Farm Service Agency
Food and Nutrition Service
Forest Service
Census Bureau
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Army Department
Navy Department
Federal Energy Regulatory Commission
Children and Families Administration
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
U.S. Customs and Border Protection
Fish and Wildlife Service
Geological Survey
National Park Service
Justice Programs Office
Occupational Safety and Health Administration
National Endowment for the Arts
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
Federal Transit Administration
Pipeline and Hazardous Materials Safety Administration
Comptroller of the Currency
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Nuclear Regulatory Commission.
Direct final rule; confirmation of effective date.
The U.S. Nuclear Regulatory Commission (NRC) is confirming the effective date of October 16, 2023, for the direct final rule that was published in the
The effective date of October 16, 2023, for the direct final rule published July 31, 2023 (88 FR 49267), is confirmed.
Please refer to Docket ID NRC-2023-0085 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
Bernard White, Office of Nuclear Materials Safety and Safeguards, telephone: 301-415-6577, email:
On July 31, 2023 (88 FR 49267), the NRC published a direct final rule amending its regulations in part 72 of title 10 of the
In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on October 16, 2023. The NRC did not receive any comments on the direct final rule. Therefore, this direct final rule will become effective as scheduled.
For the Nuclear Regulatory Commission.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Final rule; technical amendment.
The Department of Energy (DOE) is amending its standards for commercial packaged boilers (CPB) in compliance with a United States Court of Appeals for the District Court of Columbia Circuit court decision vacating the January 10, 2020 rule that amended standards for CPB.
This action is effective on September 19, 2023. However, the opinion had legal effect on August 28, 2023.
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and
Ms. Amelia Whiting, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-2588. Email:
The Energy Policy and Conservation Act of 1975 (EPCA), as amended, requires DOE to, among other things, periodically consider whether amended energy conservation standards for commercial packaged boilers are warranted. On January 10, 2020, DOE published a final rule, 85 FR 1592 (January 10, 2020; “January 2020 Final Rule”), amending energy conservation standards for commercial packaged boilers (“CPB”). A commercial packaged boiler is a packaged boiler that meets all of the following requirements: (1) has rated input of 300,000 Btu/h or greater; (2) is to any significant extent, distributed in commerce for space conditioning and/or service water heating in buildings but does not meet the definition of “hot water supply boiler”; (3) does not meet the definition of “field-constructed”; and (4) is designed to operate a steam pressure at or below 15 psig; operate at or below a water pressure of 160 psig and water temperature of 250 °F, or operate at a steam pressure at or below 15 psig and at or below a water pressure of 160 psig and water temperature of 250 °F. 10 CFR 431.82.
The American Public Gas Association (“APGA”), Air-Conditioning, Heating and Refrigeration Institute (“AHRI”), and Spire Inc. filed petitions for review of DOE's January 2020 Final Rule in the United States Courts of Appeals for the D.C. Circuit, Fourth Circuit, and Eight Circuit, respectively.
On remand, DOE published a supplemental response to comments providing additional explanation regarding these three issues. 87 FR 23421 (April 20, 2022). APGA, AHRI, and Spire Inc. filed separate petitions for review of the supplemental response to comments, which were consolidated in the D.C. Circuit. The D.C. Circuit issued an opinion on July 7, 2023, granting the petition for review and vacating the energy conservation standards for CPBs established in the January 2020 Final Rule, and remanding the proceedings to DOE. (See 10 CFR 431.87)
This final rule is not subject to the requirement to provide prior notice and an opportunity for public comment pursuant to 5 U.S.C. 553(b)(B). DOE finds good cause to waive the requirement to provide prior notice and an opportunity for public comment as such procedure is unnecessary. DOE must comply with the order of a Federal court, and has no discretion to do otherwise. In implementation of that order, DOE is vacating the current energy conservation standards for commercial packaged boilers. Comments suggesting any other course would serve no useful purpose.
The Secretary of Energy has approved publication of this final rule; technical amendment.
This document of the Department of Energy was signed on September 8, 2023, by Francisco Alejandro Moreno, Acting Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
For the reasons stated in the preamble, DOE amends part 431 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below:
42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.
(a) Each commercial packaged boiler listed in table 1 of this paragraph (a) and manufactured on or after the effective date listed must meet the indicated energy conservation standard.
(b) Each commercial packaged boiler listed in table 2 of this paragraph (b) and manufactured on or after the effective date listed in Table 2 must meet the indicated energy conservation standard.
Defense Nuclear Facilities Safety Board.
Direct final rule; confirmation of effective date.
The Defense Nuclear Facilities Safety Board (DNFSB) is confirming the effective date of October 10, 2023, for the direct final rule that was published in the
The effective date of October 10, 2023, for the direct final rule published on July 11, 2023, (88 FR 44031), is confirmed.
Patricia A. Hargrave, Associate General Counsel, Defense Nuclear Facilities Safety Board, 625 Indiana Avenue NW, Suite 700, Washington, DC 20004-2901, (202) 694-7000.
On August 30, 2021 (88 FR 44031), the DNFSB published a direct final rule to implement the Debt Collection Act (DCA), as amended, 31 U.S.C. 3701,
In the direct final rule, the DNFSB stated that, if no significant adverse comments were received, the direct final rule would become effective on October 11, 2023. The DNFSB received one comment. The DNFSB evaluated the comment against the criteria described in the direct final rule and determined that the comment was not significant and adverse. Specifically, the commentator stated that the rule would be “great” due to “the added measure of structure and accountability that will result from this rule.” The comment was positive and supportive. The direct final rule will become effective as scheduled.
Defense Nuclear Facilities Safety Board.
Interim rule with request for comments.
The Defense Nuclear Facilities Safety Board (Board) is issuing interim regulations to govern the collection of debts owed to the Board and to the United States by federal employees.
This interim final rule is effective October 19, 2023. Comments must be submitted on or before October 19, 2023.
You may submit comments at any time prior to the comment deadline by the following methods:
Patricia A. Hargrave, Associate General Counsel, Defense Nuclear Facilities Safety Board, 625 Indiana Avenue NW, Suite 700, Washington, DC 20004-2901, (202) 694-7000.
These regulations implement the debt collection procedures provided under section 5 of the Debt Collection Act (DCA), as amended, codified at 5 U.S.C. 5514. The DCA authorizes the federal government to collect debts by offset from the salaries of federal employees without the employee's consent, provided that the employee is properly notified and given the opportunity to exercise certain administrative rights.
The DCA, codified at 5 U.S.C. 5514, made changes in the way executive agencies collect debts owed to the federal government. The purpose of the DCA is to improve the ability of the government to collect money owed to it. The DCA requires each agency to establish a salary offset program for the collection of debts owed by federal employees to the federal government. Before an agency may collect a debt by salary offset, an employee-debtor must be provided with notice of the debt and the opportunity to (1) inspect and copy government records relating to the debt, (2) enter into a written repayment agreement, and (3) request an impartial hearing on the agency's determination of the existence or the amount of the debt. The employee must notify the agency of his or her intent to exercise these rights within the time prescribed in the agency's regulations.
Office of Personnel Management (OPM) regulations govern the salary offset program and establish certain minimum standards and procedures that must be incorporated into each agency's salary offset regulations. OPM's regulations require each agency to submit proposed regulations to OPM for review and approval prior to becoming final rules. The Board sent a copy of its interim rule to OPM in compliance with 5 CFR 550.1105. OPM approved the Board's interim rule on salary offset on July 27, 2023.
The Board is establishing a new part 1710 in 10 CFR, chapter XVII, that would contain the provisions necessary to meet the requirements of the DCA. The new part 1710 provides procedures for the Board to collect debts owed to the federal government by administrative offset from a federal employee's salary without his or her consent. This rule applies to all federal employees who owe debts to the Board and to current employees of the Board who owe debts to other federal agencies.
The Board has determined that this document is interpretative because it merely implements a definitive statutory scheme and the requirements contained in regulations promulgated by OPM, codified in 5 CFR part 550, subpart K. Accordingly, no notice of proposed rulemaking is required pursuant to 5 U.S.C. 553(b)(A). In addition, because this rule relates to agency management and personnel, no notice of proposed rulemaking is required pursuant to 5 U.S.C. 553(a)(2). The Board, however, will consider any public comments before issuing a final rule.
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, agencies must consider the impact of their rulemakings on “small entities” (small businesses, small organizations, and local governments) when publishing regulations subject to the notice and comment requirements of the Administrative Procedure Act. As noted in section I. Background above, the Board has determined that notice and the opportunity to comment are unnecessary because this interim rule is interpretative and relates to agency management and practice. Therefore, no analysis is required by the Regulatory Flexibility Act.
This interim rule will not result in the expenditure by state, local, and tribal governments, in aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 658 and 1501-03, 1531-34.
This interim rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.
This interim rule contains no new reporting or recordkeeping requirements under the Paperwork Reduction Act (PRA) of 1995, 44 U.S.C. 3501
According to Executive Orders 12988 and 13132, agencies must state in clear language the preemptive effect, if any, of new regulations. The creation of this interim rule affects only how the Board collects debts owed by federal employees to the government by salary offset. It does not have any effect on preemption of state, tribal, or local government laws or otherwise have federalism implications.
The Congressional Review Act, 5 U.S.C. 801
Implementing these regulations will not result in significant impacts affecting the quality of the human environment, unavoidable adverse environmental effects, rejection of reasonable alternatives to the proposed action, or irreversible or irretrievable commitments of environmental resources. The agency has not consulted with any other agencies in making this determination.
Executive Order 12866 requires federal agencies submit significant regulatory actions to the Office of Management of Budget. This interim rule is not significant and will not have a significant impact on small entities. The interim rule implements statutory and regulatory requirements to collect employee debts as allowed by statute.
The Board is publishing this interim rule without a prior proposal because it is interpretative as it merely implements a definitive statutory scheme and the requirements contained in regulations promulgated by OPM. The Board, however, will consider any comments before issuing the final rule.
Debts, Claims, Salary offset.
5 U.S.C. 5514; 5 CFR part 550 subpart K.
(a) This part provides procedures for the collection by administrative offset of a federal employee's salary without his/her consent to satisfy certain debts owed to the federal government. This part applies to all federal employees who owe debts to the Defense Nuclear Facilities Safety Board (Board) and to current employees of the Board who owe debts to other federal agencies. This part does not apply when the employee consents to recovery from his/her current pay account.
(b) These procedures do not apply to debts or claims arising under:
(1) The Internal Revenue Code of 1954, as amended, 26 U.S.C. 1
(2) The tariff laws of the United States; or
(3) Any case where a collection of a debt is explicitly provided for or prohibited by another statute.
(c) These procedures do not preclude the compromise, suspension, or termination of collection action where appropriate under the standards implementing the revised Federal Claims Collection Standards (FCCS), 31 U.S.C. 3711
(d) This part does not preclude an employee from requesting waiver of an overpayment under 5 U.S.C. 5584 or in any way questioning the amount or validity of the debt by submitting a subsequent claim to the Board. This part does not preclude an employee from requesting a waiver pursuant to other statutory provisions applicable to the particular debt being collected.
(e) The Board is not limited to collection remedies contained in the revised FCCS. The FCCS is not intended to impair common law remedies.
(1) Any amount required by law to be withheld;
(2) Amounts properly withheld for federal, state, or local income tax purposes;
(3) Amounts deducted as health insurance premiums;
(4) Amounts deducted as normal retirement contributions, not including amounts deducted for supplementary coverage; and
(5) Amounts deducted as normal life insurance premiums, not including amounts deducted for supplementary coverage.
The regulations in this part are to be followed when:
(a) The Board is owed a debt by an individual currently employed by another federal agency;
(b) The Board is owed a debt by an individual who is a current employee of the Board; or
(c) The Board employs an individual who owes a debt to another federal agency.
(a) Deductions under the authority of 5 U.S.C. 5514 shall not be made unless the creditor agency provides the employee with written notice that he/she owes a debt to the Federal government a minimum of 30 calendar days before salary offset is initiated. When the Board is the creditor agency, this notice of intent to offset an employee's salary shall be hand-delivered at work, or sent by registered mail, return receipt requested, to the employee's most current address that is available to the Board. The written notice will contain:
(1) A statement that the debt is owed and an explanation of its origin, nature, and amount;
(2) The creditor agency's intention to collect the debt by deducting from the
(3) The amount and frequency of the intended deduction (stated as a fixed dollar amount or as a percentage of pay, not to exceed 15 percent of disposable pay) and the intention to continue the deduction until the debt is paid in full or otherwise resolved;
(4) An explanation of interest, penalties, and administrative charges, including a statement that these charges will be assessed unless excused in accordance with the Federal Claims Collection Standards at 31 CFR parts 900 through 904;
(5) The employee's right to inspect and copy government records pertaining to the debt or, if the employee or his or her representative cannot personally inspect the records, to request and receive a copy of these records;
(6) If not previously provided, the opportunity (under terms agreeable to the Board) to establish a schedule for the voluntary repayment of the debt or to enter into a written agreement to establish a schedule for repayment of the debt in lieu of offset (31 CFR 901.2) (the agreement must be in writing, signed by the employee and the Board, and documented in the Board's files);
(7) The employee's right to a hearing conducted by an official arranged for by the Board (an administrative law judge, or alternatively, a hearing official not under the control of the head of the agency) if a petition is filed as prescribed in § 1710.109;
(8) The methods and time period for petitioning for hearings;
(9) A statement that the timely filing of a petition for a hearing will stay the commencement of collection proceedings;
(10) A statement that a final decision on the hearing will be issued not later than 60 days after the filing of the petition requesting the hearing unless the employee requests and the hearing official grants a delay in the proceedings;
(11) A statement that any knowingly false or frivolous statements, representations, or evidence may subject the employee to:
(i) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 5 CFR part 752, or any other applicable statutes or regulations;
(ii) Penalties under the False Claims Act, sections 3729-3731 of title 31, United States Code, or any other applicable statutory authority; or
(iii) Criminal penalties under sections 286, 287, 1001, and 1002 of title 18, United States Code or any other applicable statutory authority.
(12) A statement of other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; and
(13) Unless there are contractual or statutory provisions to the contrary, a statement that amounts paid on or deducted for the debt which are later waived or found not owed to the United States will be promptly refunded to the employee.
(b) Entitlement to hearing:
(1) An employee who has received a notice under paragraph (a) that his or her debt will be collected by means of salary offset may request a hearing concerning the existence or amount of the debt.
(2) If a hearing is given, the employee is entitled to receive a written decision from the official holding the hearing on the following issues:
(i) the determination of the creditor agency concerning the existence or amount of the debt; and
(ii) The repayment schedule, if it was not established by written agreement between the employee and the creditor agency.”
(c) Exceptions to entitlement to notice, hearing, written responses, and final decisions:
(1) Any adjustment to pay arising out of any employee's election of coverage or a change in coverage under a federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less;
(2) A routine intra-agency adjustment of pay that is made to correct an overpayment of pay attributable to clerical or administrative errors or delays in processing pay documents, if the overpayment occurred within the four pay periods preceding the adjustment, and, at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and point of contact for contesting such adjustment; or
(3) Any adjustment to collect a debt amounting to $50 or less, if, at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and a point of contact for contesting such adjustment.
(a)
(1) If the Board is the creditor agency, a hearing may be requested by filing a written petition stating why the employee disputes the existence or amount of the debt or the repayment schedule if it was not established by written agreement between the employee and the Board. The employee shall sign the petition and fully identify and explain with reasonable specificity all the facts, evidence, and witnesses, if any, which the employee believes support his or her position. The petition for a hearing must be received no later than fifteen (15) calendar days after receipt of the notice of offset unless the employee can show that the delay in meeting the deadline date was because of circumstances beyond his or her control or because of failure to receive notice of the time limit (unless he or she was otherwise aware of it).
(2) [Reserved]
(b)
(c)
(d)
(e)
(1) Informal conferences with the hearing official, in which the employee and agency representative will be given full opportunity to present evidence, witnesses, and argument;
(2) Informal meetings with an interview of the employee by the hearing official; or
(3) Formal written submissions, with an opportunity for oral presentation.
(f)
(g)
(h)
(i)
(j)
(1) A statement of the facts presented to demonstrate the nature and origin of the alleged debt;
(2) The hearing official's analysis, findings, and conclusions;
(3) The amount and validity of the debt; and
(4) The repayment schedule, where appropriate.
(a)
(b)
(c)
(1) If the amount of the debt is equal to or less than 15 percent of the disposable pay, such debt generally will be collected in one lump sum payment;
(2) Installment deductions will be made over a period of no greater than the anticipated period of employment. An installment deduction will not exceed 15 percent of the disposable pay from which the deduction is made unless the employee has agreed in writing to the deduction of a greater amount. An installment deduction may be less than 15 percent of disposable pay if the creditor agency has determined that smaller deductions are appropriate based on the employee's ability to pay.
(d)
(e)
(f)
(g)
(a)
(1) Arrange for a hearing or special review upon proper petitioning by a federal employee; and
(2) Prescribe, upon consultation with the General Counsel, such additional practices and procedures as may be necessary to carry out the intent of this regulation.
(3) The designated salary offset coordinator will be responsible for:
(i) Ensuring that each notice of intent to offset is consistent with the requirements of §§ 1710.107 and 1710.111 of this part;
(ii) Ensuring that each certification of debt that is sent to a paying agency is consistent with the requirements of paragraph (b) of this section;
(iii) Obtaining hearing officials; and
(iv) Ensuring that hearings are properly scheduled.
(b)
(1) Certify, in writing, to the paying agency that the employee owes the debt, the amount and basis of the debt, the date on which payment(s) is due, the date the Government's right to collect the debt first accrued, and that the Board's regulations implementing 5 U.S.C. 5514 have been approved by the Office of Personnel Management;
(2) Advise the paying agency of the amount or percentage of disposable pay to be collected in each installment and the number and commencing date of the installments (if a date other than the next officially established pay period is required);
(3) Advise the paying agency of the action(s) taken under 5 U.S.C. 5514(b) and give the date(s) action(s) were taken (unless the employee has consented to the salary offset in writing or signed a statement acknowledging receipt of the required procedures and the written consent or statement is forwarded to the paying agency);
(4) Submit a debt claim certification containing the information specified in paragraphs (b)(1), (2), and (3) of this section and an installment agreement (or other instruction on the payment schedule), if applicable, to the paying agency; and
(5) Submit the debt claim to the paying agency for collection if the employee is in the process of separating, and has not received a final salary check, or other final payment(s) from the paying agency. The Board must submit a properly certified claim to the agency responsible for making such payments before the collection can be made.
(c)
(d)
(a)
(1) A statement that the Board has received a certified debt claim from the creditor agency;
(2) The amount of the debt claim;
(3) The date salary offset deductions will begin;
(4) The amount of such deductions; and
(5) A copy of the notice received from the creditor agency.
(b)
(c)
(d)
(e)
(a) The Board will refund promptly any amounts deducted to satisfy debts owed to the United States when the debt is waived, found not owed to the United States, or when directed by an administrative or judicial order.
(b) Unless required or permitted by law or contract, refunds under this section may not bear interest.
An employee's involuntary payment of all or any part of a debt collected under these regulations will not be construed as a waiver of any rights that the employee may have under 5 U.S.C. 5514 or any other provision of contract or law, unless there are statutes or contracts to the contrary.
Charges may be assessed for interest, penalties, and administrative charges in accordance with the FCCS, 31 CFR 901.9.
Office of the Comptroller of the Currency (OCC), Treasury.
Final rule; amendment of a form's expiration date.
The OCC is making a nonsubstantive amendment to form “CD-1—National Bank Community Development (Part 24) Investments” to reflect the current expiration date assigned by the Office of Management and Budget under the Paperwork Reduction Act.
The final rule is effective on September 19, 2023.
Chandni Ohri, Director for Community Development, (202) 649-6420, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
The OCC is amending 12 CFR part 24, Appendix 1 to update the expiration date included on “CD-1—National Bank Community Development (Part 24) Investments” (CD-1 Form) to reflect the current August 31, 2025, expiration date assigned by the Office of Management and Budget (“OMB”) under the Paperwork Reduction Act.
The OCC is issuing the final rule without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).
The final rule is effective immediately upon publication in the
For purposes of the Congressional Review Act, OMB makes a determination as to whether a final rule constitutes a “major” rule.
The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
For the same reasons set forth above, the OCC is adopting this final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to “any rule which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”
As required by the Congressional Review Act, the OCC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number. OCC has determined that this final rule does not substantively affect any current information collections or create any new collections. The final rule will update the image of Form CD-1, “National Bank Community Development Investments” (1557-0194), that is included in 12 CFR part 24, Appendix 1 so that it reflects the expiration date of the currently approved information collection.
The Regulatory Flexibility Act (RFA)
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
Section 722 of the Gramm-Leach-Bliley Act
As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 U.S.C. 1531
Community development, Credit, Investments, Low and moderate income housing, Manpower, National banks, Reporting and recordkeeping requirements, Rural areas, Small businesses.
For the reasons stated in the
12 U.S.C. 24(Eleventh), 93a, 481 and 1818.
Federal Aviation Administration (FAA), DOT.
Final rule.
The FAA is superseding Airworthiness Directive (AD) 2020-06-10, which applied to certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. AD 2020-06-10 required repetitive inspections for cracking of the vertical stiffeners of the left- and right-hand sides of the window frames and corrective actions if necessary. Since the FAA issued AD 2020-06-10, it was determined that certain compliance times need to be reduced. This AD
This AD is effective October 24, 2023.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 24, 2023.
• For the EASA AD incorporated by reference in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available in the AD docket at
Timothy Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 206-231-3667; email
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2020-06-10, Amendment 39-19879 (85 FR 17490, March 30, 2020) (AD 2020-06-10). AD 2020-06-10 applied to certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. AD 2020-06-10 required repetitive inspections for cracking of the vertical stiffeners of the left- and right-hand sides of the window frames and corrective actions if necessary, as specified in EASA AD 2019-0173, dated July 18, 2019 (EASA AD 2019-0173). The FAA issued AD 2020-06-10 to address cracking of the vertical stiffeners of the left- and right-hand sides of the window frames, which could affect the structural integrity of the airplane.
The NPRM published in the
You may examine the MCAI in the AD docket at
In the NPRM, the FAA proposed to retain the requirements of AD 2020-06-10, with amended compliance times, as specified in EASA AD 2023-0009. The FAA is issuing this AD to address cracking of the vertical stiffeners of the left- and right-hand sides of the window frames, which could affect the structural integrity of the airplane.
The FAA received comments from one commenter, United Airlines, who supported the NPRM without change.
This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.
EASA AD 2023-0009 specifies procedures for repetitive inspections for cracking of the vertical stiffeners of the left- and right-hand sides of the window frame and corrective actions if necessary. Corrective actions include modification, rework, and repair. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
The FAA estimates that this AD affects 1,525 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
The FAA estimates that it would take about 1 work-hour per product to comply with the reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, The FAA estimates the cost of reporting the inspection results on U.S. operators to be $129,625, or $85 per product.
The FAA estimates the following costs to do any necessary on-condition modifications that would be required based on the results of any required
The FAA has received no definitive data that would enable the agency to provide cost estimates for the other on-condition actions specified in this AD.
A federal agency may not conduct or sponsor, and a person is not 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. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective October 24, 2023.
This AD replaces AD 2020-06-10, Amendment 39-19879 (85 FR 17490, March 30, 2020) (AD 2020-06-10).
This AD applies to Airbus SAS Model airplanes specified in paragraphs (c)(1) through (4) of this AD, certificated in any category, as identified in European Union Aviation Safety Agency (EASA) AD 2023-0009, dated January 16, 2023 (EASA AD 2023-0009).
(1) Model A318-111, -112, -121, and -122 airplanes.
(2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes.
(4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by a report of cracking found on the frame of the right-hand side sliding window in the flight deck, and a determination that certain compliance times need to be reduced. The FAA is issuing this AD to address cracking of the vertical stiffeners of the left- and right-hand sides of the window frames, which could affect the structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2023-0009.
(1) Where EASA AD 2023-0009 refers to its effective date, this AD requires using the effective date of this AD.
(2) Where EASA AD 2023-0009 refers to August 1, 2019 (the effective date of EASA AD 2019-0173), this AD requires using May 4, 2020 (the effective date of AD 2020-06-10).
(3) This AD does not adopt the “Remarks” section of EASA AD 2023-0009.
(4) Paragraph (3) of EASA AD 2023-0009 specifies to report inspection results to Airbus within a certain compliance time. For this AD, report inspection results (in case of findings only) at the applicable time
(i) If the inspection was done on or after the effective date of this AD: Submit the report within 90 days after the inspection.
(ii) If the inspection was done before the effective date of this AD: Submit the report within 90 days after the effective date of this AD.
(5) Where paragraph (5) of EASA AD 2023-0009 specifies credit for certain actions, this AD provides credit for using the torque values specified in Section 13 of the Airbus technical adaptations (TAs) identified in paragraphs (h)(5)(i) through (vi) of this AD, when installing a certain eccentric referenced in “Airbus SB A320-53-1402 original issue” or “Airbus SB A320-53-1403 original issue,” as specified in the applicable TA, before the effective date of this AD.
(i) Airbus TA 80662272/007/2019, Issue 1, dated August 29, 2019.
(ii) Airbus TA 80662272/008/2019, Issue 1, dated August 29, 2019.
(iii) Airbus TA 80662272/009/2019, Issue 1, dated August 29, 2019.
(iv) Airbus TA 80662272/010/2019, Issue 1, dated August 29, 2019.
(v) Airbus TA 80696258/006/2019, Issue 1, dated October 29, 2019.
(vi) Airbus TA 80696258/007/2019, Issue 1, dated October 29, 2019.
(6) Where Table 1 of EASA AD 2023-0009 specifies configurations, replace the text “post SB” with “post embodiment of SB” and replace the text “pre SB” with “pre embodiment of SB.”
Special flight permits, as described in 14 CFR 21.197 and 21.199, may be issued to operate the airplane to a location where the requirements of this AD can be accomplished, but concurrence by the Manager, International Validation Branch, FAA, is required before issuance of the special flight permit.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(ii) AMOCs approved previously for AD 2020-06-10 are approved as AMOCs for the corresponding provisions of EASA AD 2023-0009 that are required by paragraph (g) of this AD.
(2)
(3)
For more information about this AD, contact Timothy Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY; telephone 206-231-3667; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2023-0009, dated January 16, 2023.
(ii) [Reserved]
(3) For EASA AD 2023-0009, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(4) You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), DOT.
Final rule.
The FAA is adopting a new airworthiness directive (AD) for all Viking Air Limited (Viking) (type certificate previously held by Bombardier Inc. and de Havilland, Inc.) Model DHC-3 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as corrosion, wear, and fatigue-related degradation in aging aircraft. This AD requires incorporating into the existing maintenance records for your airplane the actions and associated thresholds and intervals, including life limits, specified in a supplemental inspection and corrosion control manual for Model DHC-3 airplanes. This AD also requires completing all the initial tasks identified in this manual and reporting corrosion findings to Viking. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective October 24, 2023.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 24, 2023.
• For service information identified in this final rule, contact Viking Air Limited Technical Support, 1959 de Havilland Way, Sidney, British Columbia, Canada V8L 5V5; phone: (800) 663-8444; fax: (250) 656-0673; email:
• You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For information on the availability of this material at the FAA, call (817) 222-5110. It is also available at
Deep Gaurav, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: (516) 228-7321; email:
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Viking Model DHC-3 airplanes. The NPRM published in the
The MCAI requires doing all inspections specified in Part 2 of Viking DHC-3 Otter Supplemental Inspection and Corrosion Control Manual, PSM 1-3-5, Revision IR, dated December 21, 2017 (Viking PSM 1-3-5, Revision IR), doing applicable corrective actions using Part 3 of Viking PSM 1-3-5, Revision IR, and reporting to Viking Level 2 and Level 3 corrosion as specified in Part 3 of Viking PSM 1-3-5, Revision IR.
Corrosion, wear, and fatigue-related degradation, if not addressed, could lead to structural failure with consequent loss of control of the airplane.
In the NPRM, the FAA proposed to require establishing a corrosion prevention and control program to identify and correct corrosion and cracking. In the NPRM, the FAA also proposed to require completing all of the initial tasks identified in the program and reporting corrosion findings to Viking.
You may examine the MCAI in the AD docket at
The FAA issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Viking Model DHC-3 airplanes. The SNPRM published in the
The FAA received no comments on the SNPRM or on the determination of the costs.
These products have been approved by the aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the SNPRM.
The FAA has previously mandated airworthiness limitations by issuing ADs that require revising the ALS of the existing maintenance manual or instructions for continued airworthiness to incorporate new or revised inspections. This AD, however, requires establishing and incorporating new inspections into the existing maintenance records required by 14 CFR 91.417(a)(2) or 135.439(a)(2) for your airplane. The FAA does not intend this as a substantive change. Requiring incorporation of the new ALS requirements into the existing maintenance records, rather than requiring individual repetitive inspections and replacements, allows operators to record AD compliance once after updating the existing maintenance records, rather than recording compliance after every inspection and part replacement.
The FAA reviewed Viking PSM 1-3-5, Revision IR, which specifies procedures for inspecting areas of the airplane that are particularly susceptible to corrosion, wear, and fatigue-related degradation. Viking PSM 1-3-5, Revision IR, also specifies repetitive inspection intervals, defines the different levels of corrosion, and provides corrective action if corrosion is found.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
The FAA also reviewed Viking DHC-3 Otter Service Bulletin V3/0010, Revision NC, dated March 19, 2020. The service bulletin provides a list of new inspection tasks that have been added to the DHC-3 maintenance program in Viking PSM 1-3-5, Revision IR.
In light of the heavy reliance on aviation for intrastate transportation in Alaska, the FAA has fully considered the effects of this final rule (including costs to be borne by affected operators) from the earliest possible stages of AD development. As previously stated, 14 CFR part 39 requires operators to correct an unsafe condition identified on an airplane to ensure operation of that airplane in an airworthy condition. The FAA has determined that the need to correct corrosion-related degradation in aging aircraft, which could lead to structural failure with consequent loss of control of the airplane, outweighs any impact on aviation in Alaska.
The FAA estimates that this AD affects 68 airplanes of U.S. registry. The FAA also estimates that it will take about 1 work-hour per airplane at a
Based on these figures, the FAA estimates the cost of this AD on U.S. operators to be $5,780 or $85 per airplane.
The FAA estimates it will take about 1 work-hour to report any Level 2 corrosion found during the initial or subsequent inspections or any Level 3 corrosion found during the initial or subsequent inspections, for an estimated cost of $85 per airplane.
A federal agency may not conduct or sponsor, and a person is not 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. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat. 1164 (5 U.S.C. 601-612) (RFA) establishes as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.
To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration. The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.
Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.
The FAA published an Initial Regulatory Flexibility Analysis (IRFA) for this rule to aid the public in commenting on the potential impacts to small entities. The FAA did not receive any public comments on the IRFA. The purpose of this Final Regulatory Flexibility Analysis (FRFA) is to provide the reasoning underlying the FAA's determination. A FRFA must contain the following:
(1) A statement of the need for, and objectives of, the rule;
(2) A statement of the significant issues raised by the public comments in response to the IRFA, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments;
(3) The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments;
(4) A description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available;
(5) A description of the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
(6) A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
The NPRM proposed to adopt a new AD for all Viking Model DHC-3 airplanes. This AD results from MCAI originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product.
The objective of this final rule is to require incorporating into the existing maintenance records for your airplane the actions and associated thresholds and intervals, including life limits, specified in a supplemental inspection and corrosion control manual for Model DHC-3 airplanes. This final rule also requires completing all the initial tasks identified in this manual and reporting corrosion findings to Viking.
The FAA received no public comments on the SNPRM.
The Chief Counsel for Advocacy of the SBA did not file any comments in response to the proposed rule. Thus, the FAA did not make any changes to the proposed rule in the final rule.
The RFA defines small entities as small businesses, small governmental jurisdictions, or small organizations. In 5 U.S.C. 601(3), the RFA defines “small business” to have the same meaning as “small business concern” under section 3 of the Small Business Act. The Small Business Act authorizes the SBA to define “small business” by issuing regulations.
SBA (2022) has established size standards for various types of economic activities, or industries, under the North American Industry Classification System (NAICS).
The FAA identified 68 de Havilland Model DHC-3 “Otter” airplanes that would be affected by the final rule AD. These 68 airplanes are registered to 32 private firms and 5 individuals. The individuals are excluded from this analysis as they presumably are not small entities under the RFA.
The 32 private firms own 63 airplanes. Of these firms, the FAA was able to obtain the data necessary to classify 21 of them.
AD costs per airplane are 1 work hour plus $85 reporting costs for initial inspection, for a total of $170. The AD cost per small entity is shown in the “Cost” column of Table 1 and cost impact is measured by AD cost as a percentage of revenues. As the table shows, the mean cost impact is 0.1% of annual revenues, with a maximum impact of 0.46% of annual revenues, and a minimum impact below 0.01%.
Costs under 1% of revenues for all of the small entities lead the FAA to conclude that this rule does not have a significant impact on a substantial number of small entities.
As part of the FRFA, the FAA is required to consider regulatory alternatives that may be less burdensome.
The FAA did not find any significant regulatory alternatives to this AD that would still accomplish the safety objectives of this AD.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the RFA.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective October 24, 2023.
None.
This AD applies to Viking Air Limited (type certificate previously held by Bombardier Inc. and de Havilland, Inc.) Model DHC-3 airplanes, all serial numbers, certificated in any category.
Joint Aircraft System Component (JASC) Code 2700, Flight Control System.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as corrosion, wear, and fatigue-related degradation in aging aircraft. The FAA is issuing this AD to detect and address corrosion and cracking. This condition, if not addressed, could lead to structural failure with consequent loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) Within 90 days after the effective date of this AD, incorporate into the existing maintenance records required by 14 CFR 91.417(a)(2) or 135.439(a)(2), as applicable for your airplane, the actions and associated thresholds and intervals, including life limits, specified in Parts 2 and 3 of Viking DHC-3 Otter Supplemental Inspection and Corrosion Control Manual, PSM 1-3-5, Revision IR, dated December 21, 2017 (Viking PSM 1-3-5, Revision IR). Do each initial task within 6 months after the effective date of this AD or at the threshold for each applicable task specified in Part 3 of Viking Product Support Manual PSM 1-3-5, Revision IR, whichever occurs later. Where Viking PSM 1-3-5, Revision IR, specifies contacting Viking regarding a component's alloy and heat treat condition, this AD requires contacting the Manager, International Validation Branch, FAA, Transport Canada, or Viking's Transport Canada Design Approval Organization (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.
Viking DHC-3 Otter Service Bulletin V3/0010, Revision NC, dated March 19, 2020, contains additional information related to this AD.
(2) After the action required by paragraph (g)(1) of this AD has been done, no alternative actions and associated thresholds and intervals, including life limits, are allowed unless they are approved as specified in paragraph (i) of this AD.
(1) For inspections done after the effective date of this AD, report to Viking any Level 2 or Level 3 corrosion, as specified in Viking PSM 1-3-5, Revision IR, at the times specified in and in accordance with part 3, paragraph 5, of Viking PSM 1-3-5, Revision IR.
(2) For inspections done before the effective date of this AD, within 30 days after the effective date of this AD report to Viking any Level 2 or Level 3 corrosion, as specified in Viking PSM 1-3-5, Revision IR, in accordance with part 3, paragraph 5, of Viking PSM 1-3-5, Revision IR.
(1) The Manager, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the International Validation Branch, mail it to the address identified in paragraph (j)(2) of this AD or email to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved specifically for this AD by the Manager, International Validation Branch, FAA.
(1) Refer to Transport Canada AD CF-2018-04, dated January 19, 2018, for related information. This Transport Canada AD may be found in the AD docket at
(2) For more information about this AD, contact Deep Gaurav, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: (817) 228-3731; email:
(3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (k)(3) and (4) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Viking DHC-3 Otter Supplemental Inspection and Corrosion Control Manual, PSM 1-3-5, Revision IR, dated December 21, 2017.
(ii) [Reserved]
(3) For service information identified in this AD, contact Viking Air Limited Technical Support, 1959 de Havilland Way, Sidney, British Columbia, Canada V8L 5V5; phone: (800) 663-8444; fax: (250) 656-0673; email:
(4) You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email:
U.S. Customs and Border Protection, Department of Homeland Security; Department of the Treasury.
Final rule.
This document amends the U.S. Customs and Border Protection (CBP) regulations to reflect an extension of import restrictions on certain archaeological and ethnological material of Cambodia, the addition of certain categories of archaeological and ethnological material of Cambodia to the existing import restrictions, and the clarification of certain categories of archaeological material of Cambodia. The United States has entered into an agreement with Cambodia that supersedes the existing agreement and amends the import restrictions that became effective on September 19, 2018. The restrictions, originally imposed by Treasury Decision (T.D.) 99-88 and last extended by CBP Dec. 18-11 for an additional five-year period, will continue with these amendments through September 19, 2028. The Designated List of archaeological and ethnological material of Cambodia to which the restrictions apply is reproduced below, with the amendments described.
Effective on September 19, 2023.
For legal aspects, W. Richmond Beevers, Chief, Cargo Security, Carriers and Restricted Merchandise Branch, Regulations and Rulings, Office of Trade, (202) 325-0084,
The Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601
In certain limited circumstances, the CPIA authorizes the imposition of restrictions on an emergency basis (19 U.S.C. 2603). The emergency restrictions are effective for no more than five years from the date of the State Party's request and may be extended for three years where it is determined that the emergency condition continues to apply with respect to the covered material (19 U.S.C. 2603(c)(3)). These restrictions may also be continued pursuant to an agreement concluded within the meaning of the CPIA (19 U.S.C. 2603(c)(4)). Additionally, after any restriction enters into force, either through an agreement or emergency action, CBP will by regulation promulgate (and when appropriate revise) a list of the archaeological or ethnological material of the State Party covered by the agreement or by such emergency action (19 U.S.C. 2604).
On December 2, 1999, the former United States Customs Service published Treasury Decision (T.D.) 99-88 in the
On September 19, 2003, the United States entered into the “Memorandum of Understanding Between the Government of the United States of America and the Government of the Kingdom of Cambodia Concerning the Imposition of Import Restrictions on Khmer Archaeological Material” (2003 MOU). The 2003 MOU provided for import restrictions on certain Khmer archaeological material from the 6th century through the 16th century A.D. and continued to include the archaeological material then subject to the emergency restrictions.
On September 22, 2003, CBP published a final rule, CBP Decision (CBP Dec.) 03-28, in the
The import restrictions were subsequently extended three times, and the designated list amended once, in accordance with 19 U.S.C. 2602(e) and 19 CFR 12.104g(a). On September 19, 2008, CBP published a final rule (CBP Dec. 08-40) in the
On September 19, 2018, pursuant to a Memorandum of Understanding concluded on September 12, 2018 (2018 MOU), in which the Governments of the United States and Cambodia agreed to extend the import restrictions for another five years, CBP published CBP Dec. 18-11 in the
On December 21, 2022, the United States Department of State proposed in the
On August 30, 2023, the Governments of the United States and Cambodia signed a new agreement to extend the import restrictions, include additional categories of archaeological and ethnological material, and clarify existing categories of archaeological material, titled “Agreement between the Government of the United States of America and the Government of the Kingdom of Cambodia to Extend and Amend the Memorandum of Understanding between the Government of the United States of America and the Government of the Kingdom of Cambodia Concerning the Imposition of Import Restrictions on Categories of Archaeological Material of Cambodia” (2023 Agreement). The 2023 Agreement entered into force upon signature and supersedes the 2018 MOU. Pursuant to the 2023 Agreement, the amended
Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect the amendment of the Designated List of cultural property described in CBP Dec. 03-28 and last revised by CBP Dec. 08-40. The amendments include the expansion of dates for archaeological material, clarified descriptions of certain categories of archaeological material, and the addition to the archaeological material section of a category for wood and subcategories for sima, boundary markers, seals and weights, and coins. The amendments also include the addition of an ethnological material section. The restrictions on the importation of archaeological and ethnological material will be in effect through September 19, 2028. Importation of such material of Cambodia, as described in the Designated List below, will be restricted through that date unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met.
The Designated List and additional information may also be found at the following website address:
To fulfill the terms of the 2023 Agreement, the Designated List contained in T.D. 99-88 and last revised by CBP Dec. 08-40, is amended to reflect the addition to the archaeological material section of a category for wood, subcategories for sima, boundary markers, seals and weights, and coins, as well as the expansion of dates for archaeological material and clarified descriptions of certain categories of archaeological material. The amendments also include the addition of an ethnological material section.
The Designated List includes archaeological and ethnological material. Archaeological material ranges in date from approximately 2,500 B.C. to A.D. 1750. Ethnological material ranges in date from A.D. 1400 to 1891. For the reader's convenience, CBP is reproducing the Designated List contained in T.D. 99-88 and last revised by CBP Dec. 08-40 in its entirety with these changes.
The list is divided into the following categories of objects:
Restricted archaeological material from Cambodia includes the categories listed below. The following list is representative only.
This category consists largely of materials made of sandstone, including many color shades (gray to greenish to black, pink to red and violet, and some yellowish tones) and varying granulosity. Due to oxidation and iron content, the stone surface can become hard and take on a different color from the stone core. These surface colors range from yellowish to brownish to different shades of gray. This dense surface can be polished. Some statues and reliefs are coated with a kind of clear shellac or lacquer of different colors (black, red, gold, yellow, brown). The surface of sandstone pieces can also be quite rough. Chipped surfaces can be white or gray in color. In the absence of any systematic technical analysis of ancient Khmer stonework, no exact description of other stone types can be provided. It is clear that other types of stone were also used (some volcanic rock, rhyolite, and schist, etc.), but these are nonetheless exceptional. Some quartz objects are also known. Precious and semi-precious stones were also used as applied decor or in jewelry settings.
Different types of stone degradation can be noted. Eroded surfaces result from sanding (loss of surface grains), contour scaling (detachment of surface plaques along contour lines), flaking, and exfoliation. The stone can also split along sedimentation layers. Chipping or fragmentation of sculpted stone is also common.
Stone objects included here come under several periods: Bronze Age (c. 2500-500 B.C.), Iron Age (c. 500 B.C.-A.D. 550), pre-Angkorian (6th-9th century), Angkorian (9th-15th century), and post-Angkorian (15th century-1750 A.D.). Many stone objects can be firmly assigned to one of these periods; some, notably architectural elements and statues, can be further assigned a specific style and a more precise date within the given period.
a. Architectural Elements—Stone was used for religious architecture in the pre-Angkorian and Angkorian periods. The majority of ancient Khmer temples were built almost entirely in stone. Even for those temples built primarily in brick, numerous decorative elements in stone were also employed. Only small portions of early post-Angkorian edifices were built in stone. The architectural elements that follow are therefore characteristic of pre-Angkorian and Angkorian times. Post-Angkorian forms are also included. The state of the material varies greatly, with some objects being well preserved, while others are severely eroded or fragmented. The sculpture of some pieces remains unfinished.
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b. Free-Standing Sculptures—The pre-Angkorian and Angkorian periods are characterized by extensive production of statuary in stone. Some stone statuary was also produced during the post-Angkorian period. This statuary is relatively diverse, including human figures ranging from less than one half meter to nearly three meters in height, as well as animal figures. Some figures, representations of Hindu gods, have multiple arms and heads. Figures can be represented alone or in groups of two or three. When male and female figures are presented together as an ensemble, the female figures are often disproportionately smaller than their male counterparts. Some are part-human, part-animal. Figures can be standing, sitting, or riding animal mounts. Many figures are represented wearing crowns or special headdresses and holding attributes such as a baton or a conch shell. Clothing and sometimes jewelry are sculpted into the body. Though statues are generally monolithic, later post-Angkorian statues of Buddha can have separate arms sculpted in wood and attached to the stone body. Many statues were once lacquered in black, dark brown, red, or gold colors and retain lacquer traces. Some yellow lacquer is also found.
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c. Stelae
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d. Sculpture in Brick—Brick was used mainly in pre-Angkorian and some relatively early Angkorian religious architecture. Yet, typically, while the bodies of buildings were in brick, some of the decorative elements listed above—pediments, lintels, etc., were in stone. The brick, of light orange color, was usually sculpted with a preliminary relief, which was then covered over with white stucco, itself sculpted along brick contours. Some brick reliefs seem to have been fully sculpted and not meant to be covered in stucco. Brick temple reliefs include graphic design, as well as floral or animal decor. Human and animal figures can also be represented.
e. Boundary Markers—Boundary markers were typically carved from a solid block of stone and reach approximately one meter in height. Boundary markers typically date from the 10th through 13th centuries A.D. Boundary markers were decorated in either Buddhist or Hindu iconography. Hindu decorative themes often portray depictions of Vishnu, while Buddhist decorative themes often portray the Buddha or Lokeshvara, sometimes with an additional deity featuring a domed or pointed top as a stupa, symbolizing Nirvana.
In the Bronze and Iron Ages, beads were made from semi-precious stones such as agate, carnelian, and occasionally garnet. Agate beads are banded stone, black to light brown to white in their bands. These are usually carved into tubular shapes. Carnelian beads are reddish orange and glassy. These are usually ball-shaped. Bronze and Iron Age stone bracelets have triangular or rectangular cross-sections.
During the Bronze and Iron Ages, chipped and ground tools such as adzes, whetstones, and arrowheads were made of metamorphic rock.
This category consists mainly of bronze objects. No singular alloy is characteristic of Cambodian bronzes, which contain varying degrees of
Most objects were cast using “lost wax” casting with a “clay core” technique. This technique begins with a clay core, which is covered with a layer of wax before being covered with an outer layer of clay. The wax is then melted out with hot metal, which then hardened in the mold. Each casting is unique because the mold must be destroyed to obtain the metal object, Decor can be chiseled into the finished metal surface. As early as the Bronze and Iron Ages, these objects demonstrate a very high degree of technical skill. The “repoussé” technique, by which metal is beaten into shape in a concave mold, was also used.
Most of the objects presented here can be assigned to one of the periods defined for stone objects described previously: Bronze Age (c. 2500-500 B.C.), Iron Age (c. 500 B.C.-A.D. 550), pre-Angkorian (6th-9th century), Angkorian (9th-15th century), and post-Angkorian (15th century-A.D. 1750). Some pieces, in particular statuary and ritual or domestic accessories with motifs akin to architectural decor in stone, can also be assigned to specific styles and corresponding time periods within the larger historical periods.
Khmer metal statuary is comparable to Khmer stone statuary in both thematic and stylistic treatment (see general description of free-standing sculpture above). Statues can be represented alone or in groups ranging from human figures on animal mounts to triads, to more complex ensembles including architectural structures and decor. Though some colossal statues are known in both pre-Angkorian and Angkorian times, metal statues are, generally, relatively smaller in scale than their stone counterparts. Colossal statues can reach more than two meters in height; fragments demonstrate that one reclining figure measured some six meters in length. Such colossal pieces are nonetheless rare.
Statuettes as small as 15 cm. are common; larger statues more typically reach around one meter in height. Small-scale statues are generally composed of a single cast; separate pieces can be placed together, for example on a single pedestal, to form an ensemble. Larger works can be composed of multiple pieces fitted together with joints which can be concealed by chiseled decor. Some small statuettes are solid. Others are composed of two plaques, one for the front of the piece and the other for the back; the plaques are filled with a resin- or tar-based substance and soldered together. Larger pieces are hollow. Bronze statuaries were most prevalent in the Bayon period (late 12th to early 13th century).
