exchange is proposing to eliminate the separate Pricing Options A and B currently contained in Section II. of the Fee Schedule and adopt a single fee and rebate structure that will apply to all Order Delivery Users, for executions in both securities priced at $1.00 and above and securities priced below $1.00.
Under the proposed unitary structure, the Exchange will eliminate the Order Delivery Notification Fee of $0.35 under current Pricing Option A for each Order Delivery Notification, up to 1.5 million Order Delivery Notifications per month, delivered by the Exchange's Trading System (the “System”)
In addition to the proposed elimination of the Order Delivery Notification Fee and Quotation Update Fee applicable in Order Delivery Mode, the Exchange is proposing to adopt a new rebate schedule for adding liquidity solely though Order Delivery Mode, or through use of Order Delivery mode in combination with Auto Ex Mode by the same Order Delivery User.
For executions occurring solely through Order Delivery Mode, the Exchange proposes to adopt a three-tiered, volume based-rebate plan whereby an Order Delivery User will receive a rebate of $0.0005 per executed share for ADV adding liquidity in an amount equal to or exceeding 15 million shares per calendar month; an Order Delivery User will receive a rebate of $0.0013 per executed share for ADV adding liquidity in an amount equal to or exceeding 20 million shares per calendar month; and, for ADV adding liquidity in an amount equal to or exceeding 25 million shares per calendar month, an Order Delivery User will receive a rebate of $0.0017. The rebates at each ADV tier level will apply to the total executed volume by that Order Delivery User during the calendar month.
For Order Delivery Users that also interact with the Exchange through Auto Ex Mode, the Exchange is proposing a two-tiered, volume based rebate structure that will provide a rebate to Order Delivery Users that meet or exceed certain ADV thresholds of added liquidity occurring through both forms of interaction with the System. The Exchange proposes to pay a rebate of $0.0005 per executed share for ADV adding liquidity in Order Delivery Mode in an amount equal to or greater than 300,000 shares up to 749,999 shares, plus ADV of 2 million shares or greater of added liquidity through Auto Ex Mode by the same Order Delivery User; the Exchange proposes to pay a rebate of $0.0010 per executed share for ADV adding liquidity in Order Delivery Mode in an amount equal to or exceeding 750,000 shares, plus ADV of 3 million shares or greater of added liquidity through Auto Ex Mode by the same Order Delivery User.
The Exchange notes that these rebates will apply only to the ADV of added liquidity provided through Order Delivery Mode and will not affect the rebates available to the Order Delivery User under Section I. of the Fee Schedule (Automatic Execution Mode). In every case, the Order Delivery User will receive the applicable rebate provided under Section I. for transactions adding liquidity in Auto Ex Mode but will only be eligible for the tiered rebates for liquidity added through Order Delivery Mode if the ADV levels are satisfied for the applicable tier. The rebates at each ADV tier level will apply to the total executed volume by that Order Delivery User in both modes of interaction during the calendar month.
The Exchange believes that the proposed transaction rebates will incentivize current Order Deliver Users to increase their activity in Order Delivery Mode. The Exchange's proposal is also designed to offer incentives for new entrants into Order Delivery Mode by offering transaction rebates that for activity through both forms of interaction with the System, with smaller total ADV adding liquidity in Order Delivery Mode but requiring ADV adding liquidity in Auto Ex Mode of 2 million or 3 million shares.
With respect to all of the proposed changes to the Fee Schedule for Order Delivery Mode, the Exchange is seeking to adopt a fee and rebate structure that will both incentivize current Order Delivery Users to increase their participation in Order Delivery Mode by eliminating the fees and providing for transaction rebates for adding liquidity in ADV amounts equal to or greater than 15 million shares, with the highest rebate paid for ADV of added liquidity in an amount equal to or greater than 25 million shares. The Exchange submits that the proposed transaction rebates for adding liquidity in ADV amounts combining executions in Order Delivery Mode with Auto Ex Mode will operate to incentivize smaller ECNs to increase their interaction with the Exchange, thereby providing additional liquidity and additional competition for price discovery.
Pursuant to Exchange Rule 16.1(c), the Exchange will “provide ETP Holders with notice of all relevant dues, fees, assessments and charges of the Exchange” through the issuance of a Regulatory Circular of the changes to the Fee Schedule and will provide a copy of the rule filing on the Exchange's Web site,
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,
The Exchange submits that, as set forth below, its proposal to eliminate separate Pricing Options A and B under the current Fee Schedule and adopt a unitary fee and rebate structure for Order Delivery Users meets the requirement of Section 6(b)(4) of the Act in that it provides for an equitable allocation of reasonable, dues, fees and other charges among Order Delivery Users and other persons using the facilities of the Exchange. The Exchange is seeking to provide for a structure that fulfills the dual goals of incentivizing current Order Delivery Users to increase their activity on the Exchange while at the same time promoting new entrants to become Order Delivery Users. All ETP Holders that are approved as Order Delivery Users will be subject to the same fee and rebate structure, thereby equitably allocating the fees and rebates among all Order Delivery Users. The rebates will be based on specific volume-based ADV tiers, with higher rebates paid for increased volume.
The Exchange believes that its proposal to eliminate the separate pricing options is consistent with Section 6(b)(5) of the Act in that, by seeking to increase activity in Order Delivery Mode by both current Order Delivery Users and prospective new entrants, the proposal will promote just and equitable principles of trade and operate to remove impediments to and perfect the mechanism of a free and open market and national market system.
Addressing the individual elements of the proposed changes to the Fee Schedule, the Exchange will eliminate the Order Delivery Notification Fee of $0.35 under current Section II., Pricing Option A, for each Order Delivery Notification, up to 1.5 million Order Delivery Notifications per month, delivered by the System to an Order Delivery User for potential execution against a posted displayed or undisplayed order in any security priced at $1.00 and above; the Exchange also proposes to eliminate the Quotation Update Fee for Order Delivery Users under Section IV of the Fee Schedule and assess no fee for quotation updates by Order Delivery Users, regardless of the price of the security or the number of quotation updates in a calendar month.
As proposed, Order Delivery Users will not pay any fees for Order Delivery Notifications or Quotation Updates in any security traded on the Exchange. The Exchange believes that the elimination of such fees is consistent with Section 6(b)(4) of the Act in that it reasonable as a component of the broader changes to the Fee Schedule proposed in this rule amendment, in which the fees and rebates applicable to Order Delivery Mode are being changed to simplify the structure and incentivize increased participation in Order Delivery Mode. The Exchange further believes that elimination of the Order Delivery Notification and Quotation Update Fees is consistent with the requirement of Section 6(b)(4) of the Act in that it will be equitably allocated among all Order Delivery Users, without regard to the price of the security or whether the Order Delivery User has met a numerical threshold to cap such fees, as required under the operative Fee Schedule prior to these changes. Given that these fees apply only to Exchange ETP Holders approved by the Exchange as Order Delivery Users, it is consistent with Section (6)(b)(4) to consider the equitable application of the proposed change within the context of this defined type of market participant.
Additionally, the Exchange submits that the elimination of the Order Delivery Notification and Quotation Update Fees is consistent with Section 6(b)(5) of the Act in that it is not unfairly discriminatory. These fees are specific to the Exchange's Order Delivery Mode and applicable to all Order Delivery Users; their elimination will affect only Order Delivery Users, but will apply equally to both current Order Delivery Users and to new entrants. The Exchange also notes that it previously filed with the Commission, for immediate effectiveness, changes to the Fee Schedule as of November 1, 2013 that eliminated the Order Delivery Notification Fee and Quotation Update Fee in securities priced under $1.00.
The Exchange also proposes to eliminate the 50% MDR currently provided under Pricing Option A. This amendment is consistent with Section 6(b)(4) of the Act in that it is reasonable to eliminate this rebate for Order Delivery Mode in view of the removal of the Order Delivery Notification Fee and Quotation Update Fee, which will operate to reduce the costs for use of Order Delivery Mode. The Exchange believes that it is reasonable to provide for a volume-based rebate plan for Order Delivery Mode and eliminate the MDR. The Exchange also believes that this proposal is also consistent with Section 6(b)(4) of the Act in that it is equitably allocated among all Order Delivery Users. Further, the proposed change is consistent with Section 6(b)(5) of the Act in that it is not unfairly discriminatory among market participants in that every Order Delivery User will be subject to the same rebate plan. The Exchange notes that Order Delivery Users who also interact with the System through Auto Ex Mode will be continue to be eligible for the MDR provided in Section I. of the Fee Schedule; this will include Order Delivery Users that also interact with the System using Auto Ex Mode and meet the ADV thresholds for the MDR under Section I. of the Fee Schedule.
The Exchange further submits that the elements of its proposal that provide for a tiered rebate structure for ADV of added liquidity through Order Delivery Mode, either exclusively or through combined ADV totals of added liquidity by the same Order Delivery User through Order Delivery Mode and Auto Ex Mode, are consistent with Section 6(b)(4) of the Act in that they are reasonable and equitably allocated among market participants and other persons using the facilities of the Exchange. The Exchange believes that the proposed changes are reasonable, both individually and within the broader context of the amendments to the Fee Schedule for Order Delivery. The Exchange's proposal, as discussed above, includes the elimination of Order Delivery Notification Fees and Quotation Update Fees. Together with the proposal to remove these fees, the tiered, ADV-based rebate plan is designed to incentivize current Order Delivery Users to increase their activity on the Exchange, and to encourage new entrants to Order Delivery Mode. The Exchange's goal is to increase the number of Order Delivery Users, thereby increasing liquidity on the Exchange and, optimally, providing better execution opportunities for customers.
The Exchange believes that, given its proposal to remove the fees, the amendment providing for a lower rebate than the $0.0030 per share rebate for added liquidity under current Pricing Option A is reasonable and consistent with Section 6(b)(4) of the Act. It is also reasonable, and consistent with the approach of Section I. of the Fee Schedule, to establish volume tiers for adding liquidity that will provide additional economic incentives for using Order Delivery Mode. Finally, the Exchange believes that the proposed changes are consistent with Section 6(b)(4) of the Act in that they are equitably allocated among all Order Delivery Users who satisfy the ADV tiers to be eligible for the rebates to add liquidity.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change seeks to adopt a fee and rebate structure for Order Delivery Mode that is intended to enhance competition by incentivizing current Order Delivery Users to increase their participation and attract additional ECNs to become Order Delivery Users. The proposed changes will, the Exchange submits, operate to enhance rather than burden competition by aspiring to increase liquidity on the Exchange through reasonable and equitably allocated economic incentives.
The Exchange has neither solicited nor received written comments on the proposed rule change.
The proposed rule change has taken effect upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to 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 November 18, 2013, NYSE MKT LLC (“NYSE MKT” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes the MPL Order as an undisplayed limit order that would automatically execute at the mid-point of the protected best bid (“PBB”) and the protected best offer (“PBO”). An MPL Order could interact with any incoming order, including another MPL Order, and could execute at prices out to four decimal places.
The proposed rule specifies certain limitations on the usage and execution of an MPL Order. First, an MPL Order would not be eligible to trade if it would trade at a price below $1.00 or if the execution price would be out to five decimal places above $1.00. Second, an MPL Order could not be designated as Good Till Cancelled. Finally, an MPL Order would not execute if the market were locked or crossed. When a market that had been locked or crossed becomes no longer locked or crossed, the Exchange would execute all eligible MPL Orders and other hidden interest eligible to execute at the midpoint of the PBBO.
With regards to order allocation, MPL Orders would be allocated on a parity-by-agent basis, consistent with NYSE MKT Rule 72—Equities. Moreover, an MPL Order's time priority would be based on its time of entry into Exchange systems and would not reset when an MPL Order's price shifted due to changes in the PBBO.
Under the proposal, an MPL Order could also include a Minimum Triggering Volume (“MTV”), in which case the MPL Order would not be eligible to trade unless the aggregated contra-side quantity of all interest marketable at the midpoint of the PBBO were equal to or greater than the MPL Order's MTV. There would be no guaranteed trade size based on the MTV. Exchange systems would enforce an MTV restriction even if the unexecuted portion of an MPL Order with an MTV were less than the MTV.
An MPL Order that included an MTV would be rejected if it also included a Self Trade Prevention (“STP”) Modifier. As proposed, STP Modifiers could be used with MPL Orders that do not include an MTV. An MPL Order with an STP Modifier, however, might be cancelled depending on the type of order on the contra-side. An MPL Order with an STP Modifier would not execute against another MPL Order or against a non-MPL Order with an STP Modifier with the same market participant identifier (“MPID”).
Further, under the proposal, users could designate an MPL Order with an add-liquidity-only (“ALO”) modifier (“MPL-ALO Order”). An MPL-ALO Order would not execute on arrival, even if marketable, but would remain non-displayed in the book until triggered to trade by arriving contra-side marketable interest. An incoming non-marketable MPL-ALO Order, however, could trigger a discretionary trade.
An MPL Order would not be eligible for manual executions, including openings, re-openings, or closing transactions. As such, MPL Orders would not be available to be designated as Limit “On-the-Open” (“LOO”) or Limit “At-the-Close” (“LOC”) Orders. As fully undisplayed interest, MPL Orders would not be visible to the DMM on the Floor under any circumstances.
The CCS is a liquidity schedule setting forth various price points at which the DMM is willing to interact with incoming orders. CCS interest will either execute at the price at which the full size of the order can be satisfied (“completion price”) or at the next price that is one minimum price variation (“MPV”) higher (in the case of an order to sell) or lower (in the case of an order to buy). The Exchange has stated that it believes that CCS interest cannot be designated as an MPL Order because MPL Orders are priced at the midpoint of the PBBO and could be priced less than one MPV above or below the completion price.
While, under the proposal, CCS interest cannot be designated as an MPL
MPL Orders would not be available for d-Quotes
The Exchange proposes to make a midpoint modifier available for d-Quotes that would have a discretionary range up to the midpoint of the PBBO.
In order to accommodate the use of a midpoint modifier, the Exchange is proposing to amend Rule 70.25(b)(ii)—Equities, which states that the minimum price range for a d-Quote is the minimum price variation set forth in Exchange Rule 62—Equities. Rule 62—Equities sets the minimum price variation at $0.01 for stocks priced greater than $1.00. However, with the midpoint modifier, a d-Quote can have a minimum price variation of $0.005. Therefore, the Exchange is proposing to amend this restriction by excepting d-Quotes with a midpoint modifier.
Retail Orders or Retail Price Improvement Interest, as defined in NYSE MKT Rule 107C—Equities, could not be designated as MPL Orders. MPL Orders, however, could interact with incoming Retail Orders.
The Exchange proposed that MPL Orders be available to interact with Retail Orders within the Retail Liquidity Program (“Retail Program”), a pilot program.
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission finds that the proposed rule change is consistent with the requirements of the Act. The Commission believes that the proposed MPL Order is designed to enhance order execution opportunities on the Exchange by providing market participants with an additional order type to interact with other trading interests. The Commission also believes that the proposed MPL Orders is designed to allow for additional opportunities for investors to trade at the midpoint of the PBBO, which may provide price improvement to incoming orders. Additionally, the Commission believes that the proposed introduction of the MPL Order could provide market participants with better control over their execution costs and with a means to offer price improvement opportunities. The Commission notes that other exchanges offer similar functions as the MPL Order.
The Commission believes that it is appropriate for the Exchange not to allow DMMs to enter MPL Orders through CCS, because CCS interest must observe the MPV in certain circumstances, but MPL Orders would be tied to the midpoint of the protected NBBO and could therefore have prices that do not observe the MPV. Further, the Commission believes that it is appropriate not to allow d-Quotes to enter MPL Orders, as d-Quotes would have a mid-point modifier that would provide a functionality similar to MPL Orders.
Therefore, the Commission finds that the proposed rule change is consistent with the requirements of the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”),
CME is filing a proposed rule change that is limited to its business as a derivatives clearing organization. More specifically, the proposed rule change would make amendments to CME Rule 8G802.B.2 (“IRS Product Limited Recourse”) to clarify that a CME Bankruptcy Event is also a Termination Event for IRS.
In its filing with the Commission, CME included statements concerning the purpose 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. CME has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
CME is registered as a derivatives clearing organization with the Commodity Futures Trading Commission and currently offers clearing services for many different futures and swaps products. The purpose of this proposed rule change is to make amendments to CME IRS rules that will clarify and harmonize CME rules across its IRS and CDS offerings. This filing does not involve any proposed changes to CME CDS rules. Although these changes will be effective on filing, CME plans to operationalize the proposed changes on January 16, 2014.
Currently, CME's Chapter 8H rules, providing for limited recourse for CDS, provide that a CME Bankruptcy Event (as defined in the Rules) is also a CDS Termination Event (as defined in CME Rule 8H802.B.2). CME's Chapter 8G rules, providing for limited recourse for IRS, inadvertently do not similarly include a CME Bankruptcy Event as an IRS Termination Event (as defined in CME Rule 8H802.B.2). The intent under both rule chapters is for the limited recourse provisions to work similarly in the event of a CME Bankruptcy Event. In order to harmonize the provisions, CME is proposing a clarifying amendment to CME Rule 8G802.B.2.
The changes that are described in this filing are limited to CME's business as a derivatives clearing organization clearing products under the exclusive jurisdiction of the Commodity Futures Trading Commission (“CFTC”) and do not materially impact CME's security-based swap clearing business in any way. CME notes that it has already submitted the proposed rule change that is the subject of this filing to its primary regulator, the CFTC, in CME Submission 13-590.
CME believes the proposed rule change is consistent with the requirements of the Exchange Act including Section 17A of the Exchange Act.
Furthermore, the proposed changes are limited in their effect to swaps products offered under CME's authority to act as a derivatives clearing organization. These products are under the exclusive jurisdiction of the CFTC. As such, the proposed CME changes are limited to CME's activities as a derivatives clearing organization clearing swaps that are not security-based swaps or mixed swaps; CME notes that the policies of the CFTC with respect to administering the Commodity Exchange Act are comparable to a number of the policies underlying the Exchange Act, such as promoting market transparency for over-the-counter derivatives markets, promoting the prompt and accurate clearance of transactions and protecting investors and the public interest.
Because the proposed changes are limited in their effect to swaps products offered under CME's authority to act as a derivatives clearing organization, the proposed changes are properly classified as effecting a change in an existing service of CME that:
(a) primarily affects the clearing operations of CME with respect to products that are not securities, including futures that are not security futures, and swaps that are not security-based swaps or mixed swaps; and
(b) does not significantly affect any securities clearing operations of CME or
As such, the changes are therefore consistent with the requirements of Section 17A of the Exchange Act
CME does not believe that the proposed rule change will have any impact, or impose any burden, on competition. The proposed rule change merely makes clarifying amendments for the purpose of harmonizing CME's IRS rules with its CDS rules.
CME has not solicited, and does not intend to solicit, comments regarding this proposed rule change. CME has not received any unsolicited written comments from interested parties.
The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to 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-CME-2014-01 and should be submitted on or before February 13, 2014.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 30, 2013, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend NYSE Arca Equities Rules (“Rule(s)”) 7.31, 7.32, 7.37, and 7.38 in order to update its rules related to the Exchange's order types and modifiers. The Exchange states that it is proposing these rule changes in order to provide additional specificity and transparency to NYSE Arca Equities ETP Holders
The Exchange also proposes to delete from Rule 7.31 descriptions of order types and modifiers that are no longer available to Users on Exchange systems, as well as delete cross-references to such order types and modifiers in other rules. The following order types would be deleted: Directed Order (Rule 7.31(i)), Directed Fill (7.31(j)), Fill-or-Return (Rule 7.31(p)), Fill-or-Return Plus (Rule 7.31(r)), Cleanup Order (Rule 7.31(u)), Midpoint Directed Fill (Rule 7.31(z)), and Don't Arb Me Modifier (Rule 7.31(gg)).
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Exchange believes that the proposed rule change would provide greater specificity, transparency, and clarity with respect to the use and potential use of order types and modifiers on the Exchange. According to the Exchange, these enhancements would remove impediments to and perfect the mechanism of a free and open market and national market system because, with greater clarity regarding what a specific order type or modifier does and its proper use, greater competitive forces can be brought to bear on, and help to foster the proper functioning of, the market. Further, the Exchange believes that these enhancements would protect investors and the public interest because increased transparency and specificity would enable investors and the public to understand the tools available to the agents handling their orders as well as those available to professional market participants who may be competing with their orders.
The Commission notes that the instant proposal does not add any new functionality but instead enhances and clarifies the descriptions of the order type and modifier functionality currently available on the Exchange. For example, among other things, the Exchange's proposed revisions would provide greater detail as to the operation of and interaction between certain order types and modifiers, the circumstances in which certain order types or order type and modifier combinations are rejected, order types and modifiers that are compatible or incompatible with each other, and when certain order types will route to away markets. The proposal also adds new supplementary material to Rule 7.31 that further clarifies when existing order types and modifiers can be combined, and how the Exchange handles combined order types that include instructions for how the order should operate on arrival as well as while resting on the Exchange's book. Further, the Exchange proposes to
The Commission finds good cause to approve the filing, as amended by Amendment No. 1 to the proposed rule change, prior to the thirtieth day after the date of publication of notice of filing thereof in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form
• Send an email to
All submissions should refer to File Number SR-NYSEArca-2013-92. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 17, 2013, the Municipal Securities Rulemaking Board (the “MSRB” or “Board”) filed with the Securities and Exchange Commission (the “SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to the proposed rule change, nor does it mean that the Commission will ultimately disapprove the proposed rule change. Rather, as discussed below, the Commission seeks additional input from interested parties on the MSRB's proposed change in its treatment of past interpretive guidance, as discussed in its Response, and as described below.
As further described in the Proposing Release, the MSRB states that it has examined its interpretive guidance related to time of trade disclosures, suitability, and SMMPs and proposes to consolidate this guidance and codify it into several rules: a new time of trade disclosure rule (proposed Rule G-47), a revised suitability rule (Rule G-19), and two new SMMP rules (proposed Rules D-15 and G-48). Additionally, the proposed revisions to Rule G-19 are designed to harmonize the MSRB's suitability rule with the Financial Industry Regulatory Authority's (“FINRA”) suitability rule.
In connection with the rule changes described above, the MSRB proposed the deletion of certain interpretive guidance affected by these rule changes from the MSRB's Rule Book. Additionally, in the Proposing Release, the MSRB indicated that it did not intend to preserve the relevant guidance, because doing so “would not advance the MSRB's goal to streamline its rulebook.”
One commenter asked that existing time of trade disclosure interpretive notices be archived and preserved, noting that “there are nuances contained in these interpretive notices spanning over 30 years of guidance that brokers, dealers, and municipal securities dealers have long relied upon”.
As noted above, the MSRB states that it will archive on its Web site the existing guidance that is to be deleted from the MSRB's Rule Book in connection with the proposed rule change. The MSRB further responds that to the extent that past interpretive guidance does not conflict with any MSRB rules or interpretations thereof, it remains potentially applicable, depending on the facts and circumstances of a particular case.
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposed rule change should be approved or disapproved.
Pursuant to Section 19(b)(2)(B) of the Exchange Act,
The Commission believes that the MSRB's Response, as well as the comment to which the MSRB was responding concerning the status of the existing MSRB guidance, raise issues about consistency with Section 15B(b)(2)(C) of the Exchange Act and the rules and regulations issued thereunder that are applicable to the self-regulatory organization.
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the MSRB's proposed treatment of past interpretive guidance as well as any other comments they may have regarding the proposal or the Response. In particular, the Commission invites the written views of interested persons concerning whether
Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
• Use the Commission's Internet comment form (
• Send an email 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-MSRB-2013-07 and should be submitted on or before February 13, 2014. If comments are received, any rebuttal comments should be submitted by March 6, 2014.
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 ISE proposes to amend its Schedule of Fees to clarify that the ISE's Ethernet, Gateway, and EAM session fees provide connectivity to the Topaz Exchange, LLC in addition to the ISE. The text of the proposed rule change is available on the Exchange's Internet 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 purpose of the proposed rule change is to amend the Schedule of Fees to clarify that the ISE's Ethernet, Gateway, and Electronic Access Member (“EAM”) session fees provide connectivity to the ISE's sister exchange, the Topaz Exchange, LLC d/b/a ISE Gemini (“Topaz”), in addition to the ISE. On December 16, 2013 Topaz filed a rule change that established various non-transaction fees, including Ethernet, Gateway, and Financial Information eXchange (“FIX”) session fees that provide access to both Topaz and the ISE.
The Exchange charges an Ethernet fee for its four different Ethernet connection options, which is $500 per month for a 1 Gigabit (“Gb”) connection, $4,000 per month for a 10 Gb connection, $7,000 per month for a 10 Gb low latency connection, and $12,500 per month for a 40 Gb low latency connection. The Exchange also charges members a monthly gateway fee of $250 per gateway for a shared gateway or $2,000 per gateway pair for members that elect to use their own dedicated gateways as an alternative to using shared gateways. Finally, the Exchange charges EAMs that connect to the Exchange via API a session fee of $250 per month each for the first five sessions and $100 per month each additional session, and charges EAMs that connect to the Exchange via FIX a session fee of $250 per month each for the first two sessions and $50 per month for each additional session.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
In accordance with Section 6(b)(8) 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.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
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.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Julie Simpson, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6467). The mailing address is U.S. Department of State, SA-5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522-0505.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Paul W. Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6469). The mailing address is U.S. Department of State, SA-5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522-0505.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Julie Simpson, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6467). The mailing address is U.S. Department of State, SA-5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522-0505.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of
For further information, including a list of the exhibit objects, contact Paul W. Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6469). The mailing address is U.S. Department of State, SA-5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522-0505.
Notice of meetings of the United States-Panama Environmental Affairs Council and Environmental Cooperation Commission, and request for comments.
The Department of State and the Office of the United States Trade Representative (USTR) are providing notice that the United States and Panama intend to hold the first meeting of the Environmental Affairs Council (the “Council”) and the first meeting of the Environmental Cooperation Commission (the “Commission”) on January 29, 2014 in Panama City, Panama. The purpose of the Council meeting is to review implementation of Chapter 17 (Environment) of the United States-Panama Trade Promotion Agreement (TPA) and the purpose of the Commission meeting is to review implementation of the United States-Panama Environmental Cooperation Agreement (ECA) and approve a Work Program for implementing the ECA. The Department of State and USTR invite interested organizations and members of the public to attend the public session of the meetings and comment on any items that should be included on the meeting agendas. The Department of State also invites suggestions for items to be included in the Work Program.
During the Council meeting, the United States and Panama (collectively the “Parties”) will discuss their respective implementation of and progress under Chapter 17. During the Commission meeting, the Parties will provide an overview of environmental cooperation, and present and approve the inaugural 2014-2017 Environmental Cooperation Work Program.
The public session of the Council and Commission meetings will be held on January 29, 2014, from 3:00-5:30 p.m. We request comments and suggestions in writing no later than January 22, 2014.
The public session of the Council and Commission meetings will be held at the Holiday Inn Clayton, Panama City, Panama. Please submit written comments and suggestions to both:
(1) Lauren C. Stowe, Office of Environmental Quality and Transboundary Issues, U.S. Department of State, by electronic mail at
(2) Sarah Stewart, Office of Environment and Natural Resources, Office of the United States Trade Representative, by electronic mail at
You can view and comment on this notice by going to:
Lauren C. Stowe, Telephone (202) 647- 4833 or Sarah Stewart, Telephone (202) 395-3858.
The United States-Panama TPA entered into force on October 31, 2012. Article 17.6 of the TPA establishes an Environmental Affairs Council to oversee the implementation of, and review progress under, Chapter 17. The United States-Panama ECA entered into force on December 5, 2013. Article III of the ECA establishes an Environmental Cooperation Commission and makes the Commission responsible for developing a Work Program. Article 17.6 of the TPA and Article V of the ECA require that meetings of the Council and Commission respectively include a public session, unless the Parties otherwise agree.
The Department of State is requesting suggestions for cooperative environmental activities to consider for inclusion in the first Environmental Cooperation Work Program. For additional information, please visit:
If you would like to attend the public session or provide comments, please notify Lauren Stowe at the email address listed above under the heading
• Chapter 17 of the TPA,
• The Final Environmental Review of the TPA, and
• The ECA.
These documents are available at:
The Office of the Assistant Legal Adviser for Private International Law, Department of State, gives notice of a public meeting to discuss future work related to the recognition and enforcement of insolvency-derived judgments, along with other cross-border insolvency issues under consideration in the United Nations Commission on International Trade Law (UNCITRAL). The public meeting will take place on Wednesday, February 12, 2014 from 9 a.m. until 12 p.m. EDT. This is not a meeting of the full Advisory Committee.
At its December 2013 session, UNCITRAL's Working Group V (Insolvency) determined that, among its possible areas of future work, the recognition and enforcement of insolvency-derived judgments should be the top priority. The decision of the United Kingdom Supreme Court in
Working Group V is also continuing its work on enterprise group insolvency issues. It plans to develop a set of model legislative provisions that would facilitate the cross-border insolvency of enterprise group members, addressing topics such as provision of access to foreign courts for foreign representatives and creditors of insolvency proceedings involving enterprise group members, provision of standing for group members to participate in the insolvency proceedings of other members, the use of synthetic proceedings, joint appointment of insolvency representatives for group members, and appropriate forms of relief. The Working Group also plans to continue discussing the responsibilities of corporate directors in the vicinity of insolvency, examining how such responsibilities should be applied in the context of enterprise groups. Finally, the Working Group also plans to discuss the insolvency of micro, small, and medium enterprises (MSMEs); it will evaluate the guidance currently provided by the Legislative Guide on Insolvency and determine whether further work is merited (and whether any such work should take the form of legislative guidance or model legislative provisions).
The purpose of the public meeting is to obtain the views of concerned stakeholders on all four of the above topics: (1) The recognition and enforcement of insolvency-derived judgments (i.e., what approach should be taken by model legislative provisions), (2) facilitating the cross-border insolvency of enterprise groups (i.e., what approach should be taken by model legislative provisions), (3) responsibilities of corporate directors in enterprise groups in the vicinity of insolvency (i.e., what approach should UNCITRAL take), and (4) MSME insolvency issues (i.e., whether further work is needed, and what form any such work should take). Those who cannot attend but wish to comment are welcome to do so by email to Tim Schnabel at
Data from the public is requested pursuant to Public Law 99-399 (Omnibus Diplomatic Security and Antiterrorism Act of 1986), as amended; Public Law 107-56 (USA PATRIOT Act); and Executive Order 13356. The purpose of the collection is to validate the identity of individuals who enter Department facilities.
The data will be entered into the Visitor Access Control System (VACS-D) database. Please see the Security Records System of Records Notice (State-36) at
Federal Highway Administration (FHWA), DOT.
Notice to Rescind a Notice of Intent.
The FHWA is issuing this notice to advise the public that, effective immediately, we are rescinding the Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for proposed transportation improvements along the I-95 Corridor in New London County, CT. The NOI was published in the
Eloise Powell, Team Leader for Planning, Environment, and Research, FHWA Connecticut Division, 628-2 Hebron Avenue, Suite 303, Glastonbury, CT 06033, Telephone: (860) 494-7566, Email:
The FHWA, in cooperation with the Connecticut Department of Transportation (CTDOT), issued a NOI on August 22, 2007, to prepare an EIS for proposed transportation improvements along the I-95 corridor in New London County, CT, between Interchange Exits 70 and 84, for a distance of approximately 12.3 miles. The purposes of the proposed improvements were to improve safety and provide increased capacity to meet future traffic demands. Due to the re-prioritization of major transportation projects in Connecticut and funding constraints, the CTDOT is no longer pursuing this project. Therefore, the NOI for this project is rescinded.
Federal Highway Administration (FHWA), DOT.
Notice to Rescind a Notice of Intent.
The FHWA is issuing this notice to advise the public that, effective immediately, we are rescinding the Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for proposed transportation improvements along the Route 9 Corridor located in the City of Middletown in Middlesex County, CT. The NOI was published in the
Eloise Powell, Team Leader for Planning, Environment, and Research, FHWA Connecticut Division, 628-2 Hebron Avenue, Suite 303, Glastonbury, CT 06033, Telephone: (860) 494-7566, Email:
The FHWA, in cooperation with the Connecticut Department of Transportation (CTDOT), issued a NOI on August 9, 2002, to prepare an EIS for proposed transportation improvements along the Route 9 corridor, in the City of Middletown. The proposed improvements to be evaluated were located between the Washington Street (Route 66) intersection and the Arrigoni Bridge over the Mattabesset River for a distance of approximately 6,000 feet. The purpose of the proposed improvements was to provide additional capacity for existing and future traffic volumes. Due to the environmental constraints in the project area (particularly the location of NRHP-eligible or NRHP-listed buildings in Middletown), as well as the re-prioritization of major transportation projects in Connecticut, the CTDOT is no longer pursuing this project. Rather, studies are being done to determine specific safety and capacity improvements in the Route 9 corridor. Any future transportation improvements in the Route 9 corridor will progress under a separate environmental review process, in accordance with all applicable laws and regulations. Therefore, the NOI for this project is rescinded.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA requests public comment on an application for exemption from the International Window Film Association (IWFA) to allow the use of certain glazing in the windows that does not meet the light transmission requirements specified in the Federal Motor Carrier Safety Regulations (FMCSR). Section 393.60(d) of the FMCSRs currently permits windshields and to the immediate right and left of the driver windows to be tinted, as long as the light transmission is not restricted to less than 70 percent of normal. IWFA contends that since a reduction of light entering the truck cab interior will decrease not only available visible light but also scattered light, the exemption can significantly improve driver comfort and reduce eye strain while allowing films to be used that can also reduce the heat load of the interior environment, thus making the driver more comfortable as well as lowering energy use for cooling.
Comments must be received on or before February 24, 2014.
You may submit comments identified by DOT DMS Docket Number FMCSA-2013-0436 by any of the following methods:
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Mr. Brian Routhier, Vehicle and Roadside
Section 4007 of the Transportation Equity Act for the 21st Century (TEA- 21) [Pub. L. 105-178, June 9, 1998, 112 Stat. 401] amended 49 U.S.C. 31315 and 31136(e) to provide authority to grant exemptions from the Federal Motor Carrier Safety Regulations (FMCSRs). On August 20, 2004, FMCSA published a final rule (69 FR 51589) implementing section 4007. Under this rule, FMCSA must publish a notice of each exemption request in the
The Agency reviews the safety analyses and the public comments and determines whether granting the exemption would likely achieve a level of safety equivalent to or greater than the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
IWFA applied for an exemption from 49 CFR 393.60(d) to allow the use glazing in the windows to the immediate right and left of the driver that does not meet the light transmission requirements specified in the FMCSRs. A copy of the application is included in the docket referenced at the beginning of this notice.
Section 393.60(d) of the FMCSRs permits coloring or tinting of windshields and the windows to the immediate right and left of the driver, as long as the “parallel luminous transmittance through the colored or tinted glazing is not less than 70 percent of the light at normal incidence in those portions of the windshield or windows which are marked as having a parallel luminous transmittance of not less than 70 percent.” The transmittance restriction does not apply to other windows on the commercial motor vehicle.
In its application, IWFA states:
Many commercial operators, however, have been unable to obtain the approved film products in a timely and local basis; this has generated a significant volume of inquiries to federal, state, and association offices. We are therefore requesting a favorable consideration for the use of a market-standard 50%-type of film with a 7% measurement tolerance (to accommodate variances in glass, glass condition, film manufacturing variation, and meter differences.) This would allow the standard 50%-type film to be used on CMVs for the windows to the immediate right and left of the driver. This film is the same minimum visibility requirement used in the majority of states for automobiles and is essentially “clear” to the extent that, in most cases, it is difficult to determine if a vehicle even has had film applied. Since a reduction of light entering the truck cab interior will decrease not only available visible light but also scattered light (sometimes called “interference haze” by optical researchers), it can significantly improve driver comfort and reduce eye strain while also allowing films to be used which can also reduce the heat load of the interior environment, thus making the driver more comfortable as well as lowering energy use for cooling.
In addition, IWFA stated:
This level of application would retain the industry's commitment to the enforcement community and also provide the commercial fleet operator with the expanded benefits of a larger number of film products which can provide energy and emissions improvements. It should be noted that while there may be no additional improvement in UV protection from that received by the current standard of 70 percent, the added benefit of fuel savings (and therefore greenhouse gas reductions) as well as reduced glare (haze) and enhanced driver comfort are greatly expanded by the benefits associated with the use of the requested level of film on CMVs.
In accordance with 49 U.S.C. 31315 and 31136(e), FMCSA requests public comment from all interested persons on IWFA's application for an exemption from 49 CFR 393.60(d). All comments received before the close of business on the comment closing date indicated at the beginning of this notice will be considered and will be available for examination in the docket at the location listed under the
Federal Motor Carrier Safety Administration (FMCSA), DOT
Notice of final disposition.
FMCSA announces its decision to exempt 25 individuals from its rule prohibiting persons with insulin-treated diabetes mellitus (ITDM) from operating commercial motor vehicles (CMVs) in interstate commerce. The exemptions will enable these individuals to operate CMVs in interstate commerce.
The exemptions are effective January 23, 2014. The exemptions expire on January 25, 2016.
Elaine M. Papp, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On October 30, 2013, FMCSA published a notice of receipt of Federal diabetes exemption applications from 25 individuals and requested comments from the public (78 FR 65034). The public comment period closed on November 29, 2013, and no comments were received.
FMCSA has evaluated the eligibility of the 25 applicants and determined that granting the exemptions to these individuals would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(3).
The Agency established the current requirement for diabetes in 1970 because several risk studies indicated that drivers with diabetes had a higher rate of crash involvement than the general population. The diabetes rule provides that “A person is physically qualified to drive a commercial motor vehicle if that person has no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control” (49 CFR 391.41(b)(3)).
FMCSA established its diabetes exemption program, based on the Agency's July 2000 study entitled “A Report to Congress on the Feasibility of a Program to Qualify Individuals with Insulin-Treated Diabetes Mellitus to Operate in Interstate Commerce as Directed by the Transportation Act for the 21st Century.” The report concluded that a safe and practicable protocol to allow some drivers with ITDM to operate CMVs is feasible. The September 3, 2003 (68 FR 52441),
These 25 applicants have had ITDM over a range of 1 to 26 years. These applicants report no severe hypoglycemic reactions resulting in loss of consciousness or seizure, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning symptoms, in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the past 5 years. In each case, an endocrinologist verified that the driver has demonstrated a willingness to properly monitor and manage his/her diabetes mellitus, received education related to diabetes management, and is on a stable insulin regimen. These drivers report no other disqualifying conditions, including diabetes-related complications. Each meets the vision requirement at 49 CFR 391.41(b)(10).
The qualifications and medical condition of each applicant were stated and discussed in detail in the October 29, 2013,
FMCSA received no comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the diabetes requirement in 49 CFR 391.41(b)(3) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. The exemption allows the applicants to operate CMVs in interstate commerce.
To evaluate the effect of these exemptions on safety, FMCSA considered medical reports about the applicants' ITDM and vision, and reviewed the treating endocrinologists' medical opinion related to the ability of the driver to safely operate a CMV while using insulin.
Consequently, FMCSA finds that in each case exempting these applicants from the diabetes requirement in 49 CFR 391.41(b)(3) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption will be provided to the applicants in the exemption document and they include the following: (1) That each individual submit a quarterly monitoring checklist completed by the treating endocrinologist as well as an annual checklist with a comprehensive medical evaluation; (2) that each individual reports within 2 business days of occurrence, all episodes of severe hypoglycemia, significant complications, or inability to manage diabetes; also, any involvement in an accident or any other adverse event in a CMV or personal vehicle, whether or not it is related to an episode of hypoglycemia; (3) that each individual provide a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (4) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy in his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the certification when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
Based upon its evaluation of the 25 exemption applications, FMCSA exempts Phyllis J. Cameron (IN), Jarrid S. Childress (KY), James M. Costello (IN), Gary L. Crawford (OH), Roger D. Droog (IA), Clair H. Gilmore (WA), Reubem L. Hunter, Jr. (VA), Michael A. Kollos (MN), Daniel R. Lindahl (WI), Kenneth G. Mahan, Jr. (AL), Jason L. Martin (PA), James F. McSweeney (NH), Eric W. Miller (IN), Thomas E. Orms (AL), Michael D. Pederson (MN), Williams J. Rodgers (PA), Mark A. Rosenau (MN), George M. Sapirstein (NJ), Daniel B. Shaw (FL), Christopher A. Sosa (MD), John C. Thomas (IN), Richard Wasko (FL), Douglas E. Wilhoit (PA), Richard A. Wilk (OH), and Thomas A. Young (TX) from the ITDM requirement in 49 CFR 391.41(b)(3), subject to the conditions listed under “Conditions and Requirements” above.
In accordance with 49 U.S.C. 31136(e) and 31315 each exemption will be valid for two years unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the 1/exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315. If the exemption is still effective at the end of the 2-year period, the person may apply to FMCSA for a renewal under procedures in effect at that time.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew the exemptions from the vision requirement in the Federal Motor Carrier Safety Regulations for 7 individuals. FMCSA has statutory authority to exempt individuals from the vision requirement if the exemptions granted will not compromise safety. The Agency has concluded that granting these exemption renewals will provide a level of safety that is equivalent to or greater than the level of safety maintained without the exemptions for these commercial motor vehicle (CMV) drivers.
This decision is effective February 9, 2014. Comments must be received on or before February 24, 2014.
You may submit comments bearing the Federal Docket Management System (FDMS) numbers: Docket No. [Docket No. FMCSA-2001-10578; FMCSA-2005-22194; FMCSA-2005-22727; FMCSA-2009-0303; FMCSA-2011-0102], using any of the following methods:
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Elaine M. Papp, Chief, Medical Programs Division, 202-366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may renew an exemption from the vision requirements in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce, for a two-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The procedures for requesting an exemption (including renewals) are set out in 49 CFR part 381.
This notice addresses 7 individuals who have requested renewal of their exemptions in accordance with FMCSA procedures. FMCSA has evaluated these 7 applications for renewal on their merits and decided to extend each exemption for a renewable two-year period. They are:
The exemptions are extended subject to the following conditions: (1) That each individual has a physical examination every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirements in 49 CFR 391.41(b)(10), and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provides a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file and retains a copy of the certification on his/her person while driving for presentation to a duly authorized Federal, State, or local enforcement official. Each exemption will be valid for two years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315.
Under 49 U.S.C. 31315(b)(1), an exemption may be granted for no longer than two years from its approval date and may be renewed upon application for additional two year periods. In accordance with 49 U.S.C. 31136(e) and 31315, each of the 7 applicants has satisfied the entry conditions for obtaining an exemption from the vision requirements (66 FR 53826; 66 FR 66966; 68 FR 69434; 70 FR 57353; 70 FR 71884; 70 FR 72689; 71 FR 4632; 71 FR 6825; 73 FR 6246; 74 FR 60022; 75 FR 1450; 75 FR 4623; 76 FR 29022; 76 FR 44082; 77 FR 3554; 77 FR 543). Each of these 7 applicants has requested renewal of the exemption and has submitted evidence showing that the vision in the better eye continues to meet the requirement specified at 49 CFR 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past two years indicates each applicant continues to meet the vision exemption requirements. These factors provide an
FMCSA will review comments received at any time concerning a particular driver's safety record and determine if the continuation of the exemption is consistent with the requirements at 49 U.S.C. 31136(e) and 31315. However, FMCSA requests that interested parties with specific data concerning the safety records of these drivers submit comments by February 24, 2014.
FMCSA believes that the requirements for a renewal of an exemption under 49 U.S.C. 31136(e) and 31315 can be satisfied by initially granting the renewal and then requesting and evaluating, if needed, subsequent comments submitted by interested parties. As indicated above, the Agency previously published notices of final disposition announcing its decision to exempt these 7 individuals from the vision requirement in 49 CFR 391.41(b)(10). The final decision to grant an exemption to each of these individuals was made on the merits of each case and made only after careful consideration of the comments received to its notices of applications. The notices of applications stated in detail the qualifications, experience, and medical condition of each applicant for an exemption from the vision requirements. That information is available by consulting the above cited
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315, FMCSA will take immediate steps to revoke the exemption of a driver.
You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.
To view comments, as well as any documents mentioned in this preamble, to submit your comment online, go to
State Small Business Credit Initiative (SSBCI), Department of the Treasury.
Notice of Document Availability.
This Notice announces the availability of revised
Copies of the document are available at the SSBCI Web site at
Requests for additional information should be directed to Deputy Director, SSBCI, Department of the Treasury, 655 15th Street NW., Washington, DC 20220.
SSBCI was created under the Small Business Jobs Act of 2010 (Pub. L. 111-240) (the “Act”) to help establish and strengthen state programs that support lending to small businesses. Under SSBCI, all states, territories, the District of Columbia, and eligible municipalities (collectively, “Participating States”) could apply for and receive an allocation of SSBCI funds to design and implement programs to expand access to capital to small businesses. Treasury published the
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (“OFAC”) is publishing the name of one individual whose property and interests in property has been blocked pursuant to the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”) (21 U.S.C. 1901-1908, 8 U.S.C. 1182).
The designation by the Director of OFAC of the individual identified in this notice pursuant to section 805(b) of the Kingpin Act is effective on January 8, 2014.
Assistant Director, Sanctions Compliance & Evaluation, Office of Foreign Assets Control, U.S. Department of the Treasury, Washington, DC 20220, Tel: (202) 622-2490.
This document and additional information concerning OFAC are available on OFAC's Web site at
The Kingpin Act became law on December 3, 1999. The Kingpin Act establishes a program targeting the activities of significant foreign narcotics traffickers and their organizations on a worldwide basis. It provides a statutory framework for the imposition of sanctions against significant foreign narcotics traffickers and their organizations on a worldwide basis, with the objective of denying their businesses and agents access to the U.S. financial system and the benefits of trade and transactions involving U.S. companies and individuals.
The Kingpin Act blocks all property and interests in property, subject to U.S. jurisdiction, owned or controlled by significant foreign narcotics traffickers as identified by the President. In addition, the Secretary of the Treasury, in consultation with the Attorney General, the Director of the Central Intelligence Agency, the Director of the Federal Bureau of Investigation, the Administrator of the Drug Enforcement Administration, the Secretary of Defense, the Secretary of State, and the Secretary of Homeland Security may designate and block the property and interests in property, subject to U.S. jurisdiction, of persons who are found to be: (1) Materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of, the international narcotics trafficking activities of a person designated pursuant to the Kingpin Act; (2) owned, controlled, or directed by, or acting for or on behalf of, a person designated pursuant to the Kingpin Act; or (3) playing a significant role in international narcotics trafficking.
On January 8, 2014, the Director of OFAC designated the following individual whose property and interests in property are blocked pursuant to section 805(b) of the Kingpin Act.
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 2848, 2848(SP) Power of Attorney and Declaration of Representative.
Written comments should be received on or before March 24, 2014 to be assured of consideration.
Direct all written comments to Yvette Larence, 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 LaNita Van Dyke at Internal Revenue Service, room 6511, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at
The burden estimate is as follows:
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 Special rules for certain medical uses of chemicals that deplete the ozone layer.
Written comments should be received on or before March 24, 2014 to be assured of consideration.
Direct all written comments to Yvette 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 Kerry Dennis, 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.
Department of Veterans Affairs.
Notice of amendment to an existing System of Records.
As required by the Privacy Act of 1974, 5 U.S.C. 552a(e)(4), notice is hereby given that the Department of Veterans Affairs (VA) proposes to modify its existing system of records “Loan Guaranty Home, Condominium and Manufactured Home Loan Applicants Records, Specially Adapted Housing Applicant Records and Vendee
Comments on the proposed modifications to the routine uses must be received no later than 30 days after date of publication in the
Written comments may be submitted through
Erica Lewis, Loan Specialist, Loan Guaranty Service, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420, (202) 632-8823. (This is not a toll-free number.)
The Department is proposing to amend its System of Records entitled “Loan Guaranty Home, Condominium and Manufactured Home Loan Applicants Records, Specially Adapted Housing Applicant Records and Vendee Loan Applicant Records—VA (55VA26),” by adding a new policy and practice for storing of records in the System to permit VA to maintain VA-guaranteed, insured, direct, and vendee loan records in individual folders on paper documents, automated storage media, and as electronically scanned documents.
VA has determined that it may destroy original paper documents/records after the information has been converted to an electronic medium and verified as a necessary and proper means of storage, and that the specific storage proposed for electronically scanned documents is appropriate.
A copy of the revised system notice has been sent to the House of Representatives Committee on Government Reform and Oversight, the Senate Committee on Governmental Affairs, and the Office of Management and Budget (OMB) as required by 5 U.S.C. 552a(r) and guidelines issued by OMB (59 FR 37906, 3791618, July 25, 1994.)
The proposed storage will be added to the system of records entitled “Loan Guaranty Home, Condominium and Manufactured Home Loan Applicant Records, Specially Adapted Housing Applicant Records, and Vendee Loan Applicant Records—VA (55VA26)” as published at 40 FR 38095, August 26, 1975, and amended at 48 FR 49961, October 28, 1983; 51 FR 24781, July 8, 1986; 51 FR 28289, August 6, 1986; 52 FR 721, January 8, 1987; 53 FR 49818, December 9, 1988; 56 FR 2064, January 18, 1991; 56 FR 15666, April 17, 1991; 58 FR 50629, September 28, 1993; 62 FR 35545, July 1, 1997, and 67 FR 72721, December 6, 2002.
The system of records identified as “Loan Guaranty Home, Condominium and Manufactured Home Loan Applicants Records, Specially Adapted Housing Applicant Records and Vendee Loan Applicant Records—VA (55VA26),” published at 40 FR 38095, August 26, 1975, and amended at 48 FR 49961, October 28, 1983; 51 FR 24781, July 8, 1986; 51 FR 28289, August 6, 1986; 52 FR 721, January 8, 1987; 53 FR 49818, December 9, 1988; 56 FR 2064, January 18, 1991; 56 FR 15666, April 17, 1991; 58 FR 50629, September 28, 1993; 62 FR 35545, July 1, 1997 and 67 FR 72721 December 6, 2002, is revised to add a new storage as follows:
Loan Guaranty Home, Condominium and Manufactured Home Loan Applicants Records, Specially Adapted Housing Applicant Records and Vendee Loan Applicant Records—VA (55VA26).
VA-guaranteed, insured, direct and vendee loan records are maintained in individual folders on paper documents, on automated storage media (i.e, microfilm, microfiche, magnetic tape and magnetic disks), and on electronically scanned documents.
Securities and Exchange Commission.
Proposed rules.
We are proposing rule amendments to Regulation A to implement Section 401 of the Jumpstart Our Business Startups Act. Section 401 of the JOBS Act added Section 3(b)(2) to the Securities Act, which directs the Commission to adopt rules exempting offerings of up to $50 million of securities annually from the registration requirements of the Securities Act. The proposed rules include issuer eligibility requirements, content and filing requirements for offering statements and ongoing reporting requirements for issuers.
Comments should be received by March 24, 2014.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment forms (
• Send an email to
• Use the Federal Rulemaking Portal (
• 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 S7-11-13. This file number should be included on the subject line if email is used. To help us 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 (
Zachary O. Fallon, Special Counsel; Shehzad K. Niazi, Attorney-Advisor; or Karen C. Wiedemann, Attorney Fellow; Office of Small Business Policy, Division of Corporation Finance, at (202) 551-3460, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-3628.
We propose to amend Rules 251 through 263
We also propose to revise Form 1-A,
We further propose to revise Rule 4a-1
As a result of the proposed revisions to Regulation A, conforming and technical amendments would be made to Rule 157(a),
This rulemaking would implement a statutory directive under the Jumpstart Our Business Startups Act (the “JOBS Act”)
Congress enacted Section 3(b)(2) against a background of public commentary suggesting that Regulation A, an exemption for small issues originally adopted by the Commission in 1936 under the authority of Section 3(b) of the Securities Act,
To implement Section 401 of the JOBS Act, as mandated by Section 3(b)(2), we have endeavored to craft a workable revision of Regulation A that would both promote small company capital formation and provide for meaningful investor protection. We propose to amend Regulation A to create two tiers of offerings: Tier 1, for offerings of up to $5 million in a twelve-month period, and Tier 2, for offerings of up to $50 million in a twelve-month period. Both Tiers would be subject to basic requirements as to issuer eligibility, disclosure, and other matters, drawn from the current provisions of Regulation A and updated in some areas to align Regulation A with current practice for registered offerings. In addition to these basic requirements, Tier 2 offerings would be subject to additional requirements, including the provision of audited financial statements, ongoing reporting obligations, and certain limitations on sales.
Currently, Regulation A permits unregistered public offerings of up to $5 million of securities in any twelve-month period by non-reporting U.S. and Canadian companies, including no more than $1.5 million of securities offered by securityholders of the company.
Regulation A permits issuers to communicate with potential investors, or “test the waters” for potential interest in the offering, before filing the offering statement.
Regulation A offering circulars are required to contain issuer financial statements,
Because Regulation A offerings are exempt from the registration requirements of the Securities Act, issuers and other offering participants are not subject to the liability provisions of Section 11 of the Securities Act. Instead, other anti-fraud and civil liability provisions of the securities laws, including Sections 12(a)(2) and 17 of the Securities Act, Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5, apply to the offer and sale of securities in reliance upon Regulation A.
In recent years, Regulation A offerings have been rare in comparison to offerings conducted in reliance on other Securities Act exemptions or on a registered basis. From 2009 through 2012, there were 19 qualified Regulation A offerings for a total offering amount of approximately $73 million.
Section 402 of the JOBS Act required the Comptroller General to conduct a study on the impact of state “Blue Sky” laws on offerings conducted under Regulation A, and to report its findings to Congress. The resulting U.S. Government Accountability Office (“GAO”) report to Congress indicates that various factors may have influenced the use of Regulation A, including the type of investors businesses seek to attract, the process of filing the offering statement with the Commission, state securities law compliance, and the cost-effectiveness of Regulation A relative to other exemptions.
Section 401 of the JOBS Act imposes a number of requirements for the rules the Commission must adopt under Section 3(b)(2), and also provides for the exercise of Commission discretion in setting additional terms and conditions for the exemption.
The mandatory provisions, in addition to the $50 million annual offering limit, include:
• Features based on the current provisions of Regulation A:
• the securities may be offered and sold publicly;
• the securities are not “restricted securities” within the meaning of federal securities laws and regulations;
• the civil liability provisions of Section 12(a)(2) of the Securities Act would apply to offers and sales of the securities; and
• issuers may solicit interest in the offering before filing an offering statement;
• A new requirement for issuers to file audited financial statements with the Commission annually;
• A limitation on the types of securities eligible for exemption under Section 3(b)(2) to equity securities, debt securities, and debt securities convertible into or exchangeable for equity interests, including any guarantees of such securities.
The Commission, in its discretion, may determine to include other terms, conditions, or requirements, including:
• electronic filing of offering materials, the form and content of which would be prescribed by the Commission, including audited financial statements, issuer business description, issuer financial condition, issuer corporate governance principles, use of investor funds, and other appropriate matters;
• “bad actor” disqualification provisions (which, if included, must be substantially similar to the regulations adopted under Section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”));
• periodic disclosures regarding the issuer, its business operations, financial condition, corporate governance principles, use of investor funds, and other appropriate matters.
Section 401 of the JOBS Act also requires the Commission to review the $50 million offering limit not later than two years after enactment of the JOBS Act and every two years thereafter and, if the Commission decides not to increase the amount, requires that it report its reasoning to Congress.
Title IV of the JOBS Act amended Section 3(b) of the Securities Act to add Section 3(b)(2), which, subject to various terms and conditions, directs the Commission to enact rules that add a class of securities exempt from the registration provisions of the Securities Act. Prior to the amendment, Section 3(b) contained the statutory authority relied upon to establish current Regulation A. Although the JOBS Act amended Section 3(b) to designate this existing authority as Section 3(b)(1) and add new Section 3(b)(2), it did not amend the existing statutory authority of Regulation A or direct the Commission to amend specific rules adopted thereunder.
In developing the current proposals, we considered the statutory language of JOBS Act Section 401, the legislative history, the current Regulation A exemption, comment letters received to date on Title IV of the JOBS Act
Following are the key provisions of the proposed amendments to Regulation A:
• Tier 1: annual offering limit of $5 million, including no more than $1.5 million on behalf of selling securityholders.
• Tier 2: annual offering limit of $50 million, including no more than $15 million on behalf of selling securityholders.
• Update the restrictions on issuer eligibility to exclude from Regulation A issuers that are or have been subject to any order of the Commission pursuant to Section 12(j) of the Exchange Act entered within five years before the filing of the offering statement.
• Update the restrictions on issuer eligibility to exclude from Regulation A issuers that have not filed with the Commission the ongoing reports required by the proposed rules during the two years immediately preceding the filing of an offering statement.
• Limit the amount of securities an investor can purchase in a Tier 2 offering to no more than 10% of the greater of annual income and net worth.
• Exclude asset-backed securities, as defined in Regulation AB, from the list of eligible securities.
• Update the safe harbor from integration and provide additional guidance on the potential integration of offerings conducted concurrently with, or close in time after, a Regulation A offering.
• Permit issuers to “test the waters” or solicit interest in a potential offering with the general public either before or after the filing of the offering statement, so long as any solicitation materials used after publicly filing the offering statement are preceded or accompanied by a preliminary offering circular or contain a notice informing potential investors where and how the most current preliminary offering circular can be obtained. This requirement could be satisfied by providing the uniform resource locator (“URL”) where the preliminary offering circular or the offering statement may be obtained on EDGAR.
• Require issuers and intermediaries in the prequalification period to deliver a preliminary offering circular to prospective purchasers at least 48 hours in advance of sale.
• Modernize the qualification, communications, and offering process in Regulation A to reflect analogous provisions of the Securities Act registration process:
• Permit issuers and intermediaries to satisfy their delivery requirements as to the final offering circular under an “access equals delivery” model when the final offering circular is filed and available on EDGAR;
• Require issuers that sell to prospective purchasers in reliance on the delivery of a preliminary offering circular to, not later than two business days after completion of the sale, provide the purchasers with a copy of the final offering circular or a notice that the sale occurred pursuant to a qualified offering statement that includes the URL where the final offering circular or to the offering statement of which such final offering circular is part may be obtained and contact information sufficient to notify a purchaser where a request for a final offering circular can be sent and received in response; and
• Permit issuers to file offering circular supplements after qualification of the offering statement in certain circumstances in lieu of post-qualification amendments, including to provide the types of information that may be excluded from a prospectus under Rule 430A.
• Permit continuous or delayed offerings under the proposed rules, but require issuers in continuous or delayed Tier 2 offerings to be current in their annual and semiannual reporting obligations.
• Permit issuers to qualify additional securities in reliance on Regulation A by filing a post-qualification amendment to a qualified offering statement.
• Require issuers to electronically file offering statements with the Commission.
• Permit the non-public submission of offering statements and amendments for review by Commission staff before filing such documents with the Commission, so long as all such documents are publicly filed not later than 21 calendar days before qualification.
• Eliminate the Model A (Question-and-Answer) disclosure format under Part II (Offering Circular) of Form 1-A.
• Update and clarify the Model B (Narrative) disclosure format under Part II of Form 1-A (renaming it as Offering Circular), while continuing to permit the use of Part I of Form S-1 narrative disclosure as an alternative.
• Allow an offering statement to be qualified only by order of the Commission rather than, in the absence of a delaying notation on the offering statement, without Commission action on the 20th calendar day after filing.
• Require issuers in a Tier 2 offering to include audited financial statements in their offering circulars.
• Require all issuers to file balance sheets for the two most recently completed fiscal year ends (or for such shorter time that they have been in existence).
• Permit issuers to provide financial statements in Form 1-A that are dated not more than nine months before the date of non-public submission or filing, and require issuers to include financial statements in Form 1-A that are dated not more than nine months before qualification, with the most recent annual or interim balance sheet not older than nine months. If interim financial statements are required, they must cover a period of at least six months.
• Require issuers that conduct a Tier 1 offering to electronically file a Form 1-Z exit report with the Commission not later than 30 calendar days after termination or completion of a qualified Regulation A offering to provide information about sales in such offering and to update certain issuer information.
• Require issuers that conduct a Tier 2 offering to electronically file with the Commission annual and semiannual reports, as well as current event updates.
• Require issuers that conduct a Tier 2 offering to, where applicable, provide special financial reports to provide information to investors in between the time the financial statements are included in Form 1-A and the issuer's first periodic report due after qualification of the offering statement.
• Permit the ongoing reports filed by an issuer conducting a Tier 2 offering to be used to satisfy a broker-dealer's obligations under Exchange Act Rule 15c2-11.
• Provide that issuers conducting Tier 2 offerings would exit the Regulation A ongoing reporting regime when they become subject to the ongoing reporting requirements of Section 13 of the Exchange Act, and may exit the Regulation A reporting regime at any time by filing a Form 1-Z exit report after completing reporting for the fiscal year in which the offering statement was qualified, so long as the securities of each class to which the offering statement relates are held of record by fewer than 300 persons and offers or sales made in reliance on a qualified Regulation A offering statement are not ongoing.
• Require issuers that conduct a Tier 2 offering to include in their first annual report after termination or completion of a qualified Regulation A offering, or in their Form 1-Z exit report, information about sales in the terminated or completed offering and to update certain issuer information.
• Eliminate the requirement that issuers file a Form 2-A with the Commission to report sales and the termination of sales made under Regulation A every six months after qualification and within 30 calendar days after the termination, completion, or final sale of securities in the offering.
• Substantially conform the “bad actor” disqualification provisions of Rule 262 to new Rule 506(d) and add a new disclosure requirement similar to Rule 506(e).
• In light of the total package of investor protections proposed to be included in the implementing rules for Regulation A, provide for the preemption of state securities law registration and qualification requirements for securities offered or sold to “qualified purchasers,” defined to be all offerees of securities in a Regulation A offering and all purchasers in a Tier 2 offering.
Section 401 of the JOBS Act does not include any express issuer eligibility requirements.
• companies subject to the ongoing reporting requirements of Section 13 or 15(d) of the Exchange Act (“reporting companies”);
• companies registered or required to be registered under the Investment Company Act of 1940 (“investment companies”);
• development stage companies that have no specific business plan or purpose or have indicated their business plan is to engage in a merger or acquisition with an unidentified company or companies (“blank check companies”);
• issuers of fractional undivided interests in oil or gas rights, or similar interests in other mineral rights.
Several commenters have suggested that the expanded exemption should continue to be unavailable to blank check companies,
(i) More than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the United States; and
(ii) Any of the following:
(A) The majority of the executive officers or directors are United States citizens or residents;
(B) More than 50 percent of the assets of the issuer are located in the United States; or
(C) The business of the issuer is administered principally in the United States.