Post-Angkorian bronze statues and statuettes, like their stone counterparts, take on certain characteristics of Siamese sculpture but can nonetheless usually be identified as Khmer due to certain types of decor and bodily form which maintain or develop from a specific Angkorian tradition.
a. Human and Hybrid (Part-Human, Part-Animal) Figures—Examples include, but are not limited to, standing male figures, Buddhas, four-armed male figures, female figures, gods, and goddesses, all in various attitudes and dress, including fragments of sculpture such as hands, arms, and heads.
b. Animal Figures—Animal representations in metal, typically bronze or silver, resemble those in stone in both thematic and stylistic treatment. Statues and statuettes include primarily bulls, lions, and elephants with one or three trunks. Other animals, such as horses, are also represented but are less common. Known colossal animal images date from 600 B.C. to the late 12th to early 13th century. Other animal figures, such as the mythical multiheaded serpent and mythical birds and monkeys, are also frequently found as decor of ritual or domestic objects.
c. Pedestals—Pedestals in bronze often appear to be simplified and reduced versions of their stone counterparts. One innovation of sculpting the base in openwork is to be noted.
a. Special Objects Used in Ritual and Royal Pageantry—Special ritual objects include bells, bronze lotus flowers, conch shells, palanquin hooks, and musical instruments such as tambourines, etc.
b. Containers—Ritual and domestic containers include such items as perfume holders, oil lamps or bowls, lime pots, and boxes with decorative or sculptural features.
c. Decorative Elements from Ritual or Domestic Objects—In addition to the decorative accessory items noted below, there exist insignia finials for banner poles which often take the form of small human or animal figures.
d. Jewelry—Jewelry, including but not limited to rings, bracelets, arm bands, necklaces, earrings, decorative head pieces, and belts, could have been worn not only by people but also by statues. Bronze and Iron Age bracelets may be decorated with scrolls, spirals, and the heads of buffalo/cows. Different types of rings can be noted: ring-stamps, rings with ornamental settings, rings with settings in the form of a bull or other animal, and rings with settings for stones.
e. Instruments—Diverse percussion instruments, including varying sizes of bells, drums, gongs, and cymbals, were made in bronze. These may carry geometric designs and/or images of humans and animals.
f. Animal Fittings—In addition to bells to be suspended around the necks of animals, common to both the Angkorian and the post-Angkorian periods, various kinds of decorative animal harness accessories are known in post-Angkorian times.
g. Seals and Weights—In lead and tin. Seals may be in the form of amulets, pendants, ring seals, or other designs. Weights may be molded into snail shaped weights or may be in round or square token forms.
Metal architectural elements include ceiling or wall plaques sculpted with flowers or other motifs, floral plaques, and panels.
Metal weapons and tools include arrow heads, daggers, spear tips, swords, helmets, and sickles.
Rare coinage from the Funan area of Southern Cambodia is included. Coinage dates from the 1st through 6th centuries A.D. In gold, silver, gilded silver, or tin. Designs vary, but coins often bear the image of a rising sun, a deer, a rooster, a Garuda, a team of oxen, and other designs. Inscriptions may be present and in Kharosthi script or Sanskrit.
Bronze and Iron Age ceramics are primarily earthenwares with varying colors and surface treatments. Later ceramics include both glazed and unglazed stonewares. Stonewares, and particularly glazed wares, are characteristic of the Angkorian period (9th to 15th century). Khmer ceramic production primarily concerned functional vessels (vases, pots, etc.) but also included sculptures of figurines and architectural or other decorative elements. Angkorian period vessels were generally turned on a wheel and fired in kilns. Vessels range in size from
Ceramic sculpture known to have been produced in Cambodia proper largely concerns architectural elements. Though some figurines are known and are of notable refinement, statuary and reliefs in ceramics seem to be more characteristic of provincial production.
a. Architectural Elements—Some pre-Angkorian, Angkorian, and post-Angkorian period buildings, primarily but not exclusively royal or upper-class habitation, were roofed with ceramic tiles. The tiles include undecorated flat tiles and convex and concave pieces fitted together; a sculpted eave tile was placed as a decoration at the end of each row of tiles. These pieces were produced in molds and can be earthenware or stoneware (the latter unglazed or glazed). The unglazed pieces are orange in color; the glazed pieces are creamy white to pale green. Spikes placed at the crest of roof vaults can also be made in ceramics. These spikes were fit into a cylinder, also made of ceramics, which was itself fitted into the roof vault. Architectural ceramics sometimes have human heads and anthropomorphic or zoomorphic features.
b. Figurines and Ritual Objects—Figurines, statuettes, or plaques can include human, hybrid (part-human, part-animal), and animal figures. These are typically small in size (around 10 cm.). Ritual objects found in Cambodia proper are limited primarily to pieces in the shape of a conch shell, used for pouring sacral water or as blowing horns.
a. Lidded Containers—Examples include round lidded boxes with incised or sculpted decoration, bulbous vases with lids, and jars with conical multi-tiered lids. Lids themselves include conical shapes and convex lids with knobs.
b. Lenticular Pots—Pots of depressed globular form are commonly referred to as lenticular pots. The mouth of the vessel is closed with a stopper.
c. Animal-shaped Pots—The depressed globular form can take animal shapes, with applied animal head, tail, or other body parts that can serve as handles. The animal-shaped pot is also found in other forms. Animal-shaped pots often contain remains of white lime, a substance used in betel nut chewing. Shapes include bulls, elephants, birds, horses, and other four-legged creatures.
d. Human-shaped Pots—Anthropomorphic vessels often have some applied and incised decoration representing human appendages, features, or clothing. The vessels are usually gourd-shaped bottles.
e. Bottles—This category includes a variety of vessels with raised mouths.
f. Vases—A variety of vases are grouped together under this general heading. Some are flat based and bulbous or conical. Others have pedestal feet. Some are characterized by their elongated necks. The “baluster vases,” for which Khmer ceramics are particularly known, have pedestal feet, conical bodies, relatively long necks, and flared mouths.
g. Spouted pots—These are kendi vessels, usually in the “baluster vase” form, that have short pouring spouts attached to the shoulder. Some spouted pots also have ring handles on the opposite shoulder.
h. Large jars—Large barrel-shaped jars or vats have flat bases, wide mouths, short necks, and flattened everted rims. They are always iron glazed.
i. Bowls—Bowls with broad, flat bases and flaring walls that are either straight or slightly concave, ending in plain everted or incurving rims, usually have green or yellowish glaze, although some brown-glazed bowls are known. Some are decorated with incised lines just below the rim. Most have deep flanges above the base; some are plain. Small hemispherical cups on button bases bear brown glaze. Another form is the bowl on a pedestal foot.
Bronze and Iron Age glass beads are usually very small (1-2 mm. across) and come in a range of colors from blue, green, red, and white. Other artifacts made of glass include spiral earrings and triangular bangle bracelets. The bracelets are light to dark green or blue-green and translucent.
Bone (and sometimes ivory or horn) beads, bangles, pendants, and combs are found at Bronze and Iron Age sites.
Archaeological wooden objects include architectural materials, free standing statues, and decorative wood used for religious and domestic purposes. The earliest wooden Buddhist images were produced during the pre-Angkorian period in the region of southern provinces, especially located in the Mekong delta, like the Angkor Borei site. Wooden archaeological materials date from 2500 B.C.-A.D. 1750. However, most architectural materials, wooden statues and decorative objects were found from the 9th century until A.D. 1750.
Includes wooden beams and ceiling panels. Ceiling panels are often decorated with floral motifs.
Examples include free-standing sculptures including Buddhist sculptures, human and hybrid (half-human, half-animal) figures. Free standing sculpture was often on a rectangular, round, or square pedestal base. Bases may or may not have decoration.
Examples include birds, bulls, elephants, lions, and mythical animals.
Includes wooden tools and implements used for farming and fishing, and weapons.
Restricted ethnological material from Cambodia includes the categories listed below. The following list is representative only.
Includes carved wooden architectural elements from monasteries and pagodas, dating from A.D. 1400 through 1891. Architectural pieces (some of which may be lacquered) include apexes; ceilings; columns; decorative balusters; doors; finials; panel paintings; pediments and pediment facia boards; pilasters; pillars; roofs, roof supports, and eaves; wall plaques; wall bars; and windows. Some carved architectural material may be decorated with animal, animal/human hybrid, or other mythical figures.
Simas are often decorated and carved stone pillars placed around the vihara of Buddhist monasteries at each of the eight compass directions marking the place where monks performed rituals. Sima forms are typically a decorative pillar with a conical top carved in various shapes. Some sima forms are spherical. The tops of simas are often gently peaked and may have Buddhist iconography. Decorative carved motifs typically include animals, Buddha's life stories, worshipers, and/or vegetal motifs. Simas that date from A.D. 1400 through 1891 are included.
Includes handwritten manuscripts on paper or palm leaf dating from A.D. 1400 through 1891. May be bound or in single sheets or leaves.
Palm leaf manuscripts can be in single leaves or bound into volumes. The scripts are typically Khmer Mul script or Pali-Khmer. The text on palm leaf manuscripts tends to be incised and blackened. Palm leaf manuscripts typically discuss Buddhist scripture, sermons, legal writings, classical literary texts, secular topics, and poetry. Includes materials used to bind palm leaf manuscripts.
Paper manuscripts can be single sheets or in a folded book form. Paper was usually crafted from mulberry bark. Paper can be in a natural cream color with text written in black ink, or it can be blackened, and text written either with white chalk, a yellow gamboge ink or gold ink. Two main styles of Khmer script found on paper manuscripts include aksar chrieng (slanted script) and aksar mul (round script). Paper manuscripts typically discuss Buddhist scripture, sermons, prophesies, and medicine.
Includes statues of adorned and unadorned Buddhas dating from A.D. 1400 through 1891. May be seated or standing. Bases may be carved, often with a lotus design. Wooden statues may be decorated with red lacquer, black lacquer, gold leaf, paint, and/or incrustations of glass. Standing statues typically range from 80 cm. to three meters in height. Smaller statuettes typically range from 50 to 70 cm. in height.
Includes statues of adorned and unadorned Buddhas dating from A.D. 1400 through 1891. May be seated or standing. Bases may be carved, often with a lotus design. Heights vary, typically between 14 to 40 cm. Often crafted in bronze or silver.
Includes both symbolic and anthropomorphic objects, bells, chariot fixtures, percussion instruments including varying sizes of gongs and cymbals, ritual candle holders (popil), and betel containers made of bronze dating from A.D. 1400 through 1891.
This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure under 5 U.S.C. 553(a)(1). For the same reason, a delayed effective date is not required under 5 U.S.C. 553(d)(3).
Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601,
CBP has determined that this document is not a regulation or rule subject to the provisions of Executive Order 12866 because it pertains to a foreign affairs function of the United States, as described above, and therefore is specifically exempted by section 3(d)(2) of Executive Order 12866.
This regulation is being issued in accordance with 19 CFR 0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or that of his/her delegate) to approve regulations related to customs revenue functions.
Troy A. Miller, the Senior Official Performing the Duties of the Commissioner, having reviewed and approved this document, has delegated the authority to electronically sign this document to the Director (or Acting Director, if applicable) of the Regulations and Disclosure Law Division for CBP, for purposes of publication in the
Cultural property, Customs duties and inspection, Imports, Prohibited merchandise, Reporting and recordkeeping requirements.
For the reasons set forth above, part 12 of title 19 of the Code of Federal Regulations (19 CFR part 12) is amended as set forth below:
5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States (HTSUS)), 1624.
Sections 12.104 through 12.104i also issued under 19 U.S.C. 2612;
(a) * * *
Food and Drug Administration, Department of Health and Human Services (HHS).
Final rule.
The Food and Drug Administration (FDA or the Agency) is announcing the termination of the Board of Tea Experts by the Federal Tea Tasters Repeal Act of 1996. This document removes the Board of Tea Experts from the Agency's list of standing advisory committees. FDA is also updating the statutory citation to the Federal Advisory Committee Act to reflect recodification. This technical change aligns with the desire of Congress to incorporate various provisions that were enacted separately over a period of years; reorganize them; conforming style and terminology; modernizing obsolete language; and correcting drafting errors to remove ambiguities, contradictions, and other imperfections without changing the meaning of or effect of existing law.
This rule is effective September 19, 2023.
Michael Ortwerth, Advisory Committee Oversight and Management Staff, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 5103, Silver Spring, MD 20993-0002, 301-796-8220; or
The Board of Tea Experts was established on March 2, 1897, by the Tea Importation Act of 1897 (Pub. L. 54-358, section 2, March 2, 1897, 29 Stat. 604). The Board was responsible for making recommendations to the Secretary of the Treasury to fix and establish uniform standards of purity, quality, and fitness for consumption of all kinds of teas imported into the United States. The Board was terminated by the Federal Tea Tasters Repeal Act of 1996 (Pub. L. 104-128, section 3, April 9, 1996, 110 Stat. 1198). This document aligns FDA's list of standing advisory committees with existing law by removing the Board of Tea Experts.
Additionally, with the passage of the Act of December 27, 2022 (Pub. L. 117-286, 136 Stat. 4196), Congress made revisions in title 5 of the U.S. Code, as necessary to keep the title current and to make technical amendments to improve the U.S. Code. In doing so, it recodified the Federal Advisory Committee Act to chapter 10 of the U.S. Code. Thus, the appropriate regulatory citation to the Federal Advisory Committee Act is now 5 U.S.C. 1001
Under 5 U.S.C. 553(b)(4)(B) and (d)(3) and 21 CFR 10.40(d) and (e), the Agency finds good cause to dispense with notice and public comment procedures and to proceed to an immediate effective date on this rule. Notice and public comment and a delayed effective date are unnecessary and not in the public interest as the Board was terminated by statute in 1996, and this final rule merely removes the name of the Board of Tea Experts from the list of standing advisory committees in § 14.100 (21 CFR 14.100) and updates the authority citation of 21 CFR part 14 to appropriately cite the Federal Advisory Committee Act (5 U.S.C. 1001
Therefore, the Agency is amending the authority citation of part 14 and § 14.100(a) as set forth in the regulatory text of this document.
Administrative practice and procedure, Advisory committees, Color additives, Drugs, Radiation protection.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 14 is amended as follows:
5 U.S.C. 1001
Office of Foreign Assets Control, Treasury.
Publication of web general license.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing one general license (GL) issued pursuant to the Ethiopia Sanctions Regulations: GL 4, which was previously made available on OFAC's website.
GL 4 was issued on November 12, 2021. See
OFAC: Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 202-622-4855; or Assistant Director for Compliance, 202-622-2490.
This document and additional information concerning OFAC are available on OFAC's website:
On November 12, 2021, OFAC issued GL 4 to authorize certain transactions otherwise prohibited by Executive Order (E.O.) 14046 of September 17, 2021, “Imposing Sanctions on Certain
(a) Except as provided in paragraph (b) of this general license, all transactions and activities prohibited by Executive Order (E.O.) 14046 that are ordinarily incident and necessary to the wind down of transactions involving Hidri Trust or Red Sea Trading Corporation are authorized through 12:01 a.m. eastern standard time, December 14, 2021.
(b) This general license does not authorize:
(1) Any debit to an account on the books of a U.S. financial institution of any blocked person under E.O. 14046; or
(2) Any transactions or activities otherwise prohibited by E.O. 14046, or prohibited by any part of 31 CFR chapter V, statute, or other E.O., or involving any blocked person other than the blocked persons identified in paragraph (a) of this general license.
Office of Foreign Assets Control, Treasury.
Publication of web general licenses.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing four general licenses (GLs) issued pursuant to the Global Magnitsky Sanctions Regulations: GLs 1, 1A, 2, and 2A, each of which was previously made available on OFAC's website.
GL 1 was issued on December 9, 2019. See
OFAC: Assistant Director for Licensing, 202-622-2480; Assistant Director for Regulatory Affairs, 202-622-4855; or Assistant Director for Compliance, 202-622-2490.
This document and additional information concerning OFAC are available on OFAC's website:
On December 9, 2019, OFAC issued GL 1 to authorize certain transactions otherwise prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (“the Regulations”). Subsequently, on December 18, 2019, OFAC issued GL 1A, which superseded GL 1. On July 31, 2020, OFAC issued GL 2, also authorizing certain transactions otherwise prohibited by the Regulations. On September 25, 2020, OFAC issued GL 2A, which superseded GL 2. Each GL was made available on OFAC's website (
(a) Except as provided in paragraph (b) of this general license, all transactions and activities prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583, that are ordinarily incident and necessary to the wind down of transactions involving, directly or indirectly, one or more of the following entities, or any entity in which one or more of the following entities owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, January 8, 2020:
• Ventspils Freeport Authority;
• Ventspils Attistibas Agentura (Ventspils Development Agency);
• Biznesa Attistibas Asociacija (Business Development Association); or
• Latvijas Tranzita Biznesa Asociacija (Latvian Transit Business Association).
(b) This general license does not authorize:
(1) Any debit to an account on the books of a U.S. financial institution of the entities listed in paragraph (a), or any entity in which one or more of the entities in paragraph (a) owns, directly or indirectly, a 50 percent or greater interest;
(2) Any transactions or dealings otherwise prohibited by the Global Magnitsky Sanctions Regulations, or any other part of 31 CFR chapter V, or any transactions or dealings with any blocked person other than the blocked persons described in paragraph (a) of this general license; or
(3) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V, or any Executive order except as authorized by paragraph (a) of this general license.
(a) Except as provided in paragraph (b) of this general license, all transactions and activities prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583, that are ordinarily incident and necessary to the wind down of transactions involving, directly or indirectly, one or more of the following entities, or any entity in which one or more of the following entities owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern standard time, January 8, 2020:
• Ventspils Attistibas Agentura (Ventspils Development Agency);
• Biznesa Attistibas Asociacija (Business Development Association); or
• Latvijas Tranzita Biznesa Asociacija (Latvian Transit Business Association).
(b) This general license does not authorize:
(1) Any debit to an account on the books of a U.S. financial institution of the entities listed in paragraph (a), or any entity in which one or more of the entities in paragraph (a) owns, directly or indirectly, a 50 percent or greater interest;
(2) Any transactions or dealings otherwise prohibited by the Global Magnitsky Sanctions Regulations, or any other part of 31 CFR chapter V, or any transactions or dealings with any blocked person other than the blocked persons described in paragraph (a) of this general license; or
(3) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V, or any Executive order except as authorized by paragraph (a) of this general license.
(c) Effective December 18, 2019, General License 1, dated December 9, 2019, is replaced and superseded in its entirety by this General License 1A.
(a) Except as provided in paragraph (d) of this general license, all transactions and activities otherwise prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind down of transactions involving any entity in which the XPCC owns, directly or indirectly, a 50 percent or greater interest (Blocked XPCC Subsidiary), are authorized through 12:01 a.m. eastern daylight time, September 30, 2020.
(b) Except as provided in paragraph (d) of this general license, all transactions and activities otherwise prohibited by the GMSR that are ordinarily incident and necessary to (1) divest or transfer debt, equity, or other holdings in any Blocked XPCC Subsidiary to a non-U.S. person, or (2) facilitate the transfer of debt, equity, or other holdings in any Blocked XPCC Subsidiary by a non-U.S. person to another non-U.S. person, are authorized through 12:01 a.m. eastern daylight time, September 30, 2020.
(c) The transactions and activities authorized in paragraph (b) include facilitating, clearing, and settling transactions that are ordinarily incident and necessary to a U.S. person's divestment to a non-U.S. person of debt, equity, or other holdings in any Blocked XPCC Subsidiary.
(d) This general license does not authorize:
(1) The unblocking of any property blocked pursuant to any other part of 31 CFR chapter V;
(2) Any debit to the account of any Blocked XPCC Subsidiary on the books of a U.S. financial institution;
(3) U.S. persons to sell debt, equity, or other holdings to; to purchase or invest in debt, equity, or other holdings in; or to facilitate such transactions with, directly or indirectly, any person whose property and interests in property are blocked pursuant to the GMSR, including any Blocked XPCC Subsidiary, other than purchases of or investments in debt, equity, or other holdings in any Blocked XPCC Subsidiary that are ordinarily incident and necessary to the divestment or transfer of investments in debt, equity, or other holdings in any Blocked XPCC Subsidiary as described in paragraph (b); or
(4) Any transactions or dealings involving the property or interests in property of any person whose property and interests in property are blocked pursuant to the GMSR, including the XPCC, or any person whose property and interests in property are blocked pursuant to any other part of 31 CFR chapter V, other than Blocked XPCC Subsidiaries.
(e) U.S. persons participating in transactions authorized by this general license are required, within 10 business days after the expiration date of this general license, to file a comprehensive, detailed report of each transaction, including the name of this general license, the names and addresses of parties involved, the type and scope of activities conducted, and the dates on which the activities occurred, with the Office of Foreign Assets Control, Office of Compliance and Enforcement, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220, or via email (preferred) to
(a) Except as provided in paragraph (d) of this general license, all transactions and activities otherwise prohibited by the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (GMSR), that are ordinarily incident and necessary to the wind down of transactions involving any entity in which the XPCC owns, directly or indirectly, a 50 percent or greater interest (Blocked XPCC Subsidiary), are authorized through 12:01 a.m. eastern standard time, November 30, 2020.
(b) Except as provided in paragraph (d) of this general license, all transactions and activities otherwise prohibited by the GMSR that are ordinarily incident and necessary to (1) divest or transfer debt, equity, or other holdings in any Blocked XPCC Subsidiary to a non-U.S. person, or (2) facilitate the transfer of debt, equity, or other holdings in any Blocked XPCC Subsidiary by a non-U.S. person to another non-U.S. person, are authorized through 12:01 a.m. eastern standard time, November 30, 2020.
(c) The transactions and activities authorized in paragraph (b) include facilitating, clearing, and settling transactions that are ordinarily incident and necessary to a U.S. person's divestment to a non-U.S. person of debt, equity, or other holdings in any Blocked XPCC Subsidiary.
(d) This general license does not authorize:
(1) The unblocking of any property blocked pursuant to any other part of 31 CFR chapter V;
(2) Any debit to the account of any Blocked XPCC Subsidiary on the books of a U.S. financial institution;
(3) U.S. persons to sell debt, equity, or other holdings to; to purchase or invest in debt, equity, or other holdings in; or to facilitate such transactions with, directly or indirectly, any person whose property and interests in property are blocked pursuant to the GMSR, including any Blocked XPCC Subsidiary, other than purchases of or investments in debt, equity, or other holdings in any Blocked XPCC Subsidiary that are ordinarily incident and necessary to the divestment or transfer of investments in debt, equity, or other holdings in any Blocked XPCC Subsidiary as described in paragraph (b); or
(4) Any transactions or dealings involving the property or interests in property of any person whose property and interests in property are blocked pursuant to the GMSR, including the XPCC, or any person whose property and interests in property are blocked pursuant to any other part of 31 CFR chapter V, other than Blocked XPCC Subsidiaries.
(e) U.S. persons participating in transactions authorized by this general license are required, within 10 business days after the expiration date of this general license, to file a comprehensive, detailed report of each transaction, including the name of this general license, the names and addresses of parties involved, the type and scope of activities conducted, and the dates on which the activities occurred, with the Office of Foreign Assets Control, Office of Compliance and Enforcement, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220, or via email (preferred) to
(f) Effective September 25, 2020, General License No. 2, dated July 31, 2020, is replaced and superseded in its entirety by this General License 2A.
Coast Guard, Department of Homeland Security (DHS).
Notification of enforcement of regulation.
The Coast Guard will enforce special local regulations for the Clearwater offshore Nationals/Race World Offshore on September 24, 2023, to provide for the safety of life on navigable waterways during this event. Our regulation for marine events within the Seventh Coast Guard District identifies the regulated area for this event in Clearwater, FL. During the enforcement periods, the operator of any vessel in the regulated area must comply with directions from the Patrol Commander or any designated representative.
The regulations in 33 CFR 100.703 will be enforced from 11:30 a.m. until 4 p.m., on September 24, 2023, for the location identified in Item 6 in table 1 to § 100.703.
If you have questions about this notification of enforcement, call or email Marine Science Technician First Class Mara Brown, Sector St. Petersburg Prevention Department, Coast Guard; telephone (813) 228-2191, email
The Coast Guard will enforce the special local regulations in 33 CFR 100.703, table 1 to § 100.703, Item No. 6, for the Clearwater Offshore Nationals/Race World Offshore regulated area from 11:30 a.m. until 4 p.m., on September 24, 2023. This action is being taken to provide for the safety of life on navigable waterways during this event. Our regulation for recurring marine events, Sector St. Petersburg, § 100.703, table 1 to § 100.703, Item No. 6, specifies the location of the regulated area for the Clearwater Offshore Nationals/Race World Offshore which encompasses portions of the Gulf of Mexico near Clearwater, FL. During the enforcement periods, as reflected in § 100.703(c), if you are the operator of a vessel in the regulated area you must comply with directions from the Patrol Commander or any designated representative.
In addition to this notification of enforcement in the
Federal Communications Commission
Final rule; announcement of effective date.
In this document, the Federal Communications Commission (Commission) announces that the Office of Management and Budget (OMB) has approved, for a period of three years, the information collections adopted in the Report and Order in MB Docket Nos. 03-185, 22-261 FCC 23-25,
The amendments to 47 CFR 74.703, 74.734, 74.735, 74.751, 74.763, and 74.784, published at 88 FR 30654 on May 12, 2023, are effective September 19, 2023.
Emily Harrison, Media Bureau, Video Division, at (202) 418-1665 or
This document announces that OMB approved the information collection requirements in 47 CFR 74.703, 74.734, 74.735, 74.751, 74.763, and 74.784, on September 7, 11, and 12, 2023. These rules were modified in the Report and Order in MB Docket Nos. 03-185, 22-261, FCC 23-25,
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on September 7, 11, and 12, 2023, for the information collection requirements contained in 47 CFR 74.703, 74.734, 74.735, 74.751, 74.763, and 74.784. Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.
No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Numbers for the information collection requirements in these rules are 3060-1311, 3060-0236, 3060-0248 and 3060-0250.
The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
Section 74.784(b) states that a licensee of a low power television or TV translator station shall not rebroadcast the programs of any other TV broadcast station without obtaining prior consent of the station whose signals or programs are proposed to be retransmitted. Section 74.784(b) requires licensees of low power television and TV translator stations to notify the Commission when rebroadcasting programs or signals of another station. This notification shall include the call letters of each station rebroadcast. The licensee of the low power television or TV translator station shall certify that written consent has been obtained from the licensee of the station whose programs are retransmitted. This notification shall be provided by email to
The information collection requirements contained in 47 CFR 73.1207 and 74.1284 remain the same. They are as follows:
Section 73.1207 requires that licensees of broadcast stations obtain written permission from an originating station prior to retransmitting any program or any part thereof. A copy of the written consent must be kept in the station's files and made available to the FCC upon request. Section 73.1207 also specifies procedures that broadcast stations must follow when rebroadcasting time signals, weather bulletins, or other material from non-broadcast services.
Section 74.1284 requires that the licensee of a FM translator station obtain prior consent to rebroadcast programs of any broadcast station or other FM translator. The licensee of the FM translator station must notify the Commission of the call letters of each station rebroadcast and must certify that written consent has been received from the licensee of that station. Also, AM stations are allowed to use FM translator stations to rebroadcast the AM signal. FM translator stations are low power facilities licensed for the limited purpose of retransmitting the signals of either a full power radio station or another translator station.
Section 74.703(h) requires in each instance where suspension of operation is required, the licensee shall submit a full report to the FCC via a Resumption of Operations notice in the Commission's Licensing and Management System (LMS) after operation is resumed, containing details of the nature of the interference, the source of the interfering signals, and the remedial steps taken to eliminate the interference.
The Commission is reinstating OMB control number 3060-0236 back into the Office of Management and Budget's (OMB) inventory. However, the Commission adopted on October 25, 2021, the Order (
Section 74.751(a) requires licensees of low power TV or TV translator stations to send written notification to the FCC of equipment changes which may be made at licensee's discretion without the use of a formal application.
Section 74.751(b)(4) requires low power TV or TV translator stations to file an application in the Commission's Licensing and Management System (LMS) on FCC Form 2100, Schedule C, requesting authorization for all antenna relocations.
Section 74.751(c) provides that notwithstanding the requirement in 47 CFR 74.751(b)(4), a station may file in LMS a correction of geographic coordinates where the change is 3 seconds or fewer in latitude and/or 3 seconds or fewer in longitude, provided there is no physical change in location and no other licensed parameters are changed. An exhibit should be attached to the application(s) specifying it is a coordinate correction. Stations seeking to correct coordinates by less than 3 seconds of latitude and/or longitude may do so without paying a filing fee.
Section 74.751(d) requires that licensees of low power TV or TV translator stations place in the station records a certification that the installation of new or replacement transmitting equipment complies in all respects with the technical requirements of this section and the station authorization.
Section 74.734(a)(4) requires that a notification must be made with the Commission via a Change of Control Point Notice in the Commission's Licensing and Management System (LMS) providing the name, address, and telephone number of person(s) who may be called to secure suspension of operation of a transmitter promptly should the FCC deem such action necessary.
Section 74.735(c)(4) requires that all azimuth plane patterns be plotted in a PDF attachment to the application in LMS in a size sufficient to be easily viewed. Section 74.735(c)(6) requires that all azimuth plane patterns be plotted in a PDF attachment to the application in LMS in a size sufficient to be easily viewed. Section 74.735(c)(7) requires that if a matrix pattern is submitted in the LMS application form, similar tabulations must be provided as necessary in the form of a spreadsheet attachment to the application in LMS to accurately represent the pattern.
Section 74.763(b) provides that in the event that causes beyond the control of the low power or translator station licensee make it impossible to continue operating, the licensee may discontinue operation for a period of not more than 30 days without further authority from the FCC. Section 74.763(b) requires that no later than the tenth day of discontinued operation, notification must be sent electronically via a Suspension of Operations Notice filing in the Commission's LMS database. In the event normal operation is restored before the end of the 30 day period, the licensee must notify the FCC of the date that normal operations resumed by filing a Resumption of Operations Notice filing in LMS. Finally, § 74.763(b) requires that if causes beyond the control of the licensee make it impossible to comply within the allowed period, a licensee may make a request for Special Temporary Authority via LMS no later than the 30th day for such additional time as may be necessary.
National Aeronautics and Space Administration.
Final rule.
National Aeronautics and Space Administration (NASA) is issuing a final rule amending the NASA Federal Acquisition Regulation Supplement (NFS) to conform to changes in the Federal Acquisition Regulation (FAR) that reflect an updated “commercial item” definition pursuant to a section of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232).
Andrew O'Rourke, NASA HQs, Office of Procurement Management and Policy Division, LP-011, 300 E Street SW, Washington, DC 20456-0001. Telephone 202-358-4560; facsimile 202-358-3082.
This final rule amends the NASA FAR Supplement (NFS) to change instances of “commercial item(s)” with commercial product(s), commercial services(s), or both commercial product(s) and commercial service(s) to match similar actions taken in the Federal Acquisition Regulation (FAR). FAR Case 2018-018 was published as a final rule at 86 FR 61017 on November 4, 2021, to implement section 836 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232) to separate the definition of “commercial item” into the definitions of “commercial product” and “commercial service.”
It is important to note that the amendment to separate “commercial item” with “commercial product” and “commercial service” does not expand or shrink the universe of products or services that the Government may procure using NFS part 1812, nor does it change the terms and conditions vendors must comply with.
This rule does not add any new solicitation provisions or contract clauses. This rule merely replaces the term “commercial item(s)” with “commercial product(s),” “commercial service(s),” “commercial product(s) or commercial service(s),” or “commercial product(s) and commercial service(s)” in the NFS including in part 1852, as appropriate. It does not add any new burdens because the case does not add or change any requirements with which vendors must comply.
“Publication of proposed regulations”, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because NASA is not issuing a new regulation; rather, this rule is merely an editorial change and will provide consistent language to the FAR (pursuant to section 836 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232)) throughout the NFS. The rule does not expand or shrink the universe of products or services that the Government may procure using NFS part 1812, nor does it change the terms and conditions vendors must comply with. These requirements affect only the internal operating procedures of the Government.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. requirements with which vendors must comply.
The Congressional Review Act, 5 U.S.C. 801
The Regulatory Flexibility Act (5 U.S.C. 601
The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Accordingly, 48 CFR parts 1812, 1813, 1816, 1819, 1823, 1832, and 1852 are amended as follows:
51 U.S.C. 20113(a) and 48 CFR chapter 1.
The revisions read as follows:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; quota transfer and closure.
NMFS is transferring 21.7 metric tons (mt) of Atlantic bluefin tuna (BFT) quota from the Reserve category to the General category September time period resulting in an adjusted September time period subquota of 210 mt and a Reserve category quota of 5.7 mt. NMFS is also simultaneously closing the General category fishery for large medium and giant (
The transfer is effective September 17, 2023, through September 30, 2023. The closure is effective 11:30 p.m., local time, September 17, 2023, through September 30, 2023.
Larry Redd, Jr.,
Atlantic HMS fisheries, including BFT fisheries, are managed under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971
As described in § 635.27(a), the current baseline U.S. BFT quota is 1,316.14 metric tons (mt) (not including the 25 mt ICCAT allocated to the United States to account for bycatch of BFT in pelagic longline fisheries in the Northeast Distant Gear Restricted Area). The baseline quotas for the General and Reserve categories are 710.7 mt and 38.2 mt, respectively. The General category baseline quota is suballocated to different time periods. Relevant to this action, the baseline subquota for the
Under § 635.27(a)(8), NMFS has the authority to transfer quota among fishing categories or subcategories after considering the determination criteria provided under § 635.27(a)(7). NMFS has considered all of the relevant determination criteria and their applicability to this inseason quota transfer. These criteria include, but are not limited to, the following:
Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock (§ 635.27(a)(7)(i)), biological samples collected from BFT landed by General category fishermen and provided by BFT dealers continue to provide NMFS with valuable parts and data for ongoing scientific studies of BFT age and growth, migration, and reproductive status. Additional opportunity to land BFT in the General category would support the continued collection of a broad range of data for these studies and for stock monitoring purposes.
NMFS considered the catches of the General category quota to date and the likelihood of overharvests and an earlier closure of the General category if no adjustment is made (§ 635.27(a)(7)(ii) and (ix)). To date, preliminary landings data indic ate that the General category has landed approximately 132.5 mt for the September time period. Without a quota transfer at this time, the General category would have exceeded the available quota and NMFS would have needed to close the General category fishery earlier. If this had happened, participants would have had to stop BFT fishing activities while commercial-sized BFT remain available in the areas where General category permitted vessels operate. A quota transfer of 21.7 mt at this time provides limited additional opportunities to harvest the U.S. BFT quota while avoiding a large exceedance.
Regarding the projected ability of the vessels fishing under the General category to harvest the additional amount of BFT quota transferred before the end of the fishing year (§ 635.27(a)(7)(iii)), NMFS considered General category landings over the last several years and landings to date this year. Landings are highly variable and depend on access to commercial-sized BFT and fishing conditions, among other factors. Current reports indicate the General category has already harvested almost all of the transferred 21.7 mt. Thus, this quota transfer would allow fishermen to take advantage of the availability of BFT on the fishing grounds and provide a reasonable opportunity to harvest the available U.S. BFT quota.
NMFS also considered the estimated amounts by which quotas for other gear categories of the fishery might be exceeded (§ 635.27(a)(7)(iv)) and the ability to account for all 2023 landings and dead discards. In the last several years, total U.S. BFT landings have been below the available U.S. quota such that the United States has carried forward the maximum amount of underharvest allowed by ICCAT from one year to the next. NMFS anticipates having sufficient quota to account for landings and dead discards within the adjusted U.S. quota, consistent with ICCAT recommendations.
NMFS also considered the effects of the adjustment on the BFT stock and the effects of the transfer on accomplishing the objectives of the FMP (§ 635.27(a)(7)(v) and (vi)). This transfer would be consistent with established quotas and subquotas, which are implemented consistent with ICCAT Recommendation 22-10, ATCA, and the objectives of the 2006 Consolidated HMS FMP and amendments. In establishing these quotas and subquotas and associated management measures, ICCAT and NMFS considered the best scientific information available, objectives for stock management and status, and effects on the stock. This quota transfer is in line with the established management measures and stock status determinations. Another principal consideration is the objective of providing opportunities to harvest the available General category quota without exceeding the annual quota. This consideration is based on the objectives of the 2006 Consolidated HMS FMP and its amendments, and includes achieving optimum yield on a continuing basis and optimizing the ability of all permit categories to harvest available BFT quota allocations (related to § 635.27(a)(7)(x)). Specific to the General category, this includes providing opportunities equitably across all time periods.
Given these considerations, NMFS is transferring 21.7 mt of the available 27.4 mt of Reserve category quota to the General category September time period subquota. Therefore, NMFS adjusts the General category September time period subquota to 210 mt and the Reserve category quota to 5.7 mt for the remainder of the 2023 fishing year, or until modified by a later action.
Under § 635.28(a)(1), NMFS files a closure action with the Office of the Federal Register for publication when a BFT quota (or subquota) is reached or is projected to be reached. Retaining, possessing, or landing BFT under that quota category is prohibited on or after the effective date and time of a closure notice for that category until the opening of the relevant subsequent quota period or until such date as specified.
To date, reported landings for the General category September time period total approximately 132.5 mt. Based on these landings data, NMFS has determined that the adjusted General category September time period subquota of 210 mt is projected to be reached and exceeded shortly. Therefore, retaining, possessing, or landing large medium or giant (
On May 25, 2023 (88 FR 33839), NMFS published a final rule implementing RFDs every Tuesday, Friday, and Saturday from July 1 through November 30, 2023. Since the fishery will be closed for the remainder of the September time period, NMFS waives the previously scheduled RFDs
With the RFDs waived during the closure, consistent with § 635.23(a)(4), fishermen aboard General category permitted vessels and HMS Charter/Headboat permitted vessels may tag and release BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. All BFT that are released must be handled in a manner that will maximize their survival, and without removing the fish from the water, consistent with requirements at § 635.21(a)(1). For additional information on safe handling, see the “Careful Catch and Release” brochure available at
NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landing reports within 24 hours of a dealer receiving BFT. Late reporting by dealers compromises NMFS' ability to timely implement actions such as quota and retention limit adjustments, as well as closures, and may result in enforcement actions. Additionally, and separate from the dealer reporting requirement, General and HMS Charter/Headboat category vessel owners are required to report their own catch of all BFT retained or discarded dead within 24 hours of the landing(s) or end of each trip, by accessing
After the fishery reopens on October 1, depending on the level of fishing effort and catch rates of BFT, NMFS may determine that additional adjustments are necessary to ensure available subquotas are not exceeded or to enhance scientific data collection from, and fishing opportunities in, all geographic areas. If needed, subsequent adjustments will be published in the
NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act and regulations at 50 CFR part 635 and is exempt from review under Executive Order 12866.
The Assistant Administrator for NMFS (AA) finds that pursuant to 5 U.S.C. 533(b)(B), there is good cause to waive prior notice and opportunity to provide comment on this action, as notice and comment would be impracticable and contrary to this action for the following reasons. Specifically, the regulations implementing the 2006 Consolidated HMS FMP and amendments provide for inseason retention limit adjustments to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Providing prior notice and opportunity for public comment on this quota transfer and closure of the General category is impracticable and contrary to the public interest as the General category fishery is currently underway for the September time period. Based on General category catch rates, a delay in this action would likely result in BFT landings exceeding the adjusted September 2023 General category quota. Subquota exceedance may result in the need to reduce quota for the General category later in the year and thus could affect later fishing opportunities. NMFS could not have proposed this action earlier, as it needed to consider and respond to updated landings data, in deciding to transfer a portion of the Reserve category quota to the General category quota. This action does not raise conservation and management concerns. Transferring quota from the Reserve category to the General category does not affect the overall U.S. BFT quota, and available data show the adjustment would have a minimal risk of exceeding the ICCAT-allocated quota. NMFS notes that the public had an opportunity to comment on the underlying rulemakings that established the U.S. BFT quota and the inseason adjustment criteria.
For all of the above reasons, the AA finds that pursuant to 5 U.S.C. 553(d), there is good cause to waive the 30-day delay in effective date.
16 U.S.C. 971
Federal Highway Administration (FHWA), U.S. Department of Transportation (DOT).
Notice of proposed rulemaking (NPRM); request for comments.
FHWA proposes and requests comments on regulations governing changes in access to the Dwight D. Eisenhower National System of Interstate and Defense Highways (Interstate System). As a condition of funding for Federal-aid highway projects, Federal law prohibits State departments of transportation (State DOT) from adding any point of access to or from the Interstate System without the approval of the Secretary of Transportation (Secretary). This proposed rule would codify and clarify existing policies and practices regarding State DOT requests for and FHWA approval of changes in access to the Interstate System.
Comments must be received on or before October 19, 2023. Late comments will be considered to the extent practicable. In compliance with the Paperwork Reduction Act, FHWA is also seeking comments on a new information collection. All comments relating to the information collection requirements should be submitted to the Office of Management and Budget (OMB) and to FHWA at the addresses listed in the
You may submit comments by any of the following methods:
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Comments on the proposed information collection requirements should be submitted to: Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, Attn: Desk Officer for FHWA. It is requested that comments sent to the OMB also be sent to the FHWA rulemaking docket identified in the heading of this document.
Mr. Clayton Wellman, Office of Preconstruction, Construction and Pavements (HICP-10), (202) 366-4658, or via email at
This document and all comments received may be viewed online through the Federal eRulemaking portal at
All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, FHWA will also continue to file relevant information in the docket as it becomes available after the comment period closing date and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period and after DOT has had the opportunity to review the comments submitted.
It is in the national interest to preserve and enhance the Interstate System to meet the needs of the 21st century by ensuring that it provides the highest level of service in terms of safety and mobility. Full control of access along the Interstate mainline and ramps, along with control of access on the crossroad at interchanges, is critical to such service. Under 23 U.S.C. 111 (section 111), all agreements between the Secretary and State DOTs for the construction of projects on the Interstate System shall provide that the State will not add any points of access to, or exit from, the project in addition to those approved by the Secretary in the plans for such project, without the prior approval of the Secretary. Any change to an access point can potentially add or remove access from the Interstate System. Therefore, FHWA historically has interpreted the addition of an access point to include the addition of a new, or modification of an existing, interchange or access point along the Interstate System.
The Secretary has delegated authority to administer section 111 to the Federal Highway Administrator pursuant to 49 CFR 1.85(a)(1). Section 111(e) allows FHWA to delegate to a State DOT authority to approve interstate justification reports (IJR) pertaining to certain changes in access to the Interstate System.
To facilitate implementation of these statutory requirements regarding changes in access to the federally-funded Interstate System, FHWA recognizes a need to codify and clarify current practices, as set forth in FHWA policy, in regulations. When considering a request for a change in access to the Interstate System, FHWA examines the safety, operations, and engineering (SO&E) aspects of the requested change in access. Historically, FHWA has done this by relying on the information provided in an IJR submitted by the State DOT. The IJR contains the project layouts, technical analyses, and other information supporting the change in access request. To date, FHWA has determined whether to approve the request based on the factors listed in FHWA's policy on Access to the Interstate System (Policy).
FHWA initially developed and published the Policy in October 1990
This proposed rule would establish requirements for the justification and documentation necessary for a State DOT to substantiate proposed changes in access to the Interstate System. These requirements are consistent with the existing policies and practices described above. It would facilitate decisionmaking regarding proposed changes in access to the Interstate System in a manner that considers safety, operations, and engineering. Consistent with 23 U.S.C. 109(a) and (b) and 23 U.S.C. 111, new or modified points of access for facilities subject to a Federal-aid project agreement must be approved by FHWA. To facilitate these approvals, such new or modified points of access would be required to be developed in accordance with the requirements of this proposed rule. In addition, new or modified points of access must comply with the requirements in 23 CFR part 625, Design Standards for Highways.
FHWA's decision to approve new or revised access points to the Interstate System must be supported by information justifying and documenting the proposed change in access. Therefore, the decision to approve a request is dependent on the IJR demonstrating that the proposed change in access will not result in a significant adverse impact on the Interstate System traffic operations or the safety in the project's area of influence. In addition, the proposed access must connect to a public road only, provide for all traffic movements, be designed to meet or exceed current standards, and demonstrate that the change in access can be clearly and adequately signed.
This proposed rule would identify the requirements for the change in access request and documentation necessary to substantiate any request that is submitted by a State DOT to FHWA for approval. Once the State DOT's analysis is completed, it would be required to be documented in the form of a standalone IJR and submitted by the State DOT to FHWA for a SO&E determination. FHWA expects that an IJR will be clearly written for someone who is not familiar with the project, the area, or the State. The technical analysis presented in the IJR enables FHWA to make an informed decision about safety and operational impacts of the change in access to the Interstate System and make the SO&E determination based on those impacts.
The proposed rule would not alter or restrict the option for FHWA to delegate approval authority for the determination of SO&E acceptability of IJRs to a State DOT pursuant to 23 U.S.C. 111(e). Nor would it alter a State DOT's ability to assume FHWA environmental review responsibilities under 23 U.S.C. 326 (State assumption of responsibility for categorical exclusions) or 23 U.S.C. 327 (Surface transportation Project Delivery Program). As discussed in the section-by-section analysis, under the proposed rule, FHWA may grant final approval of an Interstate System change in access request once certain conditions are met. There must be a favorable SO&E determination, and the applicable transportation planning, conformity, congestion management process, and National Environmental Policy Act (NEPA) procedures must be completed. In addition, the alternative selected and approved in the NEPA decision must also be the subject of a favorable SO&E determination. FHWA retains approval authority for final approval of changes in access to the Interstate System under the proposed rule.
The section-by-section analysis provides a detailed discussion of the proposed rule.
In § 624.1, FHWA proposes to set forth the purpose of part 624. Specifically, the purpose is to prescribe requirements and procedures for State requests for, and FHWA consideration of, changes in access to the Interstate System. Both aspects of changes in access are reflected throughout this proposal.
In § 624.3(a), FHWA proposes to specify the conditions under which proposed part 624 would be applicable. Historically, FHWA has applied the Policy to changes in access regardless of the funding source. This Policy was not applied to toll roads incorporated into the Interstate System, except for segments where Federal-aid highway funds have been expended or would be used for roadway improvements, or where the toll road section has been added to the Interstate System under the provisions of 23 U.S.C. 103(c)(4)(A). In this rulemaking, the proposed applicability aligns with 23 U.S.C. 111(a), which ties the requirement for approval of changes in access along the Interstate System to the project agreement. On roadway segments where Federal-aid highway funds or other funds administered under Title 23 have never been used and will not be used for the modified access, there is no project agreement and the provisions of 23 U.S.C. 111(a) do not apply. Therefore, under § 624.3(a)(1), applicability of the proposed rule is limited to Interstate System segments for which Federal-aid highway funds or other funds administered under Title 23 have been used in the past or are used to develop a project. As used in the proposed rule, a segment is the section of Interstate that falls within the project limits specified in the project agreement for the use of Title 23 funds.
In proposed § 624.3(b), FHWA would clarify that the requirements of this part are not applicable to ramps providing access to safety rest areas, information centers, weigh stations, and truck inspection stations located within the Interstate right-of-way when such areas are accessible to vehicles only to and from the Interstate System. This section does not change the requirements of this part for connections from other public facilities, which may be allowed if an exception is granted in accordance with § 624.7(f).
In proposed § 624.3(c), FHWA would clarify that the requirements of this part are not applicable to connections between managed lanes and general-purpose lanes on the same Interstate highway.
In § 624.5, FHWA proposes definitions for 11 terms specific to the Interstate System access approval process.
FHWA requests comments on the proposed definitions. In addition, FHWA requests comments on additional terms relating to changes in access to the Interstate System that could benefit from definition in part 624.