We propose to add two new categories of ineligible issuers to, but to otherwise maintain, Regulation A's existing issuer eligibility requirements. As proposed, the exemption would continue to be available to companies organized in, and with their principal place of business inside, the United States or Canada. Under the proposal, the exemption would continue to be unavailable to Exchange Act reporting companies, investment companies, blank check companies, certain issuers disqualified from participation in such offerings under the “bad actor” provisions of Rule 262, as proposed to be amended,
Additionally, we propose to make the exemption unavailable to issuers that have not filed with the Commission the ongoing reports required by the proposed rules during the two years immediately preceding the filing of a new offering statement (or for such shorter period that the issuer was required to file such reports).
We further propose to exclude from the category of eligible issuers under Regulation A issuers that are or have been subject to an order by the Commission denying, suspending, or revoking the registration of a class of securities pursuant to Section 12(j) of the Exchange Act that was entered within five years before the filing of the offering statement. Under Section 12(j) of the Exchange Act, an issuer's securities registered under the Exchange Act may be subject to a denial, suspension, or revocation of registration pursuant to an order by the Commission if, after notice and opportunity for a hearing, the Commission finds that the issuer of such securities has failed to comply with any of the provisions of, or the rules and regulations enacted under, the Exchange Act. We do not believe that issuers that, after notice and opportunity for a hearing, are or have been subject to such orders by the Commission within a five-year period immediately preceding the filing of the offering statement should benefit from the provisions of Regulation A, as proposed to be amended. We would therefore exclude such issuers from the category of eligible issuers.
We solicit comment on the proposed issuer eligibility requirements, the suggestions made in the advance comments to date, and on the issues discussed below.
1. As proposed, in addition to the two newly proposed issuer eligibility requirements, should we otherwise maintain the existing categories of Regulation A issuer eligibility requirements? Why or why not? If not, which categories of issuer eligibility requirements should we alter, and why? Please explain.
2. As proposed, should we add an additional issuer eligibility requirement to exclude issuers that have not filed with the Commission the ongoing reports required by the proposed rules during the two years immediately preceding the filing of a new offering statement (or for such shorter period that the issuer was required to file such reports)? If so, should we only require issuers to be current in their Regulation A ongoing reporting at the time of the filing of a new offering statement in order to be eligible? Alternatively, should we consider a time period other than two years? Why or why not?
3. As proposed, should we add an additional issuer eligibility requirement to exclude issuers that are or have been subject to an order by the Commission denying, suspending, or revoking the registration of a class of securities pursuant to Section 12(j) of the Exchange Act that was entered within five years before the filing of the offering
We are seeking comment on whether we should expand availability of the Regulation A exemption to issuers that may not satisfy domicile-based requirements, particularly those that have a substantial United States nexus, such as certain foreign companies with domestic operations, or domestic subsidiaries of foreign multinational companies.
As its name suggests, one goal of the JOBS Act was the creation of jobs within the United States.
Currently, Regulation A is limited to companies organized, and with their principal place of business, in the United States or Canada.
Alternatively, issuer eligibility under Regulation A could be extended to “domestic issuers,” defined as any issuer that is not a foreign government or a “foreign private issuer.”
4. Should issuer eligibility to rely on Regulation A continue to require an issuer to be organized under the laws of the United States or Canada with a principal place of business in the United States or Canada? Or should Regulation A be limited to issuers organized and with a principal place of business in the United States, thereby excluding Canadian issuers? Should Regulation A be made available to “domestic issuers” as described above, or to all issuers, including foreign private issuers? Is there a reason to treat Canadian issuers differently from other foreign issuers? What would the impact be on issuers, investors, and other market participants if the issuer eligibility criteria were broadened? Please explain.
5. If we modify or eliminate current requirements regarding domicile and principal place of business, should we limit availability of the exemption in some other way that reflects a U.S. nexus? If so, how should we define, or in what ways should we limit the availability of the exemption to issuers that demonstrate, a U.S. nexus? Are there criteria we could use that would be easy to administer? If so, what criteria?
6. If we extend issuer eligibility to include foreign private issuers, should we require express consent from such issuers to Exchange Act Section 10(b) liability?
As noted above, we propose not to amend Regulation A's existing prohibitions on use of the exemption by investment companies registered or required to be registered under the Investment Company Act, including BDCs; blank check companies and SPACs; and issuers of fractional undivided interests in oil or gas rights, or similar interests in other mineral rights. As proposed, shell companies that do not meet the definition of “blank check company” would continue to be able to rely on the exemption.
7. Should we amend Regulation A to make BDCs eligible to rely on it? Why or why not? Would it raise particular concerns about investor protection? If so, please explain.
8. Would extension of Regulation A issuer eligibility to BDCs be inconsistent with the exemption's current prohibition on use by reporting companies? If so, should we limit the extension of Regulation A issuer eligibility to only non-Exchange Act reporting BDCs? If not, should we permit BDC ongoing reporting under the Exchange Act to satisfy their reporting obligations under Regulation A?
9. Should we extend Regulation A issuer eligibility to include blank check companies? Or would such an extension be inconsistent with the intent of Title IV of the JOBS Act, or the Commission's investor protection mandate? Why or why not?
10. If all or some segment of blank check companies are permitted to rely on Regulation A, should we specifically exclude SPACs from being able to rely on the exemption? Why or why not?
11. Should we amend Regulation A to make shell companies ineligible to rely on it? Or would the exclusion of shell companies from Regulation A be too broad, such that many small companies or startups would become ineligible to rely on the exemption?
12. Should we limit access to Regulation A to issuers that qualify as “operating companies”? If so, should we use the operating company definition described above, or some modified version? Please include a discussion of the effects on issuer access to the exemption that would result from using such a definition as a condition to issuer eligibility.
13. Should we reconsider the continued prohibition on use of the Regulation A exemptive scheme by issuers of fractional undivided interest in oil or gas rights, or similar interests in other mineral rights? If so, please explain. Are there risks associated with this type of issuer that merit maintaining Regulation A's current prohibition on use by such issuers?
14. Are there other limitations on issuer eligibility that we should consider? Alternatively, are there other types of issuers that could benefit from Regulation A, as proposed to be amended? Please provide data, if available, on the impact of imposing fewer, more, or different limitations on issuer eligibility than we have proposed.
Regulation A currently limits the size of offerings that can be conducted under the exemption, but not the size of issuers eligible to rely on the exemption. We do not currently propose any issuer size-based limitations and to date we have not received any public comment on this issue. While we appreciate that limitations on offering size may, to some extent, create a practical limitation on the ability of larger issuers to rely on Regulation A, we are soliciting comment on potentially limiting access to Regulation A on the basis of issuer size.
We could, for example, look to the standards for “smaller reporting companies” and limit availability of the exemption to issuers with less than $75 million in public float, or, if unable to calculate the public float, less than $50 million in annual revenue.
15. Should we limit availability of the Regulation A exemption to smaller issuers? Or does the $50 million annual offering limit effectively limit availability of the exemption to smaller issuers such that the Commission need not consider issuer size-based limitations? Why or why not? Should we use issuer size-based limitations to determine the imposition of certain requirements of proposed Regulation A such as the on-going disclosure requirements?
16. If we include size-based issuer eligibility requirements, is a test based on the smaller reporting company public float and revenue thresholds appropriate for potential Regulation A issuers? Should we look to the higher thresholds recommended by the Advisory Committee, or other size thresholds? Alternatively, are there better metrics on which to determine issuer size-based eligibility (
We do not propose to make Regulation A available to companies that are subject to the reporting requirements of Section 13 of the Exchange Act.
The two public comments we have received to date on this issue take opposing positions on whether Regulation A should be available to reporting companies. One commenter suggested that reporting companies should be allowed to rely on the exemption because it would permit issuers to conduct a public offering of unrestricted securities that is less burdensome, quicker and less expensive than a public offering subject to full Securities Act registration (
Given the availability of scaled disclosure requirements for Securities Act registration and Exchange Act reporting by smaller reporting companies, we continue to believe that reporting companies would not necessarily benefit from access to Regulation A, as proposed to be amended. We therefore do not propose to permit reporting companies to rely on the proposed rules. We are soliciting comment, however, on whether reporting companies should be permitted to rely on Regulation A.
17. Should we amend issuer eligibility requirements to permit reporting companies to rely on the Regulation A exemption? Why or why not? Would reporting companies find Regulation A a useful means of raising capital? How would such a change affect issuers, investors, financial intermediaries, and other market participants?
18. If reporting companies were permitted to rely on Regulation A, should we impose limitations on their use of the exemption? For example, should reporting companies be eligible to use Regulation A only for a limited period of time,
19. If reporting companies are permitted to rely on Regulation A, should the availability of the exemption be conditioned on being current with Exchange Act reporting requirements,
Section 3(b)(3) of the Securities Act limits the availability of any exemption enacted under Section 3(b)(2) to “equity securities, debt securities, and debt securities convertible or exchangeable into equity interests, including any guarantees of such securities.”
We propose to limit the types of securities eligible for sale under both Tier 1 and Tier 2 of Regulation A to the specifically enumerated list of securities in Section 3(b)(3), with the exception of asset-backed securities. Asset-backed securities are subject to the provisions of Regulation AB, an appropriately-tailored regulatory regime enacted to cover such securities that was not in effect when Regulation A was last updated in 1992.
20. As proposed, should we exclude asset-backed securities from the list of eligible securities under Regulation A? Why or why not? If asset-backed securities were eligible to be sold under Regulation A, what changes would be required to Form 1-A and the other proposed Regulation A forms to accommodate these issuers?
21. Should any additional types of securities be specifically excluded from offerings conducted in reliance on Regulation A? If so, what types of securities, and why? Should the rules provide more specificity as to the types of securities that are included or excluded from Regulation A offerings? What effects could excluding specified types of securities from Regulation A offerings have on issuers, investors, and other market participants?
Regulation A currently permits offerings of up to $5 million of securities in any twelve-month period, including up to $1.5 million of securities offered by selling securityholders.
We believe sales by selling securityholders to be an important part of the exemptive scheme and therefore propose to preserve in Tier 1 Regulation A's current limitation of no more than $1.5 million of securities offered by selling securityholders, and permit Tier 2 offerings to include up to $15 million of securities offered by selling securityholders. Sales by selling securityholders have been permissible under Regulation A in one form or another since 1940.
Two commenters recommended permitting secondary sales by selling securityholders in the expanded exemptive scheme.
Another commenter, however, urged the Commission to prohibit selling securityholders, such as venture capital and private equity firms, from relying on the expanded exemption.
Selling securityholder access to Regulation A has been a historically important feature of the exemptive scheme. We believe it would continue to be an important part of Regulation A, as proposed to be amended. Allowing selling securityholders access to avenues for liquidity should encourage investment in companies seeking to raise capital.
We do not propose to amend Regulation A to eliminate the ability of selling securityholders to conduct secondary offerings.
In addition, we propose to eliminate the last sentence of Rule 251(b), which prohibits affiliate resales unless the issuer has had net income from continuing operations in at least one of its last two fiscal years. This provision was originally adopted in Regulation A in 1956 to prohibit secondary sales of securities of certain new companies and companies without net income in at least one of their last two fiscal years
While one commenter has expressed concern that affiliates of an issuer could use an informational advantage to sell securities in unsuccessful ventures at the expense of the investing public,
We also do not believe that a focus on issuers that have not had net income from continuing operations in at least one of its last two fiscal years would be appropriately tailored for startup and early stage companies that may devote large portions of their resources to startup expenses and research and development.
On balance, we believe that investor protections provided by Regulation A, as proposed to be amended, support the elimination of the current restriction on affiliate resales, particularly in light of the potential benefits of permitting secondary sales. We therefore do not propose to carry this provision forward in amended Regulation A.
22. Should we consider different annual offering thresholds for selling securityholder sales than the proposed $1.5 million limitation for Tier 1 offerings and $15 million limitation for Tier 2 offerings? Why or why not? If so, should sales in reliance on Regulation A by selling securityholders be permitted up to the annual offering ceiling for each respective Tier, or limited at a different threshold? Should we limit sales by selling securityholders to a percentage of the total amount offered in conjunction with a primary offering of Regulation A securities over a given period of time, or to Regulation A offerings where primary securities are offered? Alternatively, should we prohibit all sales by selling securityholders in Regulation A? Why or why not?
23. Should the rules treat sales by non-affiliate selling securityholders as a separate category of exempt transaction, as was once the case under Regulation A, and not aggregate such sales with issuer sales for purposes of determining the maximum offering amount available under the exemption? If so, should non-affiliate resales be permitted up to the applicable annual offering ceiling, or limited at a different threshold?
24. If selling securityholders are permitted to rely on Regulation A, should we impose eligibility requirements or other limitations on those securityholders? For example, should we require selling securityholders to have owned the securities offered for resale under Regulation A for a specified period of time before resale? If so, why and what should the relevant holding period be (
25. Does the existing Rule 251(b) requirement that an issuer have net income from continuing operations in each of its last two fiscal years, in order for an affiliate to be able to conduct a secondary sale in reliance on Regulation A, have continuing validity, and should we therefore retain this provision? Why or why not? Please explain.
Regulation A does not currently limit the amount of securities an investor can purchase in a qualified Regulation A offering. We recognize, however, that with the increased annual offering
Consistent with Section 3(b)(2)(G) and the Commission's investor protection mandate, in addition to the disclosure, reporting and other requirements of Regulation A, we propose to limit the amount of securities investors can purchase in a Tier 2 offering to no more than 10% of the greater of their annual income and their net worth.
We believe that this proposed new requirement could usefully augment the other requirements for Tier 2 offerings. Limiting the amount of securities that a potential investor could invest in a Tier 2 offering to 10% of the greater of the investor's annual income and net worth would help to mitigate any concern that an investor may not be able to absorb the potential loss of the investment.
Under the proposal, issuers would be required to make investors aware of the investment limitations,
26. As proposed, should we impose investment limitations on investors in Tier 2 offerings? Or does Regulation A, as proposed to be amended, have sufficient investor protections for Tier 2 offerings, such that an investment limitation for investors is not necessary? Why or why not?
27. Are the proposed investment limitations appropriate in the context of a Tier 2 offering? Why or why not? What impact would the proposed investment limitation restriction have on issuers and investors? Should the proposed limitations on investment not apply to accredited investors? Are there other investment limitation criteria we should consider? For example, should we impose a limitation based on a percentage of total investment assets in addition to, or instead of, annual income or net worth?
28. Alternatively, should the investment limitation be higher or lower than the 10% proposed? If so, what percentage and why would that percentage be appropriate? Would the proposed investment limitation be appropriate for investors that are entities rather than natural persons? Should we establish a minimum annual investment amount, similar to $2,000 annual investment that would be permitted under our proposed crowdfunding rules, that all investors could make in Regulation A offerings irrespective of their income and net worth? Why or why not?
29. Should the proposed investment limitation apply on a per offering basis, as proposed? Or should the limitation apply on an aggregated basis, across all investments in Regulation A securities? Why or why not? If the limitation were to apply on an aggregated basis, how should the limitation apply? Should we limit the provision so that only Regulation A offerings close in time (for example, within a twelve-month period), or otherwise related, would be aggregated in the 10% calculation?
30. Should we permit issuers, as proposed, to rely on an investor's representation of compliance with the 10% investment limitation, unless the issuer has knowledge that any such representation was untrue? Why or why not? If not, what level of inquiry or verification should issuers have to perform in order to ensure compliance with the requirement? Should the issuer and its intermediaries be required to have a reasonable belief that the investor certification can be relied upon (
Existing Rule 251(c) of Regulation A governs the integration of Regulation A offerings with other offerings.
• prior offers or sales of securities; or
• subsequent offers and sales of securities that are:
• registered under the Securities Act, except as provided in Rule 254(d);
• made in reliance on Rule 701 under the Securities Act;
• made pursuant to an employee benefit plan;
• made in reliance on Regulation S; or
• made more than six months after completion of the Regulation A offering.
We believe Regulation A's existing integration safe harbors provide issuers, particularly smaller issuers whose capital needs often change, with valuable certainty as to the contours of a given offering and its eligibility for an exemption from Securities Act registration. To date, the public comment we received on integration suggested we maintain Regulation A's existing integration provisions.
The safe harbor from integration provided by existing Rule 251(c) expressly provides that any offer or sale made in reliance on Regulation A will not be subject to integration with any other offer or sale made either before the commencement of, or more than six months after, the completion of the Regulation A offering.
Currently, the note to Rule 251(c) indicates that, if the provisions of the safe harbor are unavailable, offers and sales may still not be integrated with the Regulation A offering depending on the particular facts and circumstances, so there is no presumption that offerings outside the integration safe harbors should be integrated.
In addition to this approach to integration, we propose to add to the list of safe harbor provisions subsequent offers or sales of securities made pursuant to the proposed rules for securities-based crowdfunding transactions under Title III of the JOBS Act. Given the unique capital formation method available to issuers and investors in the proposed rules for securities-based crowdfunding transactions and the small dollar amounts involved, we do not propose to integrate offers or sales of such securities that occur subsequent to the commencement of any offers or sales of securities made in reliance on Regulation A.
We further propose to amend Rule 254(d) to provide that where an issuer decides to register an offering after soliciting interest in a contemplated, but abandoned, Regulation A offering, any offers made pursuant to Regulation A would not be subject to integration with the registered offering, unless the issuer engaged in solicitations of interest in reliance on Regulation A to persons other than qualified institutional buyers (“QIBs”) and institutional accredited investors permitted by Section 5(d)
31. As proposed, should we adopt an integration safe harbor in Regulation A that largely follows the existing provisions of Rule 251(c), while adding the exemption provided by the proposed JOBS Act crowdfunding rules into the list of safe harbors for subsequent offers or sales? Why or why not? Should we alter or add additional provisions to the list of safe harbors for subsequent offers or sales? If so, please provide supporting analysis for your suggestions. For example, should we reduce the six-month period in Rule 251(c)(2)(v)?
32. Should we amend the provisions of Rule 254(d), as proposed,
Exchange Act Section 12(g) requires, among other things, that an issuer with total assets exceeding $10,000,000 and a class of equity securities held of record by either 2,000 persons, or 500 persons who are not accredited investors, register such class of securities with the Commission.
Section 12(g) was originally enacted by Congress as a way to ensure that investors in over-the-counter securities about which there was little or no information, but which had a significant shareholder base, were provided with ongoing information about their investment.
One commenter suggested we provide a conditional exemption from mandatory Exchange Act reporting under Section 12(g) for emerging growth companies that have conducted a Regulation A offering and comply with its ongoing reporting requirements; otherwise, emerging growth companies that may cross the Section 12(g) asset and record holder thresholds following a Regulation A offering would be disincentivized from relying on the exemption.
We believe, however, that the Section 12(g) record holder threshold continues to provide an important baseline, above which issuers should be subject to the more expansive disclosure and compliance obligations of the Exchange Act. We are not proposing to exempt Regulation A securities from the requirements of Section 12(g) or to provide that issuers that are current in their Regulation A ongoing reporting under Tier 2 would be exempt from Section 12(g) or have their obligations to register under Section 12(g) suspended. We do, however, solicit comment as to whether a Section 12(g) exemption or suspension should be provided.
33. Should Regulation A securities be exempt from Section 12(g), either conditionally or otherwise? Would an exemption from Section 12(g) encourage Regulation A issuers to continue ongoing reporting under the proposed rules for Tier 2 offerings, where such issuers might otherwise cease reporting?
34. Does Section 12(g) continue to serve as a valuable proxy for market interest in the equity securities of an issuer issued pursuant to Regulation A, such that an issuer that crosses its asset and record holder thresholds should become subject to mandatory Exchange Act reporting? Why or why not?
The liability provisions of Section 12(a)(2) of the Securities Act apply to any public offering of securities by use of an oral communication or prospectus that includes a material misleading statement or material misstatement of fact.
Section 3(b)(2)(G)(i) gives the Commission discretion to require an offering statement in such form and with such content as it determines necessary in the public interest and for the protection of investors. The provision permits electronic filing of offering statements, and provides a non-exhaustive list of potential content that may be required in the offering statement, including audited financial statements, a description of the issuer's business operations, financial condition, corporate governance principles, use of
Currently, Regulation A offering statements are filed with the Commission in paper form.
In Section 3(b)(2)(G)(i), Congress gave the Commission discretion to require issuers to file their offering statements electronically. Commenters are generally supportive of electronic filing.
As proposed, amended Form 1-A would consist of three parts:
• an eXtensible Markup Language (XML) based fillable form, which would capture key information about the issuer and its offering using an easy to fill out online form, similar to Form D,
• a text file attachment containing the body of the disclosure document and financial statements, formatted in HyperText Markup Language (HTML) or American Standard Code for Information Interchange (ASCII) to be compatible with the EDGAR filing system;
• text file attachments, containing the exhibits index and the exhibits to the offering statement, formatted in HTML or ASCII to be compatible with the EDGAR filing system.
We further propose to require all other documents required to be submitted or filed with the Commission in conjunction with a Regulation A offering, such as ongoing reports, to be submitted or filed electronically on EDGAR.
We believe this proposed approach to electronic filing would be both practical and useful for issuers of Regulation A securities, investors in such securities, other market participants, and the Commission staff who work with issuers throughout the qualification process. Issuers would maintain better control over their filing process, reduce the printing costs associated with filing seven copies of the offering statement and any amendments with the Commission, obtain immediate confirmation of acceptance of an offering statement, and ultimately save time in the qualification process. Investors would gain real-time access to the information contained in Regulation A filings.
As proposed, electronic filing would also facilitate the capture of important financial and other information about Regulation A issuers and offerings that would enable the Commission and market participants to monitor and analyze any market that develops in Regulation A securities, including, for example, issuer size, issuer location, key financial metrics, summary information about securities offered and offering amounts, the jurisdictions in which offerings take place, and expenses associated with the offering.
We appreciate, however, that requiring EDGAR filing would impose costs on issuers that currently are not required to enter the EDGAR filing system or format their disclosure documents in ways that the EDGAR system can accept. For that reason, we are soliciting comment on whether electronic filing should be mandated for Regulation A offerings.
If electronic filing on EDGAR is required, one commenter suggested that the Commission propose for Regulation A offering circulars an analog to the “access equals delivery” model for prospectuses under Securities Act Rule 172.
We are proposing an access equals delivery model for Regulation A final offering circulars. The expanded use of the Internet and continuing technological developments suggest that we should consider alternative methods of final offering circular delivery for Regulation A, particularly given that the regulation has not been substantively updated since 1992. Where, upon qualification of an offering statement, sales of Regulation A securities occur on the basis of offers made using a preliminary offering circular, issuers and intermediaries could presume that investors have access to the Internet, and would be permitted to satisfy their delivery requirements for the final offering circular if it is filed and available on EDGAR.
Further, consistent with prior Commission releases on the use of electronic media for delivery purposes, “electronic-only” offerings of Regulation A securities would not be prohibited under the proposed rules for Regulation A.
• the preliminary offering circular and other information, but not the final offering circular, in instances where, upon qualification, the issuer plans to sell Regulation A securities based on offers made using a preliminary offering circular; and
• all documents and information, including the final offering circular, when the issuer sells Regulation A securities based on offers conducted during the post-qualification period using a final offering circular.
We further propose to maintain the existing requirements of Rule 251(d)(2)(ii), which requires dealers to deliver a copy of the current offering circular to purchasers for sales that take place within 90 calendar days after qualification,
We believe the delivery of the preliminary offering circular to potential investors before they make an investment decision remains an important investor protection that should be preserved in Regulation A, particularly in light of the proposed expanded use of “testing the waters” solicitation materials to include the period of time after non-public submission or filing of the offering statement discussed further in Section II.D. below.
In addition to the revised delivery requirements discussed above, we propose to add a provision analogous to Rule 173.
We propose to allow an issuer to withdraw an offering statement, with the Commission's consent, if none of the securities that are the subject of such offering statement have been sold and such offering statement is not the subject of a Commission order temporarily suspending a Regulation A exemption.
35. Should the rules require the electronic filing of Regulation A offering and related documents on EDGAR, as proposed? Why or why not? Please address expected costs of electronic filings and benefits to both issuers and investors of having these documents available in electronic format. Alternatively, for Tier 1 offerings, what would be the benefits, if any, of maintaining Regulation A's current paper filing system for offering statements and related documents? Should we maintain paper filing for issuers conducting Tier 1 Regulation A offerings? Why or why not?
36. As proposed, should we require issuers to file the body of the disclosure document, financial statements, and text file attachments, containing the exhibits index and the exhibits to the offering statement, electronically in a HTML or ASCII format that is compatible with the EDGAR filing system? Or should we permit the filing of offering and related materials in Portable Document Format (PDF) or in some other format that is readily accessible to smaller issuers to constitute an official filing with the Commission under Regulation S-T?
37. Should we adopt, as proposed, an access equals delivery model for final offering circular delivery requirements, in which case investors would be presumed to have access to the Internet, and issuers and intermediaries could satisfy their delivery requirements if the final offering circular were filed with the Commission on EDGAR?
38. Should we update, as proposed, the delivery requirements in Rule 251(d)(2)(i) to maintain advance delivery requirements of preliminary offering circulars, while eliminating the requirement that issuers and broker-dealers participating in the distribution of Regulation A securities pursuant to an offering statement deliver a final offering circular to investors at least 48 hours before sale? Why or why not? Would updating this provision, as proposed, be inconsistent with the rationale behind similar updates to prospectus delivery requirements for registered offerings? Why or why not?
39. While not currently proposed, should we adopt a provision similar to Exchange Act Rule 15c2-8(b), which would only require the advance delivery of a preliminary offering circular in the context of offerings by issuers not already subject to an ongoing reporting obligation under Regulation A? Similarly, should we adopt an analog to Rule 174(b),
40. In conjunction with the proposed access equals delivery model for final offering circular delivery requirements, should we adopt, as proposed, a provision analogous to Rule 173? If so, should compliance with that requirement be made a condition of Regulation A? Why or why not? Does the rationale behind Rule 173 apply to Regulation A offerings?
Unlike Title I of the JOBS Act,
Under Regulation A's proposed non-public submission of draft offering statement provisions, issuers whose securities have not been previously sold pursuant to a qualified offering statement under Regulation A or an effective registration statement under the Securities Act would be permitted to submit to the Commission a draft offering statement for non-public review. As with the confidential submission of draft registration statements, all non-public submissions of draft offering statements would be submitted via EDGAR. The initial non-public submission, all non-public amendments thereto, and correspondence with Commission staff regarding such submissions would be required to be publicly filed as exhibits to the offering statement not less than 21 calendar days before qualification of the offering statement.
41. As proposed, should the rules permit the non-public submission of draft offering statements under Regulation A? Would there be any adverse impact on public investors of permitting the non-public submission of offering statements?
42. Is the proposed requirement of public filing at least 21 calendar days before qualification appropriate? Should public filing be required sooner or later than proposed?
43. Should the availability of non-public submission of Regulation A offering statements be limited, as proposed, to issuers whose securities have not been previously sold pursuant to a qualified offering statement under Regulation A or an effective registration statement under the Securities Act, in a manner similar to the limitation under Title I of the JOBS Act on the use of confidential submissions to issuers that have not previously sold common equity securities pursuant to an effective registration statement? Or should issuers be permitted to use the non-public submission provisions more than once?
44. As proposed, should issuers that non-publicly submit an offering statement under Regulation A be required to request confidential treatment under the cover of the Commission's Rule 83? Or should we adopt a new rule relating to confidential treatment of draft offering statements in Regulation A?
Section 3(b)(2)(G)(i) of the Securities Act
Currently, Form 1-A consists of three parts: Part I (Notification), Part II (Offering Circular), and Part III (Exhibits). Part I of Form 1-A calls for certain basic information about the issuer and proposed offering that is necessary to determine the availability of the exemption.
Part II of the offering statement consists of an offering circular—similar to the prospectus in a registration statement—which serves as the primary disclosure document to investors of the material facts about the issuer, its
• Model A (Question-and-Answer Format);
• Model B, a somewhat scaled version of Form S-1 that largely follows the Commission's disclosure standards in effect for registration statements when Model B was adopted in 1981;
• Part I of Form S-1.
Commenters generally supported maintaining Regulation A's existing Form 1-A, with modifications and updates to implement the provisions of the JOBS Act.
Separately, one commenter suggested that the Commission implement an offering statement scaled on the basis of offering size.
One commenter suggested that the Commission update its rules regarding revisions to the offering statement during the post-qualification period in light of anticipated continuous, best efforts offerings.
We propose to maintain Form 1-A's existing three-part structure—Part I (Notification), Part II (Offering Circular), and Part III (Exhibits)—while making various revisions and updates to the Form.
Part I of Form 1-A serves as a notice of certain basic information about the issuer and its proposed offering, which also helps to confirm the availability of the exemption.
The information collected in Part I would continue to focus issuers on eligibility to use Regulation A, and would allow Commission staff reviewing the filings to more easily make a determination about the conditions to the availability of the exemption. If adopted, this could conserve issuer time and resources and enhance the efficiency of review by Commission staff. If, after compiling the information elicited by Part I, an issuer determined that it was ineligible to rely on Regulation A, it could choose to register its offering or, if available, conduct an exempt offering in reliance on a different exemption from registration.
The proposed notification in Part I of Form 1-A would require disclosure in response to the following items:
• Item 1. Issuer Information
• Item 2. Issuer Eligibility
• Item 3. Application of Rule 262 (“bad actor” disqualification and disclosure)
• Item 4. Summary Information Regarding the Offering and other Current or Proposed Offerings
• Item 5. Jurisdictions in Which Securities are to be Offered
• Item 6. Unregistered Securities Issued or Sold Within One Year
As proposed, Item 1 (Issuer Information), Item 2 (Issuer Eligibility), Item 3 (Application of Rule 262 (“bad actor” disqualification and disclosure)), Item 4 (Summary Information Regarding the Offering and other Current or Proposed Offerings), and Item 6 (Unregistered Securities Issued or Sold Within One Year) would represent substantive changes to Part I.
• Item 1 (Issuer Information) would require information about the issuer's identity, industry, number of employees, financial statements and capital structure, as well as contact information.
• Item 2 (Issuer Eligibility) would require the issuer to certify that it meets various proposed issuer eligibility criteria.
• Item 3 (Application of Rule 262 (“bad actor” disqualification and disclosure)) would require the issuer to certify that no disqualifying events have occurred and to indicate whether related disclosure is included in the offering circular (
• Item 4 (Summary Information Regarding the Offering and other Current or Proposed Offerings) would include indicator boxes or buttons and text boxes eliciting information about the offering (including whether the issuer was conducting a Tier 1 or Tier 2 offering, amount and type of securities offered, proposed sales by selling securityholders and affiliates, type of offering, estimated aggregate offering price of any concurrent offerings pursuant to Regulation A, anticipated fees in connection with the offering, and the names of auditors, legal counsel, underwriters, and certain others providing services in connection with the offering).
• Item 5 (Jurisdictions in Which Securities are to be Offered) would include data collection about the jurisdiction in which the securities are to be offered.
• Item 6 (Unregistered Securities Issued or Sold Within One Year), which largely restates existing Item 5 to Part I, would eliminate the requirement to provide the names and identities of the persons to whom unregistered securities were issued.
We propose to eliminate Item 1 (Significant Parties) of current Part I, which requires disclosure of the names, business address, and residential address of all the persons covered by current Rule 262. Instead, we propose to only require narrative disclosure in Part II of Form 1-A, as proposed, when the issuer has determined that a relevant party has a disclosable “bad actor” event.
As noted above, Part II (Offering Circular) in existing Form 1-A provides issuers with three options for their narrative disclosure: Model A, Model B, and Part I of Form S-1.
Model B was originally the product of a Commission review of the disclosure practices of Regulation A issuers under Model B's predecessor, Schedule I.
Form S-1 and the narrative disclosure requirements of Regulation S-K have been revised numerous times since the introduction of Model B disclosure in 1981 to reflect evolving disclosure requirements and standards. Model B disclosure, however, has remained essentially unchanged, as a version of Part I of Form S-1 circa 1981, scaled for smaller issuers. Thus, while eliciting disclosure of largely the same information, Model B and Part I of Form S-1 contain different item numbers and language.
We solicit comment as to whether it would be more appropriate to eliminate Model B disclosure altogether, and, in its place, to require issuers to follow the disclosure and form requirements of Part I of Form S-1, while maintaining Model B-specific disclosures where noted. As with the proposed updates to Model B, to the extent the Commission chose to require disclosure that tracks Part I of Form S-1, it would not increase the disclosure obligations of issuers except where noted below.
We are aware that eliminating Model A and updating Model B may raise concerns about an increase in the disclosure required for a Regulation A offering. Our proposal would create new requirements for audited financial statements (consistent with the JOBS Act requirement of the annual filing of audited financial statements) and for a section containing management's discussion and analysis (MD&A) of the issuer's liquidity, capital resources, and results of operations.
As proposed, Offering Circular disclosure in Part II of Form 1-A would cover:
• Basic information about the issuer and the offering, including identification of any underwriters and disclosure of any underwriting discounts and commissions (Item 1: Cover Page of Offering Circular);
• Material risks in connection with the offering (Item 3: Summary and Risk Factors);
• Material disparities between the public offering price and the effective cash costs for shares acquired by insiders during the past year (Item 4: Dilution);
• Plan of distribution for the offering, including the disclosure required by Item 7 (Marketing Arrangements) of Part I of current Form 1-A and disclosure regarding selling securityholders (Item 5: Plan of Distribution and Selling Securityholders);
• Use of proceeds (Item 6: Use of Proceeds to Issuer);
• Business operations of the issuer for the prior three fiscal years (or, if in existence for less than three years, since inception) (Item 7: Description of Business);
• Material physical properties (Item 8: Description of Property);
• Discussion and analysis of the issuer's liquidity and capital resources and results of operations through the eyes of management covering the two most recently completed fiscal years; and, for issuers that have not received revenue from operations during each of the three fiscal years immediately before the filing of the offering statement, the plan of operations for the twelve months following qualification of the offering statement, including a statement about whether the issuer anticipates that it will be necessary to raise additional funds within the next six months (Item 9: Management's Discussion and Analysis of Financial Condition and Results of Operations);
• Identification of directors, executive officers and significant employees with a discussion of any family relationships within that group, business experience during the past five years, and involvement in certain legal proceedings during the past five years (Item 10: Directors, Executive Officers and Significant Employees);
• Executive compensation data for the most recent fiscal year for the three highest paid officers or directors (Item 11: Compensation of Directors and Officers);
• Beneficial ownership of voting securities by executive officers, directors, and 10% owners (Item 12: Security Ownership of Management and Certain Securityholders);
• Transactions with related persons, promoters and certain control persons (Item 13: Interest of Management and Others in Certain Transactions);
• The material terms of the securities being offered (Item 14: Securities Being Offered);
• Two years of financial statements, which for Tier 2 offerings would be required to be audited. Tier 1 offerings would be required to provide audited financial statements to the extent the issuer had prepared them for other purposes;
• Any events that would have triggered disqualification of the offering under Rule 262 if the issuer could not rely on the provisions in proposed Rule 262(b)(1).
The proposed content of the Offering Circular would update the disclosure requirements in some respects to more closely align Regulation A disclosure with the smaller reporting company disclosure requirements for registered offerings, while certain scaled elements exclusive to Model B would be retained.
With the exception of the requirements for disclosure of beneficial ownership, material legal proceedings, and related party transactions for certain issuers,
Issuers providing disclosure in the Offering Circular would retain most of the scaled disclosure provisions currently found in Model B. We propose to continue to permit Regulation A issuers to:
• provide simplified executive compensation data for the three highest paid officers and directors in tabular form for the most recent fiscal year;
• disclose 10% beneficial owners of voting securities;
• follow fewer specific disclosure requirements for the description of business section.
Additionally, the Offering Circular would, in comparison to Model B of Form 1-A, contain more express MD&A disclosure requirements and guidance.
Consistent with the treatment of issuers in registered offerings, we further propose to permit issuers to incorporate by reference into Part II of the Form 1-A certain items previously submitted or filed on EDGAR. Incorporation by reference would be limited to documents publicly submitted or filed under Regulation A, such as Form 1-A and Form 1-K, and their exhibits. In order to be permitted to incorporate by reference, issuers would have to be subject to the ongoing reporting obligations for Tier 2 offerings.
Part F/S of Form 1-A currently requires issuers in Regulation A offerings to provide the following financial statements prepared in accordance with U.S. GAAP:
• a balance sheet as of a date within 90 days before filing the offering statement (or as of an earlier date, not more than six months before filing, if the Commission approves upon a showing of good cause) but, for filings made more than 90 days after the end of the issuer's most recent fiscal year, the balance sheet must be dated as of the end of the fiscal year;
• statements of income, cash flows, and stockholders' equity for each of the two fiscal years preceding the date of the most recent balance sheet, and for any interim period between the end of the most recent fiscal year and the date of the most recent balance sheet;
• financial statements of significant acquired businesses; and
• pro forma information relating to significant business combinations.
As noted above, the financial statements are not required to be audited unless the issuer has already obtained an audit of its financial statements for another purpose. If the issuer has audited financial statements, the qualifications and reports of the auditor must meet the requirements of Article 2 of Regulation S-X
We have not received extensive comment on the potential financial statement requirements for issuers under Title IV of the JOBS Act. One commenter suggested audited financial statements should be required for all offerings.
We propose to generally maintain the existing financial statement requirements of current Part F/S for Tier 1 offerings, while requiring issuers in Tier 2 offerings to file audited financial
In general, issuers conducting Tier 1 offerings must follow the requirements for the form and content of their financial statements set out in Part F/S, rather than following the requirements in Regulation S-X. However, in certain less common circumstances, such as for an acquired business or subsidiary guarantors, Part F/S directs issuers conducting Tier 1 offerings to comply with certain portions of Regulation S-X, which provides guidance on the financial statements required in such transactions.
For all Tier 2 offerings, however, issuers would be required to follow the financial statement requirements of Article 8 of Regulation S-X, as if the issuer conducting a Tier 2 offering were a smaller reporting company, unless otherwise noted in Part F/S. This requirement would include any financial information with respect to acquired businesses required by Rule 8-04 and 8-05 of Regulation S-X.
As with current Regulation A, financial statements in a Tier 1 offering would not be required to be audited. However, we also propose to maintain Regulation A's existing requirement that, if an issuer conducting a Tier 1 offering has already obtained an audit of its financial statements for other purposes, and that audit was performed in accordance with U.S. generally accepted auditing standards or the auditing standards of the PCAOB, and the auditor was independent pursuant to Rule 2-01 of Regulation S-X, then those audited financial statements must be filed. The auditor may, but need not be, registered with the PCAOB.
Issuers conducting Tier 2 offerings would, by contrast, be required to have their financial statements audited. As with Tier 1 offerings, the auditor of financial statements being filed as part of a Tier 2 offering must be independent under Rule 2-01 of Regulation S-X and must comply with the other requirements of Article 2 of Regulation S-X, but need not be PCAOB-registered.
Additionally, we propose to update the Form 1-A financial statement requirements to be consistent with the proposed timetable for ongoing reporting.
We propose to extend the permissible age of financial statements in Form 1-A to nine months, in order to permit the provision of financial statements that are updated on a timetable consistent with our proposed requirement for semiannual interim reporting.
We solicit comment below on whether issuers conducting Tier 2 offerings should be required to provide their financial statements to the Commission and on their corporate Web sites in interactive data format using the eXtensible Business Reporting Language (XBRL).
We have not received any comments about the exhibits that should be filed with the offering statement.
Under current Regulation A, an issuer must file seven copies of the offering statement with the Commission, at least one of which must be manually signed.
Additionally, if the issuer filing a Form 1-A under current Regulation A is a Canadian issuer, its authorized representative in the United States is required to sign the offering statement.
45. Should we continue to require a Part I (Notification) to be filed as part of the offering statement on Form 1-A? If so, should we require additional (or less) information in Part I than is currently required or proposed? If so, provide justifications for such disclosure.
46. As proposed, what would be the costs and benefits associated with requiring an issuer, as part of the electronic filing process, to enter key information about itself and its securities on a formatted cover sheet to accompany the EDGAR-formatted text file attachment?
47. Some market participants have urged us to simplify the disclosure requirements associated with Regulation A in order to facilitate more cost-effective capital formation by small companies.
48. As proposed, should we continue to maintain certain disclosure requirements in the proposed Offering Circular, while updating others to be more in line with the disclosure required of smaller reporting companies? If not, why not? Please provide suggestions as to what disclosure should be preserved in the Offering Circular or updated to accord with the smaller reporting company requirements in the context of registered offerings.
49. Should we provide for scaled narrative disclosure in Form 1-A based on the size of the issuer or size of the offering? Why or why not? If so, on what size-based attributes of an issuer or the offering should we base any such scaled disclosure requirements and what types of scaled disclosure would be applicable to each resulting category?
50. Should we update and provide more specific guidance as to the MD&A section required to be included in the Offering Circular, as proposed? Is there any additional guidance we should provide?
51. As proposed, and consistent with the requirements of smaller reporting companies under Item 303 of Regulation S-K, should we permit Regulation A issuers to provide only two years of information about their results of operations? Why or why not? Are there any other specific provisions from Item 303 of Regulation S-K that would (or would not) be appropriate for the types of issuers likely to rely on Regulation A? If so, please explain why any such provision should (or should not) apply.
52. Should we continue to require, as proposed, the disclosure of an issuer's plan of operations for the twelve months following qualification of the offering statement? Why or why not? Alternatively, is this disclosure requirement appropriate for the types of issuers likely to rely on Regulation A? If not, why not?
53. Should we consider adding a disclosure requirement in Part II of Form 1-A that would require issuers to disclose the value of the issuer prior to the contemplated Regulation A offering (
54. Would it be an efficiency to issuers if we were to eliminate the proposed Offering Circular disclosure format, and instead have Form 1-A refer issuers item-by-item to Form S-1 requirements, while preserving—where noted in Form 1-A itself—Model B-specific scaling? Alternatively, should we continue to allow issuers to use Part I of Form S-1 as a separate disclosure option in Part II of Form 1-A? Why or why not?
55. Should we make changes to the exhibit requirements of Part III of Form 1-A in addition to those proposed? For example, should we change the standard for filing material contracts by specifically excluding certain types of contracts?
56. As proposed, should we permit issuers that are current in their Tier 2 reporting obligations to incorporate by reference certain information in documents filed under Regulation A into Part II of the offering statement, while also requiring issuers to include a hyperlink to such information on EDGAR? Why or why not? If so, should we also permit successor entities to incorporate by reference to the extent their predecessors were eligible? Why or why not? If we permit the incorporation by reference of information already available on EDGAR, should we exclude shell companies or any other types of entities from being able to rely on any such accommodation?
57. Should we alter the proposed period of time in which an issuer must have been current in their ongoing reporting in order to be able to incorporate by reference certain information into Part II of Form 1-A that is already available on EDGAR? If so, what period of time should apply to any requirement that an issuer be current in filing its ongoing reports?
58. Instead of the proposed general requirement that issuers must file audited financial statements for Tier 2 offerings, should the rules require audited financial statements at a different threshold (
59. For Tier 2 offerings, should the financial statement updating requirement be changed from the proposed requirements in Part F/S of Form 1-A that would permit issuers to file financial statements based on a balance sheet dated within nine months of non-public submission or filing, but must otherwise be dated as of the end of the most recently completed fiscal year, if non-publicly submitted or filed three months after the end of such fiscal year? Or should Part F/S of Form 1-A require updating for Tier 2 offerings on a schedule similar to what would be required in a registered offering by a smaller reporting company? Why or why not?
60. As proposed, should we require issuers to file balance sheets for the two most recently completed fiscal years, instead of the current requirement to file a balance sheet for only the most recently completed fiscal year? Why or why not?
61. As proposed, should we permit Canadian issuers to prepare their financial statements using IFRS as issued by the IASB, rather than U.S. GAAP? If so, as noted above in Section II.B.1.a., to the extent we extend issuer eligibility to include foreign private issuers, should we permit all foreign private issuers to prepare their financial statements using IFRS as issued by the IASB, rather than U.S. GAAP?
62. As proposed, in Tier 1 offerings should we only refer to Regulation S-X when describing the auditor independence and compliance requirements of Article 2 and the financial statement requirements relating to guarantors and issuers of guaranteed securities, affiliates whose securities collateralize an issuance, or issuers engaged in oil and gas producing activities? Should we clarify the financial statement requirements in other specific situations? Instead of referring to Regulation S-X, should we develop new standards appropriate for Tier 1 offerings?
63. As proposed, should we permit issuers that do not qualify as a smaller
64. As proposed, should we require that, when audited financial statements are required to be filed in Part F/S for Tier 2 offerings, those audits be conducted in accordance with PCAOB standards? Alternatively, as with existing Regulation A, should we require the financial statements audit to be performed in accordance with U.S. GAAS or the PCAOB standards? Should we require auditors to be PCAOB-registered? Why or why not?
65. Would there be a cost difference to issuers of requiring audits in Tier 2 offerings to be conducted in accordance PCAOB standards, as proposed, compared to U.S. GAAS? Would there be a benefit to investors?
66. Would there be a cost difference to issuers if, in addition to requiring auditors to conduct the audits in Tier 2 offerings in accordance with PCAOB standards, as proposed, we also required auditors to be PCAOB-registered? Would there be a benefit to investors?
67. Should we require interactive data tagging of financial statements included in Regulation A offering statements? If so, should we require interactive data for all Regulation A offerings, or only Tier 2 offerings? What effect would the cost of compliance with any interactive data tagging requirements have on the issuers likely to rely on Regulation A? If we require interactive data tagging, should we implement a phase-in period for such tagging and detailed footnote and schedule tagging?
68. As noted above in Section II.B.1.b. discussing issuer eligibility, in order to address concerns regarding the use of Regulation A by REITs (and on the potential use by BDCs) absent additional REIT- (or BDC-) specific disclosures, should we require additional disclosure by REITs (and BDCs, if ultimately permitted to rely on the exemption)? Why or why not? If so, please make specific recommendations as to the form and content of any such additional disclosure.
69. As proposed, should we continue to permit issuers to incorporate by reference certain information into Part III (Exhibits) of the offering statement that was previously filed on EDGAR, while also requiring issuers to be subject to a Tier 2 reporting obligation? Or, as with current Regulation A, should we permit issuers to incorporate by reference in Part III of Form 1-A certain information irrespective of their obligation to file ongoing reports under Tier 2 of Regulation A? Why or why not?
70. As proposed, should we require issuers to retain manually signed copies of the offering statement for a period of five years? Or should we consider an alternative retention period? Alternatively, should we eliminate the requirement altogether in favor of alternative signature methods (
71. As proposed, should we eliminate the requirement that Form 1-A be signed by an authorized representative in the United States when the filer is a Canadian issuer? Should we, as proposed, require Canadian issuers to file a Form F-X to provide an express consent to service of process in connection with offerings qualified under Form 1-A? Why or why not? If so, should Form F-X be required to be filed by Canadian issuers in connection with other filings under Regulation A, including proposed new Form 1-K, Form 1-SA, Form 1-U, or Form 1-Z?
Rule 251(d)(3) currently allows for continuous or delayed offerings under Regulation A if permitted by Rule 415.
Rule 415 attempts to promote efficiency and cost savings in the securities markets by allowing for the registration of certain traditional and other shelf offerings.
To provide clarity regarding the application of Rule 415 concepts to Regulation A offerings, we propose to add a provision to Regulation A similar to Rule 415, but with limitations we believe would be appropriate in the context of Regulation A. The provision would establish time limits similar to those in Rule 415 and make conforming changes as necessary.
The proposed rule would provide for continuous or delayed offerings for the following types of offerings:
• securities offered or sold by or on behalf of a person other than the issuer or its subsidiary;
• securities offered and sold pursuant to a dividend or interest reinvestment plan or an employee benefit plan of the issuer;
• securities issued upon the exercise of outstanding options, warrants, or rights;
• securities issued upon conversion of other outstanding securities;
• securities pledged as collateral; or
• securities the offering of which commences within two calendar days after the qualification date, will be made on a continuous basis, may continue for a period in excess of 30 days from the date of initial qualification, and will be offered in an amount that, at the time the offering statement is qualified, is reasonably expected to be offered and sold within two years from the initial qualification date.
The Rule 415 offerings we have not proposed to incorporate into Regulation A are those that would not have been available under existing Regulation A, such as those requiring securities to be registered on Form S-3 or Form F-3 or those conducted by issuers ineligible to use Regulation A,
Under the proposed rules, changes in the information contained in the offering statement would no longer necessarily trigger an obligation to amend.
The proposed rules would build on Regulation A to create a regime similar to what is permissible for registered offerings, and would draw from and adapt the language in Rule 424, Item 512 of Regulation S-K, and Rule 430A
We further propose provisions similar to Rule 424 that would require issuers omitting certain information from an offering statement at the time of qualification, in reliance on proposed Rule 253(b), to file such information as an offering circular supplement no later than two business days following the earlier of the date of determination of such pricing information or the date of first use of the offering circular after qualification.
72. Should Regulation A continue to permit traditional shelf offerings, as proposed? Are there types of transactions not currently covered by Rule 415 that should be included in the rules relating to continuous offerings under Regulation A? If so, provide justification for including those transactions in Regulation A.
73. Should we use the time limits for continuous offerings found in Rule 415 for similar Regulation A offerings or should we lengthen or shorten such requirements? If so, please suggest new time limits and explain why they are preferable to the proposed time limits.
74. As proposed, should we permit continuous offerings that would be offered in an amount that, at the time the offering statement is qualified, the issuer reasonably expects to offer and sell within two years from the initial qualification date? Or should we limit this time period to one year from the initial qualification date?
75. We propose to no longer require issuers to amend an offering statement every time any information contained in the offering statement is changed, as is currently required in Rule 252(h), and instead require amendments to the offering statement to be filed and requalified annually to include updated financial statements, and otherwise as necessary to reflect facts or events arising after qualification which, in the aggregate, represent a fundamental change in the information set forth in the offering statement. Are there other types of changes in information or disclosure that should require a post-qualification amendment that must be qualified, rather than an offering circular supplement? Should we use a standard different from the “fundamental change” standard proposed, which is based on Item 512(a) of Regulation S-K? Please provide justifications for your suggested approach.
76. As proposed, should we permit issuers to qualify additional securities in reliance on Regulation A by filing a post-qualification amendment to a qualified offering statement? Why or why not?
77. As proposed, should we adopt provisions similar to Rule 430A that would permit issuers to omit certain information with respect to, among other things, the underwriting syndicate and related information analogous to the provisions for registered offerings under Rule 430A? Why or why not? Additionally, as proposed, should we permit decreases to the volume of, or deviations from the price range of, the securities offered in reliance on Regulation A within the described limits?
78. As proposed, should we include in Regulation A provisions similar to Rule 424, which would require issuers relying on proposed Rule 253(b) to omit certain information from an offering statement at the time of qualification to file such information as an offering circular supplement no later than two business days following the earlier of the date of determination of such pricing information or the date of first use of the offering circular after qualification? Why or why not? Additionally, as proposed, should we require offering circulars that contain substantive changes (other than information omitted in reliance on proposed Rule 253(b)) in information previously provided in the last offering circular to be filed within five business days after the date such offering circular is first used after qualification? Why or why not?
79. Should we consider additional or alternative amendments to the proposed provisions for continuous offerings and offering circular supplements? Why or why not? If so, please explain.
80. As proposed, Regulation A is not specifically designed for business combination transactions. While such transactions, outside the context of acquisition shelf business combination transactions, are not prohibited, would Part II of proposed Form 1-A provide for appropriate disclosure of business combination transactions? Why or why not? If so, what additional narrative or financial disclosure provisions, if any, should apply to issuers with respect to such transactions?
81. As proposed, should the rules preclude primary and secondary at the market offerings? Or should the rules only preclude primary at the market offerings? Why or why not? If the rules should not prohibit at the market offerings how should the offering size be calculated for purpose of determining whether the offering exceeds the proposed applicable annual offering amount limitations? Please explain.
Under Regulation A, an offering statement is generally only qualified by order of the Commission in a manner similar to a registration statement being declared effective.
We propose to alter the qualification process of existing Regulation A. As proposed, an offering statement could only be qualified by order of the Commission, and the process associated with the delaying notation would be eliminated. This not only conforms to the general practice of issuers under both Regulation A and registered offerings, but eliminates the risk that an issuer may exclude a delaying notation either in error or in an effort to become qualified automatically without review and comment by the Commission staff. Given our proposed electronic filing processes,
82. Should we amend the qualification process, as proposed, so that an offering statement can only
Under Securities Act Section 3(b)(2)(E), issuers are to be permitted to test the waters for interest in an offering before filing an offering statement on such terms and conditions as the Commission prescribes. Testing the waters is currently permitted under Rule 254 of Regulation A, which requires, among other things, that issuers submit all solicitation material to the Commission no later than the time of first use. Issuers are further required to file all solicitation materials used in reliance on Rule 254 as an exhibit under Part III of Form 1-A, and are prohibited from making sales under Regulation A until 20 calendar days after the last publication or delivery of such materials. Under Rule 254(b)(3), issuers must cease using test the waters solicitation materials after the initial filing of the offering statement.
Testing the waters under Rule 254 of Regulation A is different from testing the waters for a registered offering by an emerging growth company under Section 5(d) of the Securities Act. Under Section 5(d), testing the waters is limited to communications with QIBs and institutional accredited investors. Under current Rule 254, however, there is no limitation on the type of investors that may be solicited, as the provision is meant to assist smaller issuers in evaluating potential interest in a public offering before incurring costs associated with preparing mandated disclosure documents.
While one commenter suggested that the Commission permit the use of solicitation materials before the filing of an offering statement,
Testing the waters was first proposed and approved for use in Regulation A in 1992, to address the risk that small companies faced when expending funds to prepare for an offering of securities without knowing whether there would be any interest in the offering.
To address the potential impact of the review period, we propose to permit issuers to use testing the waters solicitation materials both before and after the offering statement is filed, subject to issuer compliance with the rules on filing and disclaimers.
Since we propose to require issuers to publicly file their offering statements not later than 21 calendar days before qualification, this timing requirement would ensure that, at a minimum, any solicitation made in the 21 calendar days before the earliest date of potential sales of securities would be conducted using the most recent version of preliminary offering circular.
We further propose to amend the Rule 254 requirements for submission or filing of solicitation material, so that such material would be submitted or filed as an exhibit when the offering statement is either submitted for non-public review or filed (and updated for substantive changes in such material after the initial non-public submission or filing) but would no longer be required to be submitted at or before the time of first use. This approach is generally consistent with the Commission staff's treatment of solicitation materials used by emerging growth companies under Title I of the JOBS Act, with two exceptions:
• solicitation materials used in Regulation A offerings would be required to be filed;
• solicitation materials used by Regulation A issuers that file an offering statement with the Commission would be publicly available as a matter of course.
We believe this approach would be consistent with the 1992 amendments to Regulation A that first allowed issuers to test the waters, and would make the use of solicitation materials more beneficial for issuers and investors, reduce the filing requirements for issuers, and entirely eliminate the filing requirement for issuers that, after testing the waters, decide not to proceed with an offering. Additionally, from an investor protection standpoint, it is important to note that sales under Regulation A may occur only under a qualified offering statement that reflects staff review and comment, including, where appropriate, disclosure addressing potentially incomplete or misleading statements made in test the waters solicitation material. For this reason, in addition to the statutory language of Section 3(b)(2)(E), which indicates that “issuer[s] may solicit interest in the offering,” we do not believe it is necessary, as one commenter suggested, to limit the availability of this provision to solicitations carried out by registered broker-dealers or by underwriters in firm commitment underwritings.
Currently, Rule 254(b)(2) requires all soliciting materials to bear a legend or disclaimer indicating: (i) That no money or other consideration is being solicited, and if sent, will not be accepted; (ii) that no sales will be made or commitments to purchase accepted until a complete offering circular is delivered; (iii) that a prospective purchaser's indication of interest is non-binding; and (iv) the identity of the issuer's chief executive officer and a brief description of the issuer's business and products.
Further, as noted above, we do not propose to limit testing the waters to QIBs and institutional accredited investors (as is currently the case with testing the waters under Title I of the JOBS Act), as we do not believe it is appropriate to adopt provisions in proposed Regulation A that are more restrictive than currently exist in the regulation.
83. As proposed, should we differentiate between the requirements for the use of testing the waters materials before the issuer publicly files an offering statement and after filing (when it is proposed that a preliminary offering circular would have to be provided)? Why or why not? Is the proposed time period during which a preliminary offering circular would be required to be provided together with testing the waters materials appropriate, or should it be longer or shorter? Is the 48-hour period for the delivery of a preliminary offering circular under proposed Rule 251(d)(2)(i) sufficient to address any concerns about the use of solicitation materials at or near the time of qualification?
84. Should we amend Rule 254, as proposed, so that solicitation material would no longer be required to be submitted to the Commission at or before the time of first use? If not, in the absence of a confidential treatment request under Commission Rule 83 (17 CFR 200.83), should solicitation material be made publicly available immediately after submission on EDGAR? Or, as proposed, should we only require solicitation materials to be publicly available when included as an exhibit to an offering statement that is filed with the Commission not later than 21 calendar days before the offering statement is qualified?
85. Is the legend or disclaimer required to be included in the solicitation materials under proposed Rule 254 appropriately tailored for the likely recipients of such materials in Regulation A offerings? Why or why not? Should solicitation materials used by the issuer and its intermediaries before the initial public filing of the offering statement be required to include specific information about the issuer or the offering similar to current rules? If so, what information should be required?
86. While not currently proposed, should we limit the use of testing the waters materials to communications with QIBs and institutional accredited investors in order to be consistent with the treatment of emerging growth companies under Title I of the JOBS Act? Would QIBs or institutional accredited investors be the likely target audience for issuers testing the waters in reliance on Regulation A? Why or why not? As proposed, should issuers and intermediaries that use testing the waters materials after publicly filing an offering statement be required to update and redistribute—through any electronic or print media or television or
87. Should we make the submission or filing of solicitation materials a condition to the Regulation A exemption, such that an issuer that fails to submit such materials as part of an offering statement submitted for non-public review, or to file such materials as part of a filed offering statement, loses its ability to rely on the exemption? If so, should we provide for a cure period for inadvertent failures to submit or file solicitation materials as an exhibit to an offering statement?
Currently, Regulation A requires issuers to file a Form 2-A with the Commission every six months after qualification to report sales under Regulation A, with a final filing due within 30 calendar days after the termination, completion, or final sale of securities in the offering.
Most commenters agree that the Commission should require some form of ongoing reporting in revised Regulation A, but differ on the degree and frequency of such reporting.
The sole advance comment received on how and when to permit terminating ongoing reports suggested that the Commission permit automatic termination (or suspension) of ongoing reporting obligations in a fashion similar to that permitted under Section 15(d) of the Exchange Act.
We are mindful that an ongoing reporting regime that is suitable for one type of entity and its investor base may prove too onerous for another entity or provide its investors with more or more frequent information than they necessarily need or seek, resulting in undue costs to the issuer. In the discussion and proposals that follow, we have endeavored to address the potential added costs and benefits associated with the provision of ongoing information about issuers of Regulation A securities to investors in such securities and any market that develops as a result.
As noted above, Regulation A currently requires issuers to file a Form 2-A with the Commission to report sales and the termination of sales made under Regulation A every six months after qualification and within 30 calendar days after the termination, completion, or final sale of securities in
As proposed, issuers in Tier 2 offerings would be subject to a Regulation A ongoing reporting regime that would, in addition to filing summary information on a recently completed offering and annual reports on proposed new Form 1-K, require issuers to file semiannual updates on proposed new Form 1-SA, current event reporting on proposed new Form 1-U, and to provide notice to the Commission of the suspension of their ongoing reporting obligations on Part II of proposed new Form 1-Z. All of these reports would be filed electronically on EDGAR.
We are concerned that uniform ongoing reporting requirements for all issuers of Regulation A securities could disproportionately affect issuers in smaller offerings.
We believe the proposed approach to ongoing reporting should support a regular flow of information about issuers conducting Tier 2 offerings, which would benefit investors and foster the development of a market in such securities, without imposing unnecessary costs on issuers that elect to conduct a Tier 1 offering. We believe our proposal strikes an appropriate balance between the investor protections associated with the provision of ongoing information about an existing or contemplated investment to potential investors and our goal of facilitating capital formation for smaller companies by not requiring too heavy a reporting obligation.
The following are the proposed ongoing reporting requirements for Tier 2 offerings:
Proposed new Form 1-K would be comprised of two parts: Part I (Notification) and Part II (Information to be included in the report).
As with Part I of Form 1-A,
The portion of the fillable form relating to a completed Regulation A offering would appear when the issuer indicates in Part I that the offering has terminated or been completed. Issuers would only be required to fill out the XML-based portion of Part I that relates to the summary information on a terminated or completed offering once. Alternatively, an issuer that elects to terminate its ongoing reporting obligation under Regulation A after terminating or completing an offering, in a fiscal year other than the fiscal year in which the offering statement was qualified, but before reporting the required summary information on Form 1-K,
The summary information disclosed would facilitate analysis of Regulation A offerings by the Commission, other regulators, third-party data providers, and market participants, while facilitating the capture of important summary information about an offering that would enable the Commission to monitor the use and effectiveness of Regulation A as a capital formation tool.
As with Part II of Form 1-A, Part II of Form 1-K would be submitted electronically by the issuer as a text file attachment containing the body of the disclosure document and financial statements, formatted in HTML or ASCII to be compatible with the EDGAR filing system. Part II would contain information about the issuer and its business based on the financial statement and narrative disclosure requirements of Form 1-A. Form 1-K would further permit issuers to incorporate by reference certain information previously filed on EDGAR, but require issuers to include a hyperlink to such material on EDGAR.
• Business operations of the issuer for the prior three fiscal years (or, if in existence for less than three years, since inception);
• Transactions with related persons, promoters, and certain control persons;
• Beneficial ownership of voting securities by executive officers, directors, and 10% owners;
• Identities of directors, executive officers, and significant employees, with a description of their business experience and involvement in certain legal proceedings;
• Executive compensation data for the most recent fiscal year for the three highest paid officers or directors;
• MD&A of the issuer's liquidity, capital resources, and results of operations covering the two most recently completed fiscal years;
• Two years of audited financial statements.
We propose that Form 1-K includes financial statements prepared on the same basis, and subject to the same requirements as to audit standards and auditor independence, as the financial statements required in the Regulation A offering circular for Tier 2 offerings.
We are proposing semiannual interim reporting for Regulation A issuers. We believe this would strike an appropriate balance between the need to provide information to the market and the cost of compliance for smaller issuers. Issuers would be required to provide semiannual updates on proposed Form 1-SA that, much like Form 10-Q, would consist primarily of financial statements and MD&A.
We propose to require that Form 1-SA be filed within 90 calendar days after the end of the issuer's second fiscal quarter. A manually-signed copy of the Form 1-SA would have to be executed by the issuer and related signatories before or at the time of filing and retained by the issuer for a period of five years.
In addition to the annual report on Form 1-K and semiannual report on Form 1-SA, we further propose to require issuers to submit current reports on Form 1-U. Issuers would be required to submit such reports in the following events:
• Fundamental changes in the nature of business;
• Bankruptcy or receivership;
• Material modification to the rights of securityholders;
• Changes in the issuer's certifying accountant;
• Non-reliance on previous financial statements or a related audit report or completed interim review;
• Changes in control of the issuer;
• Departure of the principal executive officer, principal financial officer, or principal accounting officer; and
• Unregistered sales of 5% or more of outstanding equity securities.