In § 624.7, FHWA proposes to specify the requirements applicable to Interstate System access. In § 624.7(a), FHWA proposes to require that proposed changes in access shall not result in a significant adverse impact on the Interstate System traffic operations or the safety for all roadway users in the project's area of influence, consistent with FHWA's goal of reducing fatal and serious injury crashes on the entire roadway network. The 2009 Policy stated, “An operational and safety analysis has concluded that the proposed change in access does not have a significant adverse impact on the safety and operation of the Interstate facility (which includes mainline lanes, existing, new, or modified ramps, ramp intersections with crossroad) or on the local street network based on both the current and the planned future traffic projections.” Since 2009, there has been confusion regarding the applicability of the “or” statement contained in this sentence in the 2009 Policy and carried forward in the 2017 policy. Questions have been raised about whether the “or” statement applied to the safety analysis, operational analysis, or both and whether a request for a change in access would be denied because the operational or safety analysis for either the Interstate System or the local roads was adversely impacted. To address these questions, FHWA proposes to clarify in § 624.7(a) that any change in access to the Interstate System shall not result in a significant adverse impact on the traffic operations of the Interstate System or the safety for all roadway users in the project's area of influence. To ensure safety for all roadway users in the project's area of influence, all users must be considered when reviewing an access request. To that end, the existing and projected land use along the crossroad should be examined and opportunities to improve connectivity for pedestrian and bicycle travel should be considered as part of the access modification.
FHWA also proposes to ensure that the traffic and safety data used to
With multiple operational analysis tools and methodologies available, FHWA does not require the specific use of any tool. Regardless of which tool type is selected, it is important to understand the limitations of the chosen tool(s) and apply the tools in a manner which supports a verifiable, reproducible, and accurate analysis. This includes the effective calibration of the chosen tool(s) and proper interpretation of the output. In addition, it is important to provide documentation of the operational analysis in the IJR that gives sufficient information for an independent review of the conditions and does not require the use of any specific traffic analysis tool software. FHWA encourages the use of appropriate tools in a scope commensurate with the project complexity.
For the safety evaluation, an analysis of recent crash data is useful for determining if the elements under study (freeway through lanes, interchange ramps, crossroads, and intersections) within the project area are experiencing more or greater severity of crashes than what would be considered typical for the conditions relevant to the facility. This information is helpful for identifying potential factors contributing to poor safety performance and how those conditions could be improved as part of the build proposal(s). Crash data more than 5 years old does not provide an accurate assessment of the safety performance conditions of the facility because there may have been significant changes in travel patterns and conditions as evidenced by the need for proposed changes in access. FHWA believes the 5-year requirement for traffic and safety data proposed in this rule provides State DOTs with sufficient flexibility that accounts for project development processes and ensures that the analysis is based on reasonably current data.
The safety analysis should assess the safety performance of the overall project (both Interstate and local roads) within the project's area of influence. The scope of the analysis and the tools and methodologies used for the assessment should be commensurate with the scope and complexity of the proposed project. More complex projects have greater risk for introducing unintended negative safety consequences and therefore a more robust analysis may be necessary.
The intent of the safety analysis is to guide project design decisions in an effort to: identify and mitigate any existing safety risk features that may be contributing to the number and severity of crashes; implement effective and efficient design choices that reduce future safety risks; and implement designs consistent with known human factors design guidance. Safety has traditionally been considered in highway projects within a standards-based framework. Recent advancements in the development and use of statistical models within a data driven safety analysis framework allow for a more thorough understanding of the quantitative relationship between design features and safety performance.
With multiple safety analysis tools and methodologies available, FHWA does not require the specific use of any tool. FHWA encourages the use of appropriate tools in a scope commensurate with the project complexity. If applying safety predictive models, it is important that the analysis consider the boundaries and conditions for which the model was developed. Not all conditions and scenarios have safety predictive models available.
The safety analysis should assess safety performance (number and severity of crashes) under the proposed build and no-build scenarios. Predictive safety analysis tools may be applied on individual segments or components of the project, and it may be possible to sum the results for the entire project. If using predictive safety analysis tools, it is important to acknowledge the complexities of safety modeling and the potential variability from actual results.
Instances may arise where the Interstate System could incur expected or predicted increases to overall crashes, or specific crash severity types, while the overall project crash impacts are reduced. FHWA expects agencies to carefully evaluate and discuss the tradeoffs between increased crashes on one facility versus another and will take this into account when making the SO&E determination.
In § 624.7(b), FHWA proposes to require that access to the Interstate System must connect only to a public road, consistent with FHWA practice since 1990. The American Association of State Highway and Transportation Officials (AASHTO)
In § 624.7(c), FHWA proposes to prohibit access from outside of the Interstate System right-of-way to safety rest areas, information centers, weigh stations, and truck inspection stations located within the right-of-way. Such prohibition is consistent with FHWA's implementation of the 2009 Policy as documented in the Interstate System Access Informational Guide, 2010, available at
In § 624.7(d), FHWA proposes to require that each interchange provides for all traffic movements, consistent
In § 624.7(f), FHWA proposes to grant exceptions on a case by case basis to the requirements in § 624.7(b) through (d) for the situations referenced in paragraphs (f)(1) through (f)(4). In § 624.7(f)(1), FHWA could grant exceptions for locked gate access to private property for public safety. Locked gate access is sometimes necessary for use by maintenance or utility forces in remote areas, between widely spaced interchanges for emergency management or medical personnel, hazardous materials response and evacuations at industrial sites, or for temporary construction access. In § 624.7(f)(2), FHWA could grant exceptions to allow locked gate access from an information center, weigh station, and truck inspection station to a local road as needed for public safety, such as locked gate access from a truck inspection station to a minor local road to access repair services in a remote area. In § 624.7(f)(3), FHWA could grant exceptions for access from a safety rest area to an adjacent, publicly owned conservation and recreation area if access to this area is available only through the safety rest area, as provided under 23 CFR 752.5(d). Section 752.5(d), in FHWA's regulations governing safety rest areas, allows FHWA to permit access from safety rest areas to adjacent publicly owned conservation and recreation areas if access to these areas is only available through the rest area and if these areas or their usage does not adversely affect the safety rest area facilities. In proposed § 624.7(f)(4), FHWA could grant exceptions for partial interchanges where they are necessary to provide special access (
Proposed § 624.9(a) sets out the approval process for a change in access to the Interstate System. In § 624.9(a), FHWA proposes to require that a State DOT proposing a change in access submit electronically a request letter and an IJR to FHWA demonstrating that the proposed change in access meets the requirements of part 624. FHWA would not accept requests from other parties besides a State DOT. In § 624.9(b), FHWA proposes that approval of a change in access requires a SO&E determination and a final approval. The SO&E determination is separate from the NEPA process and final approval could not be granted until the NEPA process is complete. In § 624.9(c), FHWA proposes that the SO&E determination shall be based on the safety, operational, and engineering aspects of the request as documented in an IJR submitted by the State DOT in accordance with the requirements of proposed § 624.11. In § 624.9(c), FHWA also proposes that all SO&E determinations shall be made by FHWA except where an approved PA is in effect. When an approved PA is in effect, the State DOT shall make a SO&E determination on behalf of FHWA in accordance with 23 U.S.C. 111(e) and 23 CFR 624.13 for specific types of Interstate System access.
In § 624.9(d), FHWA proposes that if a favorable SO&E determination is made, FHWA would consider whether final approval of a proposed change in access to the Interstate System is appropriate. Further, FHWA proposes that final approval may only be granted by FHWA if the following conditions are met: (1) applicable transportation planning, conformity, congestion management process, and NEPA procedures have been completed; and (2) the alternative covered by the favorable SO&E determination is of the same scope and design as the alternative selected and approved in the NEPA decision. FHWA could not issue final approval of access until the NEPA procedures have been completed because the final approval is a major Federal action subject to NEPA. However, FHWA could make a SO&E determination in advance of the NEPA decision.
In § 624.9(e), FHWA proposes that if a proposed change in access to the Interstate System has not progressed to construction within 5 years of an affirmative SO&E determination, FHWA may require a State DOT to provide verification that the requirements of § 624.7 continue to be met based on current and projected future conditions. The 2009 Policy discussed reevaluating a proposal if the project did not proceed to construction within 8 years. This limit was reduced to 3 years in the 2017 Policy to coincide with the timeframe for written NEPA re-evaluation for draft and final environmental impact statements (EIS) pursuant to 23 CFR 771.129(a) and (b). FHWA has determined that linking these two timeframes is not appropriate because the 3-year NEPA requirement applies only in situations where an EIS is developed and not every Interstate access modification request requires an EIS. As mentioned above, traffic and safety data that is up to 5 years old is adequate to make SO&E determinations. Therefore, FHWA now proposes to set the limit for a proposed change in access to progress to construction without State DOT verification under § 624.7 at 5 years after an affirmative SO&E determination. FHWA selected this duration because traffic and safety data that is older than 5 years introduces higher risk in the analysis of SO&E acceptability. The 5 year threshold for proceeding to construction will provide a maximum of 10 years [5 years (project development) + 5 years (verification)] from the time the traffic data was collected. Within this time period, some areas could see significant change in travel patterns and conditions, which may warrant a reconsideration of whether the technical assumptions that formed the basis of FHWA's prior approval are still valid. In addition, this timeframe would allow for two Long-Range Transportation Plan updates for most MPOs.
Proposed § 624.11 addresses the IJR. In § 624.11(a), FHWA proposes to require that the IJR be a standalone report. We expect that all information necessary to make the SO&E determination would be in the IJR. Relevant information from other documents must be included in the IJR, rather than referenced.
In § 624.11(b), FHWA proposes to prescribe the minimum information that must be included in the IJR, except as provided under § 624.11(d), so that FHWA can make a determination regarding the SO&E aspects of the proposed change in access request. These requirements are consistent with long-standing practice as documented in the 2010 Interstate System Access Informational Guide.
In § 624.11(b)(1), FHWA proposes to require a proposed project description and overview along with a location map with applicable distances to adjacent interchanges.
In § 624.11(b)(2), FHWA proposes to require preliminary design documents sufficient for FHWA to determine the geometric viability of the proposed project. Specifically, FHWA proposes to require that the IJR include, at a
In § 624.11(b)(3), FHWA proposes requirements for the limits of the operational and safety analysis for the proposed change in access included in the IJR. In § 624.11(b)(3)(i) and (ii), FHWA proposes that the operational and safety analysis must include at least the first adjacent existing or proposed interchanges and intersections to evaluate the impacts on the roadway network. A preliminary understanding of the traffic conditions should be gained prior to selecting the limits of the network. Based on the complexity of the proposal, logical traffic breaks should be selected within the system rather than adhering to only the minimum requirements.
In § 624.11(b)(4), FHWA proposes to require that a conceptual signing plan showing the type and location of the signs proposed to support the proposed design be included in the IJR. This plan is necessary for FHWA to determine if the proposed interchange can be adequately and clearly signed.
In § 624.11(c), FHWA proposes to specify the additional information that must be included in the IJR when a proposed change in access will not provide for all traffic movements at an interchange (also known as a partial interchange) in accordance with proposed § 624.7(d). In § 624.11(c)(1), FHWA proposes to require that the IJR must provide a full-interchange option and compare the SO&E to the proposed partial interchange option. The IJR must justify the necessity for a partial interchange alternative. In § 624.11(c)(2), FHWA proposes that the IJR must describe why a partial interchange is proposed and include the proposed mitigation to compensate for missing movements, such as wayfinding signage, local intersection improvements, mitigation of driver expectation leading to wrong-way movements on ramps, and other proposed strategies as necessary. In § 624.11(c)(3), FHWA proposes that the IJR must discuss if the future provision of a full interchange will be precluded by the proposed design.
In § 624.11(d), FHWA proposes to consider the complexity of a change in access when determining the extent of the safety and operational analysis and the format of the IJR. Due to the variation in complexity of projects, coordination between FHWA and a State DOT is necessary to determine the level of analysis needed based on the context of a specific project. Projects that include the addition of left-turn storage lanes, right-turn storage lanes and through lanes along the crossroad at the terminus of existing ramps are not changes in access and would not require IJRs. State DOTs are encouraged to coordinate with FHWA to determine what constitutes a change in access.
In § 624.13, FHWA proposes the process a State DOT must use if they wish to enter into a PA with FHWA that would delegate to the State DOT responsibility for making SO&E determinations on behalf of FHWA in accordance with 23 U.S.C. 111(e) and section 1318(d) of the Moving Ahead for Progress in the 21st Century Act (MAP-21). FHWA also proposes that, if delegated, SO&E determinations must be made in accordance with the requirements of this part. The process identified in this section is consistent with the FHWA memorandum, “Programmatic Agreement for Processing Interstate Access Requests—Revised” (PA Memo) dated April 26, 2016, available at
In § 624.13(a), FHWA proposes to specify the types of access requests that a State DOT, through a PA with FHWA, may assume delegated authority to make SO&E acceptability determinations on behalf of FHWA. The State DOT may assume all or any portion of the allowed types of access requests. The types of access requests, including new freeway-to-crossroad (service) interchanges, modifications to existing freeway-to-crossroad (service) interchanges, and completion of basic movements at freeway-to-crossroad (service) interchanges, are consistent with 23 U.S.C. 111(e).
In § 624.13(b), FHWA proposes to specify the information the State DOT must provide in the PA request. In § 624.13(b)(1), FHWA proposes that the State DOT must provide the types of access requests for which they wish to assume the responsibility of SO&E determinations. In § 624.13(b)(2), FHWA proposes that the State DOT must also describe the controls and resources they have available to effectively implement the PA and address the considerations identified in proposed § 624.13(c).
In § 624.13(c)(1), FHWA proposes that upon receipt of a State DOT's request to enter into a PA, FHWA will verify that the State DOT has developed and implemented appropriate controls and processes, and that the State DOT has the necessary resources and commits to conduct future actions in compliance with the requested PA in order to assume responsibility for SO&E determinations on behalf of FHWA. FHWA also proposes a list of specific factors that will be considered.
In § 624.13(c)(1)(i), FHWA proposes to examine whether the State DOT has in place or has modified policies, standard operating procedures (SOP), and processes that are necessary to implement the PA. In § 624.13(c)(1)(ii), FHWA proposes to examine whether State DOT processes and guidance have been developed and implemented to support the development, analysis, documentation, review, and potential processing of Interstate System access changes under the terms of the PA. In § 624.13(c)(1)(iii), FHWA proposes to examine documentation demonstrating the process, guidance, assistance, and oversight that State DOTs will provide to support local agencies who may propose changes in Interstate System access. In § 624.13(c)(1)(iv), FHWA proposes to examine documentation demonstrating whether the State DOT has the technical expertise and resources (
In § 624.13(c)(2), FHWA proposes to establish, with input from the State DOT, the scope and conditions for the State DOT's review of access requests and the process by which the State DOT will make the SO&E determination.
In § 624.13(d), FHWA proposes that the PA will require that the State DOT submit electronically an annual report to FHWA that at a minimum summarizes specific information about SO&E determinations under the PA. In § 624.13(d)(1), FHWA proposes to require a State DOT to submit a list of all the SO&E determinations made in
In § 624.13(e), FHWA proposes that once all concerns have been addressed to the satisfaction of the Secretary, the PA may be executed.
FHWA requests comments on the proposed rule. Please follow the instructions in the
The Office of Management and Budget (OMB) has not designated this rulemaking a significant action under section 3(f) of Executive Order (E.O.) 12866. Accordingly, OMB has not reviewed it. This proposed rule would codify existing policy, processes and procedures relating to new or modified access to the Interstate System. In addition, this proposed rule complies with E.O. 12866 and E.O. 13563 to improve regulation. This proposed rule is not anticipated to adversely affect, in any material way, any sector of the economy. In addition, this proposed rule would not create a serious inconsistency with any action taken or planned by another agency or materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. This proposed rule also does not raise any novel legal or policy issues. FHWA anticipates that the economic impact of this rulemaking will be minimal; therefore, a full regulatory evaluation is not necessary.
In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 5 U.S.C. 60l-612), FHWA has evaluated the effects of this proposed rule on small entities, such as local governments and businesses. Based on the evaluation, FHWA anticipates that this action would not have a significant economic impact on a substantial number of small entities. The proposed rule would codify the processes that are currently in-use by State DOTs when changes in access to the Interstate System are sought, and States are not included in the definition of small entity set forth in 5 U.S.C. 601. FHWA believes the projected impact upon small entities that utilize Federal-aid highway program funding for the development of highway improvement projects on the National Highway System would be negligible. Therefore, FHWA certifies that the proposed action would not have a significant economic impact on a substantial number of small entities.
FHWA has determined that this NPRM would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48) (UMRA). This proposed rule would not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $155 million or more in any one year (when adjusted for inflation). Further, in compliance with the Unfunded Mandates Reform Act, FHWA will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the effects on State, local, and Tribal governments and the private sector. In addition, the definition of “Federal Mandate” in the Unfunded Mandates Reform Act excludes financial assistance of the type in which State, local, or Tribal governments have authority to adjust their participation in the program in accordance with changes made in the program by the Federal Government. The Federal-aid highway program permits this type of flexibility.
FHWA has analyzed this proposed rule in accordance with the principles and criteria contained in E.O. 13132. FHWA has determined that this proposed rule would not have sufficient federalism implications to warrant the preparation of a federalism assessment. FHWA has also determined that this action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501,
In compliance with the PRA, FHWA also requests comments on the proposed new collection of information:
The proposed requirements for the submission of IJRs and PA annual reports to FHWA align with the DOT priority of Safety.
A State DOT has the option of entering into a PA with FHWA to make SO&E determinations on IJRs. If a State DOT has an approved PA then they are required to submit a PA annual report, which is used to monitor the performance of the PA. FHWA staff in the field will review the annual report as part of their oversight of the PA process.
FHWA estimates the total burden for the PA annual reports collection to be approximately 50 hours and $2,750 annually for State DOTs. It is estimated that the total burden for reviews of the PA annual reports collection will be approximately 10 hours and $660 annually for FHWA.
FHWA has analyzed this proposed rule for the purposes of the NEPA (42 U.S.C. 4321,
FHWA has analyzed this proposed rule under E.O. 13175 and believes that it would not have substantial direct effects on one or more Indian Tribes, would not impose substantial direct compliance costs on Indian Tribal governments, and would not preempt Tribal law. This proposed rule would not impose any direct compliance requirements on Indian Tribal governments nor would it have any economic or other impacts on the viability of Indian Tribes. Therefore, the funding and consultation requirements of E.O. 13175 do not apply and a Tribal summary impact statement is not required.
E.O. 12898 requires that each Federal agency make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minorities and low-income populations. FHWA has determined that
A RIN is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.
Interstate access process, Interstate Justification Report, Programmatic Agreement.
Issued under authority delegated in 49 CFR 1.81 and 1.85.
23 U.S.C. 109(a) and (b) and 111; 23 CFR 1.32; 49 CFR 1.85.
To prescribe requirements and procedures for State requests for and FHWA consideration of changes in access to the Interstate System.
(a) Except as provided in paragraph (b) and (c) of this section, this part is applicable to all segments designated as part of the Dwight D. Eisenhower National System of Interstate and Defense Highways (Interstate System) for which Federal-aid highway funds or other funds administered under title 23 have been used in the past or are used to develop a project.
(b) This part is not applicable to ramps providing access to safety rest areas, information centers, weigh stations, and truck inspection stations located within the Interstate right-of-way when such areas are accessible to vehicles only to and from the Interstate System. Connections from other public facilities to facilities within the Interstate System right-of way, if an exception is granted in accordance with § 624.7(f), are subject to the requirements of this part.
(c) This part is not applicable to connections between managed lanes and general-purpose lanes on the same Interstate highway.
The following terms used in this part are defined as follows:
(a) The proposed change in access to the Interstate System shall not result in a significant adverse impact on the Interstate System traffic operations or the safety for all roadway users in the project's area of influence, as demonstrated by operational and safety analyses based on both the current and future traffic projections using traffic and safety data that is no more than 5 years old.
(b) Interstate System access points shall connect only to a public road. Connections directly to private developments, parking lots, or private roads are prohibited.
(c) Connections from outside of the Interstate System right-of-way to safety rest areas, information centers, weigh stations, and truck inspection stations located within the Interstate System right-of-way are prohibited.
(d) Each interchange shall provide for all traffic movements.
(e) A proposed change in access shall be designed to meet the standards in accordance with part 625 of this chapter or have approved exceptions and shall comply with part 655 of this chapter.
(f) On a case by case basis, FHWA may grant exceptions to the requirements in paragraphs (b) through (d) of this section for:
(1) Locked gate access to private property for purposes of public safety;
(2) Locked gate access from an information center, weigh station, and truck inspection station to a local road for the purposes of public safety;
(3) Access from a safety rest area to an adjacent publicly owned conservation and recreation area if access to this area is available only through the safety rest area as allowed under § 752.5(d) of this chapter; or
(4) A partial interchange where necessary to provide special access, such as to managed lanes or park and ride lots, or where factors such as the social, economic, and environmental impacts of a full interchange justify an exception.
(a) To propose a change in access to the Interstate System, the State DOT
(b) Approval of a change in access to the Interstate System requires a SO&E determination and a final approval.
(c) The SO&E determination shall be based on the safety, operations, and engineering aspects of the request as documented in an IJR meeting the requirements of this part. FHWA shall make the SO&E determination, except where FHWA has delegated to a State DOT the authority to make the SO&E determination on behalf of FHWA by entering into a programmatic agreement that meets the requirements of § 624.13.
(d) If a favorable SO&E determination is made, FHWA will consider whether final approval is appropriate for the proposed change in access to the Interstate System. Final approval may only be granted by FHWA and constitutes a major Federal action under the National Environmental Policy Act (NEPA). Final approval may be granted if the following conditions are met:
(1) Applicable transportation planning, conformity, congestion management process, and NEPA procedures have been completed.
(2) The alternative covered by the favorable SO&E determination is of the same scope and design as the alternative selected and approved in the NEPA decision.
(e) If the project has not progressed to construction within 5 years of receiving an affirmative SO&E determination, FHWA may require the State DOT to provide verification that the requirements of § 624.7 continue to be met based on current and projected future conditions.
(a) The IJR shall be a standalone report. Relevant information from other documents (such as feasibility studies, NEPA documents or preliminary engineering reports) must be included in the appropriate section of the IJR.
(b) At a minimum, an IJR submitted to FHWA shall include all of the following, except as provided under paragraph (d) of this section.
(1) A description and overview of the proposed change in access including a project location map and distances to adjacent interchanges.
(2) Preliminary design documents sufficient to demonstrate the geometric viability of the proposal. The design documents shall include the design criteria, existing geometry overlaid with clearly labeled proposed geometric plan views, lane configuration schematics, typical sections, control-of-access lines, interchange spacing, ramp spacing, and other design features necessary to evaluate the proposed design.
(3) Operational and safety analyses that evaluate the impact of the proposed change in access on the Interstate System and local road network extending to the following area of influence limits at a minimum:
(i) Along the Interstate System, and interchanging freeway if applicable, to the adjacent existing or proposed interchange on either side of the proposed change in access, extending further as needed to ensure the limits of the analysis are appropriate to fully understand the impact of the proposed change in access on the Interstate System.
(ii) Along each crossroad to the first major intersection on either side of the proposed change in access, extending further as needed to demonstrate the safety and operational impacts that the proposed change in access and other transportation improvements may have on the local road network.
(4) A conceptual plan showing the type and location of the signs proposed to support the proposed design.
(c) The IJR for a proposed partial interchange shall meet the following additional requirements.
(1) The IJR shall include a full-interchange option with a comparison of the operational and safety analyses to the partial interchange option. The IJR shall justify the necessity for a partial interchange alternative.
(2) The IJR shall describe why a partial interchange is proposed and include the mitigation proposed to compensate for the missing basic movements, including wayfinding signage, local intersection improvements, mitigation of driver expectation leading to wrong-way movements on ramps, and other proposed strategies as necessary.
(3) The IJR shall describe whether future provision of a full interchange is precluded by the proposed design.
(d) FHWA will consider the complexity of a change in access when determining the extent of the safety and operational analysis and the format of the IJR.
A State DOT may submit to FHWA a written request to enter into a programmatic agreement (PA) with FHWA that delegates to the State DOT the authority to make the SO&E determination on behalf of FHWA in accordance with 23 U.S.C. 111(e) and the requirements of this part.
(a) A PA may allow a State DOT to make the SO&E determination for all or any part of the following types of change in access requests:
(1) New freeway-to-crossroad (service) interchanges;
(2) Modifications to existing freeway-to-crossroad (service) interchanges; and
(3) Completion of basic movements at freeway-to-crossroad (service) interchanges.
(b) The State DOT request to enter into a PA with FHWA shall include:
(1) The types of changes in access listed in paragraph (a) of this section for which the State DOT would like to make SO&E determinations; and
(2) A discussion of controls the State DOT has implemented, resources available, and actions that would be taken if the PA is approved, as needed to address the considerations outlined in paragraph (c) of this section.
(c) Upon receipt of the request, FHWA will:
(1) Verify that appropriate controls and processes have been developed and implemented by the State DOT, and that the State DOT has the necessary resources and commits to conduct future actions in compliance with the terms of the requested PA. FHWA will examine:
(i) State DOT policies, standard operating procedures, and processes, either in place or modified as needed to carry out the requirements of the PA;
(ii) Documentation demonstrating the processes and guidance that have been developed and implemented to support the development, analysis, documentation, review, and potential processing of each type of proposed change in access to the Interstate System to which the terms of the PA would apply;
(iii) Documentation demonstrating the process, guidance, assistance, and oversight the State DOT will provide to support local agencies (
(iv) Documentation demonstrating that the State DOT has the expertise and resources (
(v) Documentation of State DOT procedures to provide the necessary oversight, monitoring and annual reporting to the FHWA to ensure the changes in access to the Interstate
(vi) Any other factors deemed necessary by the Secretary.
(2) Establish, with input from the State DOT, the scope and conditions for the State DOT's review of change in access requests and the process by which the State DOT will make the SO&E determination.
(d) A PA shall require that the State DOT submit electronically an annual report to FHWA summarizing its performance under the PA. The report shall, at a minimum:
(1) Include the results of all changes in access to the Interstate System that were processed and received a SO&E determination under the terms of the PA for the previous calendar year;
(2) Summarize the changes in access to the Interstate System that the State DOT plans to process in the coming calendar year;
(3) Assess the effectiveness of and verify that all changes in access to the Interstate System processed through this agreement were evaluated and processed in a manner consistent with the terms of this PA;
(4) Identify any areas where improvements are needed and what actions the State DOT is taking to implement those improvements; and
(5) Include actions taken by the State DOT as part of its quality control efforts.
(e) When all concerns have been addressed to the satisfaction of the Secretary, the PA may be executed.
Environmental Protection Agency (EPA).
Notice of filing of petition and request for comment.
This document announces the Agency's receipt of an initial filing of a pesticide petition requesting the establishment or modification of regulations for residues of pesticide chemicals in or on various commodities.
Comments must be received on or before October 19, 2023.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2023-0069, through the
Charles Smith, Registration Division (RD) (7505T), main telephone number: (202) 566-2427, email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
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EPA is announcing receipt of a pesticide petition filed under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, requesting the establishment or modification of regulations in 40 CFR part 180 for residues of pesticide chemicals in or on various food commodities. The Agency is taking public comment on the request before responding to the petitioner. EPA is not proposing any particular action at this time. EPA has determined that the pesticide petition described in this document contains data or information prescribed in FFDCA section 408(d)(2), 21 U.S.C. 346a(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the pesticide petition. After considering the public comments, EPA intends to evaluate whether and what action may be warranted. Additional data may be needed before EPA can make a final determination on this pesticide petition.
Pursuant to 40 CFR 180.7(f), a summary of the petition that is the subject of this document, prepared by the petitioner, is included in a docket EPA has created for this rulemaking. The docket for this petition is available at
As specified in FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA is publishing notice of the petition so that the public has an opportunity to comment on this request for the establishment or modification of
1.
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21 U.S.C. 346a.
Office of the Chief Procurement Officer, Department of Homeland Security (DHS).
Notice of withdrawal of proposed rule.
The Department of Homeland Security (DHS) is withdrawing its proposed rule titled Homeland Security Acquisition Regulation (HSAR) Subcontractor Labor Hour Rates Under Time and Materials Contracts (HSAR Case 2010-001) and providing this notice of cancellation. The notice of proposed rulemaking proposed to amend the Homeland Security Acquisition Regulation (HSAR) parts 3016 and 3052 to require DHS contracts for time and material or labor hours (T&M/LH) to include separate labor hour rates for subcontractors and a description of the method that will be used to record and bill for labor hours for both contractors and subcontractors. DHS is withdrawing this proposed rule because of differing agency priorities and the staleness of the public comments. DHS will not take any further action on this proposal.
The proposed rule published on August 21, 2012 (75 FR 50449) is withdrawn effective September 19, 2023.
Mail: Department of Homeland Security, Office of the Chief Procurement Officer, Acquisition Policy and Legislation, ATTN: Catherine Benavides, 245 Murray Drive, Bldg. 410 (RDS), Washington, DC 20528.
Ms. Catherine Benavides, Procurement Analyst, DHS, Office of the Chief Procurement Officer, Acquisition Policy and Legislation at (202) 897-8301 or email
On August 21, 2012, the Department of Homeland Security (DHS) proposed to amend the Department of Homeland Security Acquisition Regulation (HSAR), 48 CFR chapters 3016 and 3052 to propose regulations to require DHS contracts for T&M/LH to include separate labor hour rates for subcontractors and a description of the method that will be used to record and bill for labor hours for both contractors and subcontractors. DHS is withdrawing this proposed rule because it is not a mandated requirement to set agency specific procedures. DHS is withdrawing this proposed rule and will not take any further action on this proposal.
Fish and Wildlife Service, Interior.
Notification of the availability of a final environmental impact statement and draft record of decision.
We, the U.S. Fish and Wildlife Service (Service), announce the availability of a final environmental impact statement (EIS) and draft record of decision (ROD) under the National Environmental Policy Act of 1969, as amended, for our intended action of establishing a nonessential experimental
The Service will issue a record of decision no sooner than 30 days after publication of this announcement of the availability of the final EIS in the
Liisa Niva, Acting Field Supervisor, U.S. Fish and Wildlife Service, Colorado Ecological Services Field Office, 134 Union Boulevard, Suite 670, Lakewood, CO 80228; telephone 303-236-4773; email
We announce the availability of the final environmental impact statement (EIS) and our draft record of decision (ROD) for the proposed establishment of a nonessential experimental population (NEP) of the gray wolf (
On July 21, 2022 (87 FR 43489), we published a notification of intent to prepare an environmental impact statement (EIS) for this action and held public scoping meetings, in person on August 2, 3, and 4, and virtually on August 10, 2022. Cooperating agencies included multiple Federal and State agencies, Tribal Governments, and local governments. We also participated in Tribal working groups and Tribal coordination meetings. Additionally, we shared information with the public through a dedicated website, emails, in-person meetings, and webinars.
We published the proposed rule and noticed the availability of the draft EIS on February 17, 2023 (88 FR 10258), which opened a 60-day public comment period for both documents. During the public comment period, we hosted four in-person informational public meetings on March 14, 15, 16, and 28, and a virtual public meeting on March 22, 2023. The public comment period closed on April 18, 2023. We received 4,290 pieces of correspondence during the public comment period, with 1 correspondence having 16,233 signatures. We developed our final EIS after assessing and considering all comments, both individually and collectively. Our response to the substantive comments that we received are provided as an appendix to the final EIS.
The primary authors of this notice are the staff members of the Colorado Ecological Services Field Office (see
The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531
The Department of Agriculture will submit the following information collection requirement(s) to OMB for review and approval under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. Comments are requested regarding: (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding these information collections are best assured of having their full effect if received by October 19, 2023. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
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.
General authority for these data collection activities is granted under U.S.C. Title 7, Section 2204. This survey will be conducted on a full cost recovery basis with the Iowa State University Extension & Outreach (ISU) in cooperation with the Iowa Department of Agriculture and Land Stewardship (IDALS).
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: 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; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology Comments regarding these information collections are best assured of having their full effect if received by October 19, 2023. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
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
Market News provides all interested segments of the market chain with timely, accurate information from an unbiased third party. Equal access to timely and reliable market information tends to equalize the competitive position of all market participants. In the absence of Market News information and reports, small and medium sized market participants with limited resources for developing and collecting information are at a competitive disadvantage to larger participants who might be able to afford very sophisticated information systems.
In addition, AMS buys hundreds of millions of dollars of specialty crops products each year for domestic feeding programs, and Specialty Crops Market News Division data is a critical component of the decision-making process. The absence of these data would deny primary and secondary users information that otherwise would be available to aid them in their production, marketing decisions, analyses, research and knowledge of current market conditions. The omission of these data could adversely affect prices, supply, and demand.
Farm Service Agency, U.S. Department of Agriculture (USDA).
Notice; request for comments.
In accordance with the Paperwork Reduction Act (PRA), the Farm Production and Conservation (FPAC) is requesting comments from all interested individuals and organizations on an extension of a currently approved Generic Clearance for the Collection of Qualitative Customer Feedback on the Service Delivery (0560-0286). The Farm Service Agency (FSA) initially received the PRA approval for this information collection request and has expanded it to cover all four of the agencies in the U.S. Department of Agriculture (USDA) Farm Production and Conservation (FPAC) mission area. FPAC uses the approval to cover the surveys, window pop-up surveys, focus groups, beta testing new or revised electronic systems, comment cards, and other information collection instruments or methods, which are designed to get customer feedback on service delivery for various programs administered by any of the FPAC agencies. This request for approval broadly addresses the need for information about what our customers think of our services so that we can improve service delivery; specific information collection activities will be incorporated into the approval as the need for the information is identified. For example, when we implement a new program and provide information about the services for the program on our website, we may provide a voluntary customer service questionnaire about how well the program is working for our customers, specifically within the area of customer service.
We will consider comments that we receive by November 20, 2023.
We invite you to submit comments on this notice. You may submit comments through the Federal eRulemaking Portal by going to
Comments will be available on
Mary Ann Ball, (202) 205-5851,
As a result, program staff are able to quickly implement certain types of surveys and related collection of information using OMB control number of 0560-0286. For example, when we implement a new program and provide information about the programs on our website, we may provide a voluntary customer service questionnaire about how well the program is working for our
The information collection provides a means to gather qualitative customer and stakeholder feedback in an efficient, timely manner that is consistent with the commitment to improving service delivery. By qualitative feedback, we mean information, generally from customers, that provides useful insights on perceptions and opinions based on experiences with service delivery from one of the FPAC agencies. Such information does not include statistical surveys that yield quantitative results that can be generalized to the population. The qualitative feedback will:
• Provide insights into customer or stakeholder perceptions, experiences, and expectations,
• Provide an early warning of issues with service, and
• Focus attention on areas where communication, training, or changes in operations might improve delivery of products or services.
The collection will allow for ongoing, collaborative, and actionable communication between the FPAC agencies and customers and stakeholders. It will also allow feedback to contribute directly to the improvement of program management. The solicitation of feedback will target areas such as: timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on FPAC agency services will be unavailable.
We will only submit a collection for approval under this generic clearance if it meets the following conditions:
• The collections are voluntary;
• The collections are low burden for respondents (based on considerations of total burden hours, total number of respondents, or burden hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are noncontroversial and do not raise issues of concern to other Federal agencies;
• The collections are targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information (PII) is collected only to the extent necessary and is not retained;
• Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the FPAC agencies;
• Information gathered will not be used for the purpose of substantially informing influential policy decisions; and
• Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.
As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as religious beliefs, sexual behavior and attitudes, and other matters that are commonly considered private.
Additionally, we are including surveys, focus groups, webinars, and other information collection instruments to cover a beta testing or testing of a newly developed information system or online application for any FPAC Business Center, FSA, RMA, or NRCS programs to ensure it is meeting the customers' needs when applying for payments or benefits electronically. This will be an expansion of this information collection request and is being included to streamline the timing of our conversion from paper-based forms to encourage electronic submission of information.
There are no changes to the annual burden hours in this collection. For the following estimated total annual burden on respondents, the formula used to calculate the total burden hours is the estimated average time per response multiplied by the estimated total annual number of responses.
We are requesting comments on all aspects of this information collection to help us to:
(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the FPAC agencies, including whether the information will have practical utility;
(2) Evaluate the accuracy of the estimate of burden including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility and clarity of the information to be collected;
(4) Minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All comments received in response to this notice, including names and addresses when provided, will be a matter of public record. Comments will be summarized and included in the submission for Office of Management and Budget approval.
In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family or parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Individuals who require alternative means of communication for program information (for example, braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or the USDA TARGET Center at (202) 720-2600 (voice and text telephone (TTY)) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any telephone). Additionally, program information may be made available in languages other than English.
To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at
USDA is an equal opportunity provider, employer, and lender.
Forest Service, Agriculture (USDA).
Notice of meeting.
The Hiawatha National Forest Resource Advisory Committee (RAC) will hold a public meeting according to the details shown below. The Committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act (FACA). The purpose of the Committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act as well as to make recommendations on recreation fee proposals for sites on the Hiawatha National Forest within Chippewa County, consistent with the Federal Lands Recreation Enhancement Act.
An in-person meeting will be held on September 25, 2023, at 9:30 a.m. through 4:30 p.m., eastern daylight time (EDT).
All RAC meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
This meeting will be held in person at the St. Ignace District Ranger Office, located at W1900 US-2, St. Ignace, MI 49781. RAC information and meeting details can be found by contacting the person listed under
Shannon Rische, Designated Federal Officer (DFO), by phone at 906-428-5839 or email at
The purpose of the meeting is to:
1. Make funding recommendations;
2. Plan outreach efforts for additional chairs;
3. Plan field trip;
4. Introduce new Forest Supervisor and District Ranger; and
5. Schedule the next meeting.
The agenda will include time for individuals to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing at least three days prior to the meeting date to be scheduled on the agenda. Written comments may be submitted to the Forest Service up to 14 days after the meeting date listed under
Please contact the person listed under
USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Equal opportunity practices in accordance with USDA's policies will be followed in all appointments to the Committee. To ensure that the recommendations of the Committee have taken in account the needs of the diverse groups served by USDA, membership shall include to the extent possible, individuals with demonstrated ability to represent minorities, women, and persons with disabilities. USDA is an equal opportunity provider, employer, and lender.
Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed revision of the American Community Survey Methods Panel Tests, prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit written comments by email to
Requests for additional information or specific questions related to collection activities should be directed to Elizabeth Poehler, ADC for Survey Methods, U.S. Census Bureau, 301-763-9305,
The American Community Survey (ACS) is an ongoing monthly survey that collects detailed housing and socioeconomic data from about 3.5 million addresses in the United States and about 36,000 addresses in Puerto Rico each year. The ACS also collects detailed socioeconomic data from about 195,000 residents living in group quarters facilities in the United States and Puerto Rico each year. Data is collected via self-response modes (internet and paper) as well as interviewer-administered modes via telephone and in person. Resulting tabulations from this data collection are provided on a yearly basis. The ACS allows the Census Bureau to provide timely and relevant housing and socioeconomic statistics, even for low levels of geography.
The Census Bureau plans to request Office of Management and Budget (OMB) approval to conduct a test of sexual orientation and gender identity questions on the ACS. The test is referred to as the 2024 ACS Sexual Orientation and Gender Identity (SOGI) Test. Federal agencies have expressed interest in and identified legal uses for this information, including civil rights and equal employment enforcement.
The Census Bureau proposes to test question wording, response categories, and placement of sexual orientation and gender identity questions on the questionnaire. Of specific interest is how the questions perform when completed by proxy respondents. In the ACS, one person at an address typically answers questions about everyone living there. When one person answers a survey about others, we call this “proxy reporting.” Questions on sexual orientation and gender identity are not currently asked on any federal surveys that use proxy reporting. The test will build on existing qualitative research conducted throughout the federal government and private sector, including work by the Federal Interagency Working Group on Measuring SOGI, the Measuring SOGI Research Group as part of the Federal Committee on Statistical Methodology, and the National Academies of Sciences, Engineering, and Medicine (NASEM).
We are proposing to test up to two versions of the questions using a nationally representative, split-panel test. A sample of housing units will be selected for this test; housing units in sample for the ACS will not be eligible. We are also proposing to test a variation in display of the questions in the internet mode. A follow-up reinterview will also be conducted to assess the reliability and quality of responses.
Building on recommendations from NASEM and OMB Best Practices, the Census Bureau proposes to test a two-step gender identity question: first asking about sex assigned at birth and then asking about current gender. These questions will replace the existing question on sex.
The proposed ‘sex assigned at birth’ question would ask: What sex was <Name> assigned at birth?
The ‘current gender’ question will be asked only of people who are 15 and older. The proposed question is: What is <Name's> current gender? The response categories will be Male, Female, Transgender, Nonbinary, and “This person uses a different term” (with a space to write in a response). The proposed question stem aligns with the NASEM report recommendations. It refers to the subject of the question in the stem so that respondents are not left to reason what the question is asking based solely on the response options. The wording is also more concise when administered in the proxy version of the question as shown above.
The Census Bureau proposes to add “nonbinary” as a response option. Estimates suggest that over one million adults in the U.S. use this term to describe themselves. In previous research (
The OMB best practices suggest using a ‘mark all that apply’ instruction for the gender question. However, most federal surveys do not use ‘mark all that apply’ for this question. Additionally, the California Health Interview Survey (CHIS) decided not to implement ‘mark all that apply’ in part due to concerns about “the potential for increases in
Consistent with recommendations, a verification question will also be asked for anyone whose answer to the ‘sex assigned at birth’ question and ‘current gender’ question does not match. In addition, for evaluation purposes, the Census Bureau is considering asking the verification question to a sample of respondents whose answers are the same in the two questions. The Census Bureau is also proposing to add an open-ended write-in question to gather additional information about a person's gender identity for research purposes.
The ‘sexual orientation’ question will be asked only of people who are 15 and older. The proposed question is: Which of the following best represents how <Name> thinks of themselves? With response categories of: Gay or lesbian, Straight—that is not gay or lesbian, Bisexual, and This person uses a different term (with space to write-in a response). This question is in alignment with current recommendations of how to ask about sexual orientation, however it omits an explicit “I don't know” response category. This approach follows the conventions of the ACS, which does not offer an explicit “don't know” response option for any topics in the survey to minimize item nonresponse and increase data quality. Respondents can skip this question on the internet and paper modes. Interviewers can mark “don't know” and “refusal” in the computer-assisted personal interview (CAPI) instrument.
To help address sensitivity in interviewer-led modes, especially if other household members are present, the Census Bureau is also proposing to use a flashcard for in-person interviews and use numbered response categories for both in person and telephone interviews so that respondents can indicate a response category number to select the appropriate category or categories.
Both the ‘current gender’ and ‘sexual orientation’ question allow a write-in response. In the internet mode we will test two versions of the write in. In the first version the respondent will see the question, response categories, and the write-in field when they get to the screen with the question. In the second version, the respondent will only see the question and response categories when they get to the screen with the question. If the respondent selects the “This person uses a different term” category, then the write-in space will display, and the respondent can provide a write-in response. This display experiment will be embedded within the question wording experiment.
A follow-up content reinterview is also proposed for this test. A subset of the ACS questions will be re-asked in the reinterview to measure response reliability. For half of the reinterview sample, we will reinterview the sample respondent as the original interview, for the other half we will reinterview another adult member of the household. This will allow us to compare response reliability for proxy vs. self-responses. We will also compare the reliability of the SOGI questions to other questions in the ACS.
Data collection for the test will mirror the data collection protocol for the ACS, which includes internet, paper, telephone, and in-person interviewing. In addition, a content follow-up reinterview will be conducted, most likely by telephone, though other modes such as internet are being considered. Interviews will be administered in English and Spanish.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include, or summarize, each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The AES is the primary instrument used for collecting export trade data, which are used by the Census Bureau for statistical purposes. The AES provides the means for collecting data on U.S. exports. Title 13, U.S.C., chapter 9, sections 301-307, mandates the collection of these data. The regulatory provisions for the collection of these data are contained in the Foreign Trade Regulations (FTR), title 15, Code of Federal Regulations (CFR), part 30. The official export statistics collected from these tools provide the basic component for the compilation of the U.S. position on merchandise trade. These data are an essential component of the monthly totals provided in the U.S. International Trade in Goods and Services (FT-900) Press Release, a principal federal economic indicator, and a primary component of the Gross Domestic Product. The published export data enable the private and public sector to develop practical marketing strategies as well as provide a means to assess the impact of exports on the domestic economy. These data are used in the development of U.S. Government economic and foreign trade policies, including export control purposes under the Export Control Reform Act of 2018, 50 U.S.C. 4801-4852. The Bureau of Industry and Security (BIS), U.S. Customs and Border Protection (CBP), and other enforcement agencies use these data to detect and prevent the export of certain items by unauthorized parties to unauthorized destinations or end users.
In order to publish accurate export trade statistics, the Census Bureau is responsible for maintaining the FTR, which implements the provisions for filing export information in the AES. In addition to the publication of the FT-900, the Census Bureau releases data on imports of steel mill products in advance of the regular monthly trade statistics release. This exception to the normal procedure was initially approved by the OMB in January 1999 and had been subsequently extended annually through means of a separately submitted memo. This exception has permitted the public release of preliminary monthly data on imports of steel under the provisions of the OMB's Statistical Policy Directive No. 3 on the Compilation, Release and Evaluation of Principal Federal Economic Indicators. With the revision to the AES Program in 2019, the Census Bureau eliminated the need for an annual approval from OMB since it is included in the Information Collection Request (ICR).
With this submission, the Census Bureau is requesting continued clearance of the AES program as a result of the publication of a final rule in the
The Census Bureau published a notice of proposed rulemaking in the
The information collected via the AES conveys what is being exported (description and commodity classification number); how much is exported (quantity, shipping weight, and value); how it is exported (method of transport, exporting carrier, and whether containerized); who the parties to the transaction are (USPPI, authorized agent, and intermediate and ultimate consignees); from where (State of origin and port of export); to where (port of unloading and country of ultimate destination); and when a commodity is exported (date of exportation). Profile information on the USPPI and the authorized agent provides a contact for verification of the information.
The data collected from the AES serves as the official record of export transactions and is used by the U.S. Federal Government and the private sector. The Federal Government uses
Other Federal agencies use these data to develop the components of the merchandise trade figures used in the calculations for the balance of payments and Gross Domestic Product accounts to evaluate the effects of the value of U.S. exports; and to prepare for and assist in trade negotiations under the General Agreement on Tariffs and Trade. Collection of these data also eliminates the need for conducting additional surveys for the collection of information because the AES shows the relationship of the parties to the export transaction (as required by the Bureau of Economic Analysis (BEA). The Bureau of Labor Statistics also uses the AES data as a source for developing the export price index and by the U.S. Department of Transportation for administering the negotiation of reciprocal arrangements for transportation facilities between the U.S. and other countries. Additionally, a collaborative effort amongst the Census Bureau, the National Governors' Association and other data users resulted in the development of export statistics requiring the State of origin to be reported on the AES. This information enables State governments to focus activities and resources on fostering the exports of goods that originate in their States.
The International Trade Administration relies heavily on the preliminary import statistics of steel mill products provided by the Census Bureau. As a part of the Government's steel initiative, the Department of Commerce was instructed by the Administration to monitor steel imports. The early release of preliminary statistics on steel mill imports allows the steel industry to identify trends and potential shifts in trade patterns and take appropriate action. A variety of parties, including government officials and the public with an interest in imports of steel products continue to use this monitoring system heavily. The FTR, subpart F addresses the general requirements for filing import entries with CBP in the ACE in accordance with 19 CFR, which is the source of the import data on steel mill products.
Export statistics collected from the AES aid private sector companies, financial institutions, and transportation entities in conducting market analysis and market penetration studies for the development of new markets and market-share strategies. Port authorities, steamship lines, airlines, aircraft manufacturers, and air transport associations use these data for measuring the volume and effect of air or vessel shipments and the need for additional or new types of facilities.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
As noted in the IFR, the Department believes that many respondents to this information are already known to the Department due to prior reporting. Nevertheless, the Department notes that this form, which will be available on
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
Bureau of Industry and Security, Commerce.