While not currently a requirement of Regulation A, we propose to require issuers conducting Tier 2 offerings to provide special financial reports analogous to those required under Exchange Act Rule 15d-2.
Where in connection with a succession by merger, consolidation, exchange of securities, acquisition of assets or otherwise, securities of an issuer that is not subject to the reporting requirements of Regulation A, as proposed to be amended, are issued to the holders of any class of securities of an issuer that is subject to ongoing reporting under Tier 2, we propose to require the issuer succeeding to that class of securities to continue filing reports required for Tier 2 offerings on the same basis as would have been required of the original issuer. The successor issuer may, however, suspend or terminate its reporting obligations on the same basis as the original issuer under proposed Rule 257(d).
88. Would the proposed requirement that issuers conducting Tier 2 offerings file annual, semiannual, and current reports provide a meaningful benefit for investors by helping to foster a transparent market for securities issued under Regulation A? Should this requirement apply to all issuers of securities under Regulation A, regardless of whether the issuer is conducting a Tier 1 or Tier 2 offering? Alternatively, should we not impose ongoing reporting requirements beyond the statutory mandate of annual audited financial statements? Or should we require only annual reporting of the type of information required by proposed Form 1-K, without interim periodic reporting or current updates? Should we require only annual reporting and current updates? If we require interim periodic reporting, should it be quarterly instead of the proposed semiannual reporting requirement? Should quarterly or semiannual financial statements be required to be reviewed by an independent auditor?
89. While not currently proposed, should we exempt issuers conducting Tier 1 offerings from the requirement to report certain summary information about the issuer and the offering after termination or completion of the offering? Alternatively, should issuers conducting Tier 1 offerings be required to report on a more frequent basis than currently proposed? Why or why not?
90. If we exempt some issuers from ongoing reporting, should we do so on the basis of criteria other than offering size, such as issuer size or whether the issuer has taken steps to foster a secondary market for their securities? Why or why not?
91. Should the rules require issuers that conduct a Tier 2 offering to file their annual report on new Form 1-K within 120 calendar days of the fiscal year end, and their semiannual report on new Form 1-SA with 90 calendar days of the end of the second fiscal quarter, as proposed? Or should we require such issuers to file reports on a different timetable? For example, should the timetable be the same as for non-accelerated filers under the Exchange Act, who are required to file annual reports within 90 calendar days of the fiscal year end and interim periodic reports within 45 calendar days of the end of a fiscal quarter? What effect, if any, would altering the proposed filing deadlines for annual and semiannual reporting have on the costs to issuers of preparing such reports? Please provide supporting data, if possible.
92. As proposed, does the new Form 1-K provide for the disclosure of adequate information about the issuer on an annual basis? Similarly, does the new Form 1-SA provide for the disclosure of adequate information about the issuer on a semiannual basis? Or should the form(s) require more (or less) disclosure? If so, what additional disclosure should the form(s) require, or what items of proposed disclosure should not be required? Please explain.
93. Should we require current updates, as proposed on new Form 1-U? If not, please explain why. If we require current reporting, should we include more, fewer, or different triggering events for current reporting than are currently proposed? Should the requirement to provide current reporting apply to all Regulation A issuers? Is there an appropriate segment of Regulation A issuers, other than as proposed, for which current reporting
94. Does the proposed requirement that issuers disclose material transactions that would result in, or would reasonably be expected to result in, fundamental changes to the issuer's business or corporate events on new Form 1-U provide enough guidance to issuers? If not, should we provide more guidance as to what constitutes a material transaction or corporate event? If so, please provide suggestions.
95. As proposed, should we permit issuers to incorporate by reference certain information into the Form 1-K, Form 1-SA and Form 1-U that was previously filed on EDGAR under Regulation A, while also requiring issuers to include a hyperlink to such exhibit on EDGAR? Why or why not? Should we permit issuers to incorporate by reference information from other documents, such as Exchange Act reports or Securities Act registration statements?
96. As proposed, should we require special financial reporting similar to that which is required for a registered offering under Exchange Act Rule 15d-2? As proposed, should the rules require audited financial statements for the issuer's last completed fiscal year to be filed 120 calendar days after qualification of the offering statement if the offering statement did not include such financial statements or, alternatively, require semiannual financial statements for the first six months of the issuer's fiscal year to be filed 90 calendar days after qualification of the offering statement if the offering statement did not include such financial statements and the issuer's first required periodic report would be a Form 1-SA? Why or why not?
97. As proposed, should issuers that succeed to a class of securities, in connection with a succession by merger, consolidation, exchange of securities, acquisition of assets or otherwise, that are currently subject to a Tier 2 ongoing reporting obligation, as proposed to be amended, be required to continue filing reports on the same basis as would have been required of the original issuer? Why or why not? Please explain.
98. Would the proposed ongoing reporting requirements and termination provisions of Regulation A induce companies to migrate to the Regulation A capital raising and reporting regime, such that we may see a decline in smaller reporting companies subject to full Exchange Act reporting?
Exchange Act Rule 15c2-11 governs broker-dealers' publication of quotations for securities in a quotation medium other than a national securities exchange.
A broker-dealer can, however, satisfy its obligations under Rule 15c2-11 if it has reviewed and maintained in its records certain specified information. The particular information that is required by the rule varies depending on the nature of the issuer, including, among other things:
• For an issuer that has filed a registration statement under the Securities Act, a copy of the prospectus;
• for an issuer that has filed an offering statement under the Securities Act pursuant to Regulation A, a copy of the offering circular; or
• for an issuer subject to ongoing reporting under Sections 13 or 15(d) of the Exchange Act, the issuer's most recent annual report and any quarterly or current reports filed thereafter.
We believe that the proposed ongoing reports for Tier 2 offerings under Regulation A, which would update the narrative and financial statement disclosures previously provided in Form 1-A on an annual and semi-annual basis, with additional provisions for current reporting, should also satisfy a broker-dealer's obligations under Rule 15c2-11 to review and maintain records of basic information about an issuer and its securities. We propose to amend Rule 15c2-11 to permit an issuer's ongoing reports filed in a Tier 2 offering under Regulation A to satisfy a broker-dealer's obligations to review specified information about an issuer and its security before publishing a quotation for a security (or submitting a quotation for publication) in a quotation medium.
We are also soliciting comment on other potential effects that Tier 2 ongoing reporting under Regulation A could have under other provisions of the federal securities laws. For example, it may be appropriate for timely ongoing Regulation A reporting under Tier 2 to constitute “adequate current public information” for purposes of paragraph (c) of Rule 144.
• The exact name of the issuer and any predecessor;
• The address of its principal executive offices;
• The state of incorporation, if it is a corporation;
• The exact title and class of the security;
• The par or stated value of the security;
• The number of shares or total amount of the securities outstanding as of the end of the issuer's most recent fiscal year;
• The name and address of the transfer agent;
• The nature of the issuer's business;
• The nature of products or services offered;
• The nature and extent of the issuer's facilities;
• The name of the chief executive officer and members of the board of directors;
• The issuer's most recent balance sheet and profit and loss and retained earnings statements;
• Similar financial information for such part of the two preceding fiscal years as the issuer or its predecessor has been in existence;
• Whether the broker or dealer initiating or resuming quotation or any associated person is affiliated, directly or indirectly with the issuer; and
• Whether the quotation is being submitted or published directly or indirectly on behalf of the issuer, or any director, officer or any person, directly or indirectly the beneficial owner of more than 10 percent of the outstanding units or shares of any equity security of the issuer, and, if so, the name of such person, and the basis for any exemption under the federal securities laws for any sales of such securities on behalf of such person.
We are also soliciting comment on whether ongoing Regulation A reporting for Tier 2 offerings should satisfy the information requirements of paragraph (d)(4) of Rule 144A.
99. In a Tier 2 offering, should the review of an issuer's most recent annual report and any semiannual or current reports filed under Regulation A, as contemplated in this proposal, satisfy a broker-dealer's obligation to review company information in order to quote a security in the over-the-counter market pursuant to Exchange Act Rule 15c2-11? Why or why not? Should the annual or other forms require additional information in order for a broker-dealer to be able to rely on such information for purposes of quotations under Rule 15c2-11?
100. Should ongoing Regulation A reports in Tier 2 offerings be deemed to provide “adequate current public information” about the issuer for purposes of paragraph (c) of Rule 144? Why or why not? What impact would broadening Rule 144 in this way have on affiliate resales of securities of Regulation A issuers? What impact would broadening Rule 144 in this way have on investors?
101. Should ongoing Regulation A reports in Tier 2 offerings satisfy the informational requirements of paragraph (d)(4) of Rule 144A? Why or why not? Are investors or Regulation A issuers likely to benefit?
Under Section 15(d) of the Exchange Act, an issuer that has had a Securities Act registration statement declared effective must comply with the periodic reporting requirements of the Exchange Act.
An issuer registering a class of securities under Section 12 of the Exchange Act must file either a Form 10
Issuers conducting offerings under Regulation A that seek to list the securities on a national securities exchange or otherwise enter the Exchange Act registration system would be required to file Form 10 in order to do so. We solicit comment, however, on whether we should provide a simplified means for Regulation A issuers to register a class of securities under the Exchange Act by, for example, permitting such issuers to file a Form 8-A rather than a Form 10 in conjunction with, or following, the qualification of a Regulation A offering statement on Form 1-A, as some commenters have suggested.
We also invite comment on ways to facilitate secondary market trading in the securities of Regulation A issuers, such as by encouraging the development of “venture exchanges” or other trading venues that are focused on attracting such issuers. The Commission's Advisory Committee on Small and Emerging Companies, for example, has recommended the establishment of separate U.S. equity markets for small and emerging companies, which it believes could encourage initial public offerings of the securities of these companies.
102. While not currently proposed, should we permit issuers to register under the Exchange Act classes of securities that are qualified under Regulation A by allowing them to file a Form 8-A rather than a Form 10? Why or why not? Would providing a short form registration encourage more Regulation A issuers to list their securities on national securities exchanges? Conversely, would permitting eligible issuers to use their Regulation A offering statement in conjunction with a Form 8-A reduce the likelihood that such issuers would use the Securities Act registration process, including the “IPO on-ramp” provisions of Title I of the JOBS Act? Would it serve the intended purpose of Regulation A to make such an accommodation?
103. The disclosure and financial statement requirements of Regulation A, currently and as proposed to be amended, require fewer items of disclosure or less detailed information than Securities Act registrants are required to provide. Would it cause confusion in the market or otherwise create risks for investors if issuers could transition from Regulation A disclosure in Form 1-A to Exchange Act registration without filing Form 10 or providing all the information otherwise called for by Form 10 or Form S-1? Alternatively, while not currently proposed, should simplified Exchange Act registration be available only for issuers that prepare an offering circular based on Part I of Form S-1?
104. What effect, if any, would the ongoing reporting obligations of Section 13 of the Exchange Act have on an issuer considering the potential use of Form 8-A in conjunction with a Regulation A offering as the means by which to become an Exchange Act reporting issuer? Would ongoing reporting under Section 13 of the Exchange Act be an attractive alternative for Regulation A issuers? Or some subset of Regulation A issuers? Please explain.
105. While not currently proposed, should we make Form 8-A available in connection with issuers that are subject to ongoing reporting requirements under Regulation A? Why or why not? Do the proposed ongoing reporting requirements in Regulation A, in addition to the requirement to meet the listing standards of, and be certified by, a national securities exchange provide an adequate justification for the extension of the Form 8-A accommodation to issuers subject to such an obligation?
106. Would encouraging the development of “venture exchanges” or other trading venues that are focused on attracting such issuers facilitate secondary market trading in the securities of Regulation A issuers? If so, how? How could the Commission adjust the regulatory regime to provide for a more viable secondary market for small issuers, with sufficient participation by liquidity providers, that maintains investor protections and fair and orderly markets?
As discussed in Section II.E.1. above, we propose to rescind Form 2-A, but to continue to require Regulation A issuers to file the information generally disclosed in Form 2-A with the Commission electronically on EDGAR. Consistent with the related portion of proposed new Form 1-K,
The XML-based fillable form would enable issuers to provide information in a convenient medium and capture relevant data about the recently terminated or completed Regulation A offering. As with the related portions of Form 1-K discussed above, the fillable form would be available online and not require issuers to obtain specialty software. The summary information disclosed would, however, facilitate analysis of Regulation A offerings by the Commission, other regulators, third-party data providers, and market participants. Additionally, facilitating the capture of important summary information about an offering would enable the Commission to monitor the use and effectiveness of Regulation A as a capital formation tool.
As noted above in the related proposals for Form 1-K, the summary information collected in Form 1-Z would include the date the offering was qualified and commenced, the number of securities qualified, the number of securities sold in the offering, the price of the securities, any fees associated with the offering, and the net proceeds to the issuer.
In light of the proposed ongoing reporting obligations for Tier 2 offerings, we are proposing to permit issuers that conduct a Tier 2 offering to terminate or suspend their ongoing reporting obligations on a basis similar to the provisions that allow issuers to suspend their ongoing reporting obligations under Section 13 and Section 15(d) of the Exchange Act.
We further propose that issuers' obligations to file ongoing reports in a Tier 2 offering under Regulation A would be automatically suspended upon registration of a class of securities under Section 12 of the Exchange Act or registration of an offering of securities under the Securities Act, such that Exchange Act reporting obligations would always supersede ongoing reporting obligations under Regulation A. If an issuer terminates or suspends its reporting obligations under the Exchange Act and the issuer would be eligible to suspend its Regulation A reporting obligation by filing a Form 1-Z at that time, the ongoing reporting obligations would terminate automatically and no Form 1-Z filing would be required to terminate the issuer's Regulation A reporting obligation. If the issuer would not be eligible to file a Form 1-Z at that time, it would need to recommence its Regulation A reporting with the report covering any financial period not completely covered by a registration statement or Exchange Act report.
107. As currently proposed, should we modify the current requirement in Regulation A that issuers file a Form 2-A to report sales and the termination of sales made under Regulation A to instead require issuers conducting Tier 1 offerings to report such information only after the termination or completion of the offering on Part I of proposed new Form 1-Z and issuers in Tier 2 offerings to report such information on either Part I of Form 1-Z or proposed new Form 1-K? Why or why not?
108. Is there any additional information about an issuer's recently completed or terminated Regulation A offering that should be required to be disclosed? Alternatively, should we not require any disclosure of summary information about an issuer's recently completed Regulation A offering? Why or why not?
109. Should we permit issuers to suspend their reporting obligations in a Tier 2 offering under Regulation A, as proposed, when they take on Exchange Act reporting obligations? Should we otherwise alter the proposed provisions regarding the suspension or termination of an issuer's ongoing reporting obligations in Tier 2 offering? Should issuers in Tier 2 offerings be able to suspend or terminate ongoing reporting under Regulation A on some other basis? For example, should we permit issuers to terminate their ongoing reporting obligations immediately upon completion of the offering, provided, at that time, they have less than 300 holders of record? Why or why not? Should we require a Form 1-Z filing for issuers that would be eligible to immediately file that form upon the suspension or termination of their Exchange Act reporting obligations?
110. Should we alter the number of record holders below which an issuer in a Tier 2 offering can suspend or terminate its ongoing reporting obligations from the proposed 300 record holders? Or should we alter the threshold below which certain types of issuers that are subject to a Tier 2 ongoing reporting obligation would be able to suspend or terminate reporting (
Currently, Rule 260 provides that certain insignificant deviations from a term, condition or requirement of Regulation A will not result in the issuer's loss of the exemption from registration under Section 5 of the Securities Act.
111. Should we amend Rule 260 to alter the list of deviations that would be deemed significant to the offering as a whole? Why or why not? If so, which provision(s) should be amended? Alternatively, are there other provisions within Rule 260 that should be amended? If so, please state which provisions and describe why they should be amended.
Under Securities Act Section 3(b)(2)(G)(ii), the Commission has discretion to issue rules disqualifying certain “felons and other `bad actors' ” from using the new exemption. Such rules, if adopted, must be “substantially similar” to those adopted to implement Section 926 of the Dodd-Frank Act, which requires the Commission to adopt disqualification rules for securities offerings under Rule 506 of Regulation D. The Commission adopted the disqualification provisions required by Section 926 in Rule 506(d), and a
All commenters on potential “bad actor” disqualification provisions in the context of Title IV of the JOBS Act suggest that the Commission apply the same standards for bad actor disqualification under Regulation A as under Rule 506.
Regulation A currently provides for the disqualification of “bad actors” in Rule 262.
Under the proposed amendment, the disqualification provisions would apply to the following categories of persons (“covered persons”):
• The issuer and any predecessor of the issuer or affiliated issuer;
• any director, executive officer, or other officer participating in the offering, general partner, or managing member of the issuer;
• any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power;
• any promoter connected with the issuer in any capacity at the time of filing of the offering statement or any offers or sales after qualification;
• any underwriter or person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with sales of securities in the offering;
• any general partner or managing member of any such solicitor; and
• any director, executive officer or other officer participating in the offering of any such underwriter or solicitor or of a general partner or managing member of any such underwriter or compensated solicitor.
An offering would be disqualified from reliance on the Regulation A exemption if any covered person had been the subject of the following disqualifying events:
• Criminal convictions (felony or misdemeanor) entered within five years before the filing of the offering statement in the case of issuers, their predecessors and affiliated issuers, and ten years in the case of other covered persons:
• In connection with the purchase or sale of any security;
• involving the making of a false filing with the Commission; or
• arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, or paid solicitor of purchasers of securities;
• Court injunctions and restraining orders, including any order, judgment, or decree of any court of competent jurisdiction, entered no more than five years before the filing of the offering statement, that, at the time of such filing, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:
• In connection with the purchase or sale of any security;
• involving the making of a false filing with the Commission; or
• arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, or paid solicitor of purchasers of securities;
• Final orders issued by state securities, banking, credit union, and insurance regulators, federal banking regulators, the U.S. Commodity Futures Trading Commission, and the National Credit Union Administration that at the time of filing of the offering statement either:
• Bar the covered person from association with any entity regulated by the regulator issuing the order, or from engaging in the business of securities, insurance or banking, or from savings association or credit union activities; or
• are based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the last ten years;
• Commission disciplinary orders entered pursuant to Section 15(b) or 15(B)(c) of the Exchange Act or Section 203(e) or (f) of the Investment Advisers Act of 1940 (the “Advisers Act”) that, at the time of filing of the offering statement:
• Suspend or revoke a person's registration as a broker, dealer, municipal securities dealer, or investment adviser;
• place limitations on the activities, functions, or operations of such person; or
• bar such person from being associated with any entity or from participating in the offering of any penny stock;
• Commission cease and desist orders entered no more than five years before the filing of the offering statement that, at the time of such filing, order the person to cease and desist from committing or causing a violation or future violation of any scienter-based anti-fraud provision of the federal securities laws or Section 5 of the Securities Act;
• Suspension or expulsion from membership in, or suspension or a bar from association with a member of, an SRO,
• Stop orders applicable to a registration statement and orders suspending the Regulation A exemption for an offering statement that an issuer filed or in which the person was named as an underwriter no more than five years before the filing of the offering statement, and proceedings pending at the time of such filing as to whether such a stop or suspension order should be issued;
• U.S. Postal Service false representation orders including temporary or preliminary orders entered no more than five years before the filing of the offering statement.
The proposed triggering events are substantially the same as the triggering events included in Rule 506(d).
We further propose a reasonable care exception under Regulation A on a basis consistent with Rule 506.
Proposed Rule 262 is very similar in substance to existing Rule 262, although the format is different. In its current form, Rule 262 provides three different categories of offering participants and related persons, with different disqualification triggers for each category. The amendments we propose are based on a simplified framework of potentially disqualified persons and disqualifying events, which aligns with Rule 506(d). The covered persons are the same as under current Rule 262, except that the proposal includes references to managing members of limited liability companies and, like Rule 506(d), would cover compensated solicitors of investors in addition to underwriters; executive officers and other officers participating in the offering, rather than all officers, of the issuer and any underwriter or compensated solicitor; and beneficial owners of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power, rather than beneficial owners of 10% of any class of the issuer's equity securities. The proposals would also add two new disqualification triggers: proposed Rule 262(a)(3), which covers final orders and bars of certain state and other federal regulators, and proposed Rule 262(a)(5), which covers Commission cease-and-desist orders relating to violations of scienter-based anti-fraud provisions of the federal securities laws or Section 5 of the Securities Act. Finally, the proposals include a “reasonable care” exception modeled on the Rule 506(d) provision. We believe these changes to Rule 262 are appropriate in light of the Section 3(b)(2)(G)(ii) mandate and the benefits of creating a more uniform set of standards for all exemptions that include bad actor disqualification.
Under the proposal, offerings that would have been disqualified from reliance on Regulation A under Rule 262 as currently in effect would continue to be disqualified. Triggering events that are not currently covered by Rule 262—namely, the events specified in proposed Rule 262(a)(3) and 262(a)(5)—and that pre-date effectiveness of any rule amendments would not cause disqualification, but would be required to be disclosed on a basis consistent with new Rule 506(e). Specifically, issuers would be required to indicate in Part I of Form 1-A that disclosure of triggering events that would have triggered disqualification, but occurred before the effective date of the Regulation A amendments, will be provided in Part II of Form 1-A.
In addition to soliciting comment on the proposed amendments to Rule 262, we are also soliciting comment more broadly on the interpretation of the phrase “voting equity securities,” as it appears in “any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power,” a category of covered persons in Rule 506(d) and proposed Rule 201(r)(2) of Regulation Crowdfunding, as well as in Rule 262, as proposed to be amended. When we adopted Rule 506(d), we did not define “voting equity securities,” but rather indicated that our initial intention would be to consider securities as voting equity securities if “securityholders have or share the ability, either currently or on a contingent basis, to control or significantly influence the management and policies of the issuer through the exercise of a voting right.”
112. Should we amend Rule 262, as proposed, to align with Rule 506(d)? Are there proposed amendments to the covered persons or disqualification triggering events of Rule 262 that we should not make? Why not? Are there other amendments consistent with the statutory mandate of Section 3(b)(2)(G)(ii) that we should consider?
113. How should the phrase “voting equity securities” as it appears in “any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power” in Rule 506(d), proposed Rule 201(r)(2) of Regulation Crowdfunding, and Rule 262 as proposed to be amended, be interpreted? Should we interpret it consistently with the definition of “voting securities” in Rule 405, as equity securities “the holders of which are presently entitled to vote for the election of directors”? Are there factors other than the current ability to vote for directors (or their equivalents) that should be taken into account?
Commenters have suggested that the cost of state securities law compliance, which they identify as an obstacle to the use of existing Regulation A, would discourage market participants from using the new exemption. In addition, as discussed previously, Section 402 of the JOBS Act required the Comptroller General to conduct a study on the impact of state “blue sky” laws on
NASAA recently proposed a coordinated review process for Regulation A offerings, which, if implemented, could potentially reduce the state law disclosure and compliance obligations of Regulation A issuers.
In the absence of any such coordinated review, issuers would be required to analyze and comply with separate registration or qualification requirements, or to identify and comply with applicable exemptions, in each state in which they intend to offer or sell securities under revised Regulation A, as is currently the case under Regulation A. Depending on the nature of any such coordinated review process, state securities laws could impose additional requirements and limitations on offerings beyond those imposed by Regulation A, either currently or as proposed to be amended.
As a result, most commenters strongly supported some form of state securities law preemption.
Some commenters suggested that the Commission preempt state securities laws by permitting Section 3(b)(2) securities to be listed and traded on a national securities exchange,
Commenters advocating listing and trading of Section 3(b)(2) securities on a national securities exchange have suggested we permit such listing without attendant registration of the securities under Section 12(b) of the Exchange Act
From those commenters advocating preemption through a qualified purchaser definition, suggested definitions included:
• Any purchaser in a Regulation A offering;
• Any purchaser meeting a specified net worth standard, set at or lower than the current “accredited investor” definition in Rule 501 of Regulation D;
• Any purchaser meeting a net worth or income test based on thresholds below accredited investor thresholds, combined with an investment cap;
• Any purchaser who purchased through a registered broker-dealer.
One commenter stated that it did not object to the Commission's defining “qualified purchaser” for Section 3(b)(2) securities, but objected to a definition based on transactions effected through a broker-dealer or on purchaser criteria commensurate with or less stringent than current “accredited investor” thresholds.
In light of the issues raised by commenters and in the GAO study, we are concerned that the costs associated with state securities law compliance may deter issuers from using Regulation A, even if the increased cap on offering size and other proposals intended to make Regulation A more workable are implemented. This could significantly limit the possible impact of an amended Regulation A as a tool for capital formation. We believe that the addition of Section 18(b)(4)(D)(ii) of the Securities Act, which specifically refers to a “qualified purchaser” definition that would apply to transactions under the new 3(b)(2) exemption, suggests that it is appropriate for us to consider including such a definition in our rulemaking to implement Title IV of the JOBS Act.
We also believe that Regulation A, as we propose to amend it, would provide substantial protections to purchasers. Under the proposed amendments, a Regulation A offering statement would continue to provide substantive narrative and financial disclosures about the issuer, including an MD&A discussion. The proposed electronic filing requirement, including the structured data in Part I of the offering circular, would provide ready access to key information about the issuer and the offering, and would facilitate analysis of the offering in relation to comparable opportunities. We expect that Regulation A offering statements would continue to receive the same level of Commission staff review as registration statements. Additional investor protections would be afforded by Regulation A's limitations on eligible issuers and “bad actor” disqualification provisions, which we are proposing to expand.
The requirements for Tier 2 offerings would provide further protection, because the financial statements contained in the offering circular would be required to be audited, the issuer would have an obligation to provide ongoing reporting to purchasers, and such purchasers would be limited in the percentage of income or net worth that could be invested in a single offering. Ongoing reporting would assure a continuing flow of information to investors and could support the development of secondary markets for Regulation A securities, offering the prospect of reduced investor risk through liquidity.
The approach to investor protection for Tier 2 of Regulation A is in some ways similar to the approach taken under Title III of the JOBS Act and our recently proposed rules for securities-based crowdfunding transactions under Section 4(a)(6) of the Securities Act.
Like the proposed provisions for securities-based crowdfunding, Regulation A—both as currently in effect and as proposed to be amended—is available to all types of investors, and therefore we believe it should include certain appropriate investor protections. We believe that the substantial investor protections embedded in the issuer eligibility conditions, limitations on investment, disclosure requirements, qualification process and ongoing reporting requirements of proposed Tier 2 of Regulation A, in combination, could address potential concerns that may arise as a result of the preemption of state securities law registration and qualification requirements.
We therefore propose to define the term “qualified purchaser” for certain purposes under Regulation A. As proposed, “qualified purchasers” in a Regulation A offering would consist of:
(i) All offerees; and
(ii) All purchasers in a Tier 2 offering.
We believe it would be appropriate to preempt blue sky requirements with respect to all offerees in a Regulation A offering, in order to make Regulation A a workable approach to capital raising. Issuers relying on Regulation A should be able to communicate with potential investors about their offerings using the
Alternatively, we could import existing “qualified purchaser” definitions from other regulatory regimes. These other regimes may not, however, account for the regulatory protections and limited offering size of Regulation A, or the likelihood that issuers that target investors meeting these other standards could choose to rely on other Securities Act exemptions, such as Regulation D, rather than Regulation A. We could also consider the involvement of a regulated intermediary or advisor in a transaction as, or as part of, the basis for such a definition. Such intermediaries may, however, increase costs to issuers and investors without commensurate investor protection benefits. Finally, we could consider a broad definition such that any purchaser in any Regulation A offering would be treated as a “qualified purchaser.” Our preliminary view is that the investment limitations, enhanced disclosure and ongoing reporting obligations associated with Tier 2 would meaningfully bolster the protections otherwise embedded in Regulation A, and justify a difference in treatment to offerings conducted pursuant to Tier 1.
We believe the proposed “qualified purchaser” definition for Tier 2 offerings would help to make Regulation A a more workable means of capital formation. We are soliciting comment, however, on whether we should adopt such a definition or an alternative definition and, if so, what it should require. In particular, we are mindful that, if NASAA and its members are able to implement a coordinated review program for Regulation A offerings, the costs to issuers of state law registration and qualification requirements and the time required for qualification may be substantially lower in the future. We solicit comment below on whether, rather than adopting a definition of “qualified purchaser” for Regulation A as proposed, we should wait to determine whether such a coordinated review program can be finalized, adopted and successfully implemented and, if so, whether such a program would sufficiently address current concerns about the costs of blue sky compliance.
114. Should we preempt state securities law registration and qualification requirements for certain Regulation A offerings by adopting a definition of “qualified purchaser,” as proposed? Why or why not? Please explain. In responding to this question and the questions below, please address both the practical implications of preemption for capital formation and the impact on investor protection.
115. Is there any potential alternative approach by which we might address the concern raised by commenters and the GAO that state securities regulation poses a significant impediment to the use of Regulation A?
116. Does proposed Tier 2 of Regulation A include sufficient investor protections to justify the preemption of state securities law registration and qualification requirements for offerings sold to “qualified purchasers,” defined as proposed or otherwise? If not, are there additional investor protections that would justify such preemption? What are they?
117. As proposed, should we adopt a “qualified purchaser” definition for purposes of Regulation A to include all offerees and all purchasers in a Tier 2 offering? Is it appropriate, as proposed, to treat all offerees as qualified purchasers? Is it appropriate to treat all purchasers in a Tier 2 offering as qualified purchasers, or should we impose additional limitations (based on, for example, an income threshold, a net worth threshold and/or an investment assets threshold)? Should we base the definition of “qualified purchasers” on the Investment Company Act definition of that term, or on the definition of “qualified client” under the Investment Advisers Act? Alternatively, should we define all accredited investors as qualified purchasers, as has been previously proposed?
118. Are there other approaches we should consider to defining “qualified purchaser” for Regulation A offerings? For example, should we define “qualified purchaser” as any offeree or purchaser in a Regulation A offering by an issuer that meets certain criteria—for example, specified financial criteria or operating or other criteria indicative of reduced risk? Or should we define it based on attributes of the offering that may reduce risk to investors (
119. Should we consider defining “qualified purchaser” unconditionally, as all offerees and all purchasers in any Regulation A offering? Would such a definition better address potential burdens to capital formation under Regulation A? If so, how? Would such a definition provide sufficient investor protections to support the preemption of state securities law registration and qualification requirements? If not, what would support unconditional preemption of state securities laws? Please explain.
120. In addition to providing blue sky preemption for Tier 2 offerings, should we also consider providing preemption for some or all resales of Regulation A securities? Would the need to comply with blue sky laws prevent the development of a liquid secondary market for Regulation A securities?
121. Would the preemption of state securities law registration and
As noted above, in developing the proposals, we have attempted to create a workable exemption that both promotes small company capital formation and provides for meaningful investor protections. In that context, we are mindful that issuers have a range of possible approaches to capital-raising, including Securities Act registration and other exemptions from registration, such as the statutory exemption under Section 4(a)(2) of the Securities Act, Rules 504, 505 and 506 under Regulation D
122. How does Regulation A, as proposed to be amended, compare—in terms of the type of companies that may use the exemption, its requirements, and its potential effectiveness—to other methods of capital raising that issuers may choose for small offerings? How would it compare to the proposed crowdfunding exemption? Either by reference to today's proposals or more generally, are there ways in which Regulation A could be amended that would make it a more usable exemption?