Notice of Information Collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit comments by email to Mark Crace, IC Liaison, Bureau of Industry and Security, at
Requests for additional information or specific questions related to collection activities should be directed to Mark Crace, IC Liaison, Bureau of Industry and Security, phone 202-482-8093 or by email at
This collection of information addresses three activities: (1) Import Certificates/End Use Certificates, (2) Delivery Verification, and (3) Firearms Entry Clearance Requirements.
Submitted electronically or in paper form.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Bureau of Industry and Security, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit comments by email to Mark Crace, IC Liaison, Bureau of Industry and Security, at
Requests for additional information or specific questions related to collection activities should be directed to Mark Crace, IC Liaison, Bureau of Industry and Security, phone 202-482-8093 or by email at
This information is necessary to support the execution of the President's priorities and allocations authority under the Defense Production Act of 1950 (DPA), as amended (50 U.S.C. 4501,
Submitted electronically or in paper form.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
International Trade Administration (ITA), Department of Commerce
Notice.
The Department of Commerce, ITA, is amending the Notice published at 88 FR 57418 (August 23, 2023), regarding the dates for submission of applications for appointment to the U.S. Section of the U.S.-India CEO Forum (“Forum”). ITA will accept applications for membership on the U.S. Section of the Forum for terms that will begin upon appointment and will expire on December 31, 2024. Immediate consideration will now be given to applications received by September 29, 2023. ITA will accept nominations under this notice on an ongoing basis during the charter term to fill vacancies as they arise.
ITA also notes that the following sectors are the subject of ongoing U.S.-India government engagements and is particularly seeking applicants representing:
• Healthcare in the context of tackling current and future public health emergencies and bolstering public health efforts;
• Critical and emerging technologies that are the focus of the U.S.-India initiative on Critical and Emerging Technologies (iCET), announced by President Biden and Prime Minister Modi in May 2022 to elevate and expand the strategic technology partnership and defense industrial cooperation between the governments, businesses, and academic institutions of the United States and India; and
• Long-term institutional investment, including, but not limited to, pension and endowment funds.
For inquiries and an application, please contact Noor Sclafani, International Trade Specialist, Office of South Asia, U.S. Department of Commerce, by email at
Noor Sclafani, International Trade Specialist, Office of South Asia, U.S. Department of Commerce, telephone: (202) 823-1840.
Please refer to Notice published at 88 FR 57418 (August 23, 2023).
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Gabrielle Aberle, National Marine Fisheries Service, P.O. Box 21668, Juneau, AK 99802-1668. Telephone 907-586-7356.
The National Marine Fisheries Service (NMFS), Alaska Regional Office, is requesting extension of a currently approved information collection for the Arbitration System for the Crab Rationalization Program.
The Crab Rationalization Program allocates Bering Sea and Aleutian Islands (BSAI) crab resources among
This information collection for the Arbitration System is necessary for NMFS to manage the Crab Rationalization Program crab fisheries in the BSAI. This information collection is implemented under the Crab Rationalization Program and required by regulations at 50 CFR 680.20. NMFS requires that harvesters and processors abide by an Arbitration System established to stabilize prices and negotiations during the crab harvest season. The Arbitration System is necessary to reduce contention in price negotiations. The information collected is necessary for NMFS to verify the membership of the arbitration organizations and maintain the Arbitration System.
The Arbitration System was designed to fairly and equitably resolve price, delivery terms, performance standards, and other disputes in the event that IFQ and IPQ holders are unable to reach agreement on arbitration proceedings. The Arbitration System is also designed to minimize the potential for antitrust violations. The Arbitration System includes a provision for open negotiations among IPQ and IFQ holders, as well as various negotiation approaches, including a share matching approach, a lengthy season approach where parties may postpone binding arbitration until during the season, and a binding arbitration procedure to resolve price disputes between an IPQ holder and eligible IFQ holders. The Arbitration System also provides for dissemination of market information to facilitate negotiations, coordination of matching Class A IFQ held by harvesters to IPQ held by processors, and the opportunity to use the binding arbitration process to resolve terms of price and delivery. Certain aspects of the Arbitration System are required of catcher vessel owners who hold QS/IFQ and PQS/IPQ holders and operate regardless of whether participants in the fishery actually initiate binding arbitration in order to resolve terms of price or delivery.
This information collection contains five components of the Arbitration System that are submitted to NMFS. Four are submitted annually: the Annual Arbitration Organization Report, the Market Report, the Non-binding Price Formula Report, and the Cost Allocation Agreement. The Contract Arbitrator Report is submitted if any arbitrations occur within a fishery.
The Annual Arbitration Organization Report is compiled by each of the two arbitration organizations; one organization represents the processors, and the second represents the harvesters. This report includes information on the arbitration organization and its management personnel, the crab QS fisheries to which the report applies, the ownership interest and the QS/IFQ or PQS/IPQ held by each member; and the arbitration process.
The Cost Allocation Agreement provides combined shared arbitration accounting costs. Federal regulations for the Crab Rationalization Program require that the crab arbitration costs are shared equally between IPQ holders and Class A IFQ holders—processors pay half and fishermen pay half.
The arbitration organizations use contracted parties to meet the requirements of the Market Report, Nonbinding Price Formula Report, and Contractor Arbitrator Report.
The Non-binding Price Formula Report is a pre-season report that is designed to serve as a starting point for negotiations between fishermen and processors, or as a starting point for an arbitrator in evaluating offers in an arbitration process. This report documents how each formula was developed.
The Market Report provides an analysis of the market for products of a specific crab fishery and reports on activities occurring within three months prior to its generation. The purpose of this report is to provide background information on each crab fishery, the products generated by each fishery, and position of those products in the marketplace; discuss the historical division of wholesale revenue; and provide the methods for predicting wholesale prices before the fishery occurs.
The Contract Arbitrator Report documents arbitration proceedings if they occur within a fishery.
The information is submitted by email, mail, delivery, or fax.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Jose Pablo Vazquez-Medina, Ph.D., University of California at Berkeley, 3040 Valley Life Sciences Bldg., #3140, Berkeley, CA 94720, has applied in due form for a permit to import specimens of marine mammals for scientific research.
Written comments must be received on or before October 19, 2023.
The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page,
Written comments on this application should be submitted via email to
Those individuals requesting a public hearing should submit a written request via email to
Carrie Hubard or Erin Markin, (301) 427-8401.
The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
The applicant proposes to receive, import, and export biological samples from up to 200 pinnipeds (excluding walrus) and 200 cetaceans annually. Sources of foreign and domestic parts may include subsistence harvests, captive animals, other authorized researchers or curated collections, bycatch from legal commercial fishing operations, and foreign stranded animals. The samples will be used to generate cell lines and examine the effects of stress hormones and organic pollutants on marine mammal cellular and tissue functions. The permit would be valid for 5 years.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Gabrielle Aberle, National Marine Fisheries Service, P.O. Box 21668, Juneau, AK, 99802-1668. Telephone 907-586-7356.
The National Marine Fisheries Service (NMFS), Alaska Regional Office, is requesting extension of a currently approved information collection.
This information collection contains requirements for the Central Gulf of Alaska Rockfish Program (Rockfish Program) and is necessary for NMFS to administer and monitor compliance with the management provisions of the Rockfish Program. This information collection is required in Rockfish Program regulations at 50 CFR part 679.
The Rockfish Program is a limited access privilege program developed to enhance resource conservation and improve economic efficiency in the Central Gulf of Alaska rockfish fisheries. The rockfish fisheries are conducted in Federal waters near Kodiak, Alaska, by trawl vessels and longline vessels. The Rockfish Program assigns quota share (QS) to License Limitation Program (LLP) licenses for rockfish primary and secondary species based on legal landings associated with that LLP.
Each year, an LLP license holder assigns the LLP license with rockfish QS to a rockfish cooperative. Each rockfish cooperative receives an annual cooperative fishing quota (CQ), which is an amount of primary and secondary rockfish species the cooperative is able to harvest in that fishing year.
This collection contains the information collection requirements submitted by the rockfish cooperatives for an annual rockfish CQ permit, inter-cooperative quota transfers, and vessel check-in/check-out and termination of fishing reports.
The Application for Rockfish Cooperative Fishing Quota is submitted annually by a rockfish cooperative to receive the cooperative's annual CQ
The Application for Inter-Cooperative Transfer of CQ is used by a rockfish cooperative to transfer CQ to another rockfish cooperative. The information collected includes information on the QS to be transferred. This information is used by NMFS to monitor transfers to ensure they do not exceed ownership or use caps for the fishery.
The Rockfish Program vessel check-in report must be submitted before a vessel authorized to fish under the cooperative's permit starts fishing for the cooperative, and a check-out report when a vessel stops fishing for the cooperative during the fishing season. The check-in and check-out reports are necessary so that NMFS's catch accounting system can identify catch by a vessel that should accrue to a rockfish cooperative quota allocation from catch that occurs in other, non-Rockfish Program fisheries.
A rockfish cooperative may choose to terminate its CQ permit through a termination of fishing report submitted to NMFS. This notifies NMFS that all vessels fishing for the cooperative have completed fishing in the Rockfish Program for the year.
The information is collected by mail, fax, delivery, and electronically through eFISH on the NMFS Alaska Region website at
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The American lobster resource and fishery are cooperatively managed by the states and NMFS under the authority of the Atlantic Coastal Fisheries Cooperative Management Act, according to the framework established by the Atlantic States Marine Fisheries Commission (ASMFC) in Amendment 3 of its Interstate Fishery Management Plan (ISFMP). This collection of information is in response to several addenda to Amendment 3 of the ISFMP that work to reduce trap fishing effort through limited entry fishing and trap allocation limit reductions. The Trap Transfer Program is intended to foster economic flexibility for the lobster industry while reducing fishing effort on the American lobster resource. The regulations implementing the FMP in the EEZ are specified at 50 CFR part 697.
This collection of information is being conducted to help mitigate the economic burden of scheduled trap allocation reductions in Lobster Conservation Management Areas 2 and 3 on Federal lobster permit holders through the Annual Lobster Trap Transfer Program, which allows all qualified Federal lobster permit holders to buy and sell trap allocation from Areas 2, 3, or Outer Cape Cod. NMFS collects application forms from Lobster permit holders who wish to transfer trap allocation from these areas during a 2-
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 88 State of Florida's State Reef Fish Survey (SRFS) Topical Working Group Scoping Webinar for Gulf of Mexico Red Grouper.
The SEDAR 88 assessment of Gulf of Mexico red grouper will consist of a series of webinars. See
The SEDAR 88 SRFS Topical Working Group Scoping Webinar will be held October 5, 2023, from 9 a.m. to 11 a.m., eastern.
Julie A. Neer, SEDAR Coordinator; phone: (843) 571-4366; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a multi-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report that compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report that describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, HMS Management Division, and Southeast Fisheries Science Center. Participants include data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and NGO's; International experts; and staff of Councils, Commissions, and State and Federal agencies.
The items of discussion in the webinar are as follows:
Participants will discuss what SRFS data may be available for use in the assessment of Gulf of Mexico red grouper.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
The times and sequence specified in this agenda are subject to change.
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed and continuing information
To ensure consideration, comments regarding this proposed information collection must be received on or before November 20, 2023.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Seaberry Nachbar, NOAA Dr. Nancy Foster Scholarship Program Manager, NOAA, 99 Pacific Street, Monterey, CA 93940, 831-647-4204,
This is a request for extension of an existing information collection.
NOAA's Office of National Marine Sanctuaries administers the Dr. Nancy Foster Scholarship Program, authorized by 16 U.S.C. 1445c-1 and 16 U.S.C. 1445, recognizes outstanding achievement in master's and doctoral degrees in oceanography, marine biology, or maritime archaeology—this can include but is not limited to ocean and/or coastal: engineering, social science, marine education, marine stewardship, resource management disciplines—and particularly to encourage women and members of minority groups to apply. The scholarship supports independent graduate level research through financial support of graduate degrees in such fields. Gender and minority status are not considered when selecting award recipients. However, special outreach efforts are employed to solicit applications from women and members of minority groups. Scholarships are distributed by disciplines, institutions, and geography, and by degree sought, with selections within distributions based on financial need, the potential for success in a graduate level studies program (academic achievement), and the potential for achieving research and career goals. Data collection in the form of a full application, letters of recommendation, grade point average documents, research outline, a letter of financial need statement, and a declaration statement are all required to apply for the scholarship. Applicants submit this information through
Selected awardees will also be requested to prepare a biographical sketch and photograph for NOAA's scholarship web page. Awardees are requested to prepare annual progress reports and participate in pre- and post-evaluations and one exit interview.
Information for the application is collected through an application submission, either electronically through the
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council's Summer Flounder, Scup, and Black Sea Bass Monitoring Committee will hold a public webinar meeting.
The meeting will be held on Friday, October 6, 2023, from 9 a.m. until 11 a.m. EDT. For agenda details, see
The meeting will be held via webinar. Connection information will be posted prior to the meeting at
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526-5255.
The Summer Flounder, Scup, and Black Sea Bass Monitoring Committee will meet
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to Shelley Spedden, (302) 526-5251, at least 5 days prior to the meeting date.
Department of the Army, DoD.
Notice of committee meeting.
Under the provisions of the Federal Advisory Committee Act of 1972, the Government in the Sunshine Act of 1976, the Department of Defense announces that the following Federal advisory committee meeting will take place.
The meeting will be held on Monday, October 16, 2023, Time 9:00 a.m.-11:30 a.m. Members of the public wishing to attend the meeting will be required to show a DoD government photo ID or submit to and pass a background check prior to entering West Point in order to gain access to the meeting location.
The meeting will be held in the Haig Room, Jefferson Hall, 758 Cullum Road, West Point, New York 10996.
Mrs. Deadra K. Ghostlaw, the Designated Federal Officer for the committee, in writing at: USMA G1/Adjutant General's Office, ATTN: Deadra K. Ghostlaw, 646 Swift Road, West Point, NY 10996; by email at:
The committee meeting is being held under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.150. The USMA BoV provides independent advice and recommendations to the President of the United States on matters related to morale, discipline, curriculum, instruction, physical equipment, fiscal affairs, academic methods, and any other matters relating to the Academy that the Board decides to consider.
Pursuant to 41 CFR 102-3.140d, the committee is not obligated to allow a member of the public to speak or otherwise address the committee during the meeting. However, the committee Designated Federal Official and Chairperson may choose to invite certain submitters to present their comments verbally during the open portion of this meeting or at a future meeting. The Designated Federal Officer, in consultation with the committee Chairperson, may allot a
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
The sponsor or family member completes the demographics section on both collections, a qualified medical provider completes the medical summary on the DD 2792, and the special education or early intervention staff completes the early intervention/special education summary of the DD 2792-1. On the DD2792, the sponsor or family member provides authorization for disclosure of the medical information and certifies the accuracy of the information. On the DD 2792-1, the sponsor or family member authorizes the release of information. The information is provided to EFMP medical personnel for enrollment in the program, and both medical and educational screening personnel for their determination of the availability of medical and education resources necessary to meet the family member's needs. The medical and/or educational recommendation is supplied to the appropriate Military Department's personnel department in determining the future assignment for the service member.
This information collection may also be used to identify available medical and educational resources to DoD civilian employees who are considering a job overseas to assist them in deciding whether to relocate overseas with a family member who has special medical or educational needs.
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
United States Transportation Command (USTRANSCOM), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Department of the Navy (DoN), Department of Defense (DoD).
Notice of availability.
After carefully weighing the strategic, operational, and environmental consequences of the proposed action, the DoN announces its decision to select Alternative 1A (Preferred Alternative) from the Final Environmental Impact Statement for Proposed Land Acquisition at WNY, Washington, DC (hereafter, Final EIS). This alternative will enable the DoN to improve the Antiterrorism (AT) posture, protect adjacent mission-critical activities from encroachment, and otherwise meet the purpose and need of this action. Additionally, this alternative allows the DoN to meet a long-term need of relocating the existing museum. Construction and operation of the relocated museum will provide a location for a new, world-class museum for public enjoyment and bring potential retail and commercial amenities to the local area.
The complete text of the Record of Decision (ROD), along with the August 2023 Final EIS and supporting documents is available on the project website at:
Naval Facilities Engineering System Command Washington, Attn: EIS Project Manager, 1314 Harwood Street SE, Washington, DC 20374.
The selected alternative involves the DoN exchanging certain underutilized properties (approximately 15 acres) within the WNY Southeast Corner, via lease and/or transfer, with a private developer to obtain acquisition rights of the approximately 6-acre Southeast Federal Center (SEFC) E Parcels. General Services Administration will then transfer ownership of the SEFC E Parcels to the DoN via a federal-to-federal transfer. The DoN may enter into a lease agreement with a non-federal entity to relocate the existing National Museum of the U.S. Navy to the SEFC E Parcels. The land exchange of the SEFC E Parcels for the WNY Southeast Corner will require relocation of functions from the WNY Southeast Corner to other areas within the WNY. These relocations may require additional environmental analysis and National Environmental Policy Act planning. This alternative will also include future development on the WNY Southeast Corner by the private developer and in-kind considerations at the WNY, such as upgrades to the Riverwalk and piers to be provided by the developer.
Office of Postsecondary Education, Department of Education.
Notice.
For each award year, the Secretary publishes in the
Vanessa Gomez, U.S. Department of Education, 400 Maryland Avenue SW, Room 2C179, Washington, DC 20202. Telephone: (202) 453-6708. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
If the Secretary selects an applicant for verification, the applicant's Institutional Student Information Record (ISIR) includes flags that indicate (1) that the applicant has been selected by the Secretary for verification and (2) the Verification Tracking Group (VTG) in which the applicant has been placed. The VTG indicates which FAFSA information needs to be verified for the applicant and, if appropriate, for the applicant's parent(s) or spouse. Beginning with the 2024-2025 award year, the Student Aid Report (SAR) is being replaced with the FAFSA Submission Summary. As was the case for the SAR, the FAFSA Submission Summary provided to the applicant will indicate that the applicant's FAFSA information has been selected for verification and direct the applicant to contact the institution for further instructions for completing the verification process.
To help institutions and applicants deal with the challenges resulting from the novel coronavirus disease (COVID-19) pandemic, the Secretary provided flexibilities to the verification regulations. On April 10, 2023, the federally declared national emergency related to the COVID-19 pandemic ended. As a result, these flexibilities expired at the end of the first payment period that began after April 10, 2023. Under 34 CFR 668.4, payment periods are defined for a student enrolled in an eligible program measured in standard terms, as the term,
In accordance with the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act, much of the applicant's tax return information, including information from their spouse and parents, will come directly from the IRS and will not be viewable by the student and other contributors. Such information that is transferred and not edited will essentially be verified and need no further verification. However, for instances where income and tax information cannot be obtained directly from the IRS, the applicant would have to manually enter the necessary information into the FAFSA, and that manual entry may be subject to verification.
The following chart lists, for the 2024-2025 award year, the FAFSA information that an institution and an applicant and, if appropriate, the applicant's parent(s) or spouse may be required to verify under 34 CFR 668.56. The chart also lists the acceptable documentation that must, under § 668.57, be provided to an institution for that information to be verified.
The individual FAFSA items that an applicant must verify are based upon the Verification Tracking Group to which the applicant is assigned as outlined in the following chart.
We provide a more detailed discussion on the verification process in the following resources that will be available on the Knowledge Center web page at
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• Program Integrity Information—Questions and Answers on Verification at
You may also access documents of the Department published in the
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
Take notice that the Commission received the following public utility holding company filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to
The following notice of meeting is published pursuant to section 3(a) of the government in the Sunshine Act (Pub. L. 94-409), 5 U.S.C. 552b:
Federal Energy Regulatory Commission.
September 21, 2023, 10:00 a.m.
Room 2C, 888 First Street NE, Washington, DC 20426, Open to the public.
Open.
Agenda.
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Kimberly D. Bose, Secretary, Telephone (202) 502-8400.
For a recorded message listing items stricken from or added to the meeting, call (202) 502-8627.
This is a list of matters to be considered by the Commission. It does not include a listing of all documents relevant to the items on the agenda. All public documents, however, may be viewed online at the Commission's website at
A free webcast of this event is available through the Commission's website. Anyone with internet access who desires to view this event can do so by navigating to
Immediately following the conclusion of the Commission Meeting, a press briefing will be held in the Commission Meeting Room. Members of the public may view this briefing in the designated overflow room. This statement is intended to notify the public that the press briefings that follow Commission meetings may now be viewed remotely at Commission headquarters but will not be telecast.
Take notice that the Commission has received the following Natural Gas and Oil Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659. The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380, the Office of Energy Projects has reviewed the application for a hydrokinetic pilot project license to construct and operate the Bourne Tidal Hydrokinetic Test Site Project (Bourne Tidal Project, or project). The project would be located on the Cape Cod Canal in Barnstable County, Massachusetts. Commission staff has prepared an Environmental Assessment (EA) for the proposed project.
The EA contains staff's analysis of the potential environmental impacts of the project and concludes that licensing the project, with appropriate environmental protective measures, would not constitute a major Federal action that would significantly affect the quality of the human environment.
The Commission provides all interested persons with an opportunity to view and/or print the EA via the internet through the Commission's Home Page (
You may also register online at
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Any comments should be filed within 45 days from the date of this notice.
The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at
If you have process questions, contact Robert Haltner at (202) 502-8612 or by email at
Environmental Protection Agency (EPA).
Notice.
This notice announces the availability of EPA's proposed interim registration review decision for tetrachlorvinphos (hereafter referred to as TCVP) and opens a 60-day public comment period on the proposed interim decision and revised draft human health risk assessment for TCVP.
Comments must be received on or before November 20, 2023.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2017-0750, through the
This action is directed to the public in general and may be of interest to a wide range of stakeholders including
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Registration review is EPA's periodic review of pesticide registrations to ensure that each pesticide continues to satisfy the statutory standard for registration, that is, the pesticide can perform its intended function without unreasonable adverse effects on human health or the environment. As part of the registration review process, the Agency has completed proposed interim or proposed final decisions for all pesticides listed in Table 1 in Unit IV. Through this program, EPA is ensuring that each pesticide's registration is based on current scientific and other knowledge, including its effects on human health and the environment.
EPA is conducting its registration review of the chemicals listed in the Table 1 in Unit IV pursuant to section 3(g) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Procedural Regulations for Registration Review at 40 CFR part 155, subpart C. Section 3(g) of FIFRA provides, among other things, that the registrations of pesticides are to be reviewed every 15 years. Under FIFRA, a pesticide product may be registered or remain registered only if it meets the statutory standard for registration given in FIFRA section 3(c)(5) (7 U.S.C. 136a(c)(5)). When used in accordance with widespread and commonly recognized practice, the pesticide product must perform its intended function without unreasonable adverse effects on the environment; that is, without any unreasonable risk to man or the environment, or a human dietary risk from residues that result from the use of a pesticide in or on food.
Pursuant to 40 CFR 155.58, this notice announces the availability of EPA's proposed interim registration review decision and opens a 60-day public comment period on the proposed interim registration review decision and revised draft human health risk assessment.
The registration review docket for a pesticide includes earlier documents related to the registration review case. For example, the review opened with a Preliminary Work Plan, for public comment. A Final Work Plan was placed in the docket following public comment on the Preliminary Work Plan.
The documents in the dockets describe EPA's rationales for conducting additional risk assessments for the registration review of the pesticide included in the Table in Unit IV, as well as the Agency's subsequent risk findings. The proposed interim registration review decision is supported by the rationales included in the risk assessments.
The registration review final rule at 40 CFR 155.58(a) provides for a minimum 60-day public comment period on all proposed interim registration review decisions. This comment period is intended to provide an opportunity for public input and a mechanism for initiating any necessary amendments to the proposed interim decision and risk assessments. All comments should be submitted using the methods in
The Agency will carefully consider all comments received by the closing date and may provide a “Response to Comments Memorandum” in the docket. The interim registration review decision will explain the effect that any comments had on the interim registration review decision and risk assessments and provide the Agency's response to significant comments.
Background on the registration review program is provided at:
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, 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. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) 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 OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before October 19, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) 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; (b) the accuracy of the Commission'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. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Commission staff use the information to assign licenses, determine regional spectrum requirements and to develop technical standards. The information is also used to determine whether prospective licensees operate in compliance with the Commission's rules. Without such information, the Commission could not accommodate regional requirements or provide for the efficient use of the available frequencies. This information collection includes rules to govern the operation
The notificants listed below have applied under the Change in Bank Control Act (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 applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue, NW, Washington DC 20551-0001, not later than October 4, 2023.
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Board of Governors of the Federal Reserve System.
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 public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington DC 20551-0001, not later than October 19, 2023.
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B. Federal Reserve Bank of Boston (Prabal Chakrabarti, Senior Vice President) 600 Atlantic Avenue, Boston, Massachusetts 02210-2204. Comments can also be sent electronically to
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Board of Governors of the Federal Reserve System.
September 26, 2023 at 9 a.m.
Telephonic. Dial-in (listen only) information: Number: 1-202-599-1426, Code: 726 107 825#; or via web:
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, and the Office of Management and Budget (OMB) regulations, DoD, GSA, and NASA invite the public to comment on a revision concerning certain Federal Acquisition Regulation (FAR) part 28 requirements. DoD, GSA, and NASA invite comments on: whether the proposed collection of information is necessary for the proper performance of the functions of Federal Government acquisitions, including whether the information will have practical utility; the accuracy of the estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology. OMB has approved this information collection for use through March 31, 2024. DoD, GSA, and NASA propose that OMB extend its approval for use for three additional years beyond the current expiration date.
DoD, GSA, and NASA will consider all comments received by November 20, 2023.
DoD, GSA, and NASA invite interested persons to submit comments on this collection through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
OMB Control No. 9000-0001, Certain Federal Acquisition Regulation Part 28 Requirements, Standard Forms (SF) 24, 25, 25-A, 25-B, 28, 34, 35, 273, 274, 275, 1414, 1415, 1416, and 1418
DoD, GSA, and NASA are combining OMB Control Nos. by FAR part. This consolidation is expected to improve industry's ability to easily and efficiently identify burdens associated with a given FAR part. The review of the information collections by FAR part allows improved oversight to ensure there is no redundant or unaccounted for burden placed on industry. Lastly, combining information collections in a given FAR part is also expected to reduce the administrative burden associated with processing multiple information collections.
This justification supports the extension of OMB Control No. 9000-0001 and combines it with the previously approved information collections under OMB Control No. 9000-0045, with the new title “Certain Federal Acquisition Regulation Part 28 Requirements”. Upon approval of this consolidated information collection, OMB Control No. 9000-0045 will be discontinued. The burden requirements previously approved under the discontinued number will be covered under OMB Control No. 9000-0001.
This clearance covers the information that offerors or contractors must submit to comply with the following FAR requirements:
• FAR 52.228-1, Bid Guarantee. This provision (or clause) requires offerors or contractors to furnish a bid guarantee in the proper form and amount when a performance bond or a performance and payment bond is also required. (SF 24, Bid Bond; SF 34, Annual Bid Bond).
• FAR 52.228-2, Additional Bond Security. This clause requires contractors to furnish additional bond security under certain circumstances. This clause is used both for construction and other than construction contracts. (SF 1414 Consent of Surety and SF 1415, Consent of Surety and Increase of Penalty).
• FAR 52.228-13, Alternative Payment Protections. This clause requires contractors to submit one of the payment protections listed in the clause by the contracting officer, in construction contracts greater than $35,000 but not exceeding $150,000.
• FAR 52.228-14, Irrevocable Letter of Credit. This clause requires offerors or contractors to provide certain information when they intend to use an irrevocable letter of credit (ILC) in lieu of a required bid bond, or to secure other types of required bonds such as performance and payment bonds. This clause is required in solicitations and contracts when a bid guarantee, or performance bond, or performance and payment bonds are required.
• FAR 52.228-15, Performance and Payment Bonds—Construction. This clause requires contractors to provide performance and payment bonds in construction contracts exceeding $150,000 (SF 25, Performance Bond; SF 25-A, Payment Bond; SF 25-B, Continuation Sheet (for SF's 24, 25, and 25-A); SF 273, Reinsurance Agreement for a Bonds Statute Performance Bond; SF 274, Reinsurance Agreement for a Bonds Statute Payment Bond).
• FAR 52.228-16, Performance and Payment Bonds—Other Than Construction. This clause requires contractors to furnish performance and payment bonds for other than construction contracts exceeding the simplified acquisition threshold only in certain circumstances. (SF 35, Annual Performance Bond; SF 275, Reinsurance Agreement in Favor of the United States; SF 1416, Payment Bond for Other Than Construction Contracts; SF 1418, Performance Bond for Other Than Construction Contracts).
• Standard Form (SF) 28, Affidavit of Individual Surety. This form is used by all executive agencies, including DoD, to obtain information from individuals wishing to serve as sureties to Government bonds. Offerors and contractors may use an individual surety as security for bonds required under a solicitation or contract for supplies or services (including construction). It is an elective decision on the part of the offeror or contractor to use individual sureties instead of other available sources of surety or sureties for Government bonds.
The Government retains the bid guarantees, bonds, or alternative payment protections until the contractor's obligation is fulfilled. The contracting officer uses the information on the SF 28 to determine the acceptability of individuals proposed as sureties.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, and the Office of Management and Budget (OMB) regulations, DoD, GSA, and NASA invite the public to comment on an extension concerning presolicitation notice and response. DoD, GSA, and NASA invite comments on: whether the proposed collection of information is necessary for the proper performance of the functions of Federal Government acquisitions, including whether the information will have practical utility; the accuracy of the estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology. OMB has approved this information collection for use through March 31, 2024. DoD, GSA, and NASA propose that OMB extend its approval for use for three additional years beyond the current expiration date.
DoD, GSA, and NASA will consider all comments received by November 20, 2023.
DoD, GSA, and NASA invite interested persons to submit comments on this collection through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
9000-0037, Presolicitation Notice and Response.
This clearance covers the information that offerors must submit to comply with the following Federal Acquisition Regulation (FAR) requirements:
• FAR 14.205. For sealed bidding, presolicitation notices briefly describe requirements and provide other essential information to enable potential bidders to determine whether they have an interest in the invitation and if appropriate, respond by communicating their interest in receiving the invitation for bid.
• FAR 15.201(c). For contracting by negotiation, presolicitation notices provide a means of early exchanges of information about future acquisitions between Government and industry, to which potential offerors may respond with feedback concerning acquisition strategy, terms and conditions, and any other concerns or questions.
• FAR 36.213-2. For construction contracts, presolicitation notices are required for construction requirements in excess of the simplified acquisition threshold to communicate essential information on the requirements, to which potential bidders may respond by communicating their interest in receiving the invitation for bid.
Presolicitation notices are used by the Government to inform, and, where specified, solicit a response from potential offerors or bidders. The primary purposes of the notices are to improve small business access to acquisition information and enhance competition by identifying contracting and subcontracting opportunities.
The contracting officer will use the information as follows:
• For sealed bidding, to include interested bidders in the distribution of the invitations for bids; and
• For contracting by negotiation, to consider the industry feedback in shaping the acquisition strategy.
Office of Family Assistance; Administration for Children and Families; United States Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families (ACF) is requesting to extend approval of the Temporary Assistance for Needy Families (TANF) Data Reporting for Work Participation, with proposed revisions. Revisions are intended to improve the clarity of the instructions, streamline reporting, and ensure all instructions are up-to-date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Food and Drug Administration, HHS.
Notice; request for comment.
The Food and Drug Administration (FDA or Agency) is announcing the availability of an information technology (IT) strategic plan entitled the “FDA Information Technology Strategy” and a request for comment on this IT Strategy. As part of our User Fee Program commitments and Omnibus Bill requirements, FDA will develop and publish an FDA Data and Technology Strategic Plan by September 29, 2023. This plan will define and shape the future course of FDA's data and technology capabilities, building on the existing FDA Modernization Framework. The plan will also integrate Agency and center strategies.
Submit either electronic or written comments on the Strategy by October 30, 2023, to ensure that the Agency considers your comments on this Strategy for future iterations of the IT Strategy.
You may submit comments as follows:
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked, and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Submit written requests for single copies of this IT strategy to the Office of Digital Transformation, Food and Drug Administration, FDA Library, 5630 Fishers Lane, Rm. 1087, Rockville, MD 20857. Send one self-addressed adhesive label to assist that office in processing your request or include a Fax number to which the strategy may be sent. See the
Casi Alexander, Office of Digital Transformation, Food and Drug Administration, FDA Library, 5630 Fishers Lane, Rm. 1087, Rockville, MD 20857, 240-402-5171, email:
FDA is announcing the availability of a request for comment on its draft strategy, entitled “FDA Information Technology Strategy”.
The Office of Digital Transformation (ODT) was established in September 2021 and reports directly to the Office of the Commissioner. ODT provides the vision and leadership in information technology, data, and cybersecurity needed to advance FDA's mission and strategic priorities. ODT has published a series of strategy documents known as the FDA Modernization Framework. The framework includes the Technology Modernization Action Plan, Data Modernization Action Plan, Enterprise Modernization Action Plan, Cybersecurity Modernization Action Plan, and the Leadership Modernization Action Plan. The FDA Modernization Framework aims to develop an integrated technology, data, cybersecurity, business, and leadership approach to advancing FDA's public health mission in collaboration with industry.
As part of FDA's fulfillment of requirements in section 3627 of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328), and commitments described in section IV.A.2. of the “PDUFA Reauthorization Performance Goals and Program Enhancements Fiscal Years 2023-2027” (PDUFA VI commitment letter), FDA will work with industry while developing a comprehensive framework for guiding the Agency's work and allocating annual technology budgets and resources. The FDA IT Strategy, covering Fiscal Years 2024-2026, defines and shapes the future course of FDA's data and technology capabilities as FDA transitions to the next phase of its journey. The Agency took a collaborative approach to strategy development by gathering input from numerous internal and external stakeholders that resulted in the draft FDA IT Strategy. Stakeholder input is crucial for developing a comprehensive plan that best meets the needs and goals of industry and the Agency. Comments on the strategy will be considered for future iterations of the FDA IT Strategy. Once adopted, this strategy will serve as the basis for developing an internal operational plan with objectives, tactics, and performance measures.
As part of this effort, FDA will hold an FDA Digital Transformation Symposium on December 4 to 7, 2023, to discuss this groundbreaking IT Strategy and encourage further collaboration, innovation, and transformation. On December 4 and 5, the Symposium will be shaped around the six new strategic goals, highlighting supporting objectives and initiatives. The FDA Digital Transformation Symposium will extend to December 6 and 7 to engage IT vendors in a Reverse Industry Day and other vendor-focused events. Registration information will be found on
Interested persons are invited to provide detailed comments to ODT (see
1. Which goals and objectives are most important to you? Why?
2. Describe up to five ways the FDA IT Strategy will impact your industry?
3. What gaps do you see in the FDA IT Strategy's goals or objectives?
4. What challenges or risks do you foresee in executing the FDA IT Strategy?
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Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by November 20, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection supports FDA fellowship and traineeship programs. 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. The information collection involves brief online applications completed by applicants applying to FDA's Fellowship and Traineeship programs. These voluntary online applications will allow the Agency to easily and efficiently elicit and review information from students and healthcare professionals who are interested in becoming involved in FDA-wide 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 FDA.
FDA estimates the burden of this collection of information as follows:
Based on a review of the information collection since our last request for OMB approval, we have made no adjustments to our burden estimate.
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.
Submit written comments (including recommendations) on the collection of information by October 19, 2023.
To ensure that comments on the information collection are received, OMB recommends that written comments be submitted to
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
This information collection helps support implementation of FDA's Voluntary National Retail Food Regulatory Program Standards (the Retail Program Standards). Regulatory Program Standards play a critical role in an integrated food safety system and serve as the foundation for mutual reliance between FDA and other regulatory agencies that work to ensure food safety. The Retail Program Standards define what constitutes a highly effective and responsive program for the regulation of foodservice and retail food establishments. The Retail Program Standards are intended to provide a foundation upon which continuous improvements can be made with the ultimate goal to reduce the occurrence of factors that cause and contribute to foodborne illness. In support of this goal, FDA works cooperatively with our State, local, Territorial, and Tribal partners using a risk-based approach to leverage limited resources. We engage in education and outreach efforts to facilitate collaboration with our partners in food safety. The Retail Program Standards represent an important component of a comprehensive strategic approach to help ensure the safety and security of the food supply at the retail level. Respondents to the information collection are State, local, Territorial, and Tribal governments.
The Retail Program Standards were revised most recently in August 2022 and include the following elements: (1) regulatory foundation; (2) trained regulatory staff; (3) inspection program based on Hazard Analysis and Critical Control Point principles; (4) uniform inspection program, (5) foodborne illness and food defense preparedness and response; (6) compliance and enforcement; (7) industry and community relations; (8) program support and resources; and (9) program assessment. These elements are enumerated and discussed on our website at
Finally, we are revising the information collection to include additional Agency resources. We have created a dedicated emailbox at
• Proposed Form FDA 5017, “Standardized Retail Food Safety Inspection Officer Waiver of Annual Maintenance Requirement Form,” pertains to requests for waivers from maintenance requirements, referenced in section 3-403 of the “FDA Procedures for Standardization of Retail Food Safety Inspection Officers.” FDA uses the information submitted on Form FDA 5017 to determine a food safety inspection officer's eligibility for restandardization.
• Proposed Form FDA 5018, “Standardized Retail Food Safety Inspection Officer Annual Maintenance Form,” provides verification that a food safety inspection officer has met program standardization requirements in accordance with section 3-403 of the “FDA Procedures for Standardization of Retail Food Safety Inspection Officers.”
• Proposed Form FDA 5019, “Standardized Food Safety Inspection Officer Nomination Form,” allows FDA to collect qualification information from food safety inspection officer candidates.
In the
We estimate the burden of this collection of information as follows:
Our estimate of burden for the associated program activities as identified in table 1 is based on our experience with the information collection, along with other regulatory standards programs we administer. Upon reorganizing the collection to reflect the cumulative activities, we have accounted for burden that may be attributable recordkeeping for risk-factor studies and verification tasks that may have been previously overlooked. The burden we attribute to completing and submitting FDA Form 3958, “Voluntary National Retail Food Regulatory Program Standards FDA National Registry Report,” is exclusive of other program records, which we account for in row 4. We have also accounted for burden we assume will be attendant to the completion and submission of newly developed Agency forms. As a result of these changes and adjustments, the information collection reflects an increase of 235,776.5 hours and 1,654 responses annually.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA, Agency, or we) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by November 20, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Domini Bean, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection supports implementation of statutory and regulatory authorities that govern criteria for the acceptance of electronic records, electronic signatures, and handwritten signatures executed to electronic records as equivalent to paper records. Agency regulations in part 11 (21 CFR part 11), provide for the submission of records and reports and establish that information may be submitted to FDA electronically provided that we have stated our ability to accept the records electronically in an Agency-established public docket and that the other requirements of part 11 are met. The regulations apply to records in electronic form that are created, modified, maintained, archived, retrieved, or transmitted, under any records requirements set forth in Agency regulations and to electronic records submitted under requirements of the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act, even if such records are not specifically identified in Agency regulations.
Regulations in part 11, subpart B (§§ 11.10 through 11.70) and) require the establishment of standard operating procedures to ensure appropriate use of and precautions for systems using electronic records and signatures, including the following: (1) § 11.10 specifies procedures and controls for persons who use closed systems to create, modify, maintain, or transmit electronic records; (2) § 11.30 specifies procedures and controls for persons who use open systems to create, modify, maintain, or transmit electronic records; and (3) § 11.50 specifies procedures and controls for persons who use electronic signatures.
Regulations in subpart C (§§ 11.100 through 11.300) require specific controls to ensure the security and integrity of electronic signatures based upon use of identification codes in combination with passwords.
On March 3, 2023 (88 FR 13018), we revised the regulations. Before using an electronic signature in an electronic record required by FDA, a person must submit a letter of nonrepudiation to FDA (§ 11.100(c)). Letters of nonrepudiation are required under § 11.100(c)(1) to certify that a person's electronic signatures are intended to be the legally binding equivalent of traditional handwritten signatures. The regulations were amended to update the address for submission of a certification in paper form and to provide an option for electronic submission. The regulations were also amended to communicate that information on where to submit the certification may be found on FDA's website, currently available at:
We estimate the burden of the information collection as follows:
Based on a review of the information collection since our last request for OMB approval, we have increased our estimated burden. We assume 5,000 nonrepudiation letters will be submitted annually. We arrived at this figure by looking at the average number of nonrepudiation letters received through March 2023. We further assume that half of the estimated respondents will establish controls for open systems and half will establish controls for closed systems. Finally, we assume all respondents will establish controls for the remaining technical specifications required by the regulations.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Regulatory Considerations for Prescription Drug Use-Related Software.” This draft guidance describes FDA's application of its drug labeling authorities to certain software outputs that are disseminated by or on behalf of a drug sponsor for use with a prescription drug or a prescription drug-led, drug-device combination product, which is assigned to the Center for Drug Evaluation and Research or the Center for Biologics Evaluation and Research as the lead center.
Submit either electronic or written comments on the draft guidance by December 18, 2023 to ensure that the Agency considers your comments on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002, to the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002, or to the Office of Policy, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Chris Wheeler, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 3330, Silver Spring, MD 20993, 301-796-2500,
FDA is announcing the availability of a draft guidance for industry entitled “Regulatory Considerations for Prescription Drug Use-Related Software.” This draft guidance expands on and was developed in response to comments submitted in response to the
This draft guidance, when finalized, will clarify how FDA intends to apply its drug labeling authorities to end-user output of prescription drug use-related software, how FDA intends to treat certain prescription drug use-related software as FDA-required labeling, and when and how sponsors should submit end-user output to FDA. Generally, the recommendations provided in this draft guidance are intended to align with ongoing Agency initiatives across all product centers, including digital health initiatives at the Center for Devices and Radiological Health. This draft guidance considers existing Agency policies for the regulation of software to ensure efficient, coordinated review in instances when prescription drug use-related software is reviewed by the Agency as a device.
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 current thinking of FDA on “Regulatory Considerations for Prescription Drug Use-Related Software.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
While this guidance contains no new collection of information, it does refer to previously approved FDA collections of information. The previously approved collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). The collections of information in 21 CFR part 314 for new drug applications and abbreviated new drug applications have been approved under OMB control number 0910-0001. The collections of information in 21 CFR 601.2 and 601.12 for biologics license applications and supplemental applications have been approved under OMB control number 0910-0338. The collections of information in Form FDA 2253 have been approved under OMB control number 0910-0001. The collections of information for prescription drug product labeling requirements in 21 CFR 201.56 have been approved under OMB control number 0910-0572. The collections of information in 21 CFR 202.1 for prescription drug advertisements have been approved under OMB control number 0910-0686.
Persons with access to the internet may obtain the draft guidance at
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Demonstrating Substantial Evidence of Effectiveness Based on One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence.” This guidance complements the 2019 draft guidance for industry entitled “Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products” (the 2019 Effectiveness draft guidance) and the 1998 guidance for industry entitled “Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products” (the 1998 Effectiveness guidance). Although FDA's evidentiary standard has not changed since 1998, there is a need for more Agency guidance to describe how one adequate and well-controlled clinical investigation and confirmatory evidence can be used to meet the substantial evidence requirement.
Submit either electronic or written comments on the draft guidance by December 18, 2023 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or the Office of Communication, Outreach, and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Eithu Lwin, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 6236, Silver Spring, MD 20993-0002, 301-796-0728; or Anne Taylor, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7242, Silver Spring, MD 20993-0002, 240-402-8113.
FDA is announcing the availability of a draft guidance for industry entitled “Demonstrating Substantial Evidence of Effectiveness Based on One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence.” This guidance complements the 2019 draft guidance entitled “Demonstrating Substantial Evidence of Effectiveness for Human Drug and
In 1962, Congress required for the first time that new drugs be shown to be effective as well as safe. A new drug's effectiveness must be established by substantial evidence. FDA has interpreted this substantial evidence requirement as generally requiring two adequate and well-controlled clinical investigations, each convincing on its own, to establish effectiveness.
In 1997, Congress amended section 505(d) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(d)) to make clear that FDA may consider data from one adequate and well-controlled investigation and confirmatory evidence to constitute substantial evidence if FDA determines that such data are sufficient to establish effectiveness. FDA issued the 1998 Effectiveness guidance in response to this legislative change. In 2019, the Agency concluded that more guidance was needed on the flexibility in the amount and type of evidence needed to meet the substantial evidence standard and issued the 2019 Effectiveness draft guidance, which discussed a number of approaches that can yield evidence that meets the statutory standard for substantial evidence.
Although both the 1998 Effectiveness guidance and the 2019 Effectiveness draft guidance provide examples of how a single adequate and well-controlled clinical investigation and confirmatory evidence can be used to support a marketing application, these guidances are not intended to provide a comprehensive discussion of meeting the substantial evidence standard based on one adequate and well-controlled clinical investigation and confirmatory evidence. Thus, there is a need for more Agency guidance to describe how one adequate and well-controlled clinical investigation and confirmatory evidence can be used to meet the substantial evidence requirement.
When one adequate and well-controlled clinical investigation and confirmatory evidence are considered together to assess effectiveness, the quality and quantity of the confirmatory evidence are also important considerations. Confirmatory evidence should be evidence generated from quality data derived from an appropriate source. The quantity of confirmatory evidence needed in a development program will be impacted by the features of, and results from, the single adequate and well-controlled clinical investigation that the confirmatory evidence is intended to substantiate.
This draft guidance describes these considerations in greater detail. It also provides examples of the types of evidence that could be considered confirmatory evidence that can be used with one adequate and well-controlled clinical investigation to demonstrate substantial evidence of effectiveness. Finally, the draft guidance includes recommendations for early engagement with the Agency for sponsors who intend to establish substantial evidence of effectiveness with one adequate and well-controlled clinical investigation and confirmatory evidence.
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 current thinking of FDA on “Demonstrating Substantial Evidence of Effectiveness Based on One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
While this guidance contains no new collection of information, it does refer to previously approved FDA collections of information. The previously approved collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). The collections of information in 21 CFR parts 58, 312, 314, and 601 have been approved under OMB control numbers 0910-0119, 0910-0014, 0910-0001, and 0910-0338, respectively. In addition, the collections of information pertaining to FDA's guidance entitled “Formal Meetings Between the FDA and Sponsors or Applicants of PDUFA Products” have been approved under OMB control number 0910-0001.
Persons with access to the internet may obtain the draft guidance at
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of a change in the meeting of the Digestive Diseases
The meeting notice is amended to change the start date of the meeting from 10/11-13/2023 to 11/1-3/2023. The meeting is closed to the public.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Asthma Education Prevention Program Coordinating Committee.
The meeting will be held as a virtual meeting and is open to the public. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations to view the meeting, should notify the Contact Person listed below in advance of the meeting. The meeting can be accessed from the NIH Videocast at the following link:
This notice is being published less than 15 days prior to the meeting due to scheduling conflicts.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's homepage:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Diabetes and Digestive and Kidney Diseases Advisory Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Open: January 10, 2024, 8:30 a.m. to 12:00 p.m.
Information is also available on the Institute's/Center's home page:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The 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 contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Substance Abuse and Mental Health Services Administration, Department of Health and Human Services (HHS).
Notice of intent to award supplemental funding.
This notice is to inform the public that the Substance Abuse and Mental Health Services Administration (SAMHSA) is supporting administrative supplements (in scope of the parent award) for the 58 Community Mental Health Services Block Grant (MHBG) recipients funded in FY 2023. The total amount of available funding is $8,292,318. The 58 MHBG recipients are eligible to receive up to $142,971 for a total of $8,292,318. If all eligible MHBG recipients do not apply, remaining funds will be redistributed to applicants. The funding amount per recipient may be adjusted if any MHBG recipients decline the funding. These recipients have a project end date of September 30, 2024. The supplemental funding will be used for providing and/or obtaining training and technical assistance, or workforce development meetings and activities.
Asha Stanly, MHBG Program Coordinator, CMHS State and Consumer Protection Grants Branch, Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, MD 20857, telephone 240-276-1845; email:
This is not a formal request for application. Assistance will only be provided to the 58 MHBG recipients funded in FY 2023 based on the receipt of a written statement from the SMHA confirming their interest in receiving these supplemental funds.
Cybersecurity and Infrastructure Security Agency (CISA), Department of Homeland Security (DHS).
60-Day notice and request for comments; new collection (request for a new OMB control number), 1670-NEW.
The DHS CISA Emergency Communications Division (ECD) will submit the following Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and clearance.
Comments are encouraged and will be accepted until November 20, 2023.
You may submit comments, identified by docket number Docket # CISA-2023-0022, at:
○
Executive Order 12862 directs Federal agencies to provide service to the public that matches or exceeds the best service available in the private sector. To work continuously to ensure that programs are effective and meet customers' needs, Cybersecurity Infrastructure Agency Emergency Communications Division (hereafter “the Agency”) seeks to obtain OMB approval of a generic clearance to collect qualitative feedback on service delivery. Qualitative feedback means information that provides useful insights on perceptions and opinions but are not statistical surveys that yield quantitative results that can be generalized to the population of study.
This collection of information is necessary to enable the Agency to garner customer and stakeholder feedback in an efficient, timely manner, in accordance with the commitment on improving service delivery. The information collected from customers and stakeholders will help ensure that users have an effective, efficient, and satisfying experience with the Agency's programs. This feedback will provide insights into customer or stakeholder perceptions, experiences, and expectations, provide an early warning of issues with service, or focus attention on areas where communication, training, or changes in operations might improve delivery of products or services. These collections will allow for ongoing, collaborative and actionable communications between the Agency and its customers and stakeholders. It will also allow feedback to contribute directly to the improvement of program management.
Improving agency programs requires ongoing assessment of service delivery, meaning a systematic review of the operation of a program compared to a set of explicit or implicit standards, as a way of contributing to the continuous improvement of the program. The Agency will collect, analyze, and interpret information gathered through this generic clearance to identify strengths and weaknesses of current services and make improvements in service delivery based on feedback. The respondent pool consists of, but not
The Agency will only submit a collection for approval under this generic clearance process if it meets the following conditions:
• Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the agency. (If released, appropriate Agency procedures will be followed);
• Information gathered will not be used for the purpose of substantially informing influential policy decisions;
• Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study;
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are non-controversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future; and
With the exception of information needed to provide renumeration for participants of focus groups and cognitive laboratory studies, personally identifiable information (PII) is collected only to the extent necessary and is not retained.
If these conditions are not met, the Agency will submit an information collection request to OMB for approval through the normal PRA process.
To obtain approval for a collection that meets the conditions of this generic clearance, a standardized form will be submitted to OMB along with supporting documentation (
The types of collections that this generic clearance covers include, but are not limited to:
• Customer comment cards/complaint forms.
• Focus Groups of customers, potential customers, delivery partners, or other stakeholders.
• Cognitive laboratory studies, such as those used to refine questions or assess usability of a website;
• Qualitative customer satisfaction surveys (
• In-person observation testing (
The Agency has established a manager/managing entity to serve for this generic clearance and will conduct an independent review of each information collection to ensure compliance with the terms of this clearance prior to submitting each collection to OMB.
If appropriate, agencies will collect information electronically and/or use online collaboration tools to reduce burden.
Small business or other small entities may be involved in these efforts, but the Agency will minimize the burden on them of information collections approved under this clearance by sampling, asking for readily available information, and using short, easy-to-complete information collection instruments. Without these types of feedback, the Agency will not have timely information to adjust its services to meet customer needs. If a confidentiality pledge is deemed useful and feasible, the Agency will only include a pledge of confidentiality that is supported by authority established in statute or regulation, that is supported by disclosure and data security policies that are consistent with the pledge, and that does not unnecessarily impede sharing of data with other agencies for compatible confidential use. If the agency includes a pledge of confidentiality, it will include a citation for the statute or regulation supporting the pledge.
There are no program changes since the previous OMB approval.
The Office of Management and Budget is particularly interested in comments which:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Annualized Respondent Cost: $0.
Total Annualized Respondent Out-of-Pocket Cost: $0.
U.S. Geological Survey, Department of the Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995
Interested persons are invited to submit comments on or before October 19, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request additional information about this ICR, contact John Warner by email at
In accordance with the PRA (44 U.S.C. 3501
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How the agency might 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 that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personally identifiable information (PII) in your comment, you should be aware that your entire comment—including your PII—may be made publicly available at any time. While you can ask us in your comment to withhold your PII from public review, we cannot guarantee that we will be able to do so.
20 resident interviews/FGD × 2 hrs = 40 hrs.
5 small business interviews × 1hr = 5 hrs.
300 household surveys × 0.5 hr = 150 hrs.
150 small business surveys × 0.5 hr = 75 hrs.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and associated funerary objects and has determined that there is no cultural affiliation between the human
Disposition of the human remains and associated funerary objects in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, two individuals were removed from an unknown county in northern Arizona (Accession #
The human remains and associated funerary objects in this notice were removed from a known geographic location (
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• The two objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Ak-Chin Indian Community; Chemehuevi Indian Tribe of the Chemehuevi Reservation, California; Cocopah Tribe of Arizona; Colorado River Indian Tribes of the Colorado River Indian Reservation, Arizona and California; Fort McDowell Yavapai Nation, Arizona; Fort Mojave Indian Tribe of Arizona, California, & Nevada; Fort Sill Apache Tribe of Oklahoma; Gila River Indian Community of the Gila River Indian Reservation, Arizona; Havasupai Tribe of the Havasupai Reservation, Arizona; Hopi Tribe of Arizona; Hualapai Indian Tribe of the Hualapai Indian Reservation, Arizona; Kaibab Band of Paiute Indians of the Kaibab Indian Reservation, Arizona; Kickapoo Tribe of Oklahoma; Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony, Nevada; Mescalero Apache Tribe of the Mescalero Reservation, New Mexico; Moapa Band of Paiute Indians of the Moapa River Indian Reservation, Nevada; Navajo Nation, Arizona, New Mexico, & Utah; Paiute Indian Tribe of Utah (Cedar Band of Paiutes, Kanosh Band of Paiutes, Koosharem Band of Paiutes, Indian Peaks Band of Paiutes, and Shivwits Band of Paiutes); Pascua Yaqui Tribe of Arizona; Quechan Tribe of the Fort Yuma Indian Reservation, California & Arizona; Salt River Pima-Maricopa Indian Community of the Salt River Reservation, Arizona; San Carlos Apache Tribe of the San Carlos Reservation, Arizona; San Juan Southern Paiute Tribe of Arizona; Tohono O'odham Nation of Arizona; Tonto Apache Tribe of Arizona; White Mountain Apache Tribe of the Fort Apache Reservation, Arizona; Yavapai-Apache Nation of the Camp Verde Indian Reservation, Arizona; and the Yavapai-Prescott Indian Tribe.
Written requests for disposition of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains and associated funerary objects described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains and associated funerary objects are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Lincoln County, NV.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice.
Human remains representing, at minimum, three individuals were removed from Lincoln County, NV (Accession #s
The human remains in this notice were removed from known geographic locations. These locations are the aboriginal lands of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of three individuals of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and any Indian Tribe.
• The human remains described in this notice were removed from the aboriginal land of the Kaibab Band of Paiute Indians of the Kaibab Indian Reservation, Arizona; Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony, Nevada; Moapa Band of Paiute Indians of the Moapa River Indian Reservation, Nevada; Paiute Indian Tribe of Utah (Cedar Band of Paiutes, Kanosh Band of Paiutes, Koosharem Band of Paiutes, Indian Peaks Band of Paiutes, and Shivwits Band of Paiutes); Te-Moak Tribe of Western Shoshone Indians of Nevada (Four constituent bands: Battle Mountain Band; Elko Band; South Fork Band; and Wells Band); and the Yomba Shoshone Tribe of the Yomba Reservation, Nevada.
Written requests for disposition of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Mineral County, NV.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, one individual were removed from Mineral County, NV (Accession #
The human remains in this notice were removed from a known geographic location (
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of one individual of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Confederated Tribes of the Warm Springs Reservation of Oregon; Fort Independence Indian Community of Paiute Indians of the Fort Independence Reservation, California; Fort McDermitt Paiute and Shoshone Tribes of the Fort McDermitt Indian Reservation, Nevada and Oregon; Paiute-Shoshone Tribe of the Fallon Reservation and Colony, Nevada; Pyramid Lake Paiute Tribe of the Pyramid Lake Reservation, Nevada; Reno-Sparks Indian Colony, Nevada; Walker River Paiute Tribe of the Walker River Reservation, Nevada; Yerington Paiute Tribe of the Yerington Colony & Campbell Ranch, Nevada; and the Yomba Shoshone Tribe of the Yomba Reservation, Nevada.
Written requests for disposition of the human remains in this notice must be
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of California, Davis (UC Davis) and the University of California, Berkeley (UC Berkeley) have completed an inventory of human remains and associated funerary objects and have determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from Solano County, CA.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after October 19, 2023.
Megon Noble, NAGPRA Project Manager, University of California, Davis, 412 Mrak Hall, One Shields Avenue, Davis, CA 95616, telephone (530) 752-8501, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of UC Davis and UC Berkeley. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by UC Davis and UC Berkeley.
Human remains representing, at minimum, 107 individuals were removed from Solano County, CA. In 1965, CA-SOL-11 (UC Davis Accession 16) was excavated by Walt Brown and Jay Ruby as a part of two UC Davis Field Schools. The 3,263 associated funerary objects are comprised of 3,219 objects that can be located in the collections and 44 objects that cannot be located at this time. The 3,219 locatable associated funerary objects are 50 lots consisting of worked shells (including beads and pendants); 27 lots consisting of worked bones (awls, pendants, and other worked bones); 19 lots consisting of worked stone (pendants, beads, and other worked stone); 25 projectile points; 167 lots consisting of groundstones; 1,602 lots consisting of stone debitage; 128 lots consisting of chipped stones (bifaces, scrapers, cores, and flake tools); 17 lots consisting of fired clay/ceramics; 643 lots consisting of unmodified animal bones; 446 lots consisting of unmodified shells; 25 lots consisting of charcoal; four lots consisting of plant materials (seeds, nuts, acorn caps); 18 lots consisting of ochre; 26 lots consisting of ash; two lots consisting of miscellaneous minerals; and 20 lots consisting of unmodified stones. The 44 currently missing associated funerary objects are one lot consisting of worked shells; two lots consisting of worked bones; two projectile points; two lots consisting of groundstones; 11 lots consisting of stone debitage; seven lots consisting of chipped stones; two lots consisting of miscellaneous pieces of fired clay; six lots consisting of unmodified animal bones; one lot consisting of unmodified shells; two lots consisting of charcoal; one lot consisting of unmodified stones; and seven lots consisting of unknown materials.
During May-June of 1946, University of California, Berkeley student William Clifford Massey removed three associated funerary objects from CA-SOL-11, which were subsequently appropriated by the University and accessioned into the Phoebe A. Hearst Museum of Anthropology collection. The three associated funerary objects are a stone point, one lot of stone flakes, and one lot of shells.
On October 1, 1949, as part of the California Archaeological Survey, University of California, Berkeley student Arnold R. Pilling removed three associated funerary items from CA-SOL-11, which were subsequently appropriated by the University and accessioned into the Phoebe A. Hearst Museum of Anthropology. The three associated funerary objects are a scraper, a blade, and a mortar.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological, archeological, biological, geographical, historical, linguistic, and oral traditional.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, UC Davis and UC Berkeley have determined that:
• The human remains described in this notice represent the physical remains of 107 individuals of Native American ancestry.
• The 3,269 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after October 19, 2023. If competing requests for repatriation are received, UC Davis and UC Berkeley must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. UC Davis and UC Berkeley are responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Washoe County, NV.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, 22 individuals were removed from the Falcon Hill Site in Washoe County, NV (Accession #s
The human remains in this notice were removed from a known geographic location. This location is the aboriginal land of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of 22 individuals of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains described in this notice were removed from the aboriginal land of the Confederated Tribes of the Warm Springs Reservation of Oregon; Fort McDermitt Paiute and Shoshone Tribes of the Fort McDermitt Indian Reservation, Nevada and Oregon; Paiute-Shoshone Tribe of the Fallon Reservation and Colony, Nevada; Pyramid Lake Paiute Tribe of the Pyramid Lake Reservation, Nevada; Reno-Sparks Indian Colony, Nevada; Walker River Paiute Tribe of the Walker River Reservation, Nevada; Washoe Tribe of Nevada & California (Carson Colony, Dresslerville Colony, Woodfords Community, Stewart Community, & Washoe Ranches); and the Yerington Paiute Tribe of the Yerington Colony & Campbell Ranch, Nevada.
Written requests for disposition of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Humboldt County, NV.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, two individuals were removed from Humboldt County, NV (Accession #s
The human remains and associated funerary objects in this notice were removed from known geographic locations. These locations are the aboriginal lands of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and any Indian Tribe.
• The human remains described in this notice were removed from the aboriginal land of the Confederated Tribes of the Warm Springs Reservation of Oregon; Fort McDermitt Paiute and Shoshone Tribes of the Fort McDermitt Indian Reservation, Nevada and Oregon; Paiute-Shoshone Tribe of the Fallon Reservation and Colony, Nevada; Pyramid Lake Paiute Tribe of the Pyramid Lake Reservation, Nevada; Reno-Sparks Indian Colony, Nevada; Shoshone-Bannock Tribes of the Fort Hall Reservation; Summit Lake Paiute Tribe of Nevada; Te-Moak Tribe of Western Shoshone Indians of Nevada (Four constituent bands: Battle Mountain Band; Elko Band; South Fork Band; and Wells Band); Walker River Paiute Tribe of the Walker River Reservation, Nevada; Winnemucca Indian Colony of Nevada; and the Yerington Paiute Tribe of the Yerington Colony & Campbell Ranch, Nevada.
Written requests for disposition of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Elko County, NV.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, one individual were removed from Elko County, Nevada (Accession #
The human remains in this notice were removed from a known geographic location. This location is the aboriginal land of one or more Indian Tribes. The
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of one individual of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and any Indian Tribe.
• The human remains described in this notice were removed from the aboriginal land of the Confederated Tribes of the Goshute Reservation, Nevada and Utah; Confederated Tribes of the Warm Springs Reservation of Oregon; Eastern Shoshone Tribe of the Wind River Reservation, Wyoming; Shoshone-Bannock Tribes of the Fort Hall Reservation; Shoshone-Paiute Tribes of the Duck Valley Reservation, Nevada; Te-Moak Tribe of Western Shoshone Indians of Nevada (Four constituent bands: Battle Mountain Band; Elko Band; South Fork Band; and Wells Band); and the Yomba Shoshone Tribe of the Yomba Reservation, Nevada.
Written requests for disposition of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and has determined that there is no cultural affiliation between the human remains and any Indian Tribe. The human remains were removed from Mohave County, AZ.
Disposition of the human remains in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, two individuals were removed from Mohave County, AZ (Accession #s
The human remains and associated funerary objects in this notice were removed from known geographic locations. These locations are the aboriginal lands of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Chemehuevi Indian Tribe of the Chemehuevi Reservation, California; Colorado River Indian Tribes of the Colorado River Indian Reservation, Arizona and California; Fort McDowell Yavapai Nation, Arizona; Fort Mohave Indian Tribe of Arizona, California & Nevada; Havasupai Tribe of the Havasupai Reservation, Arizona; Hopi Tribe of Arizona; Hualapai Indian Tribe of the Hualapai Indian Reservation, Arizona; Kaibab Band of Paiute Indians of the Kaibab Indian Reservation, Arizona; Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony, Nevada; Moapa Band of Paiute Indians of the Moapa River Indian Reservation, Nevada; Navajo Nation, Arizona, New Mexico, & Utah; and the Paiute Indian Tribe of Utah (Cedar Band of Paiutes, Kanosh Band of Paiutes, Koosharem Band of Paiutes, Indian Peaks Band of Paiutes, and Shivwits Band of Paiutes).
Written requests for disposition of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who
Disposition of the human remains described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of California, Berkeley intends to repatriate certain cultural items that meet the definition of objects of cultural patrimony and that have a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice. The cultural items were removed from Sutter County, Yuba County, and western Placer County, CA.
Repatriation of the cultural items in this notice may occur on or after October 19, 2023.
Alexandra Lucas, Repatriation Coordinator, Government and Community Relations (Chancellor's Office), University of California, Berkeley. 200 California Hall, Berkeley, CA 94720, telephone (510) 570-0964, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of California, Berkeley. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the summary or related records held by the University of California, Berkeley.
During the period from 1864 through 1957, 13 objects of cultural patrimony were removed from multiple identified sites in western Placer County, CA—CA-Pla-14, CA-Pla-17, CA-Pla-39, CA-Pla-4, and CA-Pla-414—and nine unknown locations in that county. Through 12 separate accessions, these objects were donated to the Lowie Museum (Phoebe A. Hearst Museum of Anthropology) at the University of California, Berkeley, by Darius Ogden Mills, Ellinor C. Davidson, Elmer J. Dawson, Franklin Fenenga, Robert Fleming Heizer, John Campbell Merriam, L. M. Layton, Loring J. Barker, Mrs. J. C. Hawver, the National Park Service, and Ralph L. Beals, as well as through the University of California Archaeological Survey, University appropriation, and other University collections. The 13 objects of cultural patrimony are one lot consisting of beads, one lot consisting of cartridges, one lot consisting of ceramics and glass, one lot consisting of clothing and textile components, one lot consisting of faunal remains, one lot consisting of floral remains, one lot consisting of metal, one lot consisting of nails, one lot consisting of ornaments, one lot consisting of plastic fragments, one lot consisting of shells, one lot consisting of worked faunal bones, and one lot consisting of worked and unworked stone.
During the period from sometime before 1881 through 1949, four objects of cultural patrimony were removed from multiple identified sites in Sutter County, CA—CA-Sut-10, CA-Sut-16, CA-Sut-5—and six unknown locations in that county. Through seven separate accessions, these objects were donated to the Lowie Museum by A. J. Blakeley, Clement W. Meighan, J. J. Coats, Jeremiah B. Lillard, and the Sacramento County Board of Education, as well as through the California Archaeological Survey, other University Collections, and University appropriation. The four lots of objects of cultural patrimony are one lot consisting of beads, one lot consisting of charmstones, one lot consisting of worked faunal bones, and one lot consisting of worked stone.
During the period 1860 through 1966, four objects of cultural patrimony were removed from multiple identified sites in Yuba County, CA—CA-Yub-10, CA-Yub-11, CA-Yub-12, CA-Yub-8, CA-Yub-9—and six unknown locations in that county. Through 12 separate accessions, these objects were donated to the Lowie Museum by Aileen W. Foulk, Bill Sundahl, Raymond Whiteley, C. M. Goethe, Geoffrey B. Bodman, Jeremiah B. Lillard, the Sacramento County Board of Education, John Campbell Merriam, and Stuart C. Way, as well as through University appropriation and other University collections. The four objects of cultural patrimony are one lot consisting of beads, one lot consisting of ornaments and pendants, one lot consisting of worked faunal bones, and one lot consisting of worked and unworked stone.
The cultural items in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: geographical, linguistic, and expert opinion (in the form of Tribal traditional knowledge).
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the University of California, Berkeley has determined that:
• The 21 lots of cultural items described above have ongoing historical, traditional, or cultural importance central to the Native American group or culture itself, rather than property owned by an individual.
• There is a relationship of shared group identity that can be reasonably traced between the cultural items and the United Auburn Indian Community of the Auburn Rancheria of California.
Additional, written requests for repatriation of the cultural items in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural items in this notice to a requestor may occur on or after October 19, 2023. If competing requests for repatriation are received, the University of California, Berkeley must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural items are considered a single request and not competing requests. The University of California, Berkeley is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and associated funerary objects and has determined that there is no cultural affiliation between the human remains and associated funerary objects and any Indian Tribe. The human remains and associated funerary objects were removed from Nye County, NV.
Disposition of the human remains and associated funerary objects in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, 12 individuals were removed from Nye County, NV (Accession #s
The human remains and associated funerary objects in this notice were removed from known geographic locations in Nye County, NV. These locations are the aboriginal lands of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of 12 individuals of Native American ancestry.
• The 52 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Confederated Tribes of the Warm Springs Reservation of Oregon; Duckwater Shoshone Tribe of the Duckwater Reservation, Nevada; Fort Independence Indian Community of Paiute Indians of the Fort Independence Reservation, California; Fort McDermitt Paiute and Shoshone Tribes of the Fort McDermitt Indian Reservation, Nevada and Oregon; Kaibab Band of Paiute Indians of the Kaibab Indian Reservation, Arizona; Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony, Nevada; Moapa Band of Paiute Indians of the Moapa River Indian Reservation, Nevada; Paiute Indian Tribe of Utah (Cedar Band of Paiutes, Kanosh Band of Paiutes, Koosharem Band of Paiutes, Indian Peaks Band of Paiutes, and Shivwits Band of Paiutes); Paiute-Shoshone Tribe of the Fallon Reservation and Colony, Nevada; Pyramid Lake Paiute Tribe of the Pyramid Lake Reservation, Nevada; Reno-Sparks Indian Colony, Nevada; Te-Moak Tribe of Western Shoshone Indians of Nevada (Four constituent bands: Battle Mountain Band; Elko Band; South Fork Band; and Wells Band); Yerington Paiute Tribe of the Yerington Colony & Campbell Ranch, Nevada; and the Yomba Shoshone Tribe of the Yomba Reservation, Nevada.
Written requests for disposition of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains and associated funerary objects described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains and associated funerary objects are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and associated funerary objects and has determined that there is no cultural affiliation between the human remains and associated funerary objects and any Indian Tribe. The human remains and associated funerary objects were removed from White Pine County, Nevada.
Disposition of the human remains and associated funerary objects in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154 telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, one individual were removed from the Ely Site in White Pine County, NV (Accession #
The human remains and associated funerary objects in this notice were removed from a known geographic location. This location is the aboriginal land of one or more Indian Tribes. The following information was used to identify the aboriginal land: a final judgment of the Indian Claims Commission.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of one individual of Native American ancestry.
• The seven objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Confederated Tribes of the Goshute Reservation, Nevada and Utah; Confederated Tribes of the Warm Springs Reservation of Oregon; Fort McDermitt Paiute and Shoshone Tribes of the Fort McDermitt Indian Reservation, Nevada and Oregon; Paiute-Shoshone Tribe of the Fallon Reservation and Colony, Nevada; Pyramid Lake Paiute Tribe of the Pyramid Lake Reservation, Nevada; Reno-Sparks Indian Colony, Nevada; Skull Valley Band of Goshute Indians of Utah; Walker River Paiute Tribe of the Walker River Reservation, Nevada; Washoe Tribe of Nevada & California (Carson Colony, Dresslerville Colony, Woodfords Community, Stewart Community, & Washoe Ranches); and the Yerington Paiute Tribe of the Yerington Colony & Campbell Ranch, Nevada.
Written requests for disposition of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains and associated funerary objects described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains and associated funerary objects are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of Nevada, Las Vegas has completed an inventory of human remains and associated funerary objects and has determined that there is no cultural affiliation between the human remains and associated funerary objects and any Indian Tribe. The human remains and associated funerary objects were removed from an unknown county in Utah.
Disposition of the human remains and associated funerary objects in this notice may occur on or after October 19, 2023.
Dr. Daniel Benyshek, University of Nevada, Las Vegas, 4505 S Maryland Parkway, Las Vegas, NV 89154, telephone (702) 895-2070, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of Nevada, Las Vegas. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of Nevada, Las Vegas.
Human remains representing, at minimum, two individuals were removed from an unknown county in Utah. (Accession #
The human remains and associated funerary objects in this notice were removed from a known geographic location (
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes, the University of Nevada, Las Vegas has determined that:
• The human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• The eight objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• No relationship of shared group identity can be reasonably traced between the human remains and associated funerary objects and any Indian Tribe.
• The human remains and associated funerary objects described in this notice were removed from the aboriginal land of the Confederated Tribes of the Goshute Reservation, Nevada and Utah; Eastern Shoshone Tribe of the Wind River Reservation, Wyoming; Kaibab Band of Paiute Indians of the Kaibab Indian Reservation, Arizona; Las Vegas Tribe of Paiute Indians of the Las Vegas Indian Colony, Nevada; Moapa Band of Paiute Indians of the Moapa River Indian Reservation, Nevada; Navajo Nation, Arizona, New Mexico, & Utah; Northwestern Band of the Shoshone Nation; Paiute Indian Tribe of Utah (Cedar Band of Paiutes, Kanosh Band of Paiutes, Indian Peaks Band of Paiutes, and Shivwits Band of Paiutes); Shoshone-Bannock Tribes of the Fort Hall Reservation; Skull Valley Band of Goshute Indians of Utah; Ute Indian Tribe of the Uintah & Ouray Reservation, Utah; and the Ute Mountain Ute Tribe.
Written requests for disposition of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization, or who shows that the requestor is an aboriginal land Indian Tribe.
Disposition of the human remains and associated funerary objects described in this notice to a requestor may occur on or after October 19, 2023. If competing requests for disposition are received, the University of Nevada, Las Vegas must determine the most appropriate requestor prior to disposition. Requests for joint disposition of the human remains and associated funerary objects are considered a single request and not competing requests. The University of Nevada, Las Vegas is responsible for sending a copy of this notice to the Indian Tribes identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the U.S Department of the Interior, Fish and Wildlife Service (USFWS) intends to repatriate a certain cultural item that meets the definition of a sacred object and that has a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice. The cultural item was removed from Cherokee County, OK.
Repatriation of the cultural item in this notice may occur on or after October 19, 2023.
Victoria Owens, U.S Fish and Wildlife Service, P.O. Box 329, Albuquerque, NM 87103, telephone (505) 248-7897, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the USFWS. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the summary or related records held by the USFWS.
One cultural item was removed from Tahlequah, Cherokee County, OK. Dennis R. “Siera” McPherron received the cultural item from William Smith, who was head of the Central Cherokee Medicine Council in the late 1980s. When the cultural item was seized by the USFWS in 2016, Mr. McPherron's traveling companion was Mr. Henry Vann, who is William Smith's nephew and a member of the United Keetoowah Band of Cherokee Indians in Oklahoma. The sacred item is a Golden Eagle feather.
The cultural item in this notice is connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the USFWS has determined that:
• The one cultural item described above is a specific ceremonial object needed by traditional Native American religious leaders for the practice of traditional Native American religions by their present-day adherents.
• There is a relationship of shared group identity that can be reasonably traced between the cultural items and the United Keetoowah Band of Cherokee Indians in Oklahoma.
Additional, written requests for repatriation of the cultural item in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural item in this notice to a requestor may occur on or after October 19, 2023. If competing requests for repatriation are received, the USFWS must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural item are considered a single request and not competing requests. The USFWS is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
United States International Trade Commission.
Notice.
The Commission hereby gives notice that it will proceed with a full review pursuant to the Tariff Act of 1930 to determine whether revocation of the antidumping duty order on tin- and chromium-coated steel sheet from Japan would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. A schedule for the review will be established and announced at a later date.
September 5, 2023.
Alejandro Orozco (202-205-3177), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
On September 5, 2023, the Commission determined that it should proceed to a full review in the subject five-year review pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. 1675(c)). The Commission found that both the domestic and respondent interested party group responses to its notice of institution (88 FR 35920, June 1, 2023) were adequate. A record of the Commissioners' votes will be available from the Office of the Secretary and at the Commission's website.
By order of the Commission.
United States International Trade Commission.
Appointment of individuals to serve as members of performance review board.
Eric Mozie, Director of Human Resources, or Ronald Johnson, Deputy Director of Human Resources, U.S. International Trade Commission (202) 205-2651.
The Chairman of the U.S. International Trade Commission has appointed the following individuals to serve on the Commission's Performance Review Board (PRB):
This notice is published in the
By order of the Chairman.
Bureau of Justice Statistics, Department of Justice.
30-Day notice.
The Office of Justice Programs, Bureau of Justice Statistics, Department of Justice (DOJ), 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 was previously published in the
Comments are encouraged and will be accepted for 30 days until October 19, 2023.
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: Jennifer Truman, Statistician, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531 (email:
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:
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Overview of this information collection:
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218 Washington, DC 20530.
Office of Justice Programs.
Notice of availability of a draft programmatic environmental assessment.
In accordance with the National Environmental Policy Act (NEPA), the Department of Justice (DOJ) Office of Justice Programs (OJP) has completed a Draft Programmatic Environmental Assessment (PEA). The OJP provides federal leadership, grants, training, technical assistance and other resources to improve the nation's capacity to prevent and reduce crime, assist victims and uphold the rule of law by strengthening the criminal and juvenile justice systems. The PEA evaluates the potential environmental impacts of implementing OJP programs that provide funding to applicants in support of OJP's mission. NEPA requires that federal agencies consider the effects of a proposed action and any reasonable alternatives on the human environment. This Draft PEA evaluates the impacts that would result from the implementation of the Proposed Action as compared to the No Action
Comments must be submitted on or before October 19, 2023.
You may view an electronic version of the Draft PEA at
Emily Gallas, Office of Justice Programs, 810 7th St. NW, Washington, DC 20531; (202) 307-0790;
The National Institute of Justice (NIJ), a component of OJP, prepared a PEA that was issued in 2010 to evaluate the impacts of NIJ grant programs. This existing 2010 NIJ PEA has since been adopted by the Bureau of Justice Assistance, another component of OJP. Council on Environmental Quality guidance recommends that agencies re-examine existing NEPA analyses for long-term programs every five years. Consistent with this recommendation, OJP has reviewed its existing PEA and has determined that a new analysis is warranted based on the factors found in 40 CFR 1502.19. OJP has prepared an updated PEA that is intended to replace the 2010 NIJ PEA and will cover all of OJP's funding programs. OJP publishes this notice pursuant to the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321,
The Proposed Action considered under this Draft PEA is for OJP to continue to provide funding to applicants to support its mission. OJP evaluates and funds approximately 7,000 projects per year nationwide. All activities considered under the Draft PEA support criminal justice activities and are funded under one of OJP's grant programs or other funding vehicles such as interagency agreements. The Draft PEA provides analysis of the following activities:
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The purpose of the Proposed Action is to allow OJP to better meet the needs of state, local, and tribal criminal justice professionals and local communities. OJP supports forensic science programs dedicated to research, development, testing, and evaluation in conjunction with capacity building and technical assistance. OJP provides funding for these activities to combat crime and promote justice across the country.
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
In this notice, OSHA announces the final decision to expand the scope of recognition for NSF International as a Nationally Recognized Testing Laboratory (NRTL).
The expansion of the scope of recognition becomes effective on September 19, 2023.
Information regarding this notice is available from the following sources:
OSHA hereby gives notice of the expansion of the scope of recognition of NSF International (NSF), as a NRTL. NSF's expansion covers the addition of one test site to the NRTL scope of recognition.
OSHA recognition of a NRTL signifies that the organization meets the requirements specified in 29 CFR 1910.7. Recognition is an acknowledgment that the organization can perform independent safety testing and certification of the specific products covered within the scope of recognition. Each NRTL's scope of recognition includes (1) the type of products the NRTL may test, with each type specified by the applicable test standard and (2) the recognized site(s) that has/have the technical capability to perform the product-testing and product-certification activities for test standards within the NRTL's scope. Recognition is not a delegation or grant of government authority; however, recognition enables employers to use products approved by the NRTL to meet OSHA standards that require product testing and certification.
The agency processes applications by a NRTL for initial recognition, as well as for an expansion or renewal of recognition, following requirements in Appendix A to 29 CFR 1910.7. This appendix requires that the agency publish two notices in the
NSF submitted an application, dated July 21, 2020 (OSHA-2006-0048-0016), to expand recognition as a NRTL to include one additional test site located at: 251 Airport Industrial Drive,
OSHA published the preliminary notice announcing NSF's expansion application in the
To obtain or review copies of all public documents pertaining to the NSF expansion application, go to
OSHA staff examined NSF's expansion application, conducted a detailed on-site assessment, and examined other pertinent information. Based on review of this evidence, OSHA finds that NSF meets the requirements of 29 CFR 1910.7 for expansion of recognition, subject to the specified limitations and conditions. OSHA, therefore, is proceeding with this final notice to grant NSF's scope of recognition. OSHA limits the expansion of NSF's recognition to include the site at Ypsilanti, Michigan as listed above. OSHA's recognition of the site limits NSF to performing product testing and certifications only to the test standards for which the site has the proper capability and programs, and for test standards in NSF's scope of recognition. This limitation is consistent with the recognition that OSHA grants to other NRTLs that operate multiple sites.
In addition to those conditions already required by 29 CFR 1910.7, NSF also must abide by the following conditions of the recognition:
1. NSF must inform OSHA as soon as possible, in writing, of any change of ownership, facilities, or key personnel, and of any major change in its operations as a NRTL, and provide details of the change(s);
2. NSF must meet all the terms of its recognition and comply with all OSHA policies pertaining to this recognition; and
3. NSF must continue to meet the requirements for recognition, including all previously published conditions on NSF's scope of recognition, in all areas for which it has recognition.
OSHA hereby expands the NRTL scope of recognition for NSF to include one additional test site.
James S. Frederick, Deputy Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW, Washington, DC 20210, authorized the preparation of this notice. Accordingly, the agency is issuing this notice pursuant to 29 U.S.C. 657(g)(2), Secretary of Labor's Order No. 8-2020 (85 FR 58393; Sept. 18, 2020), and 29 CFR 1910.7.
Signed at Washington, DC.
Millennium Challenge Corporation.
Notice.
The Millennium Challenge Act of 2003, as amended, requires the Millennium Challenge Corporation to publish a report that identifies the criteria and methodology that MCC intends to use to determine which candidate countries may be eligible to be considered for assistance under the Millennium Challenge Act for fiscal year 2024. The report is set forth in full below.
This document explains how the Board of Directors (the Board) of the Millennium Challenge Corporation (MCC) will identify, evaluate, and select eligible countries for fiscal year (FY) 2024. Specifically, this document discusses the following:
This report is provided in accordance with section 608(b) of the Millennium Challenge Act of 2003, as amended (the Act), as more fully described in Appendix A.
MCC evaluates the policy performance of all candidate countries and statutorily-prohibited countries by dividing them into two income categories for the purposes of creating “scorecards.” These categories are used to account for the income bias that occurs when countries with more per capita resources perform better than countries with fewer. In FY 2024, those scorecard evaluation income categories
• Countries whose gross national income (GNI) per capita is $2,145 or less; and
• Countries whose GNI per capita is between $2,146 and $4,465.
Appendix B lists all candidate countries and statutorily-prohibited countries for scorecard evaluation purposes.
The Board looks at three statutorily-mandated factors when it evaluates any candidate country for compact eligibility: (1) policy performance; (2) the opportunity to reduce poverty and generate economic growth; and (3) the availability of MCC funds.
Appendix C describes all 20 indicators, their definitions, what is required to “pass,” their source, and their relationship to the statutory criteria. Because of the importance of evaluating a country's policy performance in a comparable, cross-
• passed at least 10 of the 20 indicators, with at least one pass in each of the three categories,
• passed either the Political Rights or Civil Liberties indicator; and
• passed the Control of Corruption indicator.
While satisfaction of all three aspects means a country is termed to have “passed” the scorecard, the Board also considers whether the country performs “substantially worse” in any one policy category than it does on the scorecard overall.
The mandatory passing of either the Political Rights or Civil Liberties indicators is called the Democratic Rights “hard hurdle” on the scorecard, while the mandatory passing of the Control of Corruption indicator is called the Control of Corruption “hard hurdle.” Not passing either “hard hurdle” results in not passing the scorecard overall, regardless of whether at least 10 of the 20 other indicators are passed.
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Together, the 20 policy performance indicators are the predominant basis for determining which eligible countries will be selected for MCC assistance, and the Board expects a country to be passing its scorecard at the point the Board decides to select the country for a compact. The Board, however, also recognizes that even the best-available data has inherent challenges. Data gaps, real-time events versus data lags, the absence of narratives and nuanced detail, and other similar weaknesses affect each of these indicators. As such, the Board uses its judgment to interpret policy performance as measured by the scorecards. The Board may also consult other sources of information to enhance its understanding of the context underpinning a country's policy performance beyond scorecard issues (
While the Board considers a range of other information sources depending on the country, specific areas of attention typically include better understanding issues and trends in, and trajectory of:
• the state of democratic and human rights (especially vulnerable groups
• civil society's perspective on salient governance issues;
• the control of corruption and rule of law;
• the potential for the private sector (both local and foreign) to lead investment and growth;
• poverty levels within a country; and
• the country's institutional capacity.
Where applicable, the Board also considers MCC's own experience and ability to reduce poverty and generate economic growth in a given country—such as considering MCC's core areas of expertise and skills versus a country's needs, and MCC's capacity to work with a country.
This information provides greater clarity on the likelihood that MCC programs will have an appreciable impact on reducing poverty by generating economic growth in a given country. The Board has used such information to better understand when a country's performance on a particular indicator may not be up to date or is about to change. It has also used supplemental information to decline to select countries that are otherwise passing their scorecards. More details on this subject (sometimes referred to as “supplemental information”) can be found on MCC's website:
The final factor that the Board must consider when evaluating countries is the availability of funds. The agency's budget is constrained, and often specifically limited, by provisions in the Act and in applicable appropriations acts. MCC has a continuous pipeline of countries in compact development, compact implementation, threshold programs, and program closure. Consequently, the Board factors in MCC's overall portfolio when making its selection decisions given current and projected funding availability for each planned or existing program.
The following subsections describe how the Board applies each of these three statutorily-mandated factors: selection of countries for a compact,
When selecting eligible countries for a compact, the Board looks at all three statutorily-mandated aspects described in the previous section: (1) policy performance, first and foremost as measured by the scorecards and bolstered through supplemental information (as described in the previous section); (2) the opportunity to reduce poverty and generate economic growth, examined through the use of other supporting information (as described in the previous section); and (3) available funding.
At a minimum, the Board considers whether a country passes its scorecard. It also examines supporting evidence that a country's commitment to just and democratic governance, economic freedom, and investing in its people is on a sound footing and performance is on a positive trajectory (especially on the “hard hurdles” of Democratic Rights and Control of Corruption), and that MCC has the funds to support a meaningful compact with that country. Where applicable, previous threshold program information is also considered. For those countries currently developing or implementing a threshold program, the Board will examine the progress the country has made toward substantial implementation.
The Board then weighs the information described above across each of the three dimensions. During the compact development period following initial selection, the Board reevaluates a selected country based on this same approach.
Section 609(l) of the Act authorizes MCC to enter into “one or more subsequent Compacts.” MCC does not consider the eligibility of a country for a subsequent compact, however, before the country has completed its compact or is within 18 months of compact end date. Selection for a subsequent compact is not automatic and is intended for countries that (1) exhibit successful performance on their previous compact(s); (2) exhibit improved scorecard policy performance during the partnership; and (3) exhibit a continued commitment to further their sector reform efforts in any subsequent partnership. As a result, the Board has an even higher standard when selecting countries for subsequent compacts.
To evaluate the previous compact's success, the Board examines whether the compact succeeded within its budget and time limits, in particular by looking at three aspects:
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Appendix D provides details on the specific information types examined and sources used in each of the three areas. Overall, the Board is looking for evidence that the previous compact(s) will be or has been completed on time and on budget, and that there is a commitment to continued, robust reform going forward.
The Board also expects the country to have improved its overall scorecard policy performance during the partnership, and to pass the scorecard in the year of selection for the subsequent compact. The Board focuses on the following:
• The overall scorecard pass/fail rate over time, and what this suggests about underlying policy performance, as well as an examination of the underlying reasons;
• The progress over time on policy areas measured by both hard-hurdle indicators—Democratic Rights and Control of Corruption—including an examination of the underlying reasons; and
• Other indicator trajectories deemed relevant by the Board.
In all cases, while the Board expects the country to be passing its scorecard, the Board also examines other sources of information to understand the nuance and reasons behind scorecard or indicator performance over time, including any real-time updates, methodological changes within the indicators themselves, shifts in the relevant candidate pool, or alternative policy performance perspectives (such as those gleaned through consultations with civil society and related stakeholders). The Board also consults other information sources to look at policy performance over time in areas not covered by the scorecard, but that the Board deemed to be important (such as trade and foreign policy concerns).
The Board expects that subsequent compacts will endeavor to tackle deeper policy reforms necessary to unlock an identified constraint to growth. Consequently, the Board considers MCC's own experience during the previous compact in considering how committed the country is to reducing poverty and increasing economic growth, and tries to gauge the country's commitment to further sector reform should it be selected for a subsequent compact. This includes:
• Assessing the country's delivery of policy reform during the previous compact (as described above);
• Assessing expectations of the country's ability and willingness to continue embarking on sector policy reform in a subsequent compact;
• Examining both other information sources describing the opportunity to reduce poverty by generating growth (as outlined in A.2 above), and the prior compact's relative success overall, as already discussed; and
• Finally, considering how well funding can be leveraged for impact, given the country's experience in the previous compact.
Through this overall approach to selection for a subsequent compact, the Board applies the three statutorily-mandated evaluation criteria (policy performance, the opportunity to reduce poverty and generate economic growth, and available funds) in a way that assesses the previous partnership from a compact success standpoint, a commitment to improved scorecard policy performance standpoint, and a commitment to continued sector policy
During the compact development period following initial selection, the Board reevaluates a selected country based on this same approach.
Section 609(k) of the Act authorizes MCC to enter into one additional concurrent compact with a country if one or both of the compacts with the country is for the purpose of regional economic integration, increased regional trade, or cross-border collaborations.
The fundamental criteria and process for the selection of countries for such compacts remains the same as those for the selection of countries for non-concurrent compacts: countries continue to be evaluated and selected individually, as described in sections II.A, II.B, II.C, and II.F.
Section 609(k) also requires as a precondition for a concurrent compact that the Board determine that the country is making “considerable and demonstrable progress in implementing the terms of the existing Compact and supplementary agreements thereto.” This statutory requirement is fully consistent with prior Board practice regarding the selection of a country for a non-concurrent compact. For a country where a concurrent compact is contemplated, the Board will take into account whether there is clear evidence of success, as relevant to the phase of the current compact. Among other information, the Board will examine the evaluation criteria described in Section II.C.1 above, notably:
• The degree to which there is evidence of strong political will and management capacity;
• The degree to which the country has exhibited commitment and capacity to achieve program results; and
• The degree to which the country has implemented the compact in accordance with MCC's core policies and standards.
In addition to providing information to the Board so it can make its determination regarding the country's progress in implementing its current compact, MCC will provide the Board with additional information relating to the potential for regional economic integration, increased regional trade, or cross-border collaborations for any country being considered for a concurrent compact. This information may include items such as:
• The current state of a country's regional integration, such as common financial and political dialogue frameworks, integration of productive value chains, and cross-border flows of people, goods, and services.
• The current and potential level of trade between a country and its neighbors, including analysis of trade flows and unexploited potential for trade, and an assessment of the extent and significance of tariff and non-tariff barriers, including information regarding the patterns of trade.
• The potential gains from cross-border cooperation between a country and its neighbors to alleviate bilateral and regional bottlenecks to economic growth and poverty reduction, such as through physical infrastructure or coordinated policy and institutional reforms.
The Board can then weigh all information as a whole—the fundamental selection factors described in sections II.A, II.B, II.C, and II.F, the information regarding implementation of the current compact, and any additional relevant information regarding potential regional integration—to determine whether or not to direct MCC to seek to enter into a concurrent compact with a country.
The Board may also evaluate countries for participation in the threshold program. Threshold programs provide assistance to candidate countries exhibiting a significant commitment to meeting the criteria described in the previous subsections, but failing to meet such requirements. Specifically, in examining a candidate country's policy performance, the opportunity to reduce poverty and generate economic growth, and available funds, the Board will consider whether a country appears to be on a trajectory to becoming viable for compact eligibility in the medium or short term.
Some candidate countries may have a high per capita income or a high growth rate that implies there is a chance they could transition to UMIC status during the life of an MCC partnership. It is not possible to accurately predict if or when such a transition may occur.
Nonetheless, such countries may have more resources at their disposal for funding their own growth and poverty reduction strategies. As a result, in addition to using the regular selection criteria described in the previous sections, the Board will use its discretion to assess both the need and the opportunity presented by partnering with such a country, in order to ensure that MCC's scarce grant funds are directed appropriately.
Specifically, if a candidate country with a high probability of transitioning to UMIC status is under consideration for selection, the Board will examine additional data and information related to the following:
• Whether the country faces significant challenges accessing other sources of development financing (such as international capital, domestic resources, and other donor assistance) and, if so, whether MCC grant financing would be an appropriate tool;
• Whether the nature of poverty in the country (for example, high inequality or poverty headcount ratios relative to peer countries) presents a clear and strategic opportunity for MCC to assist the country in reducing such poverty through projects that spur economic growth;
• Whether the country demonstrates particularly strong policy performance, including policies and actions that demonstrate a clear priority on poverty reduction; and
• Whether MCC can reasonably expect that the country would contribute a significant amount of funding to the compact.
These additional criteria would then be applied in any additional years of selection as the country continues to develop its compact. Should a country eventually transition to UMIC status during compact development, it would no longer be a candidate for selection for that fiscal year. Continuing compact development beyond that point would then be at the Board's discretion.
This report to Congress is provided in accordance with section 608(b) of the Millennium Challenge Act of 2003, as amended (the Act), 22 U.S.C. 7707(b).
Section 605 of the Act authorizes the provision of assistance to countries that enter into a Millennium Challenge Compact with the United States to support policies and programs that advance the progress of such countries in achieving lasting economic growth and poverty reduction. The Act requires MCC to take a number of steps in selecting countries for compact assistance for FY 2024 based on the countries' demonstrated commitment to just and democratic governance, economic freedom, and investing in their people, MCC's opportunity to reduce poverty and generate economic growth in the country, and the availability of funds. These steps include the submission of reports to the congressional committees specified in the Act and publication of information in the
(1) The countries that are “candidate countries” for assistance for FY 2024 based on per capita income levels and eligibility to receive assistance under U.S. law (section 608(a) of the Act; 22 U.S.C. 7707(a));
(2) The criteria and methodology that MCC's Board of Directors (Board) will use to measure and evaluate policy performance of the candidate countries consistent with the requirements of section 607 of the Act (22 U.S.C. 7706) in order to determine “eligible countries” from among the “candidate countries” (section 608(b) of the Act; 22 U.S.C. 7707(b)); and
(3) The list of countries determined by the Board to be “eligible countries” for FY 2024, with justification for eligibility determination and selection for compact negotiation, including those eligible countries with which MCC will seek to enter into compacts (section 608(d) of the Act; 22 U.S.C. 7707(d)).
This report satisfies item 2 above.