As noted above, in recent years, Regulation A offerings have been rare. Commenters
Under our proposal, offerings for up to $5 million that are conducted under Tier 1 would benefit from the proposed updates to Regulation A's filing and qualification processes, but the proposed amendments would not otherwise substantially alter the existing exemption for such offerings.
123. As proposed, and as is currently the case for Regulation A, state law registration and qualification requirements would not be preempted for Tier 1 offerings. Issuers in offerings of up to $5 million could also elect to proceed under Tier 2, which would provide for preemption by complying with the additional requirements for Tier 2 (investment limitations, audited financial statements in the offering statement and ongoing reporting). Are there circumstances in which we should provide for preemption for Tier 1 offerings? If so, what are the circumstances? Should we consider including in Tier 1 certain elements of Tier 2, such as investment limitations, audited financial statements in the offering statement, or ongoing reporting, or some combination of these requirements in order to provide for preemption? Should we consider including requirements that draw on those for other approaches to capital-raising? If so, which requirements should we include and why? If we require ongoing reporting for issuers that have conducted Tier 1 offerings, should the substance or frequency of the requirements be different from the requirements proposed for Tier 2, such as requiring only an annual report consisting of annual financial statements and a cover sheet or only an annual report, or an annual report and current updates but no semiannual report?
124. Should we consider adding an intermediate tier for offerings exceeding $5 million but significantly less than the $50 million (
125. If an issuer undergoes a registration or qualification process that complies with the coordinated review protocol proposed and being developed by NASAA,
126. Should we provide for preemption in a Tier 1 offering or an offering conducted pursuant to the requirements for any potential intermediate tier if an issuer undergoes a registration or qualification process in
As noted above, Section 401 of the JOBS Act requires the Commission to review the $50 million offering limit not later than two years after enactment of the JOBS Act and every two years thereafter and, if the Commission decides not to increase the amount, requires that it report its reasoning to Congress.
127. As proposed to be amended, and consistent with Section 3(b)(2), should we limit offerings conducted in reliance on Regulation A in a twelve-month period to $50 million? Or should the Commission adopt an offering limit under Regulation A that is higher than $50 million in a twelve-month period?
We propose to amend existing Rules 251-263
In connection with these actions, we propose to revise Form 1-A,
We also propose to revise Rule 4a-1
As a result of the proposed revisions to Regulation A, conforming and technical amendments would be made to Rule 157(a),
We solicit comment, both specific and general, on each component of the proposals. We request and encourage any interested person to submit comments regarding:
• the proposals that are the subject of this release;
• additional or different revisions to Regulation A; and
• other matters that may have an effect on the proposals contained in this release.
Comment is solicited from the point of view of both issuers and investors, as well as of capital formation facilitators, such as broker-dealers, and other regulatory bodies, such as state securities regulators. Any interested person wishing to submit written comments on any aspect of the proposal is requested to do so. With regard to any comments, we note that such comments are of particular assistance to us if accompanied by supporting data and analysis of the issues addressed in those comments. We urge commenters to be as specific as possible.
As discussed above, Title IV of the JOBS Act requires the Commission to adopt rules under Section 3(b)(2) of the Securities Act exempting from Securities Act registration the offer and sale of securities that, in the aggregate, shall not exceed $50 million in a twelve-month period. Congress enacted Section 3(b)(2) against a background of public commentary suggesting that Regulation A, an existing exemption for offerings of up to $5 million in a twelve-month period adopted under Section 3(b)(1) of the Securities Act, should be expanded and updated to make it more useful to small companies.
We are mindful of the costs imposed by, and the benefits to be obtained from, our rules. Securities Act Section 2(b) and Exchange Act Section 3(f) require
The discussion below addresses the economic effects of the proposed rules, including the likely costs and benefits of the proposed rules, as well as the likely effect of the proposed rules on efficiency, competition and capital formation. The proposed rules include provisions mandated by the statute as well as provisions that rely on the Commission's discretionary authority. As a result, while many of the costs and benefits of the proposed rules stem from the statutory mandate of Title IV, certain costs and benefits are affected by the discretion we propose to exercise in connection with implementing this mandate. For purposes of this economic analysis, we address the costs and benefits resulting from the mandatory statutory provisions and our exercise of discretion together, because the two types of benefits and costs are not separable. We also analyze the potential costs and benefits of significant alternatives to what is proposed.
We request comment on all aspects of our economic analysis, including the potential costs and benefits of the proposed rules.
The baseline
While there are a number of factors that companies consider when determining how to raise capital, a key consideration is whether to issue securities through a registered public offering or through an offering that is exempt from Securities Act registration and ongoing Exchange Act financial reporting requirements. The choice of offering method may also depend on the size of the issuer and the amount of new capital sought. Registered offerings entail initial and ongoing fixed costs that can weigh more heavily on smaller companies, providing incentive to remain private and to pursue capital outside of public markets. As we describe throughout this economic analysis, the proposed amendments to Regulation A are intended to provide small issuers access to sources for capital unavailable through other offering exemptions without imposing the full registration and ongoing reporting requirements of a registered public offering. This section describes the various currently available offering methods and prevalence of their use.
Currently, small companies can raise capital by relying on an exemption from registration under the Securities Act, such as Section 3(a)(11),
While we do not have adequate data on offerings relying on an exemption under Section 3(a)(11) or Section 4(a)(2), certain data available related to Regulation D and Regulation A filings allow us to gauge how frequently issuers currently use these exemptions when raising capital.
Companies rarely rely on existing Regulation A when raising capital. The chart below, from the GAO study,
Based on information submitted in 1,001 Form 1-A filings between 1993 and 2012, there were 914 unique Regulation A issuers during this period. Of these, 439 offerings by 393 unique issuers were qualified by SEC staff. Examination of these filings shows that 80% of the offerings were for equity. Although issuers may include up to $1.5 million in secondary sales under existing regulations, more than 95% of Regulation A offerings included only primary shares. Analysis of industry composition indicates that many of the issuers operate in the financial industry (49%). In the year of the offering, the median financial industry issuer had assets and annual revenue of $29.3 million and $2.9 million respectively, while the median non-financial industry issuer had assets of $188,000 and annual revenue of $34,000.
Section 402 of the JOBS Act required the GAO to study the impact of blue sky laws on Regulation A offerings. The GAO examined (1) trends in Regulation A filings, (2) differences in state registration of Regulation A filings, and (3) factors that may have affected the number of Regulation A filings. In its July 2012 report on Regulation A, the GAO cited four central factors affecting the use of Regulation A offerings: (1) Costs associated with compliance with state securities regulations, or “blue sky laws”; (2) the availability of alternative offering methods exempt from registration, such as Regulation D offerings; (3) costs associated with the filing and qualification process with the SEC; and (4) the type of investors businesses sought to attract.
As identified by the GAO, compliance with state securities laws may currently affect the use of existing Regulation A. While state securities law filing fees are likely not significant in any particular state (filing fees are, on average, approximately $1000 in every state), such fees can become non-trivial when the offering extends across multiple states.
The GAO also identified costs associated with the filing and qualification process for Regulation A offerings as a potential reason for its current limited use. As described above, a business that relies on Regulation A must file an offering statement with the Commission that is subject to review by Commission staff and must be qualified before the offering can proceed. From 2002 through 2012, Regulation A filings took an average of 241 days to qualify.
Unlike other exemptions, existing Regulation A permits offerings to an unlimited number of unaccredited investors, provided that the total amount sold does not exceed $5 million in a twelve-month period. Further, securities sold under existing Regulation A have no restrictions on resale. As discussed below, Regulation A issuers currently have limited involvement in secondary markets.
Based on information available to us, it appears that the most common way to issue up to $50 million of securities is in reliance on a Regulation D offering exemption. Regulation D includes three rules providing exemptions from the registration requirements of the Securities Act. Specifically, as described in the table above, eligible issuers can rely on Rule 504 to raise up to $1 million within a twelve-month period, Rule 505 to raise up to $5 million within a twelve-month period, and Rule 506 to raise an unlimited amount. As the table notes, the three rules have different requirements that affect their use. In total, based on analysis of issuer offering details reported on Form D, Regulation D accounts for approximately $900 billion in annual capital raising.
During 2012, there were nearly 22,000 Regulation D offerings reported on Form D. Of these, approximately 12,000 would meet the conditions of Regulation A, as proposed to be amended, which excludes offerings by reporting companies, foreign issuers and investment companies, and offerings of interests in claims on natural resources. The following table reports the breakdown of Regulation D filings from 2012 for all issuers that would be eligible to use Regulation A, as proposed to be amended.
As shown
Most Regulation D issuers elect not to disclose their revenue range in their Form D filings. The following table shows the breakdown of the issuers potentially eligible to rely on Regulation A that did not disclose, and those that elected to disclose a revenue range for offerings made in 2012.
If issuers
Companies seeking to raise capital without being subject to the restrictions under exempt offerings can register the offer and sale of securities under the Securities Act.
The following figure shows the frequency of IPOs each year for companies issuing above or below $50 million.
One possible
Because of the fixed-cost nature of many of the fees associated with public offerings, size may be one of the most important determinates of whether an offering is made available to the public. As shown in the scatter plot below, there is a downward trend in IPO-related fees (excluding underwriter and printing costs and reported as a percentage of offering proceeds) as offering size increases.
For offerings below $50 million, the fixed cost components of legal and accounting-related fees, as a percentage of offering size, are particularly burdensome. In the table below, which reports the six fee types reported in Form S-1, offerings less than $50 million incur compliance related fees that are on average nearly twice those incurred by larger offerings, measured as a percentage of proceeds.
Additional statistical analysis
In addition to increased compliance costs, there are a number of other possible explanations for the decline in IPOs. For example, one benefit of a public listing is the increased liquidity that results from access to retail investors; however, catering to retail owners can involve investor relations challenges and liability-related costs.
Companies that have completed an IPO often continue to raise capital through follow-on offerings. In 2012, public follow-on offerings accounted for $155 billion, $4 billion of which came from offerings less than $50 million,
Companies with regular cash flows often rely on debt as a source of capital; however, borrowing may not be a cost effective option for many early-stage companies as they may face large information asymmetries with investors, irregular cash-flow projections, insufficient assets to offer as collateral, and high external monitoring costs.
As described above, various financing options are available to small companies looking to raise up to $50 million of capital. For many companies, access to liquid markets is an important consideration as they compare the merits of these options.
There are important differences in liquidity for securities issued in a registered offering or under Regulation D or Regulation A. Securities in registered offerings that meet listing requirements benefit from the liquidity of listing on a national securities exchange. Conversely, securities sold under Regulation D are relatively illiquid due to restrictions that prohibit resale in the public market for up to a year. Although securities issued under Regulation A are freely tradable, they typically trade in over-the-counter markets (if at all), as these issuers may not meet listing standards of a national securities exchange or be willing or able to bear the costs of ongoing reporting.
More generally, OTC-traded securities are significantly less liquid than those listed on a national securities exchange.
There is also evidence that illiquidity is especially expensive for companies that trade on OTC markets.
The various methods of raising up to $50 million in capital may attract different types of investors. For example, as discussed above, Regulation A and public offerings have no limit on the number of unaccredited investors that can participate. In contrast,
Data from Form D filings suggests that unaccredited investors are not significantly involved in Regulation D offerings of up to $50 million. While unaccredited investors can and do participate in Regulation D offerings, offerings involving unaccredited investors are typically smaller than those that do not involve unaccredited investors. In 2012, we estimate that there were approximately 220,000 investor participations in nearly 11,000 Regulation D offerings of below $50 million by issuers that would be eligible for exemption under Regulation A, as proposed to be amended.
As of 2010, 8.7 million U.S. households, or 7.4% of all U.S. households, qualified as accredited investors based on the net worth standard in the definition of “accredited investor,”
The impact of the proposed rules on the level and efficiency of capital formation will depend on the extent to which companies use the new offering method to raise capital that would not otherwise have been available to them. It will also depend on the extent to which companies elect to rely on Regulation A, as proposed to be amended, in place of existing offering methods. As discussed above, many companies finance their operations and investments with credit from banks and other financial entities.
The proposed amendments to Regulation A are intended to provide small issuers access to sources for capital unavailable through other offering exemptions without imposing the full registration and ongoing reporting requirements of a registered public offering. Hence, it is likely that companies seeking to raise capital through an offering conducted under Regulation A, as proposed to be amended, would have been able to access to capital through private offerings or registered public offerings. In this respect, the impact of the proposed Regulation A amendments on capital formation could be redistributive in nature, but with potentially significant positive effects on capital formation and allocative efficiency by providing the issuers less costly access to capital than alternative offering methods and by providing unaccredited (retail) investors with additional investment opportunities.
The potential future use of an amended Regulation A depends largely on the perceived trade-off between the costs of qualification and ongoing disclosure requirements and the potential benefits to issuers from access to a broad investor base and secondary market liquidity.
We preliminarily believe that an approach that generally preserves existing Regulation A while also introducing an option that allows issuers to raise greater amounts of capital without state review but with additional disclosure requirements is a prudent first step to adapting Regulation A for larger offerings. We believe this approach balances the trade-offs among compliance costs, investor protection, and benefits associated with liquidity and access to investors. We recognize, however, that this approach may limit the use of Regulation A for certain issuers, and we accordingly are requesting comment on additional considerations for smaller offerings. For example, the ongoing reporting obligations of a Tier 2 offering may be proportionately more burdensome for smaller issuers that are looking to raise substantially less than $50 million, and may not provide the same benefit to smaller issuers that are not pursuing secondary market liquidity. For these issuers, it may also not be reasonable to pursue a Tier 1 offering because the $5 million maximum issuance threshold may be insufficient in light of costs associated with the existing offering process. We recognize that observing market behavior under the proposed approach would provide information that would allow us to assess the need for modifications to the proposed
The disclosure requirements that we are proposing account for the trade-offs identified above and are guided by current and past market experiences. For example, prior to 1999, securities traded over-the-counter (OTC) and quoted on the OTC Bulletin Board (OTCBB) interdealer quotation system were not required to be Exchange Act reporting companies. In January 1999, the SEC approved an OTCBB eligibility rule that required companies whose securities are quoted on OTCBB to file periodic financial reports under the Exchange Act or with their primary regulator if not the SEC.
The Tier 2 reporting requirements are substantially less than Exchange Act reporting requirements, but greater than what is currently required for an exemption from registration under the existing Regulation A rules and those under Regulation D. The following table shows a selection of commonly filed reports for Exchange Act registered companies and the analogous form, if any, that would be required for securities issued under Regulation A, as proposed to be amended, or Regulation D.
Tier 2 reporting requirements are also greater than what is proposed to be required under Tier 1. We believe that it is appropriate to require
We recognize that even if the proposed rules reduce compliance costs and require sufficient disclosure to enable investors, particularly retail investors, to make informed capital allocation decisions, some issuers may still prefer other offering exemptions. Preferences for other offering exemptions could be particularly strong given that general solicitation is now permissible in certain cases under Rule 506(c). In particular, it is possible that issuers relying on Rule 506(c) may now be in a better position to identify institutional and accredited investors, such that seeking capital from a broader retail investor base is not required or desired. In addition, eliminating the ban on general solicitation for certain Rule 506 offerings may encourage new trading platforms for privately placed securities once their resale restrictions are lifted. While secondary markets for private offerings are unlikely to achieve the same level of liquidity of OTC or other listing venues, it is nonetheless possible that trading platforms could achieve levels of liquidity sufficient to allow certain types of securityholders (like founders and other affiliated owners) to exit once resale restrictions are lifted.
Under the proposed rules, and consistent with current Regulation A eligibility requirements, eligible issuers include any companies organized and with their principal place of business inside the United States or Canada excluding investment companies, reporting companies, blank check companies, and issuers of claims on natural resources, and certain disqualified “bad actors”. We also propose to exclude some issuers that are currently eligible to rely on Regulation A. Specifically, the Commission is proposing to exclude from eligibility issuers that are subject to a denial, suspension, or revocation order by the Commission pursuant to Section 12(j) of the Exchange Act within the five years immediately preceding the filing of the offering statement and issuers that have not filed required ongoing reports pursuant to Regulation A, as proposed to be amended, in the two-year period immediately preceding the filing of a new offering statement.
The proposed changes to the Regulation A eligibility requirements would have benefits and costs. In particular, we believe that the proposed exclusion from eligibility of issuers that have not complied with ongoing reporting requirements in the two-year period immediately preceding the filing of a new offering statement would
The Commission is also proposing to exclude from eligibility issuers that are subject to a denial, suspension, or revocation order by the Commission pursuant to Section 12(j) of the Exchange Act within the five years immediately preceding the filing of the offering statement. This exclusion may incentivize Exchange Act registrants to comply with their obligations, and would prevent companies with a history of reporting non-compliance from relying on Regulation A. We also recognize that this exclusion could prevent offerings by issuers that intend to comply with Regulation A requirements despite a history of Exchange Act non-compliance, which could limit capital formation in certain situations.
The proposed rules continue to exclude non-Canadian foreign issuers from use of Regulation A, but, as discussed above, we are soliciting comment about the alternative of amending Regulation A to expand eligibility to additional foreign issuers. Allowing participation by non-Canadian foreign issuers could increase competition between foreign and domestic issuers for U.S.-based investor capital. This increased competition could raise the cost of capital for Regulation A issuers to the extent that there is not a commensurate increase in the supply of Regulation A capital. It is also possible, however, that expanding eligibility to use Regulation A to non-Canadian foreign issuers could attract additional investor capital to the market such that the change would not have a material impact on domestic issuers' cost of capital.
The proposed rules also continue to exclude blank-check companies. We believe that this exclusion is appropriate given the potential difficulty for retail investors to evaluate the investment opportunities posed by these issuers, particularly because the issuers do not explicitly identify investment opportunities at the time of offering. The continued exclusion of blank check companies could prevent some legitimate early-stage companies that would otherwise be eligible issuers from relying on Regulation A.
We are not proposing to amend the existing exclusion of companies subject to the ongoing reporting requirements of Section 13 or 15(d) of the Exchange Act (“reporting companies”). As an alternative, we could amend Regulation A to expand the category of eligible issuers to include reporting companies. Although reporting companies do occasionally rely on exemptions for private placements, we believe that many reporting companies generally would not benefit from eligibility to rely on Regulation A as proposed to be amended. In particular, reporting companies are subject to Exchange Act reporting requirements that are more extensive than those proposed for Regulation A, so would not benefit from the reduced disclosure requirements; although reporting companies could potentially benefit from the liability standards conferred by reliance on Regulation A, and such issuers that do not have the class of securities being offered already listed, or are not simultaneously listing, on a national securities exchange could potentially benefit from blue sky law preemption. Nonetheless, we believe that the benefits of amending Regulation A to permit reporting companies to rely on the exemption are minimal.
The proposed rules also continue to exclude investment companies and BDCs. If, as an alternative, the Commission were to permit investment companies to use Regulation A, offerings from investment companies could increase investment opportunities for retail investors. Additionally, the Commission recognizes that permitting investment companies to rely on Regulation A could enhance capital formation indirectly. Specifically, if the use of proposed Regulation A decreased the cost of capital for investment companies and those savings were passed through to the company recipients of the investment companies' capital, expanding the eligibility for Regulation A to investment companies could potentially enhance capital formation.
Consistent with the statute, the proposed rules increase the maximum offering size from $5 million to $50 million of “equity securities, debt securities, and debt securities convertible or exchangeable to equity interests, including any guarantees of such securities.” The proposed rules exclude asset-backed securities (“ABS”) from eligibility. As discussed above, the Commission does not believe that ABS issuers are the intended beneficiaries of the mandated expansion of Regulation A. ABS are designed to pool the risk of already-issued loans and other financial assets, and, in this respect, do not constitute new capital formation. We recognize, however, that allowing ABS offerings under Regulation A could, in certain cases, lower the cost of capital for underlying borrowers whose loans are eventually securitized by ABS issuers and therefore indirectly facilitate capital formation.
Although there are potential indirect benefits from allowing ABS offerings under Regulation A, we believe that, in practice, Regulation A would have little appeal to ABS issuers if available. Most ABS offerings are much larger than the maximum allowable offer size under the proposed rules. Average ABS offering sizes are generally well over $50 million.
As explained above, we are proposing to increase the maximum offering size of Regulation A offerings by introducing two tiers of offerings. Tier 1 offerings may be up to $5 million and Tier 2 offerings may be up to $50 million. As compared to the current rules, the
Increasing the maximum offering size could lead to improved liquidity of the securities sold in offerings under Regulation A as proposed to be amended, to the extent that larger issuances permit greater breadth of ownership.
The increase in maximum offering size could also increase the potential feasibility and value of intermediation services, such market making and analyst coverage, with respect to Regulation A securities. These services require sufficient investor demand for securities and information following the issuance because market makers and analysts are generally compensated on a per transaction or subscription basis. The presence of these intermediation services could also have a positive impact on investor participation and aftermarket liquidity of Regulation A offerings, providing further demand for such services. It is also possible, however, that even the large increase in maximum offering size included in the statute and proposed rules would not be sufficient to make such services economically feasible.
Lastly, the increased maximum offering size could make Regulation A more attractive to larger or more mature companies that are in less need of capital than business start-ups. For these issuers, secondary market liquidity may be the primary goal of an offering, and it is possible that their resulting market capitalization could be much greater than the maximum offering size.
We propose to permit sales by selling securityholders of up to $1.5 million in Tier 1 offerings and to $15 million in Tier 2 offerings in any twelve-month period, which represents 30% of the total maximum offering size.
Permitting
As an alternative, we could increase the cap on secondary sales above the proposed $1.5 million for Tier 1 offerings and $15 million for Tier 2 offerings. Increasing the cap on secondary sales could provide additional exit options for incumbent shareholders, which could indirectly increase capital formation because exiting investors could more quickly redeploy their capital into new projects and business ventures.
It is also possible that increasing the cap on secondary sales could lead to better monitoring of the underwriter or placement agent if used, as the selling securityholders have incentives to ensure that the underwriter values the securities and conducts the offering so as to maximize the value of their investment.
Increasing the permitted amount of secondary sales could also result in potential costs. In particular, it is often argued that the incentives of company management are better aligned with other shareholders when managers hold a significant equity interest in the company.
There may also be investor protection benefits in some cases from precluding affiliate sales by limiting transactions between informed investors (affiliates) and uninformed investors, such as retail investors. These potential benefits may be limited, as buyers are aware that they are less informed than affiliates and consequently, security prices should generally reflect these asymmetries at the time of the offering.
Using an operating income criterion for permitting secondary sales could promote investor confidence with respect to issuer viability by reducing the incidence of insiders offloading investments in companies that are not financially viable. However, the Commission believes that doing so may result in an under- or over-inclusion of companies that are viable investment opportunities because there is no single criterion that would provide an accurate measure of the financial health of all companies that could rely on Regulation A.
Regulation A currently does not place any limitations on the amount of securities that may be purchased by an investor. As explained above, we are proposing that purchasers of Tier 2 offerings be limited to investing no more than 10% of the greater of the investor's annual income and net worth.
The proposed rules would permit issuers to rely on investors' representation that they are investing no more than 10% of their net worth and annual income. The ability to rely on investor representations should help to mitigate potential costs that issuers could incur in relation to this requirement. At the same time, we realize that investors might make inaccurate representations, whether intentionally or not, which could expose these investors to the risk of increased losses.
It is also possible that preventing investors from investing more than 10% of the greater of their income and net worth in a Tier 2 Regulation A offering could limit capital formation, particularly if potential purchasers of Tier 2 offerings are not able to meet minimum investment sizes that may be required by some issuers.
Furthermore, in some settings, it may be beneficial for issuers to involve large investments from some types of investors in Regulation A offerings. For example, it could be beneficial to allow company officers to invest a substantial portion of their net worth in an offering as a mechanism to align the officers' incentives with those of the other securityholders. While we recognize that limiting investment size could result in less capital being raised by issuers in Regulation A offerings, we believe that preventing investors from exposing more than 10% of the greater of their income or net worth in a Tier 2 offering could enhance investor protection by limiting potential losses.
As an alternative, we could also require that purchasers of Tier 1 offerings, like purchasers of Tier 2 offerings, be limited to investing no more than 10% of the greater of their annual income and net worth. We believe, however, that because Tier 1 offerings would continue to be subject to additional state oversight, any benefit associated with limiting the investment size in Tier 1 offerings could potentially be eclipsed by state-level protections. We also recognize that Tier 1 offerings would be subject to fewer reporting obligations and other investor protections than Tier 2 offerings, which could make investor losses due to fraud more likely under Tier 1.
We are proposing to allow companies to conduct other exempt offerings that would not be integrated with an offering made in reliance on Regulation A under the proposed amendments, as long as the company complies with the requirements of the exemption relied upon for the particular offering. We could have selected an alternative that would have aggregated the amounts offered in reliance on Regulation A with the amounts offered pursuant to other exempt offerings. Under such an alternative, the amounts raised in other exempt offerings would count toward the maximum offering amount under Regulation A. Compared to this alternative, the ability of issuers to conduct other exempt offerings that would not count toward the maximum offering amount under Regulation A would allow issuers to raise more capital.
As amended by the JOBS Act, Section 12(g) of the Exchange Act requires, among other things, that an issuer with total assets exceeding $10 million and a class of securities held of record by either 2,000 persons, or 500 persons who are not accredited investors, register such class of securities with the Commission.
As discussed above and in more detail below, the intent of the proposed rules is to provide sufficient financial disclosure to help investors make informed decisions while limiting the costs imposed on issuers for doing so. We believe that the limited required initial and ongoing disclosures, as proposed, accomplish this objective. If Regulation A issuers cross the shareholder of record threshold described above, however, they would no longer benefit from the limited Regulation A disclosure environment and would be subject to the more comprehensive periodic reporting requirements under the Exchange Act. This may not have significant economic consequences for issuers that are prepared to list on a national securities exchange and would otherwise be required to register with the Commission under Section 12(b) and become subject to Exchange Act reporting requirements. For issuers that do not wish to list on a national securities exchange or do not meet listing requirements, the additional disclosure burden could provide incentive to take actions that would allow them to deregister and cease reporting.
Because of the manner in which shareholders of record are tabulated, the likelihood of a Regulation A issuer triggering the 12(g) threshold is low if not triggered at the time of offering. In particular, beneficial owners of Regulation A issuers who hold their shares at a broker are not counted as a record holder. Their shares, held in “street name,” are counted at the broker level, so that each brokerage at which there is a least one beneficial owner would constitute one shareholder of record. Because of this treatment, the number of shareholders of record is often significantly less than the number of beneficial owners.
Consistent with current Regulation A, sellers of securities under Regulation A as proposed to be amended would be subject to liability to investors under Section 12(a)(2) for any offer or sale by means of an offering circular or an oral communication that includes a material misleading statement or material misstatement of fact. We believe that this would continue to benefit investors by encouraging issuers and selling securityholders to truthfully disclose all relevant facts associated with an offering, which in turn would allow potential investors to better assess the merits of the offering and make informed decisions. We do not expect this requirement to impose any significant costs beyond the liability already incurred by current Regulation A issuers.
In the context of registered transactions, Section 11 liability applies not only to the issuer and underwriter but also, in certain circumstances, to other specified persons, including the accountants, attorneys and other experts involved in preparing the registration statement. In contrast, Section 12(a)(2) liability applies by its terms only to sellers, and does not extend to “those who merely assist in another's solicitation efforts.”
We are proposing a number of modifications to the offering statement required under Regulation A. Under current Regulation A, offering materials are submitted to the Commission in paper form. We are proposing to require electronic submission of offering materials so that these materials can more easily be made available to the public.
As discussed in detail above, electronic submission has numerous benefits to issuers and investors. For example, electronic filing allows offering materials to be more easily accessed and analyzed by regulators, investors, and financial market researchers. We anticipate the effect of providing electronic access to offering materials to the public will promote liquidity and pricing efficiency for the issued securities. We also recognize that electronic filing on EDGAR may impose costs on issuers, as discussed below.
We also are proposing a number of modifications to Form 1-A intended to streamline the type of information included in the offering circular. In general, we are proposing to maintain Form 1-A's three-part structure and to make various revisions and updates to the form. For Part I, the substantive additions to Regulation A items are: issuer eligibility, bad actor disqualification and disclosure, and a summary of key issuer financial information and offering details. Since most of this information is already contained in other offering materials, the additional reporting burden in Part I of the Form 1-A should not entail significantly higher costs in terms of time or out-of-pocket expenses.
Regulation A issuers currently are required to file their offering statements on paper. Paper documents are difficult to process both for the Commission and for investors, analysts, and other researchers. The proposed rules require issuer and offering details in Part I of Form 1-A to be reported in XML format that once filed with the Commission will be machine readable. This format will allow for more efficient reviews and the systematic tracking of offering particulars by investors, regulators, and other market participants such as financial market data aggregators.
The rule also proposes eliminating one of the three alternate models for providing narrative disclosure under Part II of the offering statement. Currently, issuers can choose between Model A (for issuers that are corporations only), Model B, and Part 1 of Form S-1 as described in the release. Elimination of Model A, wherein issuers provided disclosure in a question-and-answer format, is unlikely to affect most issuers, as historically, only about 20% of issuers have elected to use Model A. Eliminating Model A also addresses regulators' concerns about possible confusion that could result from the lack of uniformity of information presented in the question-and-answer in the format. Issuers continue to have the option of using Form S-1.
The proposed changes to Model B include statutorily required disclosures and a section containing management discussion and analysis of the issuer's liquidity, capital resources, and business operations. As discussed in more detail below, these additional items may impose costs on the issuer, while providing important information to investors.
Consistent with JOBS Act requirements with regard to ongoing reporting by Regulation A issuers, we are proposing to require offering materials to include audited financial statements, but only for issuers conducting a Tier 2 offering. The benefits of audited financial statements should provide investors with greater confidence in the accuracy and quality of the financial statements of issuers seeking to raise larger amounts of capital. We understand that audited financial statements could entail significant costs to issuers, and that the costs of an audit may discourage the use of Regulation A as proposed to be amended. Based on a compilation of data submitted by reporting companies, the average cost of an audit for offerings of less than $50 million is approximately $114,000.
The proposed amendments also include a limitation on the age of financial statements at the time of qualification or filing (on these dates, financial statement data must not be older than nine months). This provision ensures that qualification is based on information that closely reflects a company's current financial condition. The additional costs from these changes are somewhat mitigated by decreases in disclosure requirements regarding the issuer's business and transactions with related persons. The higher level of disclosure would, however, enable investors to have better information for making their investment decisions.
The proposed rules would also allow for continuous or delayed offerings of eligible securities by an eligible issuer under Regulation A, on a basis analogous to shelf registration under Rule 415 for registered offerings, although acquisition shelves would not be permitted under Regulation A. Unlike existing Regulation A, the proposed rules also restrict at-the-market shelf offerings. Issuers would need to update their offering circulars annually and after the second fiscal quarter, the same timetable as is proposed to apply for ongoing reporting requirements.
The current Regulation A rules allow for continuous or delayed offerings under Rule 415, but Rule 415 only discusses registered offerings, which may have caused confusion in its application to Regulation A. The provisions in Regulation A as proposed explicitly allow for continuous or delayed offerings and would provide greater clarity. It would now be clear that eligible issuers would have greater flexibility to select the timing of their offerings based on macroeconomic conditions such as interest rates and market volatility, or other company specific factors that may contribute to a successful offering.
Excluding at the market offerings will avoid situations where sales at fluctuating market prices result in a breach of the offering ceiling or the cap on secondary sales. Issuers could thus avoid losing their exemption under Regulation A due to unanticipated market factors. While eligible issuers have to file periodic updates and amendments as described above, they have the flexibility to file only a supplement to the offering circular if there were no fundamental changes. Hence, the cost to issuers of having the flexibility to make a continuous or delayed offering could be minimal.