Since MCC was created, it has relied on the
MCC will continue to use the historical IDA classifications for eligibility to categorize countries in two groups for purposes of FY 2024 scorecard comparisons:
• Countries with GNI per capita equal to or less than IDA's historical ceiling for eligibility (
• Countries with GNI per capita above IDA's historical ceiling for eligibility but below the World Bank's upper middle income country threshold (
The list of countries for FY 2024 scorecard assessments is set forth below:
The following indicators will be used to measure candidate countries' demonstrated commitment to the criteria found in section 607(b) of the Act. The indicators are intended to assess the degree to which the political and economic conditions in a country serve to promote broad-based sustainable economic growth and reduction of poverty and thus provide a sound environment for the use of MCC funds. The indicators are not goals in themselves; rather, they are proxy measures of policies that are linked to broad-based sustainable economic growth. The indicators were selected based on (i) their relationship to economic growth and poverty reduction; (ii) the number of countries they cover; (iii) transparency and availability; and (iv) relative soundness and objectivity. Where possible, the indicators are developed by independent sources. Listed below is a brief summary of the indicators (a detailed rationale for the adoption of these indicators can be found in the public Guide to the Indicators on MCC's website at
Within each policy category, the Act sets out a number of specific selection criteria. A set of objective and quantifiable policy indicators is used to inform eligibility decisions for assistance and to measure the relative performance by candidate countries against these criteria. The Board's approach to determining eligibility ensures that performance against each of these criteria is assessed by at least one of the objective indicators. Most are addressed by multiple indicators. The specific indicators appear in parentheses next to the corresponding criterion set out in the Act.
MCC reporting and data in the following chart are used to assess threshold program performance, compact performance of MCC compact countries nearing the end of compact implementation (
For completed compacts, additional information is used to assess compact performance and is found in a country's Star Report. The Star Report and its associated quarterly business process capture key information to provide a framework for results and improve the ability to disseminate learning and evidence throughout the lifecycle of an MCC investment from selection to final evaluation. For each compact and threshold program, evidence is collected on performance indicators, evaluation results, partnerships, sustainability efforts, and learning, among other elements.
In addition to the Star Reports, MCC also surveys staff on topics related to the quality of the partnership during design and implementation of programs, progress toward program results, a partner country's commitment to undertaking policy and institutional reforms, and compliance with MCC standards. Additional information on the survey can be found in the Guide to the Program Surveys:
10:00 a.m., Thursday, September 21, 2023.
Board Room, 7th Floor, Room 7B, 1775 Duke Street (All visitors must use Diagonal Road Entrance), Alexandria, VA 22314-3428.
Open.
1. Board Briefing, Share Insurance Fund Quarterly Report.
2. NCUA Rules and Regulations, Financial Innovation—Loan Participation, Eligible Obligations, and Notes of Liquidating Credit Unions.
Melane Conyers-Ausbrooks, Secretary of the Board, Telephone: 703-518-6304.
National Endowment for the Arts.
Notice.
The National Endowment for the Arts will conduct a Tribal Consultation at the 2023 International Conference of Indigenous Tribal Archives, Libraries, and Museums in Oklahoma City, Oklahoma on Wednesday, October 25, 2023, 2:30-3:30 p.m. CDT.
The 2023 Tribal Consultation will take place on October 25, 2023, 2:30-3:30 p.m. CDT. Tribal leaders wishing to send a proxy to the consultation session should send notification to the email address listed in the address section below by October 18, 2023. If neither a tribal leader nor a proxy is able to attend this consultation session, please provide written comments to the email address listed in the address section below by November 15, 2023.
Please RSVP for this meeting by emailing
The agenda is as follows:
a. The NEA, established by Congress in 1965, is an independent Federal agency that is the largest funder of the arts and arts education in communities nationwide and a catalyst of public and private support for the arts. By advancing equitable opportunities for arts participation and practice, the NEA fosters and sustains an environment in which the arts benefit everyone in the United States. This is accomplished primarily by providing resources to support the creative lives of all communities in the United States. Grants are awarded for specific projects to 501(c)(3) nonprofit organizations, federally recognized Tribes, or units of State or local government. Individual makers, artists, and culture bearers are recognized and supported through programs such as the National Heritage Fellowship, Jazz Masters, and Creative Writing Fellowships. Forty percent of the NEA's program budget is granted to State Arts Agencies and Regional Arts Organizations, which make subgrants to support additional arts activities across the nation.
i. What is your awareness of our agency's work?
ii. Have NEA resources impacted your community? If so, how?
iii. To what extent do you see the arts and cultural activities of your tribal community reflected in the resources we offer?
iv. The review criteria for our primary grant program, Grants for Arts Projects, includes artistic excellence, which is defined as “The quality of the artists and other key individuals, creative process, works of art, organizations, arts education providers, artistic partners, and/or services involved in the project and their relevance to the audience or communities the project aims to serve.” How does this definition of artistic excellence resonate with the artistic and cultural activities of your tribal community?
a. In recent years, the NEA has made grants to Tribal governments and Tribal Colleges & Universities (TCUs). We also have recognized Indigenous artists with National Heritage Fellowships. These direct grants to Tribes, Tribal citizens, and TCUs are in addition to the grants we make to Native-serving nonprofits.
i. How can the NEA expand on this engagement with tribes and increase awareness of these opportunities?
ii. If the NEA has the resources to send staff representation to in-person events, where would our participation be most effective?
b. The NEA annually updates the Federal Resources for Native Arts & Cultural Activities, which is a consolidation of opportunities offered by federal agencies for organizations looking for funding and other resources to support Native arts and cultural activities.
i. Have you ever accessed this publication?
ii. Is this publication a useful resource to make available to tribal communities?
iii. How can we increase awareness of this resource guide?
a. Tribal Arts Councils: At the last NEA Tribal Consultation session, the NEA discussed the possibility of supporting the work of Tribal Arts Councils, bodies organized to support arts and cultural activities at the regional level by providing programs and support services. These Tribal Arts Councils could be similar in form to State, regional or local Arts agencies,
i. How would you see a tribal arts council benefiting your community?
ii. What regional needs would apply to tribal arts councils?
iii. Would a government point of contact specific to arts grants be beneficial?
iv. What support would Tribal Arts Councils require from NEA?
v. Do you currently work with your State and/or Local Arts Agency?
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the Market Dominant or the Competitive product list, or the modification of an existing product currently appearing on the Market Dominant or the Competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern Market Dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern Competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II.
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This Notice will be published in the
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend the Exchange's transaction fees at Equity 7, Section 118(e), as described further below.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange operates on the “taker-maker” model, whereby it generally pays credits to members that take liquidity and charges fees to members that provide liquidity. Currently, the Exchange has a schedule, at Equity 7, Section 118(e), which consists of several different credits and fees for Retail Orders
The purpose of the proposed rule change is to amend the Exchange's schedule of fees at Equity 7, Section 118(e). Specifically, the Exchange proposes to amend the qualifying criteria for an existing fee for RPI Orders that provide liquidity.
Currently, the Exchange charges a $0.0018 per share executed fee for RPI Orders entered by a member that (i) quotes RPI Orders in at least 1,200 symbols on average per day and (ii) provides liquidity through RPI Orders equal to or exceeding an average daily volume of 2,500,000 shares. The Exchange proposes to amend the qualifying criteria for the $0.0018 fee by eliminating the requirement to quote RPI Orders in at least 1,200 symbols on average per day. Thus, a member could qualify for the $0.0018 per share executed fee for RPI Orders if the member provides liquidity through RPI Orders equal to or exceeding an average daily volume of 2,500,000 shares.
The Exchange hopes that the less strict qualifying criteria (
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange's proposed change to its schedule of fees is reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces in the market for equity securities transaction services that constrain its pricing determinations in that market. The fact that this market is competitive has long been recognized by the courts. In
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Numerous indicia demonstrate the competitive nature of this market. For example, clear substitutes to the Exchange exist in the market for equity security transaction services. The Exchange is only one of several equity venues to which market participants may direct their order flow. Competing equity exchanges offer similar tiered pricing structures to that of the Exchange, including schedules of rebates and fees that apply based upon members achieving certain volume thresholds.
Within this environment, market participants can freely and often do shift their order flow among the Exchange and competing venues in response to changes in their respective pricing schedules. As such, the proposal represents a reasonable attempt by the Exchange to increase its liquidity and market share relative to its competitors.
The Exchange believes it is reasonable and equitable to amend the qualifying criteria for the $0.0018 per share executed fee for RPI Orders by eliminating the requirement to quote RPI Orders in at least 1,200 symbols on average per day. As discussed above, the Exchange's goal is to increase liquidity adding activity in RPI Orders on its platform. It is reasonable and equitable to address this need by easing the qualification requirements as an incentive for members to increase their liquidity activity in RPI Orders on the Exchange. If the proposal is effective in achieving this purpose, then the quality of the Exchange's market will improve, particularly with respect to RPI and Retail Orders to the benefit of all participants, especially those who submit RPI and Retail Orders.
The Exchange believes that the proposal is not unfairly discriminatory. As an initial matter, the Exchange believes that nothing about its volume-based tiered pricing model is inherently unfair; instead, it is a rational pricing model that is well-established and ubiquitous in today's economy among firms in various industries—from co-branded credit cards to grocery stores to cellular telephone data plans—that use it to reward the loyalty of their best customers that provide high levels of business activity and incent other customers to increase the extent of their business activity. It is also a pricing model that the Exchange and its competitors have long employed with the assent of the Commission. It is fair because it incentivizes customer activity that increases liquidity, enhances price discovery, and improves the overall quality of the equity markets.
The Exchange intends for its proposal to improve market quality for all members that submit RPI and Retail Orders on the Exchange and by extension attract more liquidity to the market, improving market wide quality and price discovery. Although net adders of liquidity for RPI Orders will benefit most from the proposal, this result is fair insofar as increased liquidity adding activity in RPI Orders will help to improve market quality and the attractiveness of the Exchange to all existing and prospective retail participants.
Any participant that is dissatisfied with the proposal is free to shift their order flow to competing venues that provide more generous pricing or less stringent qualifying criteria.
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.
The Exchange does not believe that its proposal will place any category of Exchange participant at a competitive disadvantage. The proposal eases the qualification requirements for the $0.0018 per share executed fee for RPI Orders. Members may modify their businesses so that they can meet the required threshold and pay lower charges. As noted above, all members of the Exchange will benefit from any increase in market activity that the proposal effectuates. Moreover, members are free to trade on other venues to the extent they believe that the fees assessed, and credits provided, are not attractive. As one can observe by looking at any market share chart, price competition between exchanges is fierce, with liquidity and market share moving freely between exchanges in reaction to fee and credit changes.
The Exchange believes that its proposed modification to its schedule of fees will not impose a burden on competition because the Exchange's execution services are completely voluntary and subject to extensive competition both from the other live exchanges and from off-exchange venues, which include alternative trading systems that trade national market system stock. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
The proposed change is reflective of this competition because, as a threshold issue, the Exchange is a relatively small market so its ability to burden intermarket competition is limited. In this regard, even the largest U.S. equities exchange by volume has less than 20% market share, which in most markets could hardly be categorized as having enough market power to burden competition. Moreover, as noted above, price competition between exchanges is fierce, with liquidity and market share moving freely between exchanges in reaction to fee and credit changes. This is in addition to free flow of order flow to and among off-exchange venues which comprises more than 40% of industry volume.
In sum, the Exchange intends for the proposed change to its fees to increase member incentives to engage in the addition of liquidity on the Exchange. If the change proposed herein is unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed change will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Equity 4, Rules 4702 and 4703.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes amendments to its Rules to address inconsistencies between the Rule Text and observed System behavior as well as behavior unaccounted for in the existing Rule text, as follows. This proposal is similar to a rule change filed by the Exchange's sister exchange, the Nasdaq Stock Market, LLC on August 16, 2023.
The first proposed rule change addresses an edge case of inconsistency between the Rule text and System behavior, this time regarding Market Maker Peg Orders.
The second proposal would amend Equity 4, Rule 4703(h), to correct its description of behavior of the Non-Displayed portion of Orders with the Reserve Attribute.
In all cases, if the remaining size of the Non-Displayed Order is less than the fixed or random amount stipulated by the Participant, the full remaining size of the Non-Displayed
As stated, this Rule requires that the entire Non-Displayed portion of a Reserve Order will become Displayed the moment the size of the Non-Displayed portion drops below an amount that a participant designates or has directed the System to randomly designate (the “Max Floor”). In conducting a test of System behavior, however, the Exchange observed that the System does not, in fact, operate in this manner. Instead, the System maintains the Non-Displayed portion of a Reserve Order as such when the size of that Non-Displayed Portion drops below the Max Floor. Rather than correct the current System behavior to match the Rule, the Exchange determined that users of Reserve Orders prefer the current System behavior because it is true to the underlying intent of Reserve functionality, which is to help limit the price impacts of trading large quantities of shares by displaying only small portions of such shares at a given time, while hiding the rest in reserve. Thus, the Exchange proposes to address the inconsistency between the Rule text and the behavior of the System by deleting the aforementioned language from Rule 4703(h). Going forward, the System will not convert to a Displayed Order the Non-Displayed remainder of a Reserve Order that falls below the Max Floor, and the System will not remove it.
The Exchange believes that its proposals are consistent with section 6(b) of the Act, in general, and further the objectives of section 6(b)(5) of the Act, in particular, in that they are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest.
It is consistent with the Act to amend the Exchange's Rules to address inconsistencies between the Rule text and observed System behavior, including by adapting the Rule text to codify observed System behavior, where the observed behavior is more consistent with the underlying purpose of an Order Attribute than is the Rule text (maintaining the Non-Displayed status of a reserve portion of a Reserve Order that drops below the Max Floor) and where System behavior reflects a nuance not contemplated by the existing Rules (clarifying that the prohibition against repricing Market Maker Peg Orders that have prices equal to or better than the NBBO only applies to round lot Market Maker Peg Orders, and not to odd lots).
Finally, it is consistent with the Act to amend Rule 4703(h) to delete qualifying language which erroneously suggests that Non-Displayed Orders with Reserve are only non-displayed when such Orders have a TIF of IOC. Investors and the public have an interest in the Exchange maintaining a Rulebook that is accurate.
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. The proposals merely address inconsistencies between Rule text and System behavior. The Exchange neither intends nor perceives that these rule changes will have any impact on competition.
No written comments were either solicited or received.
The Exchange has filed the proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule, effective September 1, 2023.
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 options venues to which market participants may direct their order flow. Based on publicly available information, no single options exchange has more than 17% of the market share and currently the Exchange represents only approximately 5% of the market share.
The Exchange's Fee Schedule sets forth standard rebates and rates applied per contract. For example, the Exchange provides a rebate of $0.25 per contract for Customer orders that add liquidity in Penny Securities, yielding fee code PY. The Fee Codes and Associated Fees section of the Fees Schedule also provides for certain fee codes associated with certain order types and market participants that provide for various other fees or rebates.
Currently, Customer orders in Penny Securities, excluding SPY, that remove liquidity are assessed a standard transaction fee of $0.48 per contract and yield fee code “PC”. Customer SPY orders that remove liquidity are assessed a standard transaction fee of $0.45 per contract and yield fee code “PR”.
Currently, IWM Customer orders that remove liquidity yield fee code PC and are assessed $0.48 per contract. The Exchange proposes to reduce the fee assessed for IWM orders that remove liquidity to $0.45 per contract. The Exchange therefore proposes to amend current fee code PR to include Customer IWM orders that remove liquidity. The standard transaction fee assessed for orders that yield fee code PR remains the same under the proposed rule change (
The Exchange also proposes to amend the definition of fee code PC to clarify that such fee code (and corresponding transaction fee) applies to all customer orders in Penny securities that remove liquidity, except Customer orders in SPY and IWM.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Act.
As described above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The proposed rule change reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all market participants. The Exchange is only one of several options venues to which market participants may direct their order flow, and it represents a small percentage of the overall market.
Additionally, the Exchange believes that the proposed amendment to reduce the transaction fee for Customer IWM orders that remove liquidity (and therefore apply fee code PR to include such orders) is consistent with section 6(b)(4) of the Act in that the proposed fee is reasonable, equitable, and not unfairly discriminatory. The Exchange believes the proposed change is reasonable as Members will pay lower fees for liquidity removing IWM Customer orders. The Exchange believes its proposed change is also reasonable as the proposed rate continues to be competitive and in line with IWM-specific pricing at other exchanges.
The Exchange also believes it is reasonable, equitable and not unfairly discriminatory to adopt IWM-specific pricing as the Exchange already maintains product-specific pricing for other products, such as SPY. Additionally, as noted above, other exchanges similarly provide for IWM-specific pricing.
Finally, the Exchange believes the change to the description of fee code PC is reasonable as such fee code does not currently apply to SPY Customer orders that remove liquidity, and as proposed will no longer apply to IWM Customer orders that remove liquidity. The Exchange believes explicitly referencing that SPY and IWM are excluded from fee code PC in the fee code description will reduce potential confusion and maintain clarity in the Fees Schedule.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. In particular, the Exchange believes the proposed rule change does not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change to reduce the transaction fee for Customer IWM orders that remove liquidity will apply to all Members. As discussed above, the Exchange believes the proposed change to reduce the transaction fee would attract additional IWM Customer orders that remove liquidity, thereby promoting market depth, price discovery and transparency and enhancing order execution opportunities for all Members. As a result, the Exchange believes that the proposed change furthers the Securities and Exchange Commission's (the “Commission's”) goal in adopting Regulation NMS of fostering competition among orders, which promotes “more efficient pricing of individual stocks for all types of orders, large and small.”
The Exchange also believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues they may participate on and direct their order flow, including 15 other options exchanges. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single options exchange has more than 17% of the market share. Therefore, no exchange possesses significant pricing power in the execution of order flow. Indeed, participants can readily choose to send their orders to other exchanges if they deem fee levels at those other venues to be more favorable. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.” The fact that this market is competitive has also long been recognized by the courts. In
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to (1) adopt Rules 5055 and 7605 which will govern the trading of flexible exchange options (“FLEX Equity Options”) on BOX; and (2) make related changes to Rules 100 (Definitions), 7620 (Accommodation Transactions), and 12140 (Imposition of Fines for Minor Rule Violations). The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's internet website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt rules to govern FLEX Equity Options and a new order type to trade FLEX Equity Options on the BOX Trading Floor.
The Securities and Exchange Commission (“Commission”) approved the trading of FLEX options in 1993.
The Exchange notes that FLEX options are currently traded on CBOE, NYSE American LLC (“NYSE American”), NYSE Arca, Inc. (“NYSE Arca”), and Nasdaq PHLX LLC (“PHLX”).
In August 2017, the Commission approved the Exchange's proposal to adopt rules for an open outcry trading floor.
The Exchange proposes to adopt Rule 5055 titled FLEX Equity Options which describes and governs FLEX Equity Options. Rule 5055(a) details the applicability of other Exchange rules with respect to the proposed FLEX Equity Options.
FLEX Equity Options will only be permitted in puts and calls that do not have the same exercise style (American or European), same expiration date and same exercise price as Non-FLEX Equity Options that are already available for trading on the same underlying security.
The Exchange proposes Rule 5055(b) which defines the following terms: FLEX Equity Option, Non-FLEX Equity Option, FLEX Market Maker, and FLEX Open Outcry Order. Specifically, the term “FLEX Equity Option” means an option on a specified underlying security that is subject to Rule 5055.
The Exchange proposes Rule 5055(c) which states that certain Exchange rules do not apply to transactions in FLEX Equity Options. Specifically, Rule 7600 “Qualified Open Outcry Orders—Floor Crossing” and Rule 7620 “Accommodation Transactions” do not apply to transactions in FLEX Equity Options.
The Exchange proposes Rule 5055(d) which states that FLEX Equity Options will have no trading rotations.
Further, the Exchange proposes Rule 5055(e) which provides that FLEX Equity Options will not be preestablished for trading, and must include one of each of the terms of a FLEX Equity Option that are described in the proposed Rule.
Next, the Exchange proposes Rule 5055(f) titled Additional Conditions of FLEX Equity Options. Proposed Rule 5055(f)(1) limits FLEX Equity Option terms such that options on an underlying security otherwise eligible for FLEX trading will only be permitted in puts and calls that do not have the same exercise style (American or European), same expiration date and same exercise price as Non-FLEX Equity Options that are already available for trading on the same underlying security.
The Exchange proposes Rule 5055(g) which states that the minimum quoting and trading increment for FLEX Equity Option contracts traded on BOX will be one cent ($0.01) for all series.
The Exchange proposes Rule 5055(h) which states that FLEX Equity Options will be subject to the exercise by exception provisions of Rule 805 of the OCC, titled Expiration Exercise Procedure.
The Exchange proposes Rule 5055(i) which details position limits for FLEX Equity Options. Specifically, 5055(i)(1) states that FLEX Equity Options will not be subject to position limits, except as long as the options positions remain open, positions in FLEX Equity Options that expire on a third Friday-of-the-month shall be aggregated with positions in Non-FLEX Equity Options on the same underlying security and shall be subject to the position and exercise limits set forth in this proposed rule, and in the current BOX rules.
The Exchange proposes to specify that, if the Exchange determines that a higher margin requirement is advisable in light of the risks associated with a FLEX Equity Option position, the Exchange may, pursuant to its authority under Rule 10130(b), consider imposing higher margin requirements upon the account maintaining the position. Additionally, it should be noted that the clearing firm carrying the account will be subject to capital charges under Rule 15c3-1 under the Act
The Exchange notes that, unlike NYSE Arca Rule 5.35-O(b), the Exchange is not proposing to include a requirement that each Participant (other than a Market Maker) that maintains a position on the same side of the market in excess of the standard position limit for Non-FLEX Equity Options of the same class on behalf of its own account or for the account of a customer shall report information on the FLEX Equity Option position, positions in any related instrument, the purpose or strategy for the position and the collateral used by the account. Proposed Rule 5055(i)(1) would also differ from NYSE Arca Rule 5.35-O(b) in that the Exchange is proposing to better tailor the Rule's description of the Exchange's ability to impose a higher margin requirement with the Exchange's existing authority to impose higher margin as described in Rule 10130(b). The Exchange believes this would better maintain consistency with its existing rules and would more accurately describe the process by which the Exchange would consider imposing higher margin requirements in practice.
The Exchange also believes that the separate reporting requirement for FLEX Equity Option positions, along with a requirement for the Exchange to monitor margin requirements for FLEX Equity Option positions separately from the manner in which the Exchange considers margin generally, add administrative burdens on Participants and the Exchange that do not meaningfully contribute to the management of margin in the options markets. The Exchange notes that the text of NYSE Arca Rule 5.35-O(b), along with comparable rule text at other exchanges that offer FLEX equity options, was originally adopted over 25 years ago when FLEX equity options were first permitted to trade without position limits.
The Exchange proposes Rule 5055(j) which governs exercise limits for FLEX Equity Options. Specifically, proposed Rule 5055(j) states that exercise limits for FLEX Equity Options shall be equivalent to the position limits established in this proposal; accordingly, there shall be no exercise limits for FLEX Equity Options.
The Exchange proposes Rule 5055(k) which details the Letter of Guarantee required for Market Makers to trade FLEX Equity Options. Specifically, proposed Rule 5055(k) states that no Market Maker shall effect any transaction in FLEX Equity Options unless a Letter of Guarantee has been issued by a clearing member organization and filed with the Exchange pursuant to Rule 8070 specifically accepting financial responsibility for all FLEX Equity Option transactions made by such Market Maker and such letter has not been revoked under Rule 8070(c).
Similarly, the Exchange proposes Rule 5055(l), which provides that no Floor Broker
The Exchange proposes to introduce a new order type to facilitate FLEX Equity Option transactions on the BOX Trading Floor. Specifically, the Exchange proposes to adopt a FOO Order type and to model it after a current order type on the Trading Floor—QOO Orders.
On the BOX Trading Floor today, a Floor Broker may bring an unmatched order to the Trading Floor in order to seek liquidity. The Floor Broker may announce the unmatched order (
Next, pursuant to proposed Rule 7605(d), FOO Orders may be Complex Orders (“Complex FOO Order”) or Multi-Leg Orders (“Multi-Leg FOO Order”) as defined in Rules 7240(a)(7) and (10) with no more than the applicable number of legs, as determined by the Exchange and communicated to Participants,
The Exchange proposes Rule 7605(e) which details announcement and representation of FOO Orders on the BOX Trading Floor that is consistent with the current Trading Floor requirements.
There will be an initiating side and a contra-side of a FOO Order. The initiating side is the order which must be filled in its entirety. The contra-side must guarantee the full size of the initiating side of the FOO Order and can be composed of multiple firms. When the Floor Broker is soliciting interest from the trading crowd when the initiating side was announced or to the extent the trading crowd offers a better price, the contra-side will be the solicited interest from the trading crowd.
The FOO Order is not deemed executed until it is processed by the Trading Host. Once the Floor Broker submits the FOO Order to the BOG there will be no opportunity for the submitting Floor Broker,
The Exchange notes that the proposed floor interaction practice is consistent with the process in BOX Rule 7600 for QOO Orders on the BOX Trading Floor where the main differences are that FOO Orders will not be eligible for the BOX Book or the Complex Order Book, there is no NBBO, and that Floor Brokers must allow Floor Participants a minimum period of time to respond to FOO Orders. Consistent with QOO Orders, a FOO Order is not deemed executed until it is processed by the Trading Host.
The Exchange proposes Rule 7605(f) which states that the minimum size for FLEX Equity Options transactions and quotations shall be one (1) contract.
Pursuant to proposed Rule 7605(h), FLEX Market Makers have an obligation to quote a FLEX Equity Option in response to any request for quote by a Floor Broker or Options Exchange Official and must provide a two-sided market.
Next, the Exchange proposes Rule 7605(i) which details the allocation process for FOO Orders. Specifically, the FOO Order will be matched by the Trading Host against the contra-side of the FOO Order, regardless of whether the contra-side order submitted by the Floor Broker is ultimately entitled to receive an allocation pursuant to proposed Rules 7605(i)(1)-(2). If no Floor Participant, other than the executing Floor Broker, is entitled to an allocation, then no further steps are necessary. If however, Floor Participants are entitled to an allocation, the remaining balance of the initiating side of the FOO Order will be allocated as described below.
First, if the FOO Order satisfies the provisions of proposed Rule 7605(k), discussed below, the executing Floor Broker is entitled to 40% of the remaining quantity of the initiating side of the FOO Order.
The Exchange proposes that after execution of the FOO Order, the executing Floor Broker is responsible for providing the correct allocations of the initiating side of the FOO Order to an Options Exchange Official or his or her designee, if necessary, who will properly record the order in the Exchange's system.
Similar to the allocation process in place for QOO Orders, the Exchange proposes to allow for a participation guarantee for certain FOO Orders executed by Floor Brokers on the Trading Floor. Specifically, when a Floor Broker holds an option order of the eligible order size or greater, the Floor Broker is entitled to cross 40% of the remaining contracts of the original order, after all bids or offers at better prices are filled, with other orders that the Floor Broker is holding.
The below examples are designed to illustrate the allocation of the initiating side of a FOO Order.
Example 1—Assume a Floor Broker wishes to execute a FOO Order for 500 contracts. When he announces the order, FLEX Market Maker 1 and FLEX Market Maker 2 both respond to the FOO Order for 250 contracts each at the same price as the Floor Broker's contra-side. FLEX Market Maker 1 responded first so he will have time priority over FLEX Market Maker 2. Since the FOO Order is for at least 50 contracts, the Floor Broker is entitled to match at least 40% of the initiating side with the Floor Broker's contra-side.
Result: The initiating side of the FOO Order will match against the Floor Broker's contra-side order for the full 500 contracts. After the execution of the FOO Order, because other Floor Participants are entitled to an allocation, the executing Floor Broker is then responsible for providing an Options Exchange Official or his or her designee the following allocation of the initiating side of the FOO Order:
Example 2—Assume a Floor Broker wishes to execute a FOO Order for 40 contracts. When he announces the order, FLEX Market Maker 1 and FLEX Market Maker 2 both respond to the FOO Order for 20 contracts each at the same price as the Floor Broker's contra-side. FLEX Market Maker 1 responded first so he will have time priority over FLEX Market Maker 2. Since the FOO Order is for less than 50 contracts, the Floor Broker is not entitled to a 40% guarantee.
Result: The initiating side FOO Order will match against the Floor Broker's contra-side for the full 40 contracts. After execution of the FOO Order, because other Floor Participants are entitled to an allocation, the executing Floor Broker is then responsible for providing an Options Exchange Official or his or her designee with the following allocation of the initiating side of the FOO Order:
Example 3—Assume a Floor Broker wishes to execute a FOO Order for 40 contracts in ABC at 1.05 (initiating side is to sell). When he announces the order, FLEX Market Maker 1 and FLEX Market Maker 2 both respond to the FOO Order for 20 contracts each. FLEX Market Maker 1 responded first at an improved price to buy 20 at 1.06 so he will have price priority over FLEX Market Maker 2.
Result: The Floor Broker will submit two FOO Orders for 20 contracts each: a FOO Order at 1.06 for 20 contracts and a FOO Order at 1.05 for 20 contracts. The initiating side of each FOO Order will match against the Floor Broker's contra-side orders for the full 20 contracts. After execution of the FOO Orders, the executing Floor Broker is then responsible for providing an Options Exchange Official or his or her
The Exchange also proposes that all orders entrusted to a Floor Broker will be considered Not Held Orders, unless otherwise specified by a Floor Broker's client. A Not Held Order is an order marked “not held”, “take time”, or which bears any qualifying notation giving discretion as to the price or time at which such order is to be executed.
The Exchange further proposes IM-7605-1 which allows Floor Brokers to bring unmatched orders (
The Exchange proposes IM-7605-2 to guide conduct on the floor.
The Exchange proposes to amend Rule 100(b)(3) to provide: “All Exchange options transactions shall be executed automatically by the Trading Host as provided in applicable Exchange Rules.”
The Exchange proposes to amend Rule 7620, titled Accommodation Transactions, and IM-7620-1 to exclude FLEX Equity Options as defined in proposed Rule 5055.
The Exchange has not yet determined the fees for FOO transactions executed on the Trading Floor. Prior to commencing trading of the proposed FOO Orders on the Trading Floor, the Exchange intends to submit a proposed rule change to the Commission setting forth the proposed fees.
The Exchange has also analyzed its capacity and represents that it believes the Exchange and the Options Price Reporting Authority (“OPRA”) have the necessary systems capacity to handle the additional message traffic associated with the listing of new series that may result from the introduction of FLEX Equity Options.
The proposed FLEX Equity Option rules are based predominately on the rules of NYSE Arca. However, the Exchange omitted certain NYSE Arca rules from the proposed rules discussed herein due to differences in the scope and operation of FLEX Option
Next, NYSE Arca Rule 5.40-O requires at least $1 million of net liquidating equity in the account of a FLEX Appointed Market Maker. However, FLEX Appointed Market Makers are appointed for FLEX Index Options on NYSE Arca but are not required for FLEX Equity Options.
An additional difference in the appointment of FLEX Market Makers is that NYSE Arca appoints FLEX Qualified Market Makers to each FLEX Equity Option of a given class, while the Exchange will qualify FLEX Market Makers for all FLEX Equity Options. The Exchange believes that the structure of its Trading Floor, with one crowd or trading area, will operate more efficiently without qualifying FLEX Market Makers by class.
Further, the Exchange notes differences between the proposed quoting obligations and those applicable on NYSE Arca. Specifically, a NYSE Arca FLEX Qualified Market Maker may, but shall not be obligated to, enter a FLEX Quote in response to a Request for Quotes on a FLEX Equity Option of the class in which he or she is qualified.
Among other NYSE Arca provisions not incorporated by the Exchange, are certain of NYSE Arca's “Special Terms for FLEX Equity Options.”
Another NYSE Arca provision not adopted by the Exchange in this proposal allows discretionary orders where Floor Brokers have discretion regarding the quantity of FLEX contracts traded.
Another NYSE Arca rule not proposed by the Exchange provides that NYSE Arca may designate FLEX Officials.
Another NYSE Arca rule provision not proposed by the Exchange is NYSE Arca Rule 5.35-O(b), which would require that each Participant (other than a Market Maker) that maintains a position on the same side of the market in excess of the standard position limit for Non-FLEX Equity Options of the same class on behalf of its own account or for the account of a customer report information on the FLEX Equity Option position, positions in any related instrument, the purpose or strategy for the position and the collateral used by the account. As described above, the options markets have changed significantly since this provision was originally adopted and the Exchange does not believe it is necessary or appropriate to continue to mandate a duplicative reporting requirement that imposes additional administrative burdens on Participants and the Exchange with limited attendant benefits. The Exchange is also proposing to better tailor the language in proposed Rule 5055(i) to its existing authority to impose higher margin requirements on Participants.
As mentioned above, rather than adopt the NYSE Arca RFQ procedure for FLEX Equity Options,
The Exchange notes that the manner in which the Exchange has proposed rules with respect to announcement of orders and responsive quotes is similar to how CBOE treats its FLEX Options; specifically, CBOE allows a FLEX Order
The Exchange's disciplinary rules, including Exchange Rules applicable to “minor rule violations,” are set forth in the Rule 12000 Series of the Exchange's current Rules. The MRVP provides that in lieu of commencing a disciplinary proceeding, the Exchange may, subject to the certain requirements set forth in the Rule, impose a fine, not to exceed $5,000, on any Options Participant, or person associated with or employed by an Options Participant, with respect to any Rule violation listed in Rules 12140(d) or (e) as discussed below. Any fine imposed pursuant to this Rule that (i) does not exceed $2,500 and (ii) is not contested, shall be reported on a periodic basis, except as may otherwise be required by Rule 19d-1 under the Act or by any other regulatory authority. Further, the Rule provides that any person against whom a fine is imposed under the Rule shall be served with a written statement setting forth: (i) the Rule(s) allegedly violated; (ii) the act or omission constituting each such violation; (iii) the fine imposed for each violation; and (iv) the date by which such determination becomes final and such fine must be paid or contested, which date shall be not less than twenty-five (25) calendar days after the date of service of such written statement. Rules 12140 (d) and (e) set forth the list of specific Exchange Rules under which an Options Participant or person associated with or employed by an Options Participant may be subject to a fine for violations of such Rules and the applicable fines that may be imposed by the Exchange. As with all the violations incorporated into its MRVP, the Exchange will proceed under this Rule only for violations that are minor in nature. Any other violation will be addressed pursuant to Rules 12030 (Letters of Consent) or 12040 (Charges).
The Exchange proposes to amend its MRVP to add certain rules relating to FLEX Equity Options to the list of rules eligible for minor rule violation plan treatment by amending Rule 12140. Specifically, the Exchange proposes to amend Rule 12140(e)(3), which covers the failure to properly execute a QOO Order, to include Failure to Properly Execute a FOO Order (proposed Rule 7605).
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange further believes that the proposal is designed to prevent fraudulent and manipulative acts and practices as the Exchange will review all current surveillance in light of any changes required, including surveillance and technology to detect disruptive or manipulative trading activity for FOO Orders on the Trading Floor, and will modify or add any surveillance as appropriate.
The Exchange believes that proposed Rule 5055(a) stating that the trading of FLEX Equity Options is subject to all other Rules applicable to the trading of options on the Exchange, unless otherwise provided in Rules 5055 and 7605, is consistent with the Act because it will ensure that, except where otherwise provided in Rules 5055 and 7605, the Exchange's existing rules will continue to apply to FLEX Equity Options, which will provide increased consistency for Participants trading FLEX Equity Options and Non-FLEX Equity Options on BOX. The Exchange reiterates that rules which contemplate the operation of or interaction with the BOX Book and the Complex Order Book will not apply to FLEX Equity Options, given that FLEX Equity Options may only be traded as FOO Orders and FOO Orders may not be placed in the BOX Book or the Complex Order Book.
The Exchange believes that the definitions proposed in Rule 5055(b) will provide increased clarity to market participants which will protect investors and the public interest by specifying definitions for FLEX Equity Options and Non-FLEX Equity Options, and by specifying that FLEX Equity Option transactions will be governed as proposed in Rule 7605 and shall not be traded other than as FOO Orders. The Exchange believes further that the term “FLEX Market Maker” will clarify the difference between Floor Market Makers and FLEX Market Makers, where the latter are qualified for trading FLEX Equity Options and have an obligation to provide quotes in response to FOO Orders. The Exchange notes that, should it decide to propose additional order types or electronic trading for FLEX Equity Options, it will revise the defined term “FLEX Open Outcry Order” accordingly.
The Exchange believes that proposed Rule 5055(d) which specifies that there shall be no trading rotations in FLEX Equity Options is designed to promote just and equitable principles of trade and to remove impediments to and perfect the mechanism of a free and open market and a national market system because it provides notice to Participants regarding the mechanisms applicable to FLEX trading, which will not include trading rotations due to the customized nature of FLEX Equity Options and the fact that there will be no requirement for specific FLEX Equity Option series to be quoted or traded each day.
The Exchange believes that some of the terms of FLEX Equity Options pursuant to proposed Rule 5055(e) serve to perfect the mechanism of a free and open market and a national market system because they will permit investors to customize some of the terms of their FLEX Equity Options to implement more precise trading strategies and hedges which may not be possible using Non-FLEX Equity Options.
Proposed rule 5055(e)(1)(v)(a) allowing a FLEX Equity Option order to be submitted on any trading day, including the expiration date, serves to perfect the mechanism of a free and open market and a national market system because it will allow investors to execute FLEX Equity Options at a time of their choosing. These investors may have improved capability to execute strategies to meet their specific investment objectives. Further, this rule is designed to provide clarity about when FLEX Equity Options may be
The Exchange also believes that proposed Rule 5055(f) to prevent FLEX Equity Options and Non-FLEX Equity Options with the same terms from trading concurrently is designed to promote just and equitable principles of trade and prevent fraudulent and manipulative acts and practices.
Further, the Exchange believes that allowing FLEX Equity Options to trade in minimum increments of $0.01
The Exchange further believes that subjecting FLEX Equity Options to the exercise by exception provisions of Rule 805 of the OCC
Position and exercise limits are designed to address potential manipulative schemes and adverse market impacts surrounding the use of options, such as disrupting the market in the security underlying the options. While position and exercise limits should address and discourage the potential for manipulative schemes and adverse market impact, if such limits are set too low, participation in the options market may be discouraged. The Exchange believes that any decision regarding imposing position and exercise limits for FLEX Equity Options must therefore be balanced between mitigating concerns of any potential manipulation and the cost of inhibiting potential hedging activity that could be used for legitimate economic purposes.
Similar to the other exchanges that trade FLEX Equity Options, the Exchange believes that eliminating position and exercise limits for FLEX Equity Options, while requiring positions in FLEX Equity Options that expire on a third Friday-of-the-month to be aggregated with positions in Non-FLEX Equity Options on the same underlying security,
The Exchange believes that the proposed elimination of position and exercise limits for FLEX Equity Options may encourage market participants to transfer their liquidity demands from OTC markets to exchanges and enable liquidity providers to provide additional liquidity to BOX through transactions in FLEX Equity Options. The Exchange notes that the Commission previously approved the elimination of position and exercise limits for FLEX Equity Options, finding that such elimination would allow exchanges “to better compete with the growing OTC market in customized equity options, thereby encouraging fair competition among brokers and dealers and exchange markets.”
Additionally, the Exchange believes that requiring positions in FLEX Equity Options that expire on a third Friday-of-the-month to be aggregated with positions in Non-FLEX Equity Options on the same underlying security subjects FLEX Equity Options and Non-FLEX Equity Options to the same position and exercise limits on third Friday-of-the-month expirations. These limitations are intended to serve as a safeguard against potential adverse effects of large FLEX Equity Option positions expiring on the same day as Non-FLEX Equity Option positions. The Exchange notes that another exchange has the same requirement.
The Exchange believes that any potential risk of manipulative activity is mitigated by existing surveillance technologies, procedures, and reporting requirements at the Exchange, which allows the Exchange to properly identify disruptive and/or manipulative trading activity. In addition to its own surveillance programs, the Exchange also works with other SROs and exchanges on intermarket surveillance related issues. Through its participation in the Intermarket Surveillance Group (“ISG”)
The Exchange believes that proposed Rule 5055(i)(1) further mitigates concerns for potential market manipulation and/or disruption in the underlying markets and thus protects investors and the public interest because the Exchange may determine that a higher margin requirement is necessary in light of the risks associated with a FLEX Equity Option position in excess of the standard limit for Non-FLEX Equity Options of the same class. The Exchange may, pursuant to its authority under Rule 10130(b), impose additional margin upon the account of any Participant, including a Participant maintaining a large FLEX Equity Option position, as a safeguard against potential adverse effects of large FLEX Equity Option positions. The Exchange notes that the clearing firm carrying the account will be subject to capital charges under SEC Rule 15c3-1 to the extent of any margin deficiency resulting from the higher margin requirement. The Exchange also notes that other exchanges currently trading FLEX options have similar position and exercise limits.
Pursuant to proposed Rule 5055(k), the Exchange will require FLEX Market Makers to provide a Letter of Guarantee issued by a clearing member organization and filed with the Exchange specifically accepting financial responsibility for all FLEX Equity Option transactions made by such person as long as such letter has not been revoked under Rule 8070(c).
Pursuant to proposed Rule 5055(l), prior to effecting any transaction in FLEX Equity Options, Floor Brokers are required to provide a Letter of Authorization issued by a clearing member organization and filed with the Exchange specifically accepting financial responsibility for all FLEX Equity Option transactions made by such person, and such letter remains in effect until a written revocation is received by the Exchange.
The Exchange believes that the proposed rule change to adopt a new order type
Under this proposal, Floor Brokers will continue to allow a reasonable amount of time for Floor Participants to participate in a FOO Order. Additionally, the Exchange will establish and communicate via Regulatory Notice a minimum time that Floor Brokers must provide for Floor Participants to respond to FOO Orders, which amount of time must be between three seconds and five minutes. While other exchanges have adopted RFQ processes for FLEX Equity Options,
The Exchange similarly proposes to align its open outcry process for FLEX Equity Options with that of Non-FLEX Equity Options and to establish a minimum time for responses to FOO Orders. The Exchange also believes that, in addition to the required minimum time, it is appropriate to continue to have Options Exchange Officials determine whether Floor Participants have been provided a reasonable amount of time to respond to a FOO Order, which is consistent with the current procedure on the BOX Trading Floor for QOO Orders.
Proposed Rule 7605(b) states that FOO Orders will be limited solely to the Trading Floor. The Exchange believes that limiting FOO Orders to the Trading Floor is consistent with the Act because, due to their unique and customizable nature, FLEX Equity Option transactions are well suited for a trading floor environment where the terms of such options can be effectively negotiated. The Exchange notes that other exchanges limit FLEX Equity Options trading to their respective trading floors.
Proposed Rule 7605(c) provides that FLEX Market Makers must be registered under Rule 8000 and must be Floor Market Makers in good standing under Rule 8500, which protects investors and the public interest by ensuring that Market Makers are qualified to perform their duties, including filing an application, demonstrating knowledge of FLEX Equity Options, and providing additional information as the Exchange may consider necessary. The Exchange shall qualify at least three FLEX Market Makers in accordance with a FLEX-specific qualification process prescribed by the Exchange to provide competition for FOO Orders and reasonable opportunities for Participants to get quotes on FLEX Equity Options. The requirement to qualify at least three FLEX Market Makers is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system. Similarly to Floor Market Makers, FLEX Market Makers will also be subject to Rule 8510, including provisions for the course and conduct of dealings, class assignments, and option priority and parity, unless otherwise specified in proposed Rule 7605.
Proposed Rule 7605(d) states that FOO Orders may be Complex FOO Orders or Multi-Leg FOO Orders, including as tied hedge orders, and that these orders may be crossed.
Another provision designed to maintain order and structure on the Trading Floor is the Exchange's proposal that FOO Orders entrusted to a Floor Broker will be considered a Not Held Order, unless otherwise specified by a Floor Broker's client.
Additionally, the requirement, in proposed IM-7605-2, that Participants disclose Public Customer Orders subject to crossing with an order that is not a Public Customer Order and all securities that are components of the Public Customer Order is designed to maintain order and structure on the Trading Floor.
Proposed Rule 7605(e) is designed to aid Floor Brokers in their duties and to maintain structure and order on the Trading Floor. For example, by providing that a FOO Order is not executed until it is processed by the Trading Host,
The Exchange believes that the proposed rules applicable to FLEX Market Makers are reasonable and will foster cooperation and coordination with persons engaged in facilitating transactions in securities, promote just and equitable principles of trade, and remove impediments to and perfect the mechanism of a free and open market and a national market system. Specifically, proposed Rules 7605(f), (g) and (h) state: (1) that the minimum size for FLEX Equity Option transactions and quotations shall be 1 contract; (2) that there are no maximum bid to ask spread differentials for FLEX Equity Option quotes; and (3) that FLEX Market Makers have an obligation to quote a FLEX Equity Option in response to any request for quote by a Floor Broker or Options Exchange Official and must provide a two-sided market.
The Exchange believes that the proposed rule to provide a Floor Broker with a guarantee or entitlement to cross
The Exchange believes that, after the allocation of any bids and offers at better prices and any eligible Floor Broker guarantee, allocating FLEX Equity Option trades between Floor Participants pursuant to the priority provisions of Rule 7610 is reasonable and promotes just and equitable principles of trade. The Exchange notes that, pursuant to Rule 7610, bids and offers are considered in order of the highest bid/lowest offer and priority shall be afforded to such bids and offers in the sequence in which they are made. In situations where the sequence cannot be determined, Floor Participants are treated on an equal basis and receive an equal number of contracts to the extent mathematically possible.
The Exchange believes that the proposed rule change to add certain proposed rules as eligible for a minor rule fine disposition under its MRVP will assist the Exchange in preventing fraudulent and manipulative acts and practices and promoting just and equitable principles of trade, and will serve to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. The Exchange believes violations of proposed Rules 7605 and 7605(h) to be minor in nature and therefore proposes to add them to the list of rules in Rule 12140(e) eligible for a minor rule fine disposition. Further, the Exchange will be able to carry out its regulatory responsibility more quickly and efficiently by incorporating these violations into the MRVP. The Exchange notes that these violations are consistent with violations at other options exchanges.
The Exchange believes that amending Rule 7620 and IM-7620-1 to exclude FLEX Equity Options is consistent with proposed Rule 5055(c) which provides that Rule 7620 shall not apply to transactions in FLEX Equity Options. The amendment is designed to provide clarity by adding FLEX Equity Options to the exclusion list in Rule 7620 and IM-7620-1 to clarify that neither
Lastly, the amendment of Rule 100(b)(3) to remove specific rule references is designed to clarify that all Exchange options transactions shall be executed automatically by the Trading Host as provided in applicable Exchange Rules. The Exchange believes that this amendment will protect investors and the public interest by removing potential ambiguity created by a list of specific rule references that may not be complete and is therefore consistent with the Act.
The Exchange reiterates that FLEX Equity Options are currently traded on four other options exchanges currently conducting options trading.
The proposed rule change is consistent with Section 11(a) of the Act and the rules thereunder. Section 11(a)(1) of the Act
As described above, the Exchange proposes to apply existing IM-7600-5 to FLEX Equity Options,
In addition to statutory exemptions, Rule 11a2-2(T) under the Act,
Rule 11a2-2(T)'s first requirement is that orders for covered accounts be transmitted from off the Trading Floor. The Commission has found that the off-floor transmission requirement is met if a covered account order is transmitted from a remote location directly to an exchange's floor by electronic means.
Second, Rule 11a2-2(T) requires that neither the initiating Participant nor an associated person of the initiating Participant participate in the execution of the transaction at any time after the order for the transaction has been transmitted. At no time following the submission of a FOO Order utilizing the Trading Floor will the submitting
Third, Rule 11a2-2(T) requires that the order be executed by a Participant that is not associated with the Participant initiating the order. To rely on the exemption in Rule 11a2-2(T), a Participant could submit a FOO Order for a covered account from off the Trading Floor to an unaffiliated Floor Broker. A Participant relying on Rule 11a2-2(T) could not submit a FOO Order for a covered account to its “house” Floor Broker on the Trading Floor for execution. If a Participant sends its FOO Order from off the floor to an affiliated Participant that is on the floor, who then directs the order into the Trading Host for execution, the off-floor Participant may not rely on the exemption in Rule 11a2-2(T).
Fourth, in the case of a transaction effected for an account with respect to which the initiating Participant or an associated person thereof exercises investment discretion, neither the initiating Participant nor any associated person may retain any compensation in connection with effecting the transaction, unless the person authorized to transact business for the account has expressly provided otherwise by written contract referring to Section 11(a) of the Act and Rule 11a2-2(T) thereunder.
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. The Exchange notes that other exchanges currently offer FLEX option trading on their respective trading floors. The Exchange believes that the proposed rules will allow BOX to compete with these other exchanges and provide an additional execution venue for these transactions for market participants. Thus, the proposed rules will promote intermarket competition by increasing the number of exchanges where FLEX Equity Options can be traded. The proposal also promotes intermarket competition by providing another alternative, exchange markets, to bilateral OTC trading of options with flexible terms. Exchange markets, in contrast with bilateral OTC trading, are centralized, transparent, and have the guarantee of the OCC for options traded.
Additionally, the Exchange believes that this proposal does not impose an undue burden on intramarket competition because Participants are not required to trade FLEX Equity Options and those that choose to trade FLEX Equity Options may do so on the same terms and pursuant to the same rules. To the extent that the proposed rules differ for FLEX Market Makers and Floor Brokers, these differences are based on the unique roles and obligations of Floor Brokers (
Lastly, the proposed MRVP changes are not intended to address competitive issues but rather are concerned solely with updating the Exchange's MRVP in connection with the proposed rules eligible for a minor rule fine disposition. Further, the proposal relates to the Exchange's role and responsibilities as a self-regulatory organization and the manner in which it disciplines its Participants and associated persons for violations of its rules. The Exchange believes the proposed MRVP changes, overall, will strengthen the Exchange's ability to carry out its oversight and enforcement functions and deter potential violative conduct.
Based on the foregoing, the Exchange believes that the proposed rule changes discussed herein do not impose any burden on competition not necessary or
The Exchange has neither solicited nor received comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Equity 4, Rules 3301A and 3301B.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes amendments to its Rules to address inconsistencies between the Rule Text and observed System behavior as well as behavior unaccounted for in the existing Rule text, as follows. This proposal is similar to a rule change filed by the Exchange's sister exchange, the Nasdaq Stock Market, LLC, on August 16, 2023.
The first proposed rule change addresses an edge case of inconsistency between the Rule text and System behavior, this time regarding Market Maker Peg Orders.
The second proposal would amend Equity 4, Rule 3301B(h), to correct its description of behavior of the Non-Displayed portion of Orders with the Reserve Attribute.
In all cases, if the remaining size of the Non-Displayed Order is less than the fixed or random amount stipulated by the Participant, the full remaining size of the Non-Displayed Order will be displayed and the Non-Displayed Order will be removed.
As stated, this Rule requires that the entire Non-Displayed portion of a Reserve Order will become Displayed the moment the size of the Non-Displayed portion drops below an amount that a participant designates or has directed the System to randomly designate (the “Max Floor”). In conducting a test of System behavior, however, the Exchange observed that the System does not, in fact, operate in this manner. Instead, the System maintains the Non-Displayed portion of a Reserve Order as such when the size of that Non-Displayed Portion drops below the Max Floor. Rather than correct the current System behavior to match the Rule, the Exchange determined that users of Reserve Orders prefer the current System behavior because it is true to the underlying intent of Reserve functionality, which is to help limit the price impacts of trading large quantities of shares by displaying only small portions of such shares at a given time, while hiding the rest in reserve. Thus, the Exchange proposes to address the inconsistency between the Rule text and the behavior of the System by deleting the aforementioned language from Rule 3301B(h). Going forward, the System will not convert to a Displayed Order the Non-Displayed remainder of a Reserve Order that falls below the Max Floor, and the System will not remove it.
The Exchange believes that its proposals are consistent with section 6(b) of the Act,
It is consistent with the Act to amend the Exchange's Rules to address inconsistencies between the Rule text and observed System behavior, including by adapting the Rule text to codify observed System behavior, where the observed behavior is more consistent with the underlying purpose of an Order Attribute than is the Rule text (maintaining the Non-Displayed status of a reserve portion of a Reserve Order that drops below the Max Floor) and where System behavior reflects a nuance not contemplated by the existing Rules (clarifying that the prohibition against repricing Market Maker Peg Orders that have prices equal to or better than the NBBO only applies to round lot Market Maker Peg Orders, and not to odd lots).
Finally, it is consistent with the Act to amend Rule 3301B(h) to delete qualifying language which erroneously suggests that Non-Displayed Orders with Reserve are only non-displayed when such Orders have a TIF of IOC. Investors and the public have an interest in the Exchange maintaining a Rulebook that is accurate.
The Exchange does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposals merely address inconsistencies between Rule text and System behavior. The Exchange neither intends nor perceives that these rule changes will have any impact on competition.
No written comments were either solicited or received.
The Exchange has filed the proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act
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
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Office of the National Ombudsman, U.S. Small Business Administration (SBA).
Notice of open meeting of the Regional Small Business Regulatory Fairness Boards.
The SBA, Office of the National Ombudsman, is issuing this notice to announce the location, date, time and agenda for the annual board meeting of the ten Regional Small Business Regulatory Fairness Boards. The meeting is open to the public.
The meeting will be held on Thursday, September 28, 2023, from 9:30 a.m. to 4 p.m. EDT, and Friday, September 29, 2023, from 9:30 a.m. to 4 p.m. EDT.
The meeting will be held virtually through Microsoft Teams.
The meeting is open to the public; however advance notice of attendance is requested. Anyone wishing to attend must contact John Kelly, Case Management Specialist, by September 21, 2023. If you need accommodations because of a disability, translation services, or require additional information, please contact John Kelly, by phone (888) 734-3247, by fax (202) 481-5719 or email
For more information on the Office of the National Ombudsman, please visit our website at
Pursuant to the Small Business Regulatory Enforcement Fairness Act (Pub. L. 104-121), sec. 222, SBA announces the meeting of the Regional Small Business Regulatory Fairness Boards (Regional Regulatory Fairness Boards). The Regional Regulatory Fairness Boards are tasked to advise the National Ombudsman on matters of concern to small businesses relating to enforcement activities of agencies and to report on substantiated instances of excessive enforcement actions against small business concerns, including any findings or recommendations of the Board as to agency enforcement practice or policy.
The purpose of the meeting is to discuss the following topics related to the Regional Regulatory Fairness Boards:
Tennessee Valley Authority.
Notice of intent.
The Tennessee Valley Authority (TVA) intends to prepare an environmental impact statement (EIS) for the purchase of electricity generated by the proposed Spring Valley II Solar Project in Colbert County, Alabama. The EIS will assess the potential environmental effects of constructing, operating, and maintaining the proposed 178-megawatt (MW) alternating current (AC) solar facility that would occupy approximately 943 acres of the 1,629-acre project study area. Public comments are invited concerning the scope of the EIS, alternatives being considered, and environmental issues that should be addressed as a part of this EIS. TVA is also requesting data, information, and analysis relevant to the proposed action from the public; affected federal, state, tribal, and local governments, agencies, and offices; the scientific community; industry; or any other interested party.
The public scoping period begins with the publication of this Notice of Intent in the
Written comments should be sent to J. Taylor Johnson, NEPA Compliance Specialist, Tennessee Valley Authority, 1101 Market Street, BR 2C-C, Chattanooga, Tennessee 37402. Comments may be submitted online at:
J. Taylor Johnson by email at
This notice is provided in accordance with the Council on Environmental Quality's Regulations (40 CFR parts 1500 to 1508) and TVA's procedures for implementing the National Environmental Policy Act (NEPA) (18 CFR 1318). TVA is an agency and instrumentality of the United States, established by an act of Congress in 1933, to foster the social and economic welfare of the people of the Tennessee Valley region and to promote the proper use and conservation of the region's natural resources. One component of this mission is the generation, transmission, and sale of reliable and affordable electric energy.
In June 2019, TVA completed the final 2019 Integrated Resource Plan (IRP) and associated EIS. The IRP is a comprehensive study of how TVA will meet the demand for electricity in its service territory over the next 20 years. The 2019 IRP recommends solar expansion and anticipates growth in all scenarios analyzed, with most scenarios anticipating 5,000-8,000 MW and one anticipating up to 14,000 MW by 2038. In 2022, customer demand for cleaner energy prompted TVA to release a Carbon-Free Request for Proposal (RFP) for renewable energy resources.
As a result of the RFP, TVA is considering entering into a Power Purchase Agreement (PPA) with Spring Valley Solar, LLC to purchase 178 MW AC of power generated by the proposed Spring Valley II Solar Project. The proposed solar facility would occupy approximately 943 acres of the 1,629-acre project study area, which is located entirely in Colbert County, Alabama. The land surplus is to accommodate relocating the arrays if any areas need to be avoided as a result of the environmental review. The project site is located south of the city limits of Tuscumbia, Alabama, near the City of Muscle Shoals and Florence, Alabama, along US Highway 43. The project site is a mixture of agricultural fields and forested areas. A map showing the project site is available at
In addition to a No Action Alternative, TVA will evaluate the action alternative of purchasing power from the proposed Spring Valley II Solar Project under the terms of a PPA. In evaluating alternatives, TVA considered other solar proposals, prior to selecting the Spring Valley II site for further evaluation. Part of the screening process included a review of transmission options, including key connection points to TVA's transmission system. The Spring Valley II site stood out as a viable option for connectivity. Environmental and cultural considerations are also included in TVA's screening. For the proposed site, the solar developer plans to consider the establishment of a footprint that could avoid impacts to cultural or biological resources. The EIS will also evaluate ways to mitigate impacts that cannot be avoided. The description and analysis of these alternatives in the EIS will inform decision makers, other agencies, and the public about the potential for environmental impacts associated with the proposed solar facility.
The Spring Valley II Solar Project that was submitted as a result of TVA's 2022 Carbon-Free RFP would help TVA meet immediate needs for additional renewable generating capacity in response to customer demands and fulfill the renewable energy goals established in the 2019 IRP. To meet these goals, public scoping is integral to the process for implementing NEPA and ensures that (1) issues are identified early and properly studied, (2) issues of little significance do not consume substantial time and effort, and (3) the analysis of identified issues is thorough and balanced.
This EIS will contain descriptions of the existing environmental and socioeconomic resources within the area that could be affected by the proposed solar facility, including the documented historical, cultural, and environmental resources. Evaluation of potential environmental impacts to these resources will include, but not be limited to, air quality and greenhouse gas emissions, surface water, groundwater, wetlands, floodplains, vegetation, wildlife, threatened and endangered species, land use, natural areas and parks and recreation, geology, soils, prime farmland, visual resources, noise, cultural resources, socioeconomics and environmental justice, solid and hazardous waste, public and occupational health and safety, utilities, and transportation.
Based on a preliminary evaluation of these resources, potential impacts to vegetation and wildlife due to the conversion of forest of various ages to early maintained grass-dominated fields may occur. Impacts to water resources would likely be minor with the use of best management practices and avoidance of siting project components in or near streams, wetlands, and riparian areas to the extent feasible. Land use would be impacted by the conversion of farmland to industrial use and the elimination of current farming operations, which would also result in visual impacts. A listed National Register of Historic Places property is located outside of the project footprint but in proximity and potential viewshed. Due to the location, there is a high probability of additional cultural resources to be present. Additional cultural resources surveys will be conducted to identify resources within the project area and viewshed and to assess effects.
Beneficial impacts are expected by facilitating the development of renewable energy and thereby increasing local job opportunities, as well as improving regional air quality and reducing carbon emissions. The EIS will analyze measures that would avoid, minimize, or mitigate identified environmental effects. The final range of issues to be addressed in the environmental review will be determined, in part, from scoping comments received.
TVA requests assistance with identifying any new potential alternatives to the proposed action to be considered. TVA also requests assistance with identifying any known potential impacts of the proposed action that should be analyzed. Information interested parties possess which would assist in the analysis of resources is also appreciated. The preliminary identification of reasonable alternatives, information, and analyses relevant to the proposed action in this notice is not meant to be exhaustive or final.
The public is invited to submit comments on the scope of this EIS no later than the date identified in the
After consideration of comments received during the scoping period, TVA will develop and distribute a scoping document that will summarize public and agency comments that were received and identify the schedule for completing the EIS process. Following analysis of the issues, TVA will prepare the draft EIS for public review and comment, expected to be released mid-2024. TVA anticipates the final EIS in mid-2025. In finalizing the EIS and in making its final decision, TVA will consider the comments that it receives on the draft.
Federal Aviation Administration (FAA), Department of Transportation.
Notice of public meeting.
This notice announces a meeting of the NextGen Advisory Committee (NAC).
The date and time of the meeting is October 4, 2023, from 12 p.m.-4:30 p.m. eastern time. If you wish to attend the meeting virtually, you must submit a request by September 26, 2023. If you need to request accommodations for a disability, you must submit the request by September 26, 2023. If you wish to make a public statement during the meeting, you must submit a written copy of your remarks by September 26, 2023. For NAC member review prior to the meeting, you must submit your written statement no later than September 26, 2023.
The meeting location is at the Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591, with a virtual option. The FAA will post virtual meeting information to the NAC internet website at least one week in advance of the meeting. Information on the NAC, including copies of previous meeting minutes, is available on the NAC internet website at:
Members of the public who wish to observe the meeting virtually or in person must send the required information listed in the
Kimberly Noonan, NAC Coordinator, U.S. Department of Transportation, at
The Secretary of Transportation established the NAC under agency authority in accordance with the provisions of the Federal Advisory Committee Act (FACA), as amended, Public Law 92-463, 5 U.S.C. app. 2, to provide independent advice and recommendations to the FAA and to respond to specific taskings received directly from the FAA. The NAC recommends consensus-driven advice relating to Air Traffic Management System modernization for FAA consideration.
At the meeting, the agenda will cover the following topics:
The FAA will post the detailed agenda on the NAC internet website at least one week in advance of the meeting.
The meeting is open to the public. Members of the public who wish to attend are asked to register via email by submitting their full legal name, country of citizenship, contact information (telephone number and email address), and name of their industry association or applicable affiliation, and if they would like to attend the meeting in-person or virtually. Please email this information to the email address listed in the
The U.S. Department of Transportation is committed to providing equal access to this meeting for all participants. If you need alternative formats or services because of a disability, please contact the person listed in the
The agenda allows a maximum of six minutes for oral comments from members of the public joining the meeting. To accommodate as many speakers as possible, each commenter may have limited speaking time. Individuals wishing to reserve speaking time during the meeting must submit a request at the time of registration, along with the proposed speaker's name, address, organizational affiliation, and a written copy of the oral statement. If the number of registrants requesting to make oral statements is greater than the meeting allows, the FAA will select speakers in the order the FAA receives the requests. Speakers are required to submit a copy of their prepared remarks for inclusion in the meeting records and for circulation to NAC members to the person listed under the heading
Members of the public may submit written statements for inclusion in the meeting records and circulation to the NAC members. Members of the public must submit written statements to the person listed under the heading
Signed in Washington, DC.
Federal Highway Administration (FHWA), Department of Transportation (DOT).
Notice.
The Surface Transportation Project Delivery Program, commonly known as the National Environmental Policy Act (NEPA) Assignment Program, allows a State to assume FHWA's environmental responsibilities for review, consultation, and compliance for Federal highway projects. When a State assumes these Federal responsibilities, the State becomes solely responsible and liable for the responsibilities it has assumed, in lieu of FHWA. This program mandates annual audits during each of the first 4 years to ensure the State's compliance with program requirements. This is the fourth and final audit of the Florida Department of Transportation's (FDOT) performance of its responsibilities under the NEPA Assignment Program. This notice finalizes the findings of the fourth and final audit report for FDOT.
Ms. Marisel Lopez Cruz, Office of Project Development and Environmental Review, (407) 867-6402,
An electronic copy of this notice may be downloaded from the specific docket page at:
The Surface Transportation Project Delivery Program, codified at title 23, United States Code (U.S.C.), section 327, commonly known as the NEPA Assignment Program, allows a State to assume FHWA's responsibilities for environmental review, consultation, and compliance for Federal highway projects. When a State assumes these Federal responsibilities, the State becomes solely liable for carrying out the responsibilities it has assumed, in lieu of FHWA. Effective December 14, 2016, FDOT assumed FHWA's responsibilities for environmental review and the responsibilities for reviews under other Federal environmental requirements.
Section 327(g) of Title 23, U.S.C., requires the Secretary to conduct annual audits to ensure compliance with the memorandum of understanding during each of the first 4 years of State participation and, after the fourth year, monitor compliance. The results of each audit must be made available for public comment. This notice finalizes the findings of the fourth audit report on FDOT participation in the program. A draft version of this report was published in the
This is a report of the fourth and final audit of the Florida Department of Transportation's (FDOT) assumption of National Environmental Policy Act (NEPA) responsibilities under the Surface Transportation Project Delivery Program. Under the authority of section 327 of Title 23, United States Code (U.S.C.), FDOT and the Federal Highway Administration (FHWA) executed a memorandum of understanding (MOU) on December 14, 2016, whereby FHWA assigned, and FDOT assumed, FHWA's NEPA responsibilities and liabilities for Federal-aid highway projects and other related environmental reviews for transportation projects in Florida.
The FHWA formed a team in January 2020 to conduct an audit of FDOT's performance according to the terms of the MOU. The team held internal meetings and reviewed FDOT's 2019 Project Development & Environment (PD&E) Manual and NEPA project files, FDOT's response to FHWA's pre-audit information request (PAIR), and FDOT's NEPA Assignment Self Assessment Summary Report. The team presented initial project file observations to FDOT Office of Environmental Management (OEM) on June 26, 2020, and July 28, 2020. The team conducted virtual interviews with FDOT, resource agencies, and prepared preliminary audit results from September 21-24, 2020. The team presented these preliminary observations to FDOT OEM leadership on September 25, 2020.
While FDOT continues to develop, revise, and implement procedures and processes required to carry out the NEPA Assignment Program, it is FHWA's expectation that documentation to support a project's decision will be included in the Statewide Environmental Project Tracker (SWEPT) system prior to project closeout. By addressing the observation in this report, FDOT will continue to assure a successful program.
Overall, the team found that FDOT remains committed to delivering a successful NEPA Program. This report describes numerous successful practices, no observations, and one non-compliance observation. The FDOT has carried out the responsibilities it has assumed in keeping with the intent of the MOU and FDOT's application. Through this report, FHWA is notifying FDOT of the one non-compliance observation that requires FDOT to take corrective action. The report concludes with the status of FHWA's non-compliance observations from the first, second, and third audit reviews, including any FDOT self-imposed corrective actions.
The purpose of the audits performed under the authority of 23 U.S.C. 327 is to assess a State's compliance with the provisions of the MOU as well as all
The overall scope of this audit review is defined both in statute (23 U.S.C. 327) and the MOU (Part 11). An audit generally is defined as an official and careful examination and verification of accounts and records, especially of financial accounts, by an independent unbiased body. With regard to accounts or financial records, audits may follow a prescribed process or methodology and be conducted by “auditors” who have special training in those processes or methods. The FHWA considers this review to meet the definition of an audit because it is an unbiased, independent, official, and careful examination and verification of records and information about FDOT's assumption of environmental responsibilities.
The team consisted of NEPA subject matter experts (SME) from FHWA offices in Texas, Georgia, and Headquarters, as well as staff from FHWA's Florida Division. The diverse composition of the team, as well as the process of developing the review report and publishing it in the
The team conducted a careful examination of FDOT policies, guidance, and manuals pertaining to NEPA responsibilities, as well as a representative sample of FDOT's project files. Other documents, such as the August 2020 PAIR responses and FDOT's August 2020 Self Assessment Summary Report, also informed this review. In addition, the team interviewed FDOT and resource and regulatory agency staff via video conference. This review is organized around the six NEPA Assignment Program elements: program management; documentation and records management; quality assurance/quality control (QA/QC); legal sufficiency; performance measurement; and training program. In addition, the team considered three cross-cutting focus areas: (1) Environmental Permits; (2) Process Improvements; and, (3) Project Authorizations.
The team defined the timeframe for highway project environmental approvals subject to this fourth audit to be between May 2019 and April 2020, when 635 projects were approved. The team drew judgmental samples totaling 110 projects from data in FDOT's online file system, SWEPT. In the context of this report, descriptions of environmental documents are consistent with FDOT's Project Development and Environment Manual. The FHWA judgmentally selected all reevaluations of Environmental Impact Statements with Records of Decision (ROD) (three projects) and Environmental Assessments with Findings of No Significant Impacts (FONSI) (eight projects). The team selected a random sample of 61 Type 1 Categorical Exclusions (CE), 16 Type 2 CEs, and 22 Type 2 CE Reevaluations, for a total of 110 projects in the sample. The team reviewed all fiscal project authorization files in the audit period (422 project files) downloaded from FHWA's Fiscal Management Information System to determine if the NEPA certification was completed for these projects prior to the authorization. In addition, for all projects with a NEPA approval date within the audit year (316 projects), SWEPT was used to evaluate the supporting environmental information. The remaining 106 projects used the FDOT Project Approvals Reports to provide a cursory review of the environmental information.
The team submitted a PAIR to FDOT that contained 25 questions covering all 6 NEPA Assignment Program elements. The FDOT responses to the PAIR were used to develop questions for the virtual interviews with FDOT staff.
The team conducted a total of 32 interviews. Interview participants included staff from all seven FDOT District offices and the FDOT Central Office. The team interviewed FDOT legal and environmental staff. The team also interviewed representatives from the following resource agencies: National Oceanic and Atmospheric Administration—National Marine Fisheries Service; the U.S. Coast Guard; the U.S. Fish and Wildlife Service; U.S. Army Corps of Engineers; and the State Historic Preservation Officer from the Florida Department of State, Division of Historic Resources.
The team compared FDOT policies and procedures (including the published 2019 PD&E Manual) for the audit focus areas to the information obtained during interviews and project file reviews to determine if FDOT's performance of its MOU responsibilities are in accordance with FDOT policies and procedures and Federal requirements. Individual observations were documented during interviews and reviews and combined under the six NEPA Assignment Program elements. The audit results are described below by program element.
The team recognizes that FDOT's efforts have included implementing the requirements of the MOU by: processing and approving projects; refining policies, procedures, and guidance documents; refining the SWEPT Tracking System for official project files; training staff; implementing a QA/QC Plan; and conducting a self assessment for monitoring compliance with the assumed responsibilities. The team found evidence of FDOT's continuing efforts to train staff in clarifying the roles and responsibilities of FDOT staff, and in educating staff in an effort to assure compliance with all of the assigned responsibilities.
During the fourth audit, the team identified numerous successful practices, no observations, and one non-compliance observation that FDOT will need to address through corrective actions.
The FDOT has carried out the responsibilities it has assumed consistent with the intent of the MOU and FDOT's application. The team finds that FDOT is in substantial compliance with the terms of the MOU. By addressing the non-compliance observation in this report, FDOT will continue to assure a successful program.
Successful practices are practices that the team believes are positive, and encourages FDOT to continue or expand those programs in the future. The team identified numerous successful practices in this report. Observations are items the team would like to draw FDOT's attention to, which may improve processes, procedures, and/or outcomes. The team identified no observations in this report.
A non-compliance observation is an instance where the team finds the State is not in compliance or is deficient with regard to a Federal regulation, statute, guidance, policy, State procedure, or the MOU. Non-compliance may also include instances where the State has failed to secure or maintain adequate personnel and/or financial resources to carry out the responsibilities they have assumed. The FHWA expects the State to develop and implement corrective actions to address all non-compliance
The team acknowledges that sharing initial results during the closeout and sharing the draft audit report with FDOT provided them the opportunity to clarify any observation, as needed, and/or begin implementing corrective actions to improve the program.
The Audit Report addresses all six MOU program elements as separate discussions.
The FDOT has continued and expanded its working relationships with the resource agencies. The FDOT has been meeting early and often with some resource agencies to discuss ongoing and future projects. This enhanced communication minimizes delays in project delivery and permitting processes. The Efficient Transportation Decision Making process was in place prior to NEPA Assignment and this tool continues to foster good relationships between FDOT and the resource agencies. Districts are beginning to conduct periodic Environmental Technical Advisory Team (ETAT) Webinars instead of annual ETAT meetings to discuss upcoming projects. In addition, federally funded positions dedicated to FDOT projects reduce delays in project delivery.
The SWEPT is a fundamental component of FDOT's NEPA Assignment success. The SWEPT continues to be a critical and flexible tool in implementing the NEPA Assignment Program responsibilities. The review team learned through the interviews that as FDOT users have become more familiar with the SWEPT System, they have praised its usefulness in streamlining the NEPA documentation process. The SWEPT provides standards for documentation in templates, provides a consistent interface, and facilitates the creation of the administrative record. Users also have an opportunity to provide input to improve SWEPT's ability to track project progression. The SWEPT has continued to evolve and is now used to support the permitting process for some projects.
The FDOT's internal communication is robust and effective. As FDOT's NEPA Assignment Program matures, communication and relationships continue to improve between FDOT's OEM staff, district staff, and consultants. Communications at the program level between OEM and district staff have become a regular part of their day-to-day operations. The OEM engagement through the Project Delivery Coordinators has helped save time on projects and improved consistency. Monthly meetings within the districts among environmental staff and permit coordinators have improved project development and delivery. One district holds quarterly meetings between permitting, environmental management, and construction offices to discuss outstanding items and issues.
The FDOT Districts accelerate NEPA project delivery through enhanced scoping. The review team learned through interviews that two districts have staff complete surveys and assessments before the NEPA process begins to accelerate project delivery. Once the NEPA process begins, the district consultants are then able to complete the NEPA phase in a shorter timeframe, without having to wait on seasonal surveys, such as those required for some species, and other information that is needed for the NEPA decisions. This early information gathering is an example of Planning and Environment Linkages to allow for accelerated NEPA project delivery and reduced costs for consultant services in the environmental phase.
The SWEPT provides a QA/QC advantage. The review team learned through interviews that SWEPT provides additional environmental document quality control for the project file. The use of templates in SWEPT and the SWEPT System validation control point prevents project advancement and approval until required documents are uploaded and serves as additional QA/QC tools.
The FDOT has an attorney dedicated to Section 4(f) reviews. Section 4(f) is a complex law which is challenging to master and implement. This practice allows FDOT counsel to provide consistent advice, develop subject matter expertise, and allows for streamlined reviews ensuring the analysis meets the legal sufficiency requirements in accordance with 23 CFR part 774.
Counsel has been fully integrated into the NEPA decisionmaking process. The FDOT Districts routinely contact counsel with questions throughout the NEPA development process. Consulting early and often with counsel has not only expedited the NEPA decisionmaking process but also translated into counsel being invited to participate in other phases of project development and policy matters.
The FDOT has continued to focus resources ensuring staff, other agencies, and consultants are adequately trained. In the audit period FDOT again trained more than 2,300 staff, consultants, resource agencies and local agencies in over 100 courses on topics such as Section 4(f), Permits, Wetlands, and the PD&E Manual. Through information presented in the FDOT Self Assessment and the interviews, the review team learned of the variety in, and growth of, FDOT's environmental training program.
The FDOT has a strong onboarding process when new employees join the OEM. The OEM initiated a 6-month pilot program to conduct weekly sessions led by technical experts. These onboarding mentoring sessions with SMEs are being recorded and made available for other FDOT staff to watch on demand.
Based on information reported in FDOT's 2020 Self Assessment Summary Report, FDOT met, exceeded, or was close to achieving all targets for the review period.
The team reviewed environmental documentation for 61 Type 1 CEs, 16 Type 2 CEs, and 33 Reevaluations which included RODs, FONSIs, and Type 2 CEs to determine if the environmental review met Federal requirements. The team also reviewed 422 fiscal project authorization files to determine if NEPA was completed for these projects prior to the authorization.
The team found some CEs that did not have a Statewide Transportation Improvement Program (STIP) page or had an outdated STIP page (10 projects) in their documentation for fiscal constraint. The team also found that some fiscal project authorizations did not have documentation verifying that NEPA was completed (11 projects). The FDOT has already updated the SWEPT System by uploading any missing documentation. In addition, FDOT committed to making process
While the SWEPT System has validation control points in place, there are still opportunities for additional enhancements regarding quality assurance to ensure these documents are included in all project files. It is FHWA's expectation that documentation to support a project's decision will be included in the SWEPT system prior to project closeout.
The FHWA reported a non-compliance observation related to some FDOT project files that lacked documentation to support the environmental analysis or decision as part of Audit #1, Audit #2, and Audit #3. Also, as part of Audit #3, FHWA identified the lack of documentation to support the project authorization. The FDOT and FHWA have productively worked together to resolve documentation issues from these previous audits. The FDOT implemented several process improvements to address noted procedural deficiencies.
To address the 2017 and 2018 findings, FDOT implemented enhancements to SWEPT including revisions to the Type 1 CE checklist, the Type 2 CE form, and the reevaluation form. They added STIP and the Transportation Improvement Plan planning consistency uploading instructions, added validation for data within the Type 1 CE checklist for right-of-way, wetlands, floodplains, and waterways, added an attachment point for the project commitment record in the Type 1 CE checklist, allowed multiple attachments for Section 7 Endangered Species Act concurrence letters, integrated Section 4(f) approvals for applicable classes of action, and developed a spreadsheet tool for the project managers to verify which documents need to be uploaded to the project file. The FDOT also updated the PD&E manual, conducted training for their staff on the SWEPT and PD&E manual enhancements and on the areas of noted deficiencies. The FDOT also developed computer based training in some of these areas for future use.
To address the 2019 findings, FDOT implemented enhancements to SWEPT by adding validation for data within the Type 1 CE checklist for bridge permits. The FDOT also updated the PD&E manual, conducted training for their staff on the SWEPT, and made PD&E manual enhancements in the noted deficiency areas. The FDOT also developed computer based training for class of actions, CEs, and environmental assessments.
The improvements made in response to the 2017, 2018, and 2019 observations were assessed during this final audit and are considered sufficient to address the issues underlying the non-compliance observations in those audits.
The FHWA received two responses to the
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of renewal of exemptions; correction.
In a notice of renewal of exemptions published in the
This correction is effective September 6, 2023. Comments on the notice must still be received on or before October 5, 2023.
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room W64-224, Washington, DC 20590-0001, (202) 366-4001,
On September 6, 2023, FMCSA published a notice of renewal of exemptions (88 FR 60732) with an effective date of September 12, 2023, which FMCSA announced its decision to renew exemptions for eight individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate CMV drivers. The notice inadvertently published Alex Courtney O'Donnell Bertling's legal name incorrectly. Through this notice, FMCSA corrects the September 6, 2023, notice of renewal of exemptions by correctly indicating Alex Courtney O'Donnell Bertling's legal name.
In FR Doc. 2023-18993 appearing on page 60732 in the
1. On page 60733, in the third column, “Courtney Bertling (OR)” is corrected to read “Alex Courtney O'Donnell Bertling (OR)”.
Issued under authority delegated in 49 CFR 1.87.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition.
FMCSA announces its decision to renew exemptions for five individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to continue to operate CMVs in interstate commerce.
The exemptions were applicable on August 13, 2023. The exemptions expire on August 13, 2025.
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-4001,
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption request. DOT posts these comments, without edit, including any personal information the commenter provides, to
On August 3, 2023, FMCSA published a notice announcing its decision to renew exemptions for five individuals from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) to operate a CMV in interstate commerce and requested comments from the public (88 FR 51393). The public comment period ended on September 5, 2023, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(8).
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received no comments in this proceeding.
Based on its evaluation of the five renewal exemption applications, FMCSA announces its decision to exempt the following drivers from the epilepsy and seizure disorders prohibition in § 391.41(b)(8).
As of August 13, 2023, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following five individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers (88 FR 51393):
The drivers were included in docket number FMCSA-2014-0212, FMCSA-2017-0253, FMCSA-2020-0049, or FMCSA-2021-0025. Their exemptions were applicable as of August 13, 2023 and will expire on August 13, 2025.
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date 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 exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being 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(b).
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of final disposition.
FMCSA announces its decision to exempt 21 individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these
The exemptions were applicable on September 10, 2023. The exemptions expire on September 10, 2025.
Ms. Christine A. Hydock, Chief, Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-4001,
To view comments go to
In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments from the public on the exemption requests. DOT posts these comments, without edit, including any personal information the commenter provides, to
On August 3, 2023, FMCSA published a notice announcing receipt of applications from 21 individuals requesting an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) and requested comments from the public (88 FR 51395). The public comment period ended on September 5, 2023, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that granting exemptions to these individuals would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(8).
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received no comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-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 statutes allow the Agency to renew exemptions at the end of the 5-year period. However, FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The Agency's decision regarding these exemption applications is based on the 2007 recommendations of the Agency's Medical Expert Panel. The Agency conducted an individualized assessment of each applicant's medical information, including the root cause of the respective seizure(s) and medical information about the applicant's seizure history, the length of time that has elapsed since the individual's last seizure, the stability of each individual's treatment regimen and the duration of time on or off of anti-seizure medication. In addition, the Agency reviewed the treating clinician's medical opinion related to the ability of the driver to safely operate a CMV with a history of seizure and each applicant's driving record found in the Commercial Driver's License Information System for commercial driver's license (CDL) holders, and interstate and intrastate inspections recorded in the Motor Carrier Management Information System. For non-CDL holders, the Agency reviewed the driving records from the State Driver's Licensing Agency. A summary of each applicant's seizure history was discussed in the August 3, 2023,
These 21 applicants have been seizure-free over a range of 50 years while taking anti-seizure medication and maintained a stable medication treatment regimen for the last 2 years. In each case, the applicant's treating physician verified his or her seizure history and supports the ability to drive commercially.
The Agency acknowledges the potential consequences of a driver experiencing a seizure while operating a CMV. However, the Agency believes the drivers granted this exemption have demonstrated that they are unlikely to have a seizure and their medical condition does not pose a risk to public safety.
Consequently, FMCSA finds further that in each case exempting these applicants from the epilepsy and seizure disorder prohibition in § 391.41(b)(8) would likely achieve a level of safety equal to that existing without the exemption, consistent with the applicable standard in 49 U.S.C. 31315(b)(1).
The terms and conditions of the exemption are provided to the applicants in the exemption document and include the following: (1) each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5T; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 21 exemption applications, FMCSA exempts the following drivers from the epilepsy and seizure disorder prohibition in § 391.41(b)(8), subject to the requirements cited above:
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date 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 exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136, 49 U.S.C. chapter 313, or the FMCSRs.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that by letter dated July 1, 2023, the Port Authority Trans-Hudson Corporation (PATH) petitioned the Federal Railroad Administration (FRA) for an extension of a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 214 (Railroad Workplace Safety). The relevant Docket Number is FRA-2018-0041.
Specifically, PATH requests continued relief from the definition of “fouling a track” found in 49 CFR 214.7,
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted at
Communications received by November 20, 2023 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of public meeting.
FRA announces the sixty-fifth meeting of the Railroad Safety Advisory Committee (RSAC), a Federal advisory committee that provides advice and recommendations to FRA on railroad safety matters through a consensus process. This meeting of the RSAC will focus on efforts made regarding potential safety improvements related to the February 3, 2023, Norfolk Southern freight train derailment in East Palestine, Ohio.
The RSAC meeting is scheduled for Thursday, October 26, 2023. The meeting will commence at 9:30 a.m. and will adjourn by 4:30 p.m. (all times Eastern Daylight Time). Requests to submit written materials to be reviewed during the meeting must be received by October 16, 2023. Requests for accommodations because of a disability must be received by October 16, 2023.
The RSAC meeting will be held at the National Association of Home Builders, located at 1201 15th Street NW, Washington, DC 20005. A final agenda will be posted on the RSAC
Kenton Kilgore, RSAC Designated Federal Officer/RSAC Coordinator, FRA Office of Railroad Safety, (202) 365-3724 or
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), FRA is giving notice of a meeting of the RSAC.
The RSAC is composed of 56 voting representatives from 30 member organizations, representing various rail industry perspectives. The diversity of the Committee ensures the requisite range of views and expertise necessary to discharge its responsibilities.
Any member of the public may submit a written statement to the committee at any time; however, submissions for committee review during the meeting must be received by October 16, 2023.
Issued in Washington, DC.
Under part 235 of title 49 Code of Federal Regulations (CFR) and 49 U.S.C. 20502(a), this document provides the public notice that by letters received on July 21, 2023, and September 1, 2023, Union Railroad, LLC (URR) petitioned the Federal Railroad Administration (FRA) seeking approval to discontinue or modify a signal system. FRA assigned the petition Docket Number FRA-2023-0059.
Specifically, URR requests to discontinue the control point One Block, located in Braddock, Pennsylvania. The following are requested to be removed: signals 76, 80, 82, 86, 88, and 90; power switches 81 and 83; hand-throw switch T-20; lock movements 75 and 97; the circuit controller on switch 95; and track circuits 64T, 72T, 76T, 82T, 86T, 91T, and 97AT. URR states that the involved tracks are primarily used for switching leads and yard tracks in freight service at a maximum speed of 20 miles per hour. In support of its request, URR states that “safety of operations will be positively impacted by eliminating any confusion as to who should be contacted for permission on a given track.”
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted at
Communications received by November 20, 2023 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable. Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), the U.S. Department of Transportation (DOT) solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that on August 3, 2023, the Peninsula Corridor Joint Powers Board (Caltrain) petitioned the Federal Railroad Administration (FRA) for an extension of a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR parts 229 (Railroad Locomotive Safety Standards), 231 (Railroad Safety Appliance Standards), and 238 (Passenger Equipment Safety Standards). The relevant Docket Number is FRA-2018-0067.
Specifically, Caltrain requests continued relief for its Stadler-built KISS Electric Multiple Unit (EMU) railcars specific to the passenger area emergency brake valve (as required by § 229.47(b),
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted at
Communications received by November 20, 2023 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that on August 8, 2023, Providence and Worcester Railroad; the International Association of Sheet Metal, Air, Rail and Transportation Workers; and the Brotherhood of Railroad Signalmen (collectively, “Petitioners”) petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 240 (Qualification and Certification of Locomotive Engineers) and part 242 (Qualification and Certification of Conductors). FRA assigned the petition Docket Number FRA-2023-0065.
Specifically, Petitioners request relief required to participate in FRA's Confidential Close Call Reporting System (C
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested parties desire an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted at
Communications received by November 20, 2023 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable.
Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Under part 235 of title 49 Code of Federal Regulations (CFR) and 49 U.S.C. 20502(a), this document provides the public notice that by letters received on July 20, 2023, and September 1, 2023, Union Railroad, LLC (URR) petitioned the Federal Railroad Administration (FRA) seeking approval to discontinue or modify a signal system. FRA assigned the petition Docket Number FRA-2023-0055.
Specifically, URR requests to discontinue the signal system on Track #2 Southbound Main between signal 200 at control point (CP) Mon Junction and signal 262 at CP Bull Run, a distance of 7,633 feet. The track section is located in Duquesne, Pennsylvania, on the Mon Southern Division. It is signaled for bidirectional operation and
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted at
Communications received by November 20, 2023 will be considered by FRA before final action is taken. Comments received after that date will be considered if practicable. Anyone can search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Under 5 U.S.C. 553(c), the U.S. Department of Transportation (DOT) solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Issued in Washington, DC.
Federal Transit Administration (FTA), Department of Transportation (DOT).
Notice of Safety Advisory.
The Federal Transit Administration (FTA) is issuing Safety Advisory 23-1 to encourage agencies that provide bus service to consider mitigation strategies to reduce bus-to-person collisions. This safety advisory provides guidance on identifying specific hazards that may cause or contribute to bus-to-person collisions, completing a safety risk assessment, and developing mitigations to address the assessed safety risks for transit agencies. FTA's Safety Advisory 23-1 “Bus-to-Person Collisions” is available on the agency's public website (
Joseph DeLorenzo, Associate Administrator for Transit Safety and Oversight, FTA, telephone (202) 366-1783 or
Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT).
Notice of advisory committee meeting.
This notice announces a public meeting of the Gas Pipeline Advisory Committee (GPAC) to discuss the notices of proposed rulemaking (NPRMs) titled “Gas Pipeline Leak Detection and Repair” and “Class Location Change Requirements.”
PHMSA will hold a public meeting from November 27, 2023, to December 1, 2023. The GPAC will meet each day from 8:30 a.m. to 5 p.m. ET to discuss the NPRMs. However, the meeting may end early if the GPAC completes its review of the NPRMs. Members of the public who wish to attend are asked to register no later than November 20, 2023. PHMSA requests that individuals who require accommodations because of a disability notify Tewabe Asebe by email at
The meeting will be held in person at the Westin Crystal City, 1800 Richmond Highway, Arlington, VA 22202. The agenda and any additional information, including information on how to participate in the meeting, will be published on the meeting website at
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Tewabe Asebe, Office of Pipeline Safety, by phone at 202-366-5523 or by email at
The GPAC will meet from November 27, 2023, to December 1, 2023, to discuss the “Gas Pipeline Leak Detection and Repair” NPRM that PHMSA published in the
In the “Gas Pipeline Leak Detection and Repair” NPRM, PHMSA proposes to make regulatory amendments that implement congressional mandates in the “Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020” to reduce methane emissions from new and existing gas transmission pipelines, distribution pipelines, regulated (Types A, B, C, and offshore) gas gathering pipelines, underground natural gas storage facilities, and liquefied natural gas facilities. Among the proposed amendments for Part 192-regulated gas pipelines are strengthened leakage survey and patrolling requirements; performance standards for advanced leak detection programs; leak grading and repair criteria with mandatory repair timelines; requirements for mitigation of emissions from blowdowns; pressure relief device design, configuration, and maintenance requirements; and clarified requirements for investigating failures. Finally, this NPRM proposes to expand reporting requirements for operators of all gas pipeline facilities within DOT's jurisdiction, including underground natural gas storage facilities and liquefied natural gas facilities. PHMSA requested public comments with a submission deadline of August 16, 2023.
In the “Class Location Change Requirements” NPRM, PHMSA proposes to revise the Federal Pipeline Safety Regulations to amend the requirements for gas transmission pipeline segments that experience a change in class location. Under the existing regulations, pipeline segments located in areas where the population density has significantly increased must perform one of the following actions: reduce the pressure of the pipeline segment; pressure test the pipeline segment to higher standards; or replace the pipeline segment. This proposed rule would add an alternative set of requirements operators could use—based on implementation of integrity management principles and pipe eligibility criteria—to manage certain pipeline segments where the class location has changed from a Class 1 location to a Class 3 location. Through required periodic assessments, repair criteria, and other extra preventive and mitigative measures, PHMSA expects this alternative approach will provide long-term safety benefits consistent with the current natural gas pipeline safety rules while also providing cost savings for pipeline operators. PHMSA requested public comments with a submission deadline of December 14, 2020.
Following the GPAC meeting, PHMSA will evaluate the GPAC's recommendations and publish final rules that address the comments received and relevant information from the GPAC meeting report.
The GPAC is a statutorily mandated advisory committee that provides PHMSA and the Secretary of Transportation with recommendations on proposed standards for the transportation of gas by pipeline. The committee was established in accordance with 49 U.S.C. 60115 and the Federal Advisory Committee Act of 1972 (Pub. L. 92-463) to review PHMSA's regulatory initiatives and determine their technical feasibility, reasonableness, cost-effectiveness, and practicability. The committee consists of 15 members, with membership evenly divided among federal and state governments, regulated industry, and the general public.
The meeting will be open to the public. Members of the public who wish to attend must register on the meeting website and include their names and affiliations. PHMSA will provide members of the public reasonable opportunity to make a statement during this meeting. Additionally, PHMSA will record the meeting and post a record to the public docket. PHMSA is committed to providing all participants with equal access to this meeting. Public comments on the proceedings of the GPAC meeting must be submitted by January 5, 2024. If you need an accommodation due to a disability, please contact Tewabe Asebe by phone at 202-366-5523 or by email at
PHMSA is not always able to publish a notice in 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 names of four entities that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) whose property and interests in property have been blocked pending investigation. All property and interests in property subject to U.S. jurisdiction of these entities are blocked pending investigation, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Bradley Smith, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On September 14, 2023, pursuant to section 203 of the International Emergency Economic Powers Act, 50 U.S.C. 1702, Executive Order 14024 of April 15, 2021, “Blocking Property With Respect to Specified Harmful Activities of the Government of the Russian Federation,” 86 FR 20249, 3 CFR, 2021 Comp., p. 542 (Apr. 15, 2021), and section 587.201 of the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (the “Regulations”), OFAC blocked pending investigation the property and interests in property of the following four entities whose names will be placed on the SDN List with the tag [BPI-RUSSIA-EO14024] in accordance with Note 2 to § 587.201 of the Regulations.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning new Form 15424,
Written comments should be received on or before November 20, 2023 to be assured of consideration.
Direct all written comments to Andrés Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of the form and instructions should be directed to Sara Covington, at (202) 317-5744, at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The following paragraph applies to all the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
Books or records relating to a collection of information must be
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the ICR for OMB approval of the extension of the information collection; they will also become a matter of public record.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. ch. 10, that the Advisory Committee on Prosthetics and Special-Disabilities Programs will meet on October 17-18, 2023. The meeting sessions will begin at 8:30 a.m. EST and end at 4:30 p.m. EST on both days.
The meeting will be a hybrid meeting, held in-person at the Lafayette Building, 811 Vermont Avenue NW, Room 3611, Washington, DC and virtually via WebEx conferencing. All sessions will be open to the public. The public is invited to attend the meeting virtually on both days via WebEx conferencing at the following URLs:
The purpose of the Committee is to advise the Secretary of Veterans Affairs on VA's prosthetics programs designed to provide state-of-the-art prosthetics and the associated rehabilitation research, development, and evaluation of such technology. The Committee also provides advice to the Secretary on special-disabilities programs, which are defined as any program administered by the Secretary to serve Veterans with spinal cord injuries, blindness or visual impairments, loss of extremities or loss of function, deafness or hearing impairment, and other serious incapacities in terms of daily life functions.
The Committee will convene in open (hybrid) sessions with introductory remarks from the Committee Chair; the Executive Director for Rehabilitation and Prosthetics; and Department Senior Leaders. The Committee will hear presentations from the following Veterans Health Administration (VHA) National Program Offices: Recreation Therapy and Creative Arts Therapy Service; Blind Rehabilitation Service; Prosthetic and Sensory Aids Service; Audiology and Speech Pathology Service; and the National Veterans Sports Programs and Special Events. The committee will also hear presentations from the PACT Act Team; Workforce Management and Consulting; Geriatrics and Extended Care Service; Patient Centered Care & Cultural Transformation (Whole Health), as well as from the Neurology subcommittees.
The meeting will include time reserved for public comments before the meeting closes on October 18, 2023. Members of the public may submit written statements for review by the Committee in advance of the meeting. Public comments may be received no later than October 11, 2023, for inclusion in the official meeting record. Please send these comments to Dr. Lauren Racoosin, Designated Federal Officer, Rehabilitation and Prosthetic Services, Veterans Health Administration, at
Office of the Comptroller of the Currency, Department of the Treasury; Board of Governors of the Federal Reserve System; and Federal Deposit Insurance Corporation.
Notice of proposed rulemaking with request for public comment.
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation are issuing a proposed rule for comment that would require certain large depository institution holding companies, U.S. intermediate holding companies of foreign banking organizations, and certain insured depository institutions, to issue and maintain outstanding a minimum amount of long-term debt. The proposed rule would improve the resolvability of these banking organizations in case of failure, may reduce costs to the Deposit Insurance Fund, and mitigate financial stability and contagion risks by reducing the risk of loss to uninsured depositors.
Comments must be received on or before November 30, 2023.
Comments should be directed to:
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You may review comments and other related materials that pertain to this action by the following method:
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The docket may be viewed after the close of the comment period in the same manner as during the comment period.
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Following the 2008 financial crisis, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC and, together with the OCC and the Board, the “agencies”) adopted rules and guidance, both jointly and individually, to improve the resolvability, resilience, and safety and soundness of all banking organizations. The agencies have continued to evaluate whether existing regulations are appropriate to address evolving risks. In recent years, certain banking organizations that are not global systemically important banking organizations (GSIBs) have grown in size and complexity, and new vulnerabilities have emerged, such as increased reliance on uninsured deposits. In light of these trends, the Board and the FDIC issued an advance notice of proposed rulemaking (ANPR) in October 2022 seeking public input on whether a long-term debt requirement was appropriate to address the financial stability risk associated with the material distress or failure of certain non-GSIB large banking organizations.
To address these risks, the Board is proposing to require Category II, III, and IV bank holding companies (BHCs) and
By augmenting loss-absorbing capacity, LTD can provide banking organizations and banking regulators greater flexibility in responding to the failure of covered entities and covered IDIs. In the resolution of a failed IDI, the availability of an outstanding amount of LTD may increase the likelihood of an orderly and cost-effective resolution for the IDI and may help minimize costs to the DIF. Even where the amount of outstanding LTD is insufficient to absorb enough losses so that all depositor claims at the IDI can be fully satisfied, it would reduce potential costs to the DIF and may expand the range of options available to the FDIC as receiver. In addition, the proposed LTD requirement could improve the resilience of covered entities and covered IDIs by enhancing the stability of their funding profiles. Investors in LTD could also exercise market discipline over issuers of LTD.
Covered entities today primarily operate a bank-centric business model, with deposits providing the main source of their funding.
As recent events have highlighted, high levels of uninsured deposit funding can pose an especially significant risk of bank runs when customers grow concerned over the solvency of their bank. The failure of covered entities or covered IDIs can also spread to a broader range of banking organizations, impacting the provision of financial services and access to credit for individuals, families, and businesses. FDIC research shows that account holders with uninsured deposits are more sensitive to negative news regarding the stability of their banks and are more likely to withdraw funds to protect themselves than those holding only insured deposits.
Among covered entities that are subject to resolution planning requirements under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), most indicate that their preferred resolution strategy involves the resolution of their IDI subsidiaries under the Federal Deposit Insurance Act of 1950, as amended (FDI Act), with the covered entities being resolved under Chapter 11 of the U.S. Bankruptcy Code. In the resolution of an IDI under the FDI Act, the FDIC as receiver has a variety of strategic options, including, among others, selling the IDI's assets and transferring its deposit liabilities to one or more healthy acquirers, transferring the IDI's assets and deposit liabilities to a bridge depository institution, or executing an insured deposit payout and liquidation of the assets of the failed bank. Many covered entities focus in their resolution plans on a bridge strategy where the FDIC transfers the assets and deposit liabilities of a failed IDI to a newly organized bridge depository institution that the FDIC continues to operate. This resolution option can allow the FDIC to effectively stabilize the operations of the failed IDI and preserve the failed IDI's franchise value, making the business of the failed IDI or its separate business lines more attractive to a greater number of potential acquirers.
The FDIC is required by section 13(c) of the FDI Act to resolve an IDI in a manner that poses the least cost to the DIF.
The recent failures of three IDIs that would have been covered within the scope of this proposal, Silicon Valley Bank (SVB), Signature Bank (SBNY), and First Republic Bank (First Republic), highlighted the risks posed by the failure of a covered IDI, including systemic contagion, as well as the challenges that the FDIC can face in executing an orderly resolution for covered IDIs. The comparative absence of alternate forms of stable funding in these cases, other than equity and deposits, increased these banks' vulnerability to deposit runs, and these runs precipitated their failures. Despite prompt action taken by regulators to facilitate the resolution of these failed IDIs, there was contagion in the banking sector, particularly for certain covered entities and certain regional banking organizations,
The proposed LTD requirements would improve the resolvability of covered entities and covered IDIs because LTD can be used to absorb loss and create equity in resolution. In particular, because LTD is subordinate to deposits and can be used by the FDIC to absorb losses by leaving it behind in the receivership estate of a failed IDI, it can help mitigate the risk that any depositors would take losses in the resolution of the IDI. Because LTD absorbs losses before deposits, an LTD requirement at the covered IDI would give the FDIC greater flexibility, including the potential to transfer all deposit liabilities (including uninsured deposit liabilities) of a failed IDI to an acquirer or to a bridge depository institution in a manner consistent with the FDI Act's least-cost requirement.
Expanding the FDIC's range of options for resolving a failed IDI to potentially include the use of a bridge depository institution that can assume all deposits on a least-cost basis can significantly improve the prospect of an orderly resolution. When an IDI fails quickly, a bridge depository institution might afford the FDIC additional time to find an acquirer for the IDI's assets and deposits. Transfer of deposits and assets to a bridge depository institution may also give the FDIC additional time to execute a variety of resolution strategies, such as selling the IDI in pieces over time or effectuating a spin-off of all or parts of the IDI's operations or business lines. LTD can therefore reduce costs to the DIF and expand the available resolution options if a bank fails. The availability of LTD would also improve the FDIC's options for resolving a failed IDI by maintaining franchise value, improving the marketability of the failed IDI, and reducing the need to use DIF resources to stabilize the institution or support a purchaser. Further, the availability of LTD could enable strategies involving bridge depository institutions to meet the least-cost test. The availability of LTD resources would also potentially support resolution strategies that involve a recapitalized bridge depository institution exiting from resolution on an independent basis as a newly-chartered IDI that would have new ownership. This may be particularly important in circumstances where there are market or other limitations that preclude finding a suitable acquirer, and where other options, such as liquidation, are not feasible or involve unacceptable levels of systemic risk. Further, there may be a limited market for the covered IDIs subject to this proposal due to their size and, in some cases, relatively more specialized business models. As a result, at the time of resolution, strategies that involve the sale of large IDIs may be limited due to market or other barriers, or may involve high costs in order to make a sale attractive and feasible for an acquirer, especially taking into account post-acquisition capital requirements. The availability of LTD to absorb losses or to recapitalize a failed IDI through the resolution process could also mitigate the impact of a covered IDI's failure on financial stability by reducing the risk to uninsured depositors, thereby reducing the risk of runs and contagion. LTD can therefore reduce costs to the DIF and expand the available resolution options if a bank fails.
Although the primary benefits of LTD relate to the resolution of covered entities and their covered IDI subsidiaries, LTD can also improve the resiliency of these banking organizations prior to failure. Considering its long maturity, LTD would be a stable source of funding and, in contrast to other forms of funding like uninsured deposits, may serve as a source of market discipline through pricing.
The agencies are inviting comment on this notice of proposed rulemaking to improve the resolvability of covered entities and covered IDIs. The proposal includes five key components.
First, the proposal would require Category II, III, and IV covered entities to issue and maintain outstanding minimum levels of eligible LTD. This aspect of the proposal is being issued solely by the Board.
Second, the proposal would require covered IDIs to issue and maintain outstanding a minimum amount of eligible LTD.
Third, the operations of covered entities would be subject to “clean holding company” requirements to further improve the resolvability of covered entities and their operating subsidiaries. This aspect of the proposal is being issued solely by the Board. In particular, the proposal would prohibit covered entities from issuing short-term debt instruments to third parties, entering into qualified financial contracts (QFCs) with third parties, having liabilities that are subject to “upstream guarantees”
Fourth, to limit the potential for financial sector contagion due to interconnectivity in the event of the failure of a covered entity or covered IDI, the proposed rule would expand the existing capital deduction framework for LTD issued by U.S. GSIBs and the IHCs of foreign GSIBs to include external LTD issued by covered entities and external LTD issued by covered IDIs. This aspect of the proposal is being issued by all of the agencies.
Finally, the proposal would make certain technical changes to the existing TLAC rule that applies to the U.S. GSIBs and U.S. IHCs of foreign GSIBs. This aspect of the proposal is being issued solely by the Board. These changes would harmonize provisions within the TLAC rule and address items that have been identified through the Board's administration of the rule.
The revisions introduced by the proposal would interact with the agencies' capital rule and proposed amendments to those rules.
In October 2022, the Board and the FDIC published an ANPR to solicit public input regarding whether an extra layer of loss-absorbing capacity could improve optionality in resolving certain large banking organizations and their subsidiary IDIs, and the costs and benefits of such a requirement.
Many commenters asserted that an LTD requirement for covered entities and covered IDIs is unnecessary and that most covered entities and covered IDIs are prepared for orderly resolution pursuant to their existing resolution plans submitted to the FDIC and the Board. Specifically, commenters argued that covered entities are better capitalized and have stronger liquidity positions under post-crisis regulations, and that covered entities are non-complex and present minimal systemic risk. The commenters also maintained that recent balance sheet growth at covered entities is not concerning because such growth has involved increases in mostly low-risk, liquid assets. Further, commenters asserted that the resolution plans that have been submitted to the agencies by the covered entities and covered IDIs subject to such requirements are effective and already provide for optionality in resolution. The commenters argued that the imposition of a uniform LTD requirement would be inappropriate for the multiple point of entry (MPOE) resolution strategies followed by certain covered entities and could require covered entities to unnecessarily change their established resolution plans. Commenters also argued that anticipated stronger capital requirements that would be imposed pursuant to the anticipated Basel III finalization reforms would further diminish the need for an LTD requirement.
Multiple commenters, while supporting the spirit of the policy options raised in the ANPR, suggested the agencies should raise equity capital requirements rather than impose an LTD requirement to improve the resiliency of covered entities. Alternatively, some commenters argued that covered entities should be able to count any equity capital in excess of regulatory minimums toward any LTD requirement.
Several commenters argued that the benefits of an LTD requirement for covered entities would not outweigh its immediate costs. These commenters asserted that an excessive LTD requirement could decrease the availability of credit to businesses and consumers. Further, a few commenters suggested that an LTD requirement could imply uninsured depositor protection for IDIs subject to such a requirement, thereby increasing moral hazard. Several commenters stressed that any LTD requirement should be supported by a rigorous cost-benefit analysis.
Finally, several commenters questioned whether the Board possesses the statutory authority to impose an LTD requirement on BHCs under section 165(b) of the Dodd-Frank Act, as amended.
The agencies considered these comments in developing the proposed rule. In light of recent experiences with SVB, SBNY, and First Republic, the agencies are extending the scope of the proposed rule to large banking organization with total consolidated assets of $100 billion or more to reduce the likelihood of contagion from these banking organizations and to reduce the cost to the DIF should they fail. The agencies further note that both equity capital and LTD can be used to absorb losses and reduce the potential impact
The proposed rule would apply to Category II, III, and IV U.S. BHCs and SLHCs, and Category II, III, and IV U.S. IHCs of FBOs that are not currently subject to the existing TLAC rule as defined under the Board's Regulations LL and YY (covered entities).
Given the size of covered entities, the agencies continue to believe that the failure of one or more covered entities or covered IDIs could potentially have a negative impact on U.S. financial markets and the broader U.S. economy. While several commenters to the ANPR downplayed this concern, this risk was demonstrated by the recent failures of SBNY, SVB, and First Republic,
As noted above, the proposed rule would apply to Category II, III, and IV SLHCs, as defined in 12 CFR 238.10. Section 10(g) of the Home Owners' Loan Act (HOLA)
Section 165 of the Dodd-Frank Act directs the Board to establish specific enhanced prudential standards for large BHCs and companies designated by the Financial Stability Oversight Council to prevent or mitigate risks to the financial stability of the United States.
SLHCs that are covered HCs engage in many of the same activities and face similar risks as BHCs that are covered HCs. SLHCs that are covered HCs are substantially engaged in banking and financial activities, including deposit taking and lending.
Under the proposal, a covered entity would be required to maintain outstanding eligible LTD in an amount that is the greater of 6.0 percent of the covered entity's total risk-weighted
The proposed eligible LTD requirement was calibrated primarily on the basis of a “capital refill” framework. Under that framework, the objective of the LTD requirement is to ensure that each covered entity has a minimum amount of eligible LTD such that, if the covered entity's going-concern capital is fully depleted and the covered entity fails and enters resolution, the eligible LTD would be sufficient to fully recapitalize the covered entity by replenishing its going-concern capital to at least the amount required to meet minimum leverage capital requirements and common equity tier 1 risk-based capital requirements plus the capital conservation buffer applicable to covered entities.
In terms of risk-weighted assets, a covered entity's common equity tier 1 capital level is subject to a minimum requirement of 4.5 percent of risk-weighted assets plus a capital conservation buffer equal to at least 2.5 percent.
The application of the capital refill framework to the leverage-based capital component of the LTD requirement is analogous. A covered entity's tier 1 leverage ratio minimum is 4 percent of average total consolidated assets and its supplementary leverage ratio minimum is 3 percent of total leverage exposure, if the covered entity is subject to the supplementary leverage ratio.
The proposed eligible LTD requirement would support an MPOE
The calibration of the eligible LTD requirement is based on the capital refill framework, which depends on the precise structure and calibration of bank capital requirements. The Board will continue to evaluate the LTD requirement in light of any changes to capital requirements over time. In addition, the proposed rule would reserve the authority for the Board to require a covered entity to maintain more, or allow a covered entity to maintain less, eligible LTD than the minimum amount required by the proposed rule under certain circumstances. This reservation of authority would ensure that the Board could require a covered entity to maintain additional LTD if the covered entity poses elevated risks that the proposed rule seeks to address.
The proposed rule would also prohibit a covered entity from redeeming or repurchasing any outstanding eligible LTD without the prior approval of the Board if after the redemption or repurchase the covered entity would not meet its minimum LTD requirement. The proposed rule would allow a covered entity to redeem or repurchase its eligible LTD without prior approval where such redemption or repurchase would not result in the covered entity failing to comply with the minimum eligible LTD requirement. This would give the covered entity flexibility to manage its outstanding debt levels without interfering with the underlying purpose of the proposed rule. In addition, the proposed rule also includes a provision that would allow the Board, after providing a covered entity with notice and an opportunity to respond, to order the covered entity to exclude from its outstanding eligible LTD amount any otherwise eligible debt securities with features that would significantly impair the ability of such
In addition, the Board could take an enforcement action against a covered entity for falling below its minimum LTD requirement. This would be consistent with the Board's authority to pursue enforcement actions for violations of law, rules, or regulations.
The proposed rule also would additionally create a new requirement for covered IDIs to issue eligible LTD. Requiring covered IDIs to maintain minimum amounts of eligible LTD, which would be available to absorb losses in the event of the failure of the IDI, would improve the FDIC's resolution options for the covered IDI. The objective of the IDI-level LTD requirement is to ensure that, if a covered IDI's equity capital is significantly or completely depleted and the covered IDI fails, the eligible IDI LTD would be available to absorb losses, which would help to protect depositors and certain other creditors and afford the FDIC additional optionality in resolving the IDI, including by supporting the transfer of all deposits to one or more acquirers. Where the failed bank is transferred to a bridge depository institution, the eligible LTD would help stabilize the operations of the bridge, thereby providing additional options for the FDIC to ultimately exit the bridge.
Several commenters to the ANPR suggested that increasing bank regulatory capital levels would be a more effective way to improve resiliency of covered entities and covered IDIs because additional capital would reduce their probability of default in the first place. While higher regulatory capital levels would reduce the probability of default of a covered IDI and may increase the chance that a covered entity or covered IDI would have remaining equity in the event of its failure, regulatory capital is likely to be significantly or completely depleted in the lead up to an FDI Act resolution. While eligible LTD would not help a troubled IDI remain adequately capitalized on a going-concern basis, it would significantly reduce the likelihood of contagion and loss to the DIF in resolving the failed bank. For example, if in the lead up to resolution an IDI were to fall below its minimum tier 1 capital requirements, any eligible LTD outstanding at the IDI level would have significant gone-concern benefits in that it would help to recapitalize the IDI. Because eligible LTD of a covered IDI would be available to absorb losses and protect depositors in the event of the failure of the IDI, it would increase optionality for the FDIC in resolving the IDI while meeting the least-cost requirement of the FDI Act. By supporting the FDIC's transfer of assets and deposits to a bridge depository institution in accordance with the least-cost requirement, eligible LTD may help preserve the franchise value of a failed bank and enable the FDIC to pursue restructuring options such as the sale of subsidiaries, branch networks, or business lines, as well as other potential options for divestiture and exit.
A covered IDI that is a consolidated subsidiary of a covered entity would be required to issue its eligible LTD to a company in the United States that consolidates the IDI for accounting purposes. In practice, the proceeds raised by the issuance of eligible LTD by a covered entity would generally be “downstreamed” to its covered IDI subsidiary in return for eligible internal LTD that would satisfy such covered IDI's own eligible LTD requirement. A covered IDI that is not a controlled subsidiary of a parent entity would be required to issue its eligible LTD to a party that is not an affiliate of the covered IDI. A covered IDI that is a consolidated subsidiary of a further parent entity that is not a covered entity would be permitted to issue its eligible LTD to a parent that controls the covered IDI or to investors that are not affiliates.
The proposed rule would require four categories of IDIs to issue eligible LTD. First, the proposed rule would apply to any IDI that has at least $100 billion in total consolidated assets and is not controlled by a parent entity (mandatory externally issuing IDI). Second, the proposed rule would apply to any IDI that has at least $100 billion in total consolidated assets and (i) is a consolidated subsidiary of a company that is not a covered entity, a U.S. GSIB or a foreign GSIB subject to the TLAC
The agencies propose to apply the IDI LTD requirement based on an IDI's size. While size is not the only indicator of complexity, it is a readily observable indicator, and, in general, IDIs with assets above $100 billion tend to be more complex in terms of their businesses and operations, are more difficult to resolve, and have a smaller pool of prospective acquirers. As IDIs cross the $100 billion threshold in total consolidated assets, their resolution can become increasingly costly to the DIF.
Covered IDIs under the proposed rule would include IDIs affiliated with IDIs that have at least $100 billion in total consolidated assets because the FDIC may seek to resolve an IDI with at least $100 billion in assets and its affiliated IDIs using either the same bridge depository institution or multiple bridge depository institutions. When an IDI in a group fails, it is likely that all IDIs in the group fail due to interconnectedness and the statutory cross-guaranty imposed on affiliated IDIs in the event of the failure of an IDI in the group.
The proposed rule would apply to mandatory and permitted externally issuing IDIs for the reasons discussed above concerning the risks associated with IDIs that have at least $100 billion in total assets. The risks associated with the failure of a mandatory externally issuing IDI are not diminished because of the lack of a parent company and the risks associated with the failure of a permitted externally issuing IDI are not diminished because its parent is not subject to an LTD requirement. Mandatory and permitted externally issuing IDIs may not have the benefit of receiving the support of a holding company or being part of a regulated consolidated organization with diversified businesses. Applying the proposed rule to mandatory and permitted externally issuing IDIs in addition to those with a covered entity parent ensures competitive equality across all covered IDIs.
Under the proposal, a covered IDI would be required to maintain outstanding eligible LTD in an amount that is the greater of 6.0 percent of the covered IDI's total risk-weighted assets, 3.5 percent of its average total consolidated assets,
The proposed IDI LTD requirement is calibrated by reference to the covered IDI's balance sheet and to ensure that sufficient LTD would be available at the covered IDI. The IDI LTD requirement is also calibrated to help ensure that the resolution of a covered IDI does not impose unduly high costs on the economy.
The proposed IDI LTD requirement has been calibrated so that, assuming a failed covered IDI's equity capital is significantly or completely depleted, the eligible LTD outstanding would be sufficient to capitalize a newly-formed bridge depository institution with an amount necessary to comply with the minimum leverage capital requirements and common equity tier 1 risk-based capital requirements plus buffers applicable to ordinary non-bridge IDIs after accounting for some balance sheet depletion.
The proposed calibration would appropriately support the FDIC in resolving covered IDIs under the FDI Act because the eligible LTD at the IDI could improve market confidence, improve the marketability of the failed IDI, and stabilize the bridge depository institution, thereby providing more optionality in resolution. Importantly, it could also provide for an exit from resolution by enabling a recapitalized bridge depository institution to exit from resolution as a newly chartered IDI following a period of stabilization and restructuring.
The amount of LTD required to be positioned at the covered IDI is based upon the balance sheet of the covered IDI and will reflect the size and importance of the covered IDI relative to the group. Thus, it improves the optionality of resolution at an IDI level while also potentially supporting an SPOE resolution of the covered entity in the event that option is available and would be effective.
The proposed rule would authorize an agency to require a covered IDI that it supervises to maintain an amount of eligible LTD that is greater than the minimum requirement in the proposed rule under certain circumstances. This would ensure that a covered IDI that presents elevated risk that the proposed rule seeks to address would be required to maintain a corresponding amount of eligible LTD.
The proposed rule would include a provision that would allow the appropriate Federal banking agency, after providing a covered IDI with notice and an opportunity to respond, to order the covered IDI to exclude from its outstanding eligible LTD any otherwise eligible debt securities with features that would significantly impair the ability of such debt securities to absorb losses in resolution.
In addition, the appropriate Federal banking agency could take an enforcement action against a covered IDI for falling below a minimum IDI LTD requirement. This would be consistent with the agencies' authority to pursue enforcement actions for violations of law, rules, or regulations.
The proposal would require LTD to satisfy certain eligibility criteria to qualify as eligible LTD. Although the requirements for all eligible LTD generally would be the same under the proposed rule, eligible external LTD would have certain features not applicable to eligible LTD issued within a consolidated organization (eligible internal LTD). As discussed above, covered HCs and mandatory externally issuing IDIs may only issue eligible external LTD to satisfy the proposed LTD requirement. Internally issuing IDIs and nonresolution covered IHCs must issue eligible internal LTD, while permitted externally issuing IDIs and resolution covered IHCs may issue either (see section V, subsection C for discussion of nonresolution and resolution covered IHCs). The general purpose of these requirements is to ensure that LTD used to satisfy the proposed rule is in fact able to be used effectively and appropriately to absorb losses in support of the orderly resolution of the issuer. The proposed requirements for eligible LTD are generally the same as those required for firms subject to the TLAC rule.
Under the proposed rule, eligible external LTD issued by covered HCs, mandatory and permitted externally issuing IDIs, and resolution covered IHCs (together, external issuers) must be paid in and issued directly by the external issuer, be unsecured, have a maturity of greater than one year from the date of issuance, have “plain vanilla” features (that is, the debt instrument has no features that would interfere with a smooth resolution proceeding), be issued in a minimum denomination of $400,000, and be governed by U.S. law.
Consistent with this purpose, the proposed rule would authorize the agencies, after providing an external issuer with notice and an opportunity to respond, to order the external issuer to exclude from its outstanding LTD amount any otherwise eligible debt securities with features that would significantly impair the ability of such debt securities to absorb losses in resolution.
Eligible external LTD would be required to be paid in and issued directly by the external issuer. Thus, debt instruments issued by a subsidiary of a covered entity or covered IDI would not qualify as eligible external LTD.
The requirement that eligible external LTD be issued directly by the covered entity or covered IDI and not a subsidiary would serve several purposes. In the case of eligible external LTD issued by a covered entity that is in turn matched by eligible internal LTD at a covered IDI subsidiary, the requirement would make sure that the covered entity has an amount of stable funding that is sourced externally and that could be used to purchase the LTD issued by the covered IDI subsidiary to meet the IDI's minimum LTD requirement.
Additionally, requiring eligible external LTD to be issued by the covered entity (or, in the case of a permitted or mandatory externally issuing IDI, the covered IDI) and not a subsidiary would simplify administration of the proposed rule by preventing a banking organization from issuing external LTD from multiple entities, which could complicate the firm's internal monitoring and examiner monitoring for compliance with the proposed rule. This requirement also would take advantage of the fact that, within a consolidated organization, the holding company generally is the entity used as a capital raising vehicle.
Finally, for external issuers that are covered entities, issuance directly from the covered entity and not a subsidiary would provide flexibility to support a range of resolution strategies. For instance, use by an external issuer (such as a covered HC) of proceeds from the issuance of eligible external LTD to purchase eligible internal LTD from a covered IDI subsidiary would support resolution of the covered IDI under the FDI Act. Where SPOE is an available option, the issuer's eligible external LTD could be used to absorb losses incurred throughout the banking organization, enabling the recapitalization of operating subsidiaries that had incurred losses and enabling those subsidiaries to continue operating on a going-concern basis. For an SPOE approach to be implemented successfully, the eligible external LTD must be issued directly by the covered entity because debt issued by a subsidiary generally cannot be used to absorb losses, even at the issuing subsidiary itself, unless that subsidiary enters a resolution proceeding.
Eligible external LTD also may only be held by certain investors. In the case of covered entities, eligible external LTD must be held by a nonaffiliate. The requirement for eligible external LTD to not be held by an affiliate ensures that LTD issuance generates new loss-absorbing capacity that is truly held
Eligible external LTD would be required to be unsecured, not guaranteed by the external issuer or a subsidiary or an affiliate of the external issuer, and not subject to any other arrangement that legally or economically enhances the seniority of the instrument (such as a credit enhancement provided by an affiliate).
The primary rationale for these restrictions is to ensure that eligible external LTD can serve its intended purpose of absorbing losses incurred by the banking organization in resolution. To the extent that a creditor is secured, or provided with credit support of any type, it can avoid suffering losses by seizing the collateral that secures the debt. The debt being secured would thwart the purpose of eligible external LTD by leaving losses with the external issuer (which would lose the collateral) rather than imposing them on the eligible external LTD creditor (which could take the collateral). As a result, this requirement ensures that losses can be imposed on eligible LTD in resolution in accordance with the standard creditor hierarchy under bankruptcy or an FDI Act resolution, under which secured creditors are paid ahead of unsecured creditors.
A secondary purpose of these restrictions is to prevent eligible external LTD from contributing to the asset fire sales that can occur when a financial institution fails and its secured creditors seize and liquidate collateral. Asset fire sales can drive down the value of the assets being sold, which can undermine financial stability by transmitting financial stress from the failed firm to other entities that hold similar assets.
Eligible external LTD instruments would be required to be “plain vanilla” instruments. Exotic features could create complexity and thereby diminish the prospects for an orderly resolution of the external issuer. These limitations would help to ensure that eligible external LTD represents loss-absorbing capacity with a definite value that can be quickly determined in resolution. In a resolution proceeding, claims represented by such “plain vanilla” debt instruments are more easily ascertainable and relatively certain compared to more complex and volatile instruments. Permitting exotic features could engender uncertainty as to the level of the issuer's loss-absorbing capacity and could increase the complexity of the resolution proceeding and potentially result in a disorderly resolution.
Under the proposed rule, external LTD instruments would be excluded from treatment as eligible external LTD if they: (i) are structured notes; (ii) have a credit-sensitive feature; (iii) include a contractual provision for conversion into or exchange for equity in the issuer; or (iv) include a provision that gives the holder a contractual right to accelerate payment (including automatic acceleration), other than a right that is exercisable (1) on one or more dates specified in the instrument, (2) in the event of the issuer entering into insolvency or resolution proceedings, or (3) the issuer's failure to make a payment on the instrument when due that continues for 30 days or more.
The proposed rule would exclude structured notes, including principal-protected structured notes, from treatment as eligible external LTD. Structured notes contain features that could make their valuation uncertain, volatile, or unduly complex. In addition, they are often liabilities held by retail investors (as opposed to institutional investors) and, as discussed in greater detail below in the context of minimum denomination requirements, holdings of LTD by more sophisticated investors can better ensure that LTD holders understand the risks of LTD and that such holders are in a position to provide market discipline with respect to LTD issuers. To promote resiliency and market discipline, it is important that external issuers maintain a minimum amount of loss-absorbing capacity with a value that is easily ascertainable at any given time. Moreover, in resolution, debt instruments that will be subjected to losses must be capable of being valued accurately and with minimal risk of dispute. The requirement that eligible external LTD not contain the features associated with structured notes advances these goals.
For purposes of the proposed rule, a “structured note” is defined as a debt instrument that: (i) has a principal amount, redemption amount, or stated maturity that is subject to reduction based on the performance of any asset,
Structured notes with principal protection often combine a zero-coupon bond, which pays no interest until the bond matures, with an option or other derivative product, whose payoff is linked to an underlying asset, index, or benchmark.
The proposed rule would exclude from treatment as eligible external LTD debt that includes contractual provisions for its conversion into equity or for it to be exchanged for equity. The fundamental objective of the external LTD requirement is to ensure that external issuers will have a minimum amount of loss-absorbing capacity available to absorb losses upon the issuer's entry into resolution. Debt instruments that could convert into equity prior to resolution may not serve this goal, since the conversion would reduce the amount of debt that will be available to absorb losses in resolution. In addition, debt with features to allow conversion into equity is often complex and thus may not be characterized as “plain vanilla.” Convertible debt instruments may be viewed as debt instruments with an embedded equity call option. The embedded equity call option introduces a derivative-linked feature to the debt instrument that is inconsistent with the purpose of the clean holding company requirements (described below) and introduces uncertainty and complexity into the value of such securities. For these reasons, eligible external LTD may not include contractual provisions allowing for its conversion into equity or for it to be exchanged for equity prior to the issuer's resolution under the proposed rule.
Under the proposal, eligible external LTD cannot have a credit-sensitive feature or provide the holder of the instrument a contractual right to the acceleration of payment of principal or interest at any time prior to the instrument's stated maturity (an acceleration clause), other than upon the occurrence of either a receivership, liquidation, or similar proceeding,
The restriction on acceleration clauses serves the same purpose as several of the other restrictions discussed above,
Senior debt instruments issued by external issuers commonly also include payment default event clauses. These clauses provide the holder with a contractual right to accelerate payment upon the occurrence of a “payment default event”—that is, a failure by the issuer to make a required payment when due. Payment default event clauses, which are not permitted in tier 2 regulatory capital, raise more concerns than insolvency or resolution event clauses because a payment default event may occur (triggering acceleration) before the institution has entered a resolution proceeding and a stay has been imposed. Such a pre-resolution payment default event could cause a decline in the issuer's loss-absorbing capacity.
Nonetheless, the proposed rule would permit eligible external LTD to be subject to payment default event acceleration rights for two reasons. First, default or acceleration rights upon a borrower's default on its direct payment obligations are a standard feature of senior debt instruments, such that a prohibition on such rights could be unduly disruptive to the potential market for eligible external LTD. Second, the payment default of an issuer on an eligible external LTD instrument would likely be a credit event of such significance that whatever diminished capacity led to the payment default event would also be a sufficient trigger for an insolvency or a resolution event acceleration clause, in which case a prohibition on payment default event acceleration clauses would have little or no practical effect.
In addition, the proposed rule would provide that an acceleration clause relating to a failure to pay principal or interest must include a “cure period” of at least 30 days. During this cure period, the issuer could make payment on the eligible external LTD before such debt could be accelerated and if the issuer satisfies its obligations on the eligible external LTD within the cure period, the instrument could not be accelerated. This would ensure that an accidental or temporary failure to pay principal or interest does not trigger immediate acceleration. Moreover, this cure period for interest payments is found in many existing debt instruments and is consistent with current market practice.
Under the proposal, the amount of eligible external LTD that is due to be paid between one and two years would be subject to a 50 percent haircut for purposes of the external LTD requirement, and the amount of eligible external LTD that is due to be paid in less than one year would not count toward the external LTD requirement.
The purpose of these restrictions is to limit rollover risk of debt instruments that qualify as eligible external LTD and ensure that eligible external LTD provides stable funding and will be reliably available to absorb losses in the event that the issuer fails and enters resolution. Debt that is due to be paid in less than one year does not adequately serve these purposes because of the possibility that the debt could mature during the period between the time when the issuer begins to experience extreme stress and the time when it enters a resolution proceeding. If the debt matures during that period, then it would be likely that the creditors would be unwilling to maintain their exposure to the issuer and would therefore refuse to roll over the debt or extend new credit, and the distressed issuer would likely be unable to replace the debt with new LTD that would be available to absorb losses in resolution. This run-off dynamic could result in a case where the covered entity enters resolution with materially less loss-absorbing capacity than would be required to support or recapitalize its IDIs or other subsidiaries, potentially resulting in a disorderly resolution. To protect against this outcome, eligible external LTD would cease to count toward the external LTD requirement upon being due to be paid in less than one year, so that the full required amount of loss-absorbing capacity would be available in resolution even if the resolution period were preceded by a year-long stress period.
For the same reasons, eligible external LTD that is due to be paid in less than two years but greater than or equal to one year is subject to a 50 percent haircut under the proposed rule for
The proposed rule also provides similar treatment for eligible external LTD that could become subject to a “put” right—that is, a right of the holder to require the issuer to redeem the debt on demand—prior to reaching its stated maturity. Such an instrument would be treated as if it were due to be paid on the day on which it first became subject to the put right, since on that day the creditor would be capable of demanding payment and thereby subtracting the value of the instrument from the issuer's loss-absorbing capacity.
Eligible external LTD instruments would be required to consist only of liabilities that can be effectively used to absorb losses during the resolution of the external issuer without giving rise to material risk of successful legal challenge. To this end, the proposal would require eligible external LTD to be governed by the laws of the United States or any State.
The proposed rule also would require eligible external LTD to be issued through instruments with minimum principal denominations and would exclude from eligible external LTD instruments that can be exchanged by the holder for smaller denominations.
The agencies propose setting the minimum denomination requirement at $400,000. A required minimum denomination of $400,000 would fall in the range of reasonable minimum denomination levels described below and would generally disincentivize direct holdings of such investments by retail investors without preventing institutional investors from purchasing eligible external LTD. In the agencies' experience, most institutional investors are able to purchase instruments in minimum denominations of $400,000. In addition, according to the 2019 Survey of Consumer Finances, the median value of the total portfolio of directly-held bonds for households that had at least one bond and had household incomes in the 90th to 100th percentiles was $400,000.
The agencies considered alternative minimum denomination thresholds between $100,000 and $1 million. There are several arguments to support the reasonableness of a minimum denomination requirement at thresholds between $100,000 and $1 million. Setting the minimum denomination at $100,000 would likely result in well over half of retail investors not participating in the market for direct purchases of eligible LTD, which would meaningfully accomplish the agencies' goal of generally reducing the degree of direct retail investor holdings of eligible LTD. According to the Survey of Consumer Finances, the median value of the total portfolio of directly-held bonds for households that had at least one bond in 2019 was $121,000.
The proposed rule would require eligible LTD issued by a covered IDI to be contractually subordinated so that the claim represented by the LTD in the receivership of the IDI would be junior to deposit and general unsecured claims.
Requiring contractual subordination would also provide further clarity about the priority of the claim represented by eligible LTD in a receivership of the issuing institution, which facilitates an orderly resolution. The FDIC may need to transfer certain general unsecured claims, which could include trade creditors (if any) and non-dually-payable foreign deposits,
The requirements for eligible internal LTD are generally the same as those for eligible external LTD. However, eligible internal debt securities are subject to two key distinctions from eligible external debt securities under the proposed rule. First, eligible internal LTD issued by an IDI must be issued to and remain held by a company that consolidates the covered IDI, generally an upstream parent. Second, eligible internal LTD would not be subject to the minimum principal denomination requirement. As discussed further below, eligible internal LTD issued by a covered IHC would be required to include a contractual conversion trigger and would not include a prohibition against credit sensitive features.
Where a covered IDI issues eligible internal LTD, such eligible internal LTD would be required to be paid in and issued to a company that consolidates the covered IDI.
For a covered IDI that is a consolidated subsidiary of a covered IHC, the proposed rule would require that eligible internal LTD of the covered IDI be issued to the covered IHC, or a subsidiary of the covered IHC that consolidates the IDI. In other words, to constitute eligible internal LTD, the LTD of such an IDI could not be directly issued to a foreign affiliate that controls the IDI; doing so would mean that losses could be imposed on foreign affiliates through the IDI's LTD, rather than passing up to the covered IHC, which in turn has issued outstanding loss-absorbing LTD. This requirement is consistent with the design of internal eligible LTD issued by a covered IHC to its foreign parent or a wholly owned subsidiary of that foreign parent. Internal LTD issued by a covered IHC to a foreign parent must contain a contractual conversion trigger, which is discussed below.
Certain covered IHCs that would not be expected to enter into resolution upon the failure of their parent FBOs would be required to issue eligible internal LTD to a foreign company that directly or indirectly controls the covered IHC, or to a wholly owned subsidiary of a controlling foreign company.
The proposed rule would not require eligible internal LTD to be issued in minimum denominations. As discussed above, the purpose of the minimum denomination requirement is to increase the chances that LTD holders are sophisticated investors that can provide market discipline for covered entities and covered IDIs. These concerns do not apply in the case of eligible internal LTD, which by definition cannot be held by retail or outside investors.
The proposed rule would set forth certain requirements for eligible internal LTD that are specific to covered IHCs. Specifically, the proposed rule would require certain covered IHCs to issue only eligible internal LTD, where the resolution strategy of the covered IHC's foreign parent follows an SPOE model. In addition, eligible internal LTD issued by covered IHCs must include a contractual provision that is approved by the Board that provides for immediate conversion or exchange of the instrument into common equity tier 1 capital of the covered IHC upon issuance by the Board of an internal debt conversion order. Finally, eligible internal LTD issued by covered IHCs would not be subject to a prohibition on credit-sensitive features.
Only certain covered IHCs would have the option to issue debt externally to third-party investors. Specifically, covered IHCs of FBOs with a top-tier group-level resolution plan that contemplates their covered IHCs or subsidiaries of their covered IHCs entering into resolution, receivership, insolvency, or similar proceedings in the United States (resolution covered IHCs), are permitted to issue eligible LTD externally. Such resolution covered IHCs are more analogous to covered HCs, because both have established resolution plans that involve these entities entering resolution proceedings in the United States. Covered IHCs of FBOs with top-tier group-level resolution plans that do not contemplate their covered IHCs or the subsidiaries of their covered IHCs entering into resolution, receivership, insolvency, or similar proceedings (non-resolution covered IHCs) must issue LTD internally within the FBO, from the covered IHC to a foreign parent or a wholly owned subsidiary of the foreign parent.
This proposal would require the top-tier FBO of a covered IHC to certify to the Board whether the planned resolution strategy of the top-tier FBO involves the covered IHC or its subsidiaries entering resolution, receivership, insolvency, or similar proceedings in the United States. The certification must be provided by the top-tier FBO to the Board six months after the effective date of the final rule. In addition, the top-tier FBO with a covered IHC must provide an updated certification to the Board upon a change in resolution strategy. The proposed identification process is similar to the process used for U.S. IHCs subject to the TLAC rule.
A covered IHC is a “resolution covered IHC” under the proposed rule if the certification provided indicates that the top-tier FBO's planned resolution strategy involves the covered IHC or its subsidiaries entering into resolution, receivership, insolvency or similar proceeding in the United States. A covered IHC is a “non-resolution covered IHC” under the proposed rule if the certification provided to the Board indicates that the top-tier FBO's planned resolution strategy does not involve the covered IHC or its subsidiaries entering into resolution, receivership, insolvency, or similar proceedings in the United States.
In addition, under the proposed rule, the Board may determine in its discretion that an entity that is certified to be a non-resolution covered IHC is a resolution covered IHC, or that an entity that is certified to be a resolution covered IHC is a non-resolution covered IHC. In reviewing certifications provided with respect to covered IHCs, the Board would expect to review all the information available to it regarding a firm's resolution strategy, including information provided to it by the firm. The Board would also expect to consult with the firm's home-country resolution authority in connection with this review. In addition, the Board may consider a number of factors including but not limited to: (i) whether the FBO conducts substantial U.S. activities outside of the IHC chain; (ii) whether the group's capital and liability structure is set up in a way to allow for losses to be upstreamed to the top-tier parent; (iii) whether the top-tier parent or foreign affiliates provide substantial financial or other forms of support to the U.S. operations (
A covered IHC would have one year or a longer period determined by the Board to comply with the requirements of the proposed rule applicable to non-resolution covered IHCs if it would become a non-resolution covered IHC because it either changes its resolution strategy or if the Board disagrees with the covered IHC's certification of its resolution strategy. For example, if the Board determines that a firm that had certified it is a resolution covered IHC is a non-resolution covered IHC for purposes of the rule, the IHC would have up to one year from the date on which the Board notifies the covered IHC in writing of such determination to
As noted, under the proposed rule, the Board may extend the one-year period discussed above. In acting on any requests for extensions of this time period, the Board would consider whether the covered IHC had made a good faith effort to comply with the requirements of the rule.
The proposed rule would require eligible internal LTD, whether issued by resolution covered IHCs or non-resolution covered IHCs, to contain a contractual conversion feature. The contractual trigger would allow the Board to require the covered IHC to convert or exchange all or some of the eligible internal LTD into common equity tier 1 capital on a going-concern basis (that is, without the covered IHC's entry into a resolution proceeding) under certain circumstances. These include if the Board determines that the covered IHC is “in default or in danger of default” and any of the three following additional circumstances applies.
The principal purpose of this requirement is to ensure that losses incurred by the covered IHC are shifted to a foreign parent without the covered IHC having to enter a resolution proceeding. If the covered IHC's eligible internal LTD is sufficient to recapitalize the covered IHC in light of the losses that the covered IHC has incurred, this goal could be achieved through conversion of the eligible internal LTD into equity upon the occurrence of the trigger conditions.
Eligible external LTD issued by resolution covered IHCs is not required to contain a contractual conversion trigger. The proposed rule gives resolution covered IHCs the option to issue debt externally to third-party investors under the proposed rule on the same terms as covered HCs.
The proposed rule would not require eligible internal LTD issued by covered IHCs to include the prohibition against including certain credit-sensitive features that applies to other eligible LTD. This would match the requirements for eligible internal LTD issued by U.S. IHCs subject to the Board's TLAC rule.
The agencies anticipate that some covered entities and their subsidiary IDIs, as well as potentially certain other covered IDIs, will have external LTD outstanding at the time of finalization of the proposed rule. To enable covered entities and covered IDIs to most readily and effectively meet minimum LTD requirements as the proposed requirements are phased in, the proposed rule would allow some of this legacy external LTD to count toward the minimum requirements in the proposed rule, even where such legacy external LTD does not meet certain eligibility requirements. Specifically, the proposal would provide an exception for the following categories of outstanding external LTD instruments issued by covered HCs, resolution covered IHCs, and their subsidiary IDIs, and permitted and required externally issuing IDIs, that do not conform to all of the eligibility requirements that will apply to issuances of eligible internal or external LTD going forward once notice of the final rule resulting from this proposal is published in the
The allowance for eligible legacy external LTD would reduce the costs of modifying the terms of existing outstanding debt or issuing new debt to meet applicable minimum LTD requirements. Over time, debt that is subject to the legacy exception will mature and be replaced by LTD that must meet all of the proposal's eligibility requirements. This approach is consistent with the intent of the legacy exceptions that were made available to entities subject to the TLAC rule in relation to LTD instruments issued prior to December 31, 2016.
As noted above, the proposal would authorize the agencies, after providing a covered entity or covered IDI with notice and an opportunity to respond, to order the covered entity or covered IDI to exclude from its outstanding eligible LTD amount any otherwise eligible debt securities. These provisions would also apply to eligible legacy external LTD.
To promote the resiliency of covered entities and minimize the knock-on effects of the failure of a covered entity to its counterparties and the financial system, the Board proposes to impose “clean holding company” requirements on covered entities. These requirements are similar to those imposed on U.S. GSIBs and U.S. IHCs subject to the TLAC rule.
As discussed further below, these provisions provide benefits independent of the resolution strategy of a covered entity, including by improving the resiliency of covered entities, limiting certain transactions that can give rise to financial stability risks before a covered entity fails, and simplifying a covered entity so that it and its relevant subsidiaries can be resolved in a prompt and orderly manner.
These provisions may also advance several goals in connection with the resolution of the covered entity. In the case of SPOE resolution, these provisions support the goal of that resolution strategy to achieve the rapid recapitalization of the material subsidiaries of a covered entity with minimal interruption to the ordinary operations of those subsidiaries. The proposed clean holding company restrictions would advance this goal by prohibiting transactions that would distribute losses that should be borne solely by a covered entity to the covered entity's subsidiaries.
In the case of an MPOE resolution, in which a covered entity and its subsidiary IDI would enter into resolution, these provisions would limit the extent to which a subsidiary of a covered entity would experience losses or disruptions in its operations as a result of the failure of the covered entity prior to and during resolution. In particular, the prohibition on covered entity liabilities that are subject to upstream guarantees or offset rights would prevent a failed covered entity's creditors from passing their losses on to the covered entity's subsidiaries. Furthermore, covered entities that currently plan for an MPOE resolution strategy may nevertheless be resolved pursuant to an SPOE resolution strategy or adopt an SPOE resolution strategy in the future. Applying the clean holding company requirements to covered entities that currently plan for an MPOE resolution ensures that the benefits of these requirements that may be more significant for covered entities with an SPOE resolution strategy are readily available to covered entities with an MPOE resolution strategy that ultimately are resolved with an SPOE resolution strategy or eventually change their resolution strategy to an SPOE strategy.
The proposed rule would prohibit covered entities from externally issuing debt instruments with an original maturity of less than one year. Under the proposed rule, a liability has an original maturity of less than one year if it would provide the creditor with the option to receive repayment within one
The prohibition on external issuance of short-term debt instruments would improve the resiliency of covered entities and their subsidiaries and help mitigate the financial stability risks presented by destabilizing funding runs. A covered entity with significant short-term obligations is less resilient because, in the event of real or perceived stress, short-term creditors can refuse to roll over their loans to the covered entity. In that case, the covered entity must either find replacement funding or sell assets in order to pay its short-term creditors. Both of these outcomes normally would weaken the covered entity because replacement funding is likely to be at a premium and the assets would likely be sold at a loss in order to quickly generate cash. In response to the termination or curtailment of a covered entity's short-term funding or the covered entity's asset sales, counterparties or customers of the covered entity's subsidiaries may also lose confidence in those subsidiaries and unwind transactions with or withdraw funding from them. This issue may be acute for IDIs because their main creditors—depositors—generally have the ability to demand their funds on short notice. Prohibiting external issuance of short-term debt instruments by covered entities decreases the likelihood of these outcomes, improving the resiliency of a covered entity and its subsidiaries. For example, a covered entity is better able to serve as a source of managerial and financial strength to its subsidiary IDI if the covered entity is not experiencing a run on its short-term liabilities.
Decreasing the likelihood of a funding run also benefits financial stability. The sale of assets by a covered entity to repay its short-term creditors can be a key channel for the propagation of stress through the financial system. If those assets are widely held by other firms, then the sale by a covered entity of those assets can depress the fair value of those assets, thereby significantly affecting other firms' balance sheets, which could precipitate stress at those institutions, which could require further asset sales. The proposed rule would help mitigate these financial stability risks by prohibiting covered entities from relying on short-term funding and reducing run risk.
The prohibition against short-term funding in the proposed rule applies to both secured and unsecured short-term borrowings. Although secured creditors are less likely to take losses in resolution than unsecured creditors, secured creditors may nonetheless be unwilling to maintain their exposure to a covered entity that comes under stress in order to avoid potential disruptions in access to the collateral during resolution proceedings.
Under the proposal, covered HCs would be permitted to enter into QFCs only with their subsidiaries and covered IHCs would be permitted to enter into QFCs only with their affiliates, with the exception described below of entry into certain credit enhancement arrangements with respect to QFCs between a covered entity's subsidiary and third parties. The proposal defines QFCs by reference to Title II of the Dodd-Frank Act, which defines QFCs to include securities contracts, commodities contracts, forward contracts, repurchase agreements, and swap agreements, consistent with