Consistent with Title IV of the JOBS Act, the proposed rules permit issuers to “test the waters” by soliciting interest in the offering. Regulation A issuers would be allowed to use all forms of communications with all potential investors in these communications. Under current Regulation A, testing the waters is permitted only until the offering statement is filed with the Commission, and solicitation material is required to be filed prior to or concurrent with first use. Under the proposal, testing the waters would be permitted both before and after filing of the offering statement, and testing the water materials would be required to be filed with the Commission at the time of initial submission of the offering statement, and would be updated thereafter.
In general, allowing issuers to gauge interest through testing the waters may reduce uncertainty regarding whether an offering could be completed successfully. If after testing the waters, the issuer is not confident that it will attract sufficient investment, the issuer can consider alternate methods of raising capital and thereby avoid the costs of an unsubscribed or under-subscribed offering. Allowing solicitation prior to filing enables issuers to determine market interest in their securities before incurring the costs of preparing and filing an offering statement.
By expanding the permissible scope of testing the waters, the proposed rules could have several benefits. In particular, allowing issuers to advertise their intention to raise capital prior to qualification of the offering statement could decrease the time required to raise the desired amount of capital. This option may be useful for smaller companies, especially early-stage companies, which may find it too costly to solicit through intermediaries. Thus, at least for some companies, the proposed rules could lead to lower search costs and therefore lower issuance costs. The expansion of testing the waters could also increase the type and extent of information available to investors, which could lead to more efficient prices for the offered securities.
In addition, to the extent that the proposed rules permit testing the waters for an expanded period of time, investors who previously found it difficult to find investment opportunities in private offerings may be able to find and potentially invest in a larger and more diverse pool of investment opportunities, allowing investors to more efficiently allocate their capital. The net effect would be to enhance both capital formation and allocative efficiency. Further, requiring issuers to attach the offering statement to their testing the waters materials (or providing information about where it can be accessed) would allow investors to be fully aware of the details of the offering material in a timely manner that would support sound investment decisions.
We recognize that there would also be potential costs associated with expanding the use of testing the waters. In particular, to the extent that testing the waters increases under the proposed rules, the proposed rules could result in increased levels of inappropriate and potentially fraudulent activity, because solicitation of these offerings can be directed towards all investors, including non-accredited and unsophisticated investors. To some extent, these costs are mitigated by the application of Section 12(a)(2) and the general antifraud provisions of the federal securities laws. By expanding the scope of permissible testing the waters, the proposed amendments could also lead to investor confusion about how to process the different disclosure materials they receive. For example, investors already aware of an impending offering through testing the waters materials may neglect to read the offering circular, which could be substantively different from the material distributed when testing the waters.
The Commission could require submission of testing the waters materials before or concurrent with first use, allowing regulators to better assess how testing the waters is used to gauge investor interest prior to filing of the offering statement. Requiring initial submission of testing the waters materials could increase costs for issuers that decide not to proceed with the offering after testing the waters. Requiring submission before filing the offering circular could decrease issuers' willingness to test the waters and could potentially limit the overall reliance on Regulation A. Any additional solicitation materials that could result from requiring early submission would also lead to an increase in the amount of material available for investors about the offering, which could increase confusion and the costs incurred by investors evaluating their investment opportunities.
Requiring limited ongoing disclosure could improve investor decision-making and ultimately benefit issuers by improving the price efficiency of securities issued through an amended Regulation A offering, to the extent that secondary markets for these securities develop. Ongoing financial disclosures and mandatory disclosures of key material events would allow existing and potential future investors to periodically update their expectations of the issuer's prospects and act accordingly. By standardizing the content, timing, and form of these disclosures, the proposed amendments would make it easier for investors to compare information across issuers than if disclosure decisions were otherwise left to voluntary, bilateral arrangements between issuers and investors, as would be the case without mandatory disclosures. Hence, the proposed amendments to require ongoing disclosure under Regulation A would eliminate many potential differences in disclosures between issuers that could otherwise impair the capital allocation decisions of investors,
More generally, the proposed ongoing disclosure requirements should result in fewer information asymmetries between issuers and their investors than currently exist for securities offered under the existing Regulation A or other exempt offering methods. The enhanced disclosure requirements should help improve the ability of investors with different risk preferences to identify investment opportunities best suited for
In addition to the direct costs of preparing the mandatory disclosures, issuers of securities in a Regulation A offering under the proposed rules would be subject to potential indirect disclosure costs by revealing to their competitors and other market participants information about their business not previously required to be disclosed.
Nonetheless, the indirect costs of increased disclosures are present for any issuer seeking improved liquidity through access to public capital markets and a broader investor base that includes unaccredited investors. Enhanced disclosure is likely to improve the liquidity of the securities of Regulation A issuers in the secondary market, particularly for securities that are traded in the OTC market.
Currently, Regulation A issuers do not have ongoing reporting obligations. Under the proposed amendments, issuers that conducted Tier 2 offerings would be required to provide annual audited financial statements on Form 1-K. The Commission is further proposing that issuers that conducted Tier 2 offerings provide a semi-annual update on Form 1-SA and current event reporting on Form 1-U. These proposed requirements are more extensive, in terms of breadth and frequency, than those for current Regulation A offerings and those for other exempt offerings.
As discussed above, in addition to the proposed annual and semi-annual reporting requirements, the proposed rules include several event-based disclosure requirements, similar to the event-based reporting of reporting companies on Form 8-K. These events, like the ongoing financial performance of a company, can be important determinants in an investor's capital allocation decision. The direct cost of reporting these events is often minimal, particularly to the extent that the disclosed information is simply the announcement of a new development, such as the sale of an unregistered security. Of the 26 relevant current reporting items on Form 8-K, listed in the table below, eleven are proposed to be required to be reported, in whole or in part, by issuers that conducted Tier 2 offerings.
We have
We also propose requiring disclosure of certain meaningful corporate events. Bankruptcy (Item 1.03) can have direct effects on valuation as it changes a number of obligations of the issuer,
Finally, we propose requiring the disclosure of changes in issuer management, which can have direct implications on the issuer's future prospects and security prices.
The proposed rules allow for a termination or suspension of an issuer's ongoing reporting obligations if the number of record holders of the class of securities to which the Regulation A offering statement relates falls below 300 persons or suspension upon registration of a class of securities under Section 12 of the Exchange Act or registration of an offering of securities under the Securities Act.
For Tier 2 issuers, which are subject to substantial ongoing reporting requirements, the option for suspending or terminating the Regulation A reporting obligations could be beneficial, especially for issuers that are not seeking secondary market liquidity, and smaller issuers for which the fixed costs of complying with the ongoing disclosure requirements would weigh more heavily.
Although Tier 1 issuers are not subject to periodic and current event reporting requirements, we propose to require issuers of Tier 1 offerings to notify the Commission of their terminated reporting obligation using Form 1-Z upon completion of the offering. Under the proposed rules, Form 1-Z would take the place of Form 2-A, which is currently required upon completion of a Regulation A offering. For Tier 1 issuers, Form 1-Z will require issuers to provide updated information regarding some features of the completed offering, such as the final proceeds raised net of fees.
We propose to amend Rule 262 to include bad actor disqualification provisions in substantially the same form recently adopted under Rule 506(d), but without the categories of covered persons specific to fund issuers, which are not proposed to be eligible to use Regulation A.
The proposed rules likely would induce issuers to implement measures to restrict bad actor participation in offerings made in reliance on Regulation A, which could help reduce the potential for fraud in these types of offerings. If disqualification standards lower the risk premium associated with the presence of bad actors in securities offerings, any resulting reduction in fraud could also reduce the cost of raising capital to issuers that rely on Regulation A as proposed to be amended. In addition, the requirement that issuers determine whether any covered persons are subject to disqualification might reduce the need for investors to do their own investigations and could therefore increase efficiency.
The proposed disqualification provisions likely would also impose costs on issuers, other covered persons and investors. If issuers are disqualified from participating in offerings made in reliance on proposed Regulation A, they may experience increased costs in raising capital through alternative methods. These costs could hinder potential investment opportunities for such issuers, which could have negative effects on capital formation. In addition, issuers may incur personnel costs to avoid the participation of covered persons who are subject to disqualifying events. Issuers also might incur costs by restructuring share ownership to avoid beneficial ownership of more than 20% from individuals subject to disqualifying events. Finally, issuers might incur costs by devoting resources to seeking disqualification waivers.
As discussed above, we are also proposing a reasonable care exception under Regulation A on a basis consistent with Rule 506.
The proposed requirement that issuers disclose matters that would have triggered disqualification, had such matters occurred after the effective date of proposed Regulation A, also would impose costs and benefits. The proposed disclosure requirement would likely reduce issuer costs, relative to the cost of disqualification. This approach would not preclude the participation of past bad actors, whose disqualifying events occurred prior to the effective date of the proposed rules, which could expose investors to the risks that arise when bad actors are associated with an offering. Nevertheless, investors would benefit by having access to such information that could inform their investment decisions. Disclosure of triggering events may also make it more difficult for issuers to attract investors, and issuers may experience some or all of the impact of disqualification as a result. Some issuers may, accordingly, choose to exclude involvement from prior bad actors to avoid such disclosures.
We believe the inclusion of Commission cease-and-desist orders in the list of disqualifying events would not impose a significant, incremental cost on issuers and other covered persons because many might already be subject to Commission cease-and-desist orders or may already be disqualified on the basis of orders issued by state regulators, federal banking regulators and the National Credit Union Administration.
Under the proposed rules, orders issued by the CFTC would trigger
As explained above, Regulation A offerings are subject to registration or qualification under state “blue sky laws,” unless the offering is made to “qualified purchasers” (as the Commission may define that term) or is offered or sold on a national securities exchange. Compliance with blue sky law requirements can impose significant costs, predominantly as a result of having to coordinate independent reviews across multiple regulatory regimes when issuers are offering securities to investors in multiple states.
The GAO study of Regulation A offerings found that blue sky law compliance was one of four central factors in the infrequent reliance on Regulation A.
Based on these requirements, we are proposing to define the term “qualified purchasers” for purposes of Regulation A to include all offerees in a Regulation A offering and all purchasers in a Tier 2 Regulation A offering. Therefore, as proposed, Tier 1 offerings would be subject to state registration and qualification requirements to the same extent as offerings under current Regulation A, whereas such requirements would be preempted for Tier 2 offerings.
Because state registration requirements were cited as a central factor in the infrequent reliance on Regulation A,
We recognize that the proposal could impose some costs. For example, because the types of issuers and investors that would participate in Regulation A offerings could vary by state, state-specific securities requirements may potentially be tailored to the specific investors and issuers involved in these transactions. It is possible that state securities regulators could provide a meaningful level of investor protection for certain offerings because of greater familiarity with local issuers and investors.
As a policy alternative, we could permit one or a subset of states to qualify certain Regulation A offerings either in place of, or in addition to, federal qualification. This alternative could allow state securities regulators to provide a comparable level of oversight, while still limiting the costs associated with requiring issuers to undergo multiple review processes. Depending on how this alternative is implemented, it may not result in comparable review. For example, if state review is conducted by a single state, issuers could seek review from the state with the least stringent standards and could therefore increase the level of fraud in Regulation A offerings. A potentially greater risk of fraud could negatively affect both investors and issuers, which may find it more expensive to raise capital using Regulation A, as proposed to be amended, if investors demand higher returns because of any perceived increase in the risk associated with this type of offering. The Commission also recognizes that there are a number of alternative definitions of qualified purchaser that we could propose. One alternative that we could have selected is to define as a “qualified purchaser” any purchaser in any Regulation A offering. Compared to the definition in the proposed rulemaking, such a broad definition would allow Tier 1 Regulation A offerings to qualify for the state law preemption, which in turn would decrease the cost of such offerings and potentially enhance capital formation. However, the resulting loss of state review for Tier 1
Other alternatives can be broadly categorized as relying on attributes of the investor, the issuer, and/or the offering. We discuss these alternatives in greater detail below.
We could have selected a policy alternative that defines as a “qualified purchaser” any purchaser who meets a specified income or net worth standard that is set either lower or higher than the current “accredited investor” definition in Rule 501 of Regulation D. Compared to the definition in the proposed rulemaking, such an alternative could limit the number of offerings that would qualify for state preemption because some investors that purchased securities in Tier 2 offerings would not satisfy these alternative definitions. However, such alternatives might allow the preemption of blue sky law for Tier 1 offerings, which are not subject to the same reporting and other obligations proposed for Tier 2. Limiting eligible investors could result in higher offering costs for potential Regulation A issuers but could also lower the likelihood of fraud in Regulation A offerings compared to the proposed rules.
Another policy alternative that we could have adopted is to define a “qualified purchaser” as any purchaser who purchases securities in a Regulation A offering through a registered broker-dealer. Such an alternative could have limited the number of offerings that would qualify for state preemption because some investors might not use broker-dealers when participating in Tier 2 offerings. Such a limitation could result in higher offering costs for issuers. Additionally, such an alternative could have increased the cost to investors participating in Tier 2 offerings because they would have to pay broker-dealer fees. On the other hand, the presence of registered broker-dealers, who presumably perform due diligence on potential investments, could result in lower likelihood of fraud in this market compared to the proposed rules, and could support blue sky preemption for Tier 1 offerings as well as Tier 2 offerings.
In addition, we could have defined qualified purchasers as investors in a Regulation A offering in which the issuer meets specified conditions. For example, the definition could require that the issuer meet some financial criteria, or that the issuer meet some governance requirements. The potential advantage of defining qualified purchaser according to attributes of the issuer is that indicators of fraud or risky investments are often characteristics of the issuer (e.g. shell companies, financially distressed companies, etc.). Therefore, a definition based on issuer attributes might effectively identify the investments most in need of additional regulatory oversight. However, it may be difficult to identify criteria that effectively distinguish between fraudulent or excessively risky investments and safer investments, given the wide variety of potential issuers. For example, a high degree of leverage would be indicative of financial distress in some companies, but could be optimal in others.
Lastly, we could have used attributes of the offering, other than or in addition to the proposed requirements for Tier 2, to define qualified purchasers. For example, qualified purchasers could be defined in relation to offerings in which issuers and agents of the issuer assume increased liability for material misstatements and omissions, offerings over a certain size, or offerings with a firm commitment underwriting. While some of these factors are correlated with the riskiness of the offering, using a definition based on these factors could prompt issuers to sub-optimally modify features of the offering in order to avoid state regulation.
We considered the policy alternative suggested by one commenter to preempt blue sky laws with respect to secondary sales of Regulation A securities in addition to preempting blue sky laws governing primary offerings.
For securities issued in Regulation A offerings that end up trading on the OTC market, the proposed new Tier 2 disclosure requirements would provide timely and relevant issuer information to broker-dealers that initiate quotations and make markets in these securities and to investors in these securities. This information would be much more detailed than what is currently required for non-reporting issuers under Rule 15c2-11 and reported on Form 211. Similarly, for issuers with existing securities trading on the OTC market, the disclosure proposed to be required under Tier 2 would supplement the issuer information otherwise used by broker-dealers when relying on the existing piggyback exception of Rule 15c2-11.
A particular set of OTC-listed companies—those that cease reporting and, if necessary, delist from national securities exchanges—might find the proposed rules attractive for raising capital. As mentioned above, the proposed Tier 2 disclosure requirements are less stringent than those applicable to reporting companies. Companies that delist from national exchanges might be able to use Regulation A offerings to raise capital as well as maintain liquid securities in the OTC market. The potential effect of the proposed rules on companies that delist from national securities exchanges is difficult to predict. Companies that would like to maintain liquidity for their securities trading in the OTC market and face a less burdensome disclosure regime than entailed by Exchange Act registration might find Regulation A useful. On the other hand, companies that delist from national securities exchanges because they want to minimize disclosure and
The potential future use of Regulation A could also depend on the willingness of financial intermediaries such as placement agents or underwriters to participate in offerings. For example, in registered offerings, underwriters are frequently used to identify potential investors and are primarily responsible for facilitating a successful distribution of the offered securities. Some commenters claim that underwriters are generally unwilling to participate in small offerings because the commissions are not sufficient to warrant their involvement.
Throughout this release, we have discussed the anticipated costs and benefits of the proposed rules and their potential impact on efficiency, competition and capital formation. We request and encourage any interested person to submit comments regarding the proposed rules, our analysis of the potential effects of the rules and other matters that may have an effect on the proposed rules. We request comment from the point of view of issuers, investors and other market participants. With regard to any comments, we note that such comments are of particular assistance to us if accompanied by supporting data and analysis of the issues addressed in those comments. We also are interested in comments on the qualitative benefits and costs we have identified and any benefits and costs we may have overlooked. We urge commenters to be as specific as possible.
128. What types of companies (
129. Are investors in private companies likely to use the amended Regulation A exemption to exit their investments? Would eliminating current Rule 251(b), which prohibits resales by affiliated parties unless the issuer has had operating income in at least one of the last two years, affect fraud in this market?
130. How likely is the amended Regulation A exemption to attract companies that are considering a traditional IPO? What types of companies (
131. How likely is the amended Regulation A exemption to attract companies that are considering offerings relying on Rule 506(b) or Rule 506(c) of Regulation D? What would be the costs and benefits from relying on the amended Regulation A exemption versus Rule 506(b) or Rule 506(c) of Regulation D? Please provide estimates, where possible.
132. What is the economic effect of the proposed investment limitation in Tier 2 Regulation A offerings? What types of issuers and investors are most likely to be affected by this restriction? Will this restriction enhance investor protection? What would be the economic effect of imposing a similar restriction on Tier 1 Regulation A offerings?
133. Would the amended Regulation A exemption attract intermediaries (e.g., broker-dealers or underwriters) to the market for Regulation A offerings? How would the presence of intermediaries change the cost structure for Regulation A issuers? Would the amended Regulation A exemption make it economically feasible for intermediaries to serve as market makers and provide research and analyst coverage? Would the presence of intermediaries likely increase the chances that a wider variety of investors will participate in Regulation A offerings?
134. Do the proposed disclosure requirements help ensure that investors have a reasonable understanding of the risks and costs of investing in Regulation A securities? If not, what additional requirements would further mitigate the associated risks? How would the costs and benefits of the requirements compare to the costs and benefits of the disclosure that currently exists for securities offered under the current Regulation A requirements? How would the costs and benefits compare to other exempt offering methods? Please provide estimates, where possible.
135. How would the proposed preemption of state blue sky laws for offerings made to qualified purchasers, as we propose to define that term, affect the costs and benefits of Tier 1 and Tier 2 Regulation A offerings? Please provide estimates, where possible. Would the proposed blue sky law preemption affect fraud and investor protection and capital formation in this market?
136. The Commission is interested in receiving comments, views, estimates and data on all aspects of the proposal and the following:
• Expected size of the Regulation A market (
• Overall economic impact of the proposed rules; and
• Any other aspect of the economic analysis.
137. What would be the economic impact of the policy alternatives discussed in the proposed rules?
Certain provisions of the proposed rules contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
(1) “Regulation A (Form 1-A and Form 2-A)” (OMB Control Number 3235-0286);
(2) “Form 1-K” (a proposed new collection of information);
(3) “Form 1-SA” (a proposed new collection of information);
(4) “Form 1-U” (a proposed new collection of information);
(5) “Form 1-Z” (a proposed new collection of information);
(6) “Form ID” (OMB Control Number 3235-0328).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. We are applying for OMB control numbers for the proposed new collections of information in accordance with 44 U.S.C. 3507(j) and 5 CFR 1320.13, and OMB has not yet assigned a control number to each new collection. Responses to these new collections of information would be mandatory for issuers raising capital under Regulation A.
The number, type and size of the issuers that would participate in offerings of securities under Regulation A, as proposed to be amended, is uncertain, but data regarding current market practices may help identify the number and characteristics of potential issuers that may offer and sell securities in reliance on the proposed rules.
Currently, Regulation A requires issuers to file a Form 1-A: Offering Statement and a Form 2-A: Report of Sales and Uses of Proceeds with the Commission. Regulation A has 1.00 administrative burden hour associated with it, while current Form 1-A takes approximately 608.00 hours to prepare and Form 2-A takes approximately 12.00 hours to prepare.
Under the proposed rules, an issuer conducting a transaction in reliance on Regulation A would be able to conduct either a Tier 1 offering or a Tier 2 offering.
We expect that issuers relying on proposed Regulation A for Tier 1 offerings of up to $5 million in a twelve-month period would largely be at a similar stage of development to issuers relying on existing Regulation A and would therefore not experience an increased compliance burden with proposed Form 1-A. Given the increased annual offering threshold of $50 million, however, we expect that issuers conducting Tier 2 offerings pursuant to proposed Regulation A may be at a more advanced stage of
We estimate that compliance with the requirements of a Form 1-A provided in connection with transactions made in reliance on proposed Regulation A would require 187,500 burden hours (250 offering statements × 750.00 hours/offering statement) in aggregate each year, which corresponds to 140,625 aggregated hours carried by the issuer internally (250 offering statements × 750.00 hours/offering statement × 0.75) and aggregated costs of $18,750,000 (250 offering statements × 750.00 hours/offering statement × 0.25 × $400) for the services of outside professionals. These estimates include the time and cost of collecting the information, preparing and reviewing disclosure, filing documents and retaining records. In deriving our estimates, we recognize that the burdens likely would vary among individual issuers based on a number of factors, including the stage of development of the business, the amount of capital an issuer seeks to raise and the number of years since inception of the business. We believe that some issuers would experience costs in excess of the average and some issuers may experience less than the average costs.
Under the proposed rules, any issuer that conducts a Tier 2 offering in reliance on proposed Regulation A would be required to file an annual report with the Commission on Form 1-K: Annual Report.
We estimate that compliance with the requirements of Form 1-K for issuers with an ongoing reporting obligation under proposed Regulation A would require 112,800 burden hours (188 issuers × 600.00 hours/issuer) in the aggregate each year, which corresponds to 84,600 hours carried by the issuer internally (188 issuers × 600.00 hours/issuer × 0.75) and costs of $11,280,000 (188 issuers × 600.00 hours/issuer × 0.25 × $400) for the services of outside professionals.
Under the proposed rules, any issuer that conducts a Tier 2 offering in reliance on proposed Regulation A would be required to file a semiannual report with the Commission on Form 1-SA: Semiannual Report.
We estimate that compliance with the requirements of Form 1-SA for issuers with an ongoing reporting obligation under proposed Regulation A would require 23,428.75 burden hours (188 issuers × 187.43 hours/issuer) in the aggregate each year, which corresponds to 19,914.44 hours carried by the issuer internally (188 issuers × 187.43 hours/issuer × 0.85) and costs of $1,405,725 (188 issuers × 187.43 hours/issuer × 0.15 × $400) for the services of outside professionals.
Under the proposed rules, any issuer that conducts a Tier 2 offering in reliance on proposed Regulation A would be required to promptly file current reports on proposed Form 1-U with the Commission.
As with Form 1-SA, we estimate that 85 percent of the burden of preparation would be carried by the issuer internally and that 15 percent would be carried by outside professionals retained by the issuer at an average cost of $400 per hour.
Under the proposed rules, all Regulation A issuers would be required to file a notice under cover of Form 1-Z: Exit Report. Issuers conducting Tier 1 offerings would be required to file Part I of Form 1-Z that would disclose information similar to the information previously required of issuers on Form 2-A.
The Form 1-Z would be similar to the Form 15 that issuers file to provide notice of termination of the registration of a class of securities under Exchange Act Section 12(g) or to provide notice of the suspension of the duty to file reports required by Exchange Act Sections 13(a) or 15(d).
Under the proposed rules, an issuer would be required to file specified disclosures with the Commission on EDGAR.
The collections of information required under proposed Rules 251 through 263 would be mandatory for all issuers seeking to rely on the Regulation A exemption. Responses on Form 1-A, Form 1-K, Form 1-SA, Form 1-U and Form 1-Z would not be confidential, although issuers may request confidential treatment for certain materials submitted in conjunction with the filings.
The Commission invites comment on all of the above estimates. Pursuant to 44 U.S.C. 3506(c)(2)(A), the Commission requests comment in order to: (1) Evaluate whether the proposed collections of information are necessary for the proper performance of our functions, including whether the information would have practical utility; (2) evaluate the accuracy of our estimate of the burden of the proposed collections of information; (3) determine whether there are ways to enhance the quality, utility and clarity of the information to be collected; and (4) evaluate whether there are ways to minimize the burden of the proposed collections of information on those who respond, including through the use of automated collection techniques or other forms of information technology.
Persons submitting comments on the proposed collection of information requirements should direct their comments to the Office of Management and Budget, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and should also send a copy of their comments to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090, with reference to File No. S7-11-13. Requests for materials submitted to OMB by the Commission, with regard to these collections of information, should be in writing, with reference to File No. S7-11-13, and they should be submitted to the Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549-2736. As OMB is required to make a decision concerning the collections of information between 30 and 60 days after publication, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication.
This Initial Regulatory Flexibility Analysis has been prepared in accordance with 5 U.S.C. 603. It relates to the following:
• proposed amendments to Rules 251 through 263 of Regulation A, Form 1-A, Rule 4a-1 under the Trust Indenture Act, Rule 15c2-11 under the Exchange Act, and Item 101 of Regulation S-T;
• proposed new Forms 1-K, 1-SA, 1-U, and 1-Z; and
• the proposed rescission of Form 2-A.
The proposed rule amendments, new forms, and rescission of Form 2-A are designed to implement the requirements of Section 3(b)(2) of the Securities Act and to make certain conforming changes based on our proposed amendments to Regulation A. Section 3(b)(2) directs the Commission to adopt rules adding a class of securities exempt from the registration requirements of the Securities Act for offerings of up to $50 million of securities within a twelve-month period, subject to various additional terms and conditions set forth in Section 3(b)(2) or as provided for by the Commission as part of the rulemaking process.
Our primary objective is to implement Section 401 of the JOBS Act, as mandated by Section 3(b)(2), by expanding and updating Regulation A in a manner that makes public offerings of up to $50 million less costly and more flexible while providing a framework for regulatory oversight to protect investors. In so doing, we have endeavored to craft a workable revision of Regulation A that would both promote small company capital formation and provide for meaningful investor protection. We believe that issuers, particularly small businesses, benefit from having a wide range of capital-raising strategies available to them, and that an expanded and updated Regulation A could serve as a valuable option that augments the exemptions more frequently relied upon, thereby facilitating capital formation for small businesses.
The amendments are being proposed under the authority set forth in Sections 3(b), 19 and 28 of the Securities Act of 1933, as amended, and Section 401 of the JOBS Act.
For purposes of the Regulatory Flexibility Act, under our rules, an
While proposed Regulation A would be available for offerings of up to $50 million in securities in a twelve-month period, only offerings up to $5 million in securities in a twelve-month period would be offerings by small entities. It is difficult to predict the number of small businesses that would use proposed Regulation A due to the many variables created by our proposed amendments. Nevertheless, we believe that proposed Regulation A will increase the overall number of Regulation A offerings of $5 million or less due to the ability to non-publicly submit draft offering statements for review by the Commission's staff, the expanded use of solicitation of interest materials, the ability to electronically file and transmit offering statements and offering circulars, the potential for preemption of state regulatory review if the issuer elects to conduct a Tier 2 offering, and other significant changes summarized in Section II.A. above.
Regulation A is currently limited to offerings with an aggregate offering price of $5 million or less.
As discussed above in Section II.C., the proposed regulation includes reporting, recordkeeping and other compliance requirements. In particular, the proposed regulation would impose certain reporting requirements on issuers offering and selling securities in a transaction relying on the exemptions provided by Section 3(b) and Regulation A. The proposed rules would require that issuers relying on the exemption file with the Commission certain information specified in Form 1-A about the issuer and the offering, including the issuer's contact information; use of proceeds from the offering; price or method for calculating the price of the securities being offered; business and business plan; property; financial condition and results of operations; directors, officers, significant employees and certain beneficial owners; material agreements and contracts; and past securities sales.
As discussed above in Section II.E., issuers conducting Tier 2 offerings would also be required to file annual reports on proposed new Form 1-K, semiannual updates on proposed new Form 1-SA, current event reporting on proposed new Form 1-U, and to provide notice to the Commission of the termination of their ongoing reporting obligations on proposed new Form 1-Z. A Tier 1 offering would be limited to $5 million in a twelve-month period. Issuers in a Regulation A offering that would result in exceeding $5 million in a twelve-month period would be required to comply with the requirements for Tier 2 offerings, including being subject to ongoing reporting.
An issuer subject to the Tier 2 periodic and current event reporting described above would be required to provide information annually on Form 1-K, including the issuer's business and business plan; conflicts of interest and related party transactions; executive and director compensation; financial condition and results of operations; and audited financial statements. The semiannual update on Form 1-SA would consist primarily of unaudited, interim financial statements for the issuer's first two fiscal quarters and information regarding the issuer's financial condition and results of operations. The current event reporting on Form 1-U would require issuers to disclose certain major developments, including changes of control; changes in the principal executive officer and principal financial officer; fundamental changes in the nature of business; material transactions or corporate events; unregistered sales of five percent or more of outstanding equity securities; changes in the issuer's certifying accountant; and non-reliance on previous financial statements.
Unlike the other ongoing reporting requirements, Form 1-Z would only be required for issuers in both Tier 1 and Tier 2 offerings to report summary information about a completed or terminated Regulation A offering. Issuers conducting Tier 2 offerings would, however, be subject to the additional provision in Form 1-Z that relates to the voluntary termination of an issuer's continuous reporting obligations under Tier 2 and thus its use by small entities would be limited. Also, the information that is required in Form 1-Z is minimal.
Although we estimated that approximately 188 issuers under proposed Regulation A would enter the proposed ongoing reporting regime every year, we believe that very few small businesses would do so. A small business under our rules would only be required to file ongoing reports under Regulation A if a Regulation A offering would result in exceeding the Tier 1 annual offering limitation of $5 million in a twelve-month period.
We believe that there are no federal rules that conflict with or duplicate the proposed rules.
The Regulatory Flexibility Act directs us to consider significant alternatives that would accomplish the stated objective of our proposals, while minimizing any significant adverse impact on small entities. In connection with the proposed amendments and
We considered whether it is necessary or appropriate to establish different compliance or reporting requirements, timetables, or to clarify, consolidate, or simplify compliance and reporting requirements under the proposed rules for small entities. With respect to using performance rather than design standards, we used performance standards to the extent appropriate under the statute. For example, issuers have the flexibility to customize the presentation of certain disclosures in their offering statements.
We encourage comments with respect to any aspect of this initial regulatory flexibility analysis. In particular, we request comments regarding:
• The number of small entities that may be affected by the proposals;
• The existence or nature of the potential impact of the proposals on small entities discussed in the analysis; and
• How to quantify the impact of the proposed rules.
We request members of the public to submit comments and ask them to describe the nature of any impact on small entities they identify and provide empirical data supporting the extent of the impact. Such comments will be considered in the preparation of the final regulatory flexibility analysis, if the proposals are adopted, and will be placed in the same public file as comments on the proposed amendments themselves.
For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996,
• An annual effect on the economy of $100 million or more;
• A major increase in costs or prices for consumers or individual industries; or
• Significant adverse effects on competition, investment or innovation.
We request comment on whether our proposals would be a “major rule” for purposes of SBREFA. We solicit comment and empirical data on:
• The potential effect on the U.S. economy on an annual basis;
• Any potential increase in costs or prices for consumers or individual industries; and
• Any potential effect on competition, investment or innovation.
We request those submitting comments to provide empirical data and other factual support for their views if possible.
The amendments and forms contained in this document are being proposed under the authority set forth in Sections 3(b), 19 and 28 of the Securities Act of 1933, as amended, and Section 401 of the JOBS Act.
Reporting and recordkeeping requirements, Securities.
In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is proposed to be amended as follows:
15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78
(a) When used with reference to an issuer, other than an investment company, for purposes of the Securities Act of 1933, means an issuer whose total assets on the last day of its most recent fiscal year were $5 million or less and that is engaged or proposing to engage in small business financing. An issuer is considered to be engaged or proposing to engage in small business financing under this section if it is conducting or proposes to conduct an offering of securities which does not exceed the dollar limitation prescribed by section 3(b)(1) of the Securities Act.
3. Revise the undesignated center heading and §§ 230.251 through 230.263 to read as follows:
(a)
(1) Offerings pursuant to Regulation A in which the sum of all cash and other consideration to be received for the securities being offered (“aggregate offering price”) plus the aggregate offering price for all securities sold pursuant to other Regulation A offering statements within the twelve months before the start of and during the current offering of securities does not exceed $5,000,000, including not more than $1,500,000 offered by all selling securityholders (“Tier 1 offerings”); and
(2) Offerings pursuant to Regulation A in which such sum does not exceed $50,000,000, including not more than $15,000,000 offered by all selling securityholders (“Tier 2 offerings”).
Where a mixture of cash and non-cash consideration is to be received, the aggregate offering price must be based on the price at which the securities are offered for cash. Any portion of the aggregate offering price attributable to cash received in a foreign currency must be translated into United States currency at a currency exchange rate in effect on or at a reasonable time before the date of the sale of the securities. If securities are not offered for cash, the aggregate offering price must be based on the value of the consideration as established by bona fide sales of that consideration made within a reasonable time, or, in the absence of sales, on the fair value as determined by an accepted standard. Valuations of non-cash consideration must be reasonable at the time made. If convertible securities or warrants are being offered, the underlying securities must also be qualified and the aggregate offering price must include the conversion, exercise, or exchange price of such securities.
(b)
(1) Is an entity organized under the laws of the United States or Canada, or any State, Province, Territory or possession thereof, or the District of Columbia, with its principal place of business in the United States or Canada;
(2) Is not subject to section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78a
(3) Is not a development stage company that either has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies;
(4) Is not an investment company registered or required to be registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1
(5) Is not issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;
(6) Is not, and has not been, subject to any order of the Commission entered pursuant to Section 12(j) of the Exchange Act (15 U.S.C. 78
(7) Has filed with the Commission all the reports it was required to file, if any, pursuant to Rule 257 (§ 230.257) during the two years before the filing of the offering statement (or for such shorter period that the issuer was required to file such reports); and
(8) Is not disqualified under Rule 262 (§ 230.262).
(c)
(1) Prior offers or sales of securities; or
(2) Subsequent offers or sales of securities that are:
(i) Registered under the Securities Act, except as provided in Rule 255(e) (§ 230.255(e));
(ii) Made pursuant to Rule 701 (§ 230.701);
(iii) Made pursuant to an employee benefit plan;
(iv) Made pursuant to Regulation S (§ 230.901-905);
(v) Made more than six months after the completion of the Regulation A offering; or
(vi) Made in reliance on Regulation Crowdfunding (§ 230.XX-XX).
If these safe harbors do not apply, whether subsequent offers and sales of securities will be integrated with the Regulation A offering will depend on the particular facts and circumstances. See Securities Act Release No. 4552 (November 6, 1962) [27 FR 11316].
(d)
(i) Except as allowed by Rule 255 (§ 230.255), no offer of securities may be made unless a Form 1-A offering statement has been filed with the Commission.
(ii) After the Form 1-A offering statement has been filed, but before it is qualified:
(A) Oral offers may be made;
(B) Written offers pursuant to Rule 254 (§ 230.254) may be made; and
(C) Communications pursuant to Rule 255 (§ 230.255) may be made.
(iii) After the Form 1-A offering statement has been qualified, any written offers must be accompanied with or preceded by the most recent offering circular filed with the Commission for such offering.
(2)
(i) No sale of securities may be made until:
(A) The Form 1-A offering statement has been qualified;
(B) A Preliminary Offering Circular is delivered at least 48 hours before the sale to any person that before qualification of the offering statement had indicated an interest in purchasing securities in the offering, including those persons that responded to an issuer's solicitation of interest materials; and
(C) For Tier 2 offerings, no sale may be made to a purchaser if the aggregate purchase price paid by such purchaser for securities in the offering (including any conversion, exercise, or exchange price for securities that are convertible, exercisable or exchangeable for other securities) is more than ten percent (10%) of the greater of such purchaser's annual income and net worth, based on the representations of the purchaser (with annual income and net worth for natural person purchasers determined as provided in Rule 501 (§ 230.501), provided that the issuer does not know, at the time of sale, that any such representation is untrue.
(ii) In a transaction that represents a sale by the issuer or an underwriter, or a sale where there is not an exclusion or exemption from the requirement to deliver a Final Offering Circular pursuant to paragraph 251(d)(2)(iii) of this rule, each underwriter or dealer selling in such transaction must deliver to each purchaser from it, not later than two business days following the completion of such sale, a copy of the Final Offering Circular or, in lieu of such Final Offering Circular, a notice to the effect that the sale was made pursuant to a qualified offering statement that includes the uniform resource locator (“URL”) where the Final Offering Circular, or the offering statement of which such Final Offering Circular is part, may be obtained on EDGAR and contact information sufficient to notify a purchaser where a
(iii) Sales by a dealer (including an underwriter no longer acting in that capacity for the security involved in such transaction) that take place within 90 calendar days after the qualification of the Regulation A offering statement may be made only if the dealer delivers a copy of the current offering circular to the purchaser before or with the confirmation of sale, provided that where an offering statement relates to offerings to be made from time to time pursuant to paragraph (d)(3) of this rule, such 90 calendar day period shall commence on the day of the first bona fide offering of securities under such offering statement; and
(3)
(A) Securities that are to be offered or sold solely by or on behalf of a person or persons other than the issuer, a subsidiary of the issuer, or a person of which the issuer is a subsidiary;
(B) Securities that are to be offered and sold pursuant to a dividend or interest reinvestment plan or an employee benefit plan of the issuer;
(C) Securities that are to be issued upon the exercise of outstanding options, warrants, or rights;
(D) Securities that are to be issued upon conversion of other outstanding securities;
(E) Securities that are pledged as collateral; or
(F) Securities the offering of which will be commenced within two calendar days after the qualification date, will be made on a continuous basis, may continue for a period in excess of 30 days from the date of initial qualification, and will be offered in an amount that, at the time the offering statement is qualified, is reasonably expected to be offered and sold within two years from the initial qualification date. These securities may be offered and sold only if not more than three years have elapsed since the initial qualification date of the offering statement under which they are being offered and sold; provided, however, that if a new offering statement has been filed pursuant to this paragraph (d)(3)(i)(F), securities covered by the prior offering statement may continue to be offered and sold until the earlier of the qualification date of the new offering statement or 180 days after the third anniversary of the initial qualification date of the prior offering statement. Before the end of such three-year period, an issuer may file a new offering statement covering the securities. The new offering statement must include all the information that would be required at that time in an offering statement relating to all offerings that it covers. Before the qualification date of the new offering statement, the issuer may include as part of such new offering statement any unsold securities covered by the earlier offering statement by identifying on the cover page of the new offering circular or the latest amendment the amount of such unsold securities being included. The offering of securities on the earlier offering statement will be deemed terminated as of the date of qualification of the new offering statement. Securities may be sold pursuant this paragraph (d)(3)(i)(F) only if the issuer is current in its annual and semiannual filings pursuant to Rule 257(b) (§ 230.257(b)), at the time of such sale.
(ii) At the market offerings, by or on behalf of the issuer or otherwise, are not permitted under this Regulation A. As used in this paragraph (d)(3)(ii), the term
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(ii) Every amendment that includes audited financial statements must include the consent of the certifying accountant to the use of such accountant's certificate in connection with the amended financial statements in the offering statement or offering circular and to being named as having audited such financial statements.
(iii) Amendments solely relating to Part III of Form 1-A must comply with
(2) Post-qualification amendments must be filed in the following circumstances for ongoing offerings:
(i) At least every 12 months after the qualification date to include the financial statements that would be required by Form 1-A as of such date; or
(ii) To reflect any facts or events arising after the qualification date of the offering statement (or the most recent post-qualification amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the offering statement.
(a)
(b) Notwithstanding paragraph (a) of this section, the offering circular may omit information with respect to the public offering price, underwriting syndicate (including any material relationships between the issuer or selling securityholders and the unnamed underwriters, brokers or dealers), underwriting discounts or commissions, discounts or commissions to dealers, amount of proceeds, conversion rates, call prices and other items dependent upon the offering price, delivery dates, and terms of the securities dependent upon the offering date; provided, that the following conditions are met:
(1) The securities to be qualified are offered for cash.
(2) The outside front cover page of the offering circular includes a bona fide estimate of the range of the maximum offering price and the maximum number of shares or other units of securities to be offered or a bona fide estimate of the principal amount of debt securities offered, subject to the following conditions:
(i) The range must not exceed $2 for offerings where the upper end of the range is $10 or less and 20% if the upper end of the price range is over $10; and
(ii) The upper end of the range must be used in determining the aggregate offering price under Rule 251(a) (§ 230.251(a)).
(3) The offering statement does not relate to securities to be offered by competitive bidding.
(4) The volume of securities (the number of equity securities or aggregate principal amount of debt securities) to be offered may not be omitted in reliance on this paragraph (b).
A decrease in the volume of securities offered or a change in the bona fide estimate of the offering price range from that indicated in the offering circular filed as part of a qualified offering statement may be disclosed in the offering circular filed with the Commission pursuant to Rule 253(g) (§ 230.253(g)), so long as the decrease in the volume of securities offered or change in the price range would not materially change the disclosure contained in the offering statement at qualification. Notwithstanding the foregoing, any decrease in the volume of securities offered and any deviation from the low or high end of the price range may be reflected in the offering circular supplement filed with the Commission pursuant to Rule 253(g)(1) (§ 230.253(g)(1)) if, in the aggregate, the decrease in volume and/or change in price represent no more than a 20% change from the maximum aggregate offering price calculable using the information in the qualified offering statement. In no circumstances may this paragraph be used to offer securities where the maximum aggregate offering price would result in the offering exceeding the limit set forth in Rule 251(a) (§ 230.251(a)) for offerings under Regulation A or if the change would result in a Tier 1 offering becoming a Tier 2 offering. An offering circular supplement may not be used to increase the volume of securities being offered. Additional securities may only be offered pursuant to a new offering statement or post-qualification amendment qualified by the Commission.
(c) The information omitted from the offering circular in reliance upon paragraph (b) of this rule must be contained in an offering circular filed with the Commission pursuant to Rule 252(e) (§ 230.252(e)) and paragraph (g) of this rule; except that if such offering circular is not so filed by the later of 15 business days after the qualification date of the offering statement or 15 business days after the qualification of a post-qualification amendment thereto that contains an offering circular, the information omitted in reliance upon paragraph (b) of this rule must be contained in a qualified post-qualification amendment to the offering statement.
(d)
(1) Information in the offering circular must be presented in a clear, concise and understandable manner and in a type size that is easily readable. Repetition of information should be avoided; cross-referencing of information within the document is permitted.
(2) Where an offering circular is distributed through an electronic medium, issuers may satisfy legibility requirements applicable to printed documents by presenting all required information in a format readily communicated to investors.
(e)
(f)
The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.
(g)
(1) An offering circular that discloses information previously omitted from the offering circular in reliance upon Rule 253(b) (§ 230.253(b)) must be filed with the Commission no later than two business days following the earlier of the date of determination of the offering price or the date such offering circular is first used after qualification in connection with a public offering or sale.
(2) An offering circular that reflects information other than that covered in paragraph (g)(1) of this rule that constitutes a substantive change from or addition to the information set forth in the last offering circular filed with the Commission must be filed with the Commission no later than five business days after the date it is first used after qualification in connection with a public offering or sales. If an offering circular filed pursuant to this paragraph (g)(2) consists of an offering circular supplement attached to an offering circular that (i) previously had been filed or (ii) was not required to be filed pursuant to paragraph (g) of this rule because it did not contain substantive changes from an offering circular that previously was filed, only the offering circular supplement need be filed under paragraph (g) of this rule, provided that the cover page of the offering circular supplement includes a cross reference to the date(s) of the related offering circular and any offering circular supplements thereto that together constitute the offering circular with respect to the securities currently being offered or sold.
(3) An offering circular that discloses information, facts or events covered in both paragraphs (g)(1) and (2) must be filed with the Commission no later than
(4) An offering circular required to be filed pursuant to paragraph (g) of this rule that is not filed within the time frames specified in paragraph (g) must be filed pursuant to this paragraph (4) as soon as practicable after the discovery of such failure to file.
(5) Each offering circular must be filed with the Commission in electronic format by means of EDGAR in accordance with the EDGAR rules set forth in Regulation S-T (17 CFR Part 232).
(6) Each offering circular filed under this rule must contain in the upper right corner of the cover page the paragraph and subparagraph of this rule under which the filing is made, and the file number of the offering statement to which the offering circular relates.
Before qualification of the required offering statement, but after its filing, a written offer of securities may be made if it meets the following requirements:
(a) The outside front cover page of the material bears the caption
An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.
(b) The Preliminary Offering Circular contains substantially the information required in an offering circular by Form 1-A (§ 239.90 of this chapter), except that information that may be omitted under Rule 253(b) (§ 230.253(b)) may be omitted if the conditions set forth in Rule 253(b) are met.
(c) The Preliminary Offering Circular is filed as a part of the offering statement.
(a) At any time before the qualification of an offering statement, including before the non-public submission or public filing of such offering statement, an issuer or any person authorized to act on behalf of an issuer may communicate orally or in writing to determine whether there is any interest in a contemplated securities offering. Such communications are deemed to be an offer of a security for sale for purposes of the antifraud provisions of the federal securities laws. No solicitation or acceptance of money or other consideration, nor of any commitment, binding or otherwise, from any person is permitted until qualification of the offering statement.
(b) The communications must:
(1) State that no money or other consideration is being solicited, and if sent in response, will not be accepted;
(2) State that no offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is qualified, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date;
(3) State that a person's indication of interest involves no obligation or commitment of any kind; and
(4) After the public filing of the offering statement:
(i) State from whom a copy of the most recent version of the Preliminary Offering Circular may be obtained, including a phone number and address of such person;
(ii) Provide the URL where such Preliminary Offering Circular or to the offering statement in which such Preliminary Offering Circular was filed may be obtained; or
(iii) Include a complete copy of the Preliminary Offering Circular.
(c) Any written communication under this rule may include a means by which a person may indicate to the issuer that such person is interested in a potential offering. This issuer may require the name, address, telephone number, and/or email address in any response form included pursuant to this paragraph (c).
(d) If solicitation of interest materials are used after the public filing of the offering statement and such solicitation of interest materials contain information that is inaccurate or inadequate in any material respect, revised solicitation of interest materials must be redistributed in a manner substantially similar to the manner in which such materials were originally distributed. Notwithstanding the foregoing in this paragraph (d), if the only information that is inaccurate or inadequate is contained in a Preliminary Offering Circular provided with the solicitation of interest materials pursuant to paragraphs (b)(4)(i) or (b)(4)(ii) of this rule, no such redistribution is required in the following circumstances:
(1) in the case of paragraph (b)(4)(i) of this rule, the revised Preliminary Offering Circular will be provided to any persons making new inquiries and will be recirculated to any persons making any previous inquiries; or
(2) in the case of paragraph (b)(4)(ii) of this rule, the URL continues to link directly to the most recent Preliminary Offering Circular or to the offering statement in which such revised Preliminary Offering Circular was filed.
(e) Where an issuer decides to register an offering under the Securities Act after soliciting interest in a contemplated, but abandoned, Regulation A offering, the Regulation A exemption for offers would not be subject to integration with the registered offering, unless the issuer engaged in solicitations of interest pursuant to this rule to persons other than qualified institutional buyers and institutional accredited investors permitted by Section 5(d) of the Securities Act. In such circumstances, the issuer (and any underwriter, broker, dealer, or agent used by the issuer in connection with the proposed offering) must wait at least 30 calendar days between the last such solicitation of interest in the Regulation A offering and the filing of the registration statement with the Commission.
For purposes of Section 18(b)(3) of the Securities Act [15 U.S.C. 77r(b)(3)], a “qualified purchaser” of a security offered or sold pursuant to Regulation A means any offeree of such security and, in a Tier 2 offering, any purchaser of such security.
(a)
(b)
(1)
(2)
(A) audited financial statements for the issuer's last full fiscal year (or for the life of the issuer if less than a full fiscal year) preceding the fiscal year in which the issuer's offering statement became qualified; or
(B) financial statements covering the first half of the issuer's current fiscal year if the offering statement was qualified during the second half of that fiscal year.
(ii) The special financial report described in paragraph (a)(2)(i)(A) of this rule must be filed under cover of Form 1-K within 120 calendar days after the qualification date of the offering statement and must include audited financial statements for such last full fiscal year or other period, as the case may be. The special financial report described in paragraph (a)(2)(i)(B) of this rule must be filed under cover of Form 1-SA within 90 calendar days after the qualification date of the offering statement and must include the semiannual financial statements for the first half of the issuer's fiscal year, which may be unaudited.
(iii) A special financial report must be signed in accordance with the requirements of the form on which it is filed.
(3)
(4)
(5)
(c)
(d)
(2) The duty to file reports under paragraph (b) of this rule with respect to a class of securities held of record (as defined in Rule 12g5-1 (§ 240.12g5-1)) by less than 300 persons shall be suspended for such class of securities immediately upon filing with the Commission an exit report on Form 1-Z (§ 239.94) if the issuer of such class has filed all reports due pursuant to this rule before the date of such Form 1-Z filing for the shorter of (i) the period since the issuer became subject to such reporting obligation, or (ii) its most recent three fiscal years and the portion of the current year preceding the date of filing Form 1-Z. For the purposes of this subsection, the term “class” shall be construed to include all securities of an issuer that are of substantially similar character and the holders of which enjoy substantially similar rights and privileges. If the Form 1-Z is subsequently withdrawn or denied, the issuer must, within 60 days, file with the Commission all reports which would have been required if such exit report had not been filed. If the suspension resulted from the issuer's merger into, or consolidation with, another issuer or issuers, the notice must be filed by the successor issuer.
(3) The ability to suspend reporting, as described in paragraph (d)(2) of this rule, is not available for any class of securities if (i) during that fiscal year an offering statement was qualified or (ii) at the time of filing of Form 1-Z, offers or sales of securities of that class are being made pursuant to Regulation A.
(e)
(1) automatically terminate if the issuer is eligible to suspend its duty to file reports under paragraph (d)(2)-(3); or
(2) recommence with the report covering any financial period after that included in any registration statement or Exchange Act report.
(a) The Commission may at any time enter an order temporarily suspending a Regulation A exemption if it has reason to believe that:
(1) No exemption is available or any of the terms, conditions or requirements of Regulation A have not been complied with;
(2) The offering statement, any sales or solicitation of interest material, or any report filed pursuant to Rule 257 (§ 230.257) contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;
(3) The offering is being made or would be made in violation of section 17 of the Securities Act;
(4) An event has occurred after the filing of the offering statement that would have rendered the exemption hereunder unavailable if it had occurred before such filing;
(5) Any person specified in Rule 262(a) (§ 230.262(a)) has been indicted for any crime or offense of the character specified in Rule 262(a)(1) (§ 230.262(a)(1)), or any proceeding has been initiated for the purpose of enjoining any such person from engaging in or continuing any conduct or practice of the character specified in Rule 262(a)(2) (§ 230.262(a)(2)), or any proceeding has been initiated for the purposes of Rule 262(a)(3)-(8) (§ 230.262(a)(3)-(8)); or
(6) The issuer or any promoter, officer, director or underwriter has failed to cooperate, or has obstructed or refused to permit the making of an investigation by the Commission in connection with any offering made or proposed to be made in reliance on Regulation A.
(b) Upon the entry of an order under paragraph (a) of this rule, the Commission will promptly give notice to the issuer, any underwriter and any selling securityholder:
(1) That such order has been entered, together with a brief statement of the reasons for the entry of the order; and
(2) That the Commission, upon receipt of a written request within 30 calendar days after the entry of the order, will within 20 calendar days after receiving the request, order a hearing at a place to be designated by the Commission.
(c) If no hearing is requested and none is ordered by the Commission, an order entered under paragraph (a) of this rule shall become permanent on the 30th calendar day after its entry and shall remain in effect unless or until it is modified or vacated by the Commission. Where a hearing is requested or is ordered by the Commission, the Commission will, after notice of and opportunity for such hearing, either vacate the order or enter an order permanently suspending the exemption.
(d) The Commission may, at any time after notice of and opportunity for hearing, enter an order permanently suspending the exemption for any reason upon which it could have entered a temporary suspension order under paragraph (a) of this rule. Any such order shall remain in effect until vacated by the Commission.
(e) All notices required by this rule must be given by personal service, registered or certified mail to the addresses given by the issuer, any underwriter and any selling securityholder in the offering statement.
(a) If none of the securities that are the subject of an offering statement have been sold and such offering statement is not the subject of a proceeding under Rule 258 (§ 230.258), the offering statement may be withdrawn with the Commission's consent. The application for withdrawal must state the reason the offering statement is to be withdrawn, must be signed by an authorized representative of the issuer and must be filed with the Commission in electronic format by means of EDGAR in accordance with the EDGAR rules set forth in Regulation S-T (17 CFR Part 232). Any withdrawn document will remain in the Commission's files, as well as the related request for withdrawal.
(b) When an offering statement has been on file with the Commission for nine months without amendment and has not become qualified, the Commission may, in its discretion, declare the offering statement abandoned. If the offering statement has been amended, the nine-month period shall be computed from the date of the latest amendment.
(a) A failure to comply with a term, condition or requirement of Regulation A will not result in the loss of the exemption from the requirements of section 5 of the Securities Act for any offer or sale to a particular individual or entity, if the person relying on the exemption establishes that:
(1) The failure to comply did not pertain to a term, condition or requirement directly intended to protect that particular individual or entity;
(2) The failure to comply was insignificant with respect to the offering as a whole, provided that any failure to comply with paragraphs (a), (b), (d)(1) and (3) of Rule 251 (§ 230.251) shall be deemed to be significant to the offering as a whole; and
(3) A good faith and reasonable attempt was made to comply with all applicable terms, conditions and requirements of Regulation A.
(b) A transaction made in reliance upon Regulation A must comply with all applicable terms, conditions and requirements of the regulation. Where an exemption is established only through reliance upon paragraph (a) of this rule, the failure to comply shall nonetheless be actionable by the Commission under section 20 of the Securities Act.
(c) This provision provides no relief or protection from a proceeding under Rule 258 (§ 230.258).
As used in this Regulation A, all terms have the same meanings as in Rule 405 (§ 230.405), except that all references to
(a)
(b)
(c)
(d)
(a) No exemption under this Regulation A shall be available for a sale of securities if the issuer; any predecessor of the issuer; any affiliated issuer; any director, executive officer, other officer participating in the offering, general partner or managing member of the issuer; any beneficial owner of 20% or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power; any promoter connected with the issuer in any capacity at the time of filing, any offer after qualification, or such sale; any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities; any general partner or managing member of any such solicitor; or any director, executive officer or other officer participating in the offering of any such solicitor or general partner or managing member of such solicitor:
(1) Has been convicted, within ten years before the filing of the offering statement (or five years, in the case of issuers, their predecessors and affiliated issuers), of any felony or misdemeanor:
(i) In connection with the purchase or sale of any security;
(ii) Involving the making of any false filing with the Commission; or
(iii) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(2) Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before the filing of the offering statement, that, at the time of such filing, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:
(i) In connection with the purchase or sale of any security;
(ii) Involving the making of any false filing with the Commission; or
(iii) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(3) Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:
(i) At the time of the filing of the offering statement, bars the person from:
(A) Association with an entity regulated by such commission, authority, agency, or officer;
(B) Engaging in the business of securities, insurance or banking; or
(C) Engaging in savings association or credit union activities; or
(ii) Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct entered within ten years before such sale;
(4) Is subject to an order of the Commission entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78
(i) Suspends or revokes such person's registration as a broker, dealer, municipal securities dealer or investment adviser;
(ii) Places limitations on the activities, functions or operations of such person; or
(iii) Bars such person from being associated with any entity or from participating in the offering of any penny stock;
(5) Is subject to any order of the Commission entered within five years before the filing of the offering statement that, at the time of such filing, orders the person to cease and desist from committing or causing a violation or future violation of:
(i) Any scienter-based anti-fraud provision of the federal securities laws, including without limitation section 17(a)(1) of the Securities Act of 1933 (15 U.S.C. 77q(a)(1)), section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and 17 CFR 240.10b-5, section 15(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78
(ii) Section 5 of the Securities Act of 1933 (15 U.S.C. 77e).
(6) Is suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;
(7) Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before the filing of the offering statement, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, at the time of such filing, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued; or
(8) Is subject to a United States Postal Service false representation order entered within five years before the filing of the offering statement, or is, at the time of such filing, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.
(b) Paragraph (a) of this rule shall not apply:
(1) With respect to any order under § 230.262(a)(3) or (a)(5) that occurred or was issued before [effective date of rule];
(2) Upon a showing of good cause and without prejudice to any other action by the Commission, if the Commission determines that it is not necessary under the circumstances that an exemption be denied;
(3) If, before the filing of the offering statement, the court or regulatory authority that entered the relevant order, judgment or decree advises in writing (whether contained in the relevant judgment, order or decree or separately to the Commission or its staff) that disqualification under paragraph (a) of this rule should not arise as a consequence of such order, judgment or decree; or
(4) If the issuer establishes that it did not know and, in the exercise of reasonable care, could not have known that a disqualification existed under paragraph (a) of this rule.
(c) For purposes of paragraph (a) of this rule, events relating to any affiliated issuer that occurred before the affiliation arose will be not considered disqualifying if the affiliated entity is not:
(1) In control of the issuer; or
(2) Under common control with the issuer by a third party that was in control of the affiliated entity at the time of such events.
(d)
An issuer will not be able to establish that it has exercised reasonable care unless it has made, in light of the circumstances, factual inquiry into whether any disqualifications exist. The nature and scope of the factual inquiry will vary based on the facts and circumstances concerning, among other things, the issuer and the other offering participants.
(a) If the issuer is not organized under the laws of any of the states of or the United States of America, it shall at the time of filing the offering statement required by Rule 252 (§ 230.252),
(b) Any change to the name or address of the agent for service of the issuer shall be communicated promptly to the Commission through amendment of the requisite form and referencing the file number of the relevant offering statement.
(b) * * *
(2) * * *
(iii) * * *
(A) The term “filing of the offering statement” as used in § 230.262 shall mean the first sale of securities under this section;
(B) The term “underwriter” as used in § 230.262(a) shall mean a person that has been or will be paid directly or indirectly remuneration for solicitation of purchasers in connection with sales of securities under this section; and
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78
The revisions, additions and reservations read as follows:
(a) * * *
(1) * * *
(vii) Form F-X (§ 239.42 of this chapter) when filed in connection with a Form CB (§§ 239.800 and 249.480 of this chapter) or a Form 1-A (§ 239.90);
(xvii) Filings made pursuant to Regulation A (§§ 230.251-230.263 of this chapter).
(b) * * *
(8) [Reserved]
(c) * * *
(6) Filings on Form 144 (§ 239.144 of this chapter) where the issuer of the securities is not subject to the reporting requirements of section 13 or 15(d) of the Exchange Act (15 U.S.C. 78m or 78o(d), respectively).
15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, § 401, 126 Stat. 313 (2012), unless otherwise noted.
This form shall be used for filing annual reports under Regulation A (§§ 230.251-230.263 of this chapter).
This form shall be used for filing semiannual reports under Regulation A (§§ 230.251-230.263 of this chapter).
This form shall be used for filing current reports under Regulation A (§§ 230.251-230.263 of this chapter).
This form shall be used to file an exit report under Regulation A (§§ 230.251-230.263 of this chapter).
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78
Section 240.15c2-11 also issued under 15 U.S.C. 78j(b), 78o(c), 78q(a), 78w(a), and Pub. L. 112-106, § 401, 126 Stat. 313 (2012).
(a) * * *
(3) A copy of the issuer's most recent annual report filed pursuant to section 13 or 15(d) of the Act or pursuant to Regulation A ((§§ 230.251-230.263 of this chapter), or a copy of the annual statement referred to in section 12(g)(2)(G)(i) of the Act in the case of an issuer required to file reports pursuant to section 13 or 15(d) of the Act or an issuer of a security covered by section 12(g)(2)(B) or (G) of the Act, together with any semiannual, quarterly and current reports that have been filed under the provisions of the Act or Regulation A by the issuer after such annual report or annual statement;
(d) * * *
(2) * * *
(i) A broker-dealer shall be in compliance with the requirement to obtain current reports filed by the issuer if the broker-dealer obtains all current reports filed with the Commission by the issuer as of a date up to five business days in advance of the earlier of the date of submission of the quotation to the quotation medium and the date of submission of the paragraph (a) information pursuant to the applicable rule of the Financial Industry Regulatory Authority, Inc. or its successor organization; and
15 U.S.C. 77c, 77eee, 77ggg, 77nnn, 77sss, 78 ll (d), 80b-3, 80b-4, 80b-11 and Pub. L. 112-106, § 401, 126 Stat. 313 (2012), unless otherwise noted.
The provisions of the Trust Indenture Act of 1939 shall not apply to any security that has been or will be issued otherwise than under an indenture. The same issuer may not claim this exemption within a period of twelve consecutive months for more than $50,000,000 aggregate principal amount of any securities.
By the Commission.
Environmental Protection Agency (EPA).
Notice.
The Toxic Substances Control Act (TSCA) Interagency Testing Committee (ITC) transmitted its 73rd ITC Report to the EPA Administrator on December 31, 2013. In the 73rd ITC Report, which is included with this notice, the ITC is revising the
Comments must be received on or before February 24, 2014.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2013-0651, by one of the following methods:
•
•
•
This notice is directed to the public in general. It may, however, be of particular interest to you if you manufacture (defined by statute to include import) and/or process TSCA-covered chemicals and you may be identified by the North American Industrial Classification System (NAICS) codes 325 and 32411. Because this notice is directed to the general public and other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be interested in this action.
1.
2.
i. Identify the document by docket ID number and other identifying information (subject heading,
ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
iii. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
iv. Describe any assumptions and provide any technical information and/or data that you used.
v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
vi. Provide specific examples to illustrate your concerns and suggest alternatives.
vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
viii. Make sure to submit your comments by the comment period deadline identified.
The Toxic Substances Control Act (TSCA) (15 U.S.C. 260l
The ITC is revising the TSCA section 4(e)
The TSCA section 4(e)
Environmental protection, Chemicals, Hazardous substances.
The Toxic Substances Control Act (TSCA) Interagency Testing Committee (ITC) is revising the TCSA section 4(e)
The TSCA section 4(e)
The ITC was established by TSCA section 4(e) “to make recommendations to the Administrator respecting the chemical substances and mixtures to which the Administrator should give priority consideration for the promulgation of rules for testing under section 4(a). . . At least every six months . . ., the Committee shall make such revisions to the
During this reporting period, the ITC discussed the 50 HPV Challenge Program orphan chemicals remaining on the TSCA section 4(e)
In 2004, at EPA's request, the ITC added 281 HPV Challenge Program orphan (unsponsored) chemicals to the
TSCA Interagency Testing Committee (7405M), Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; url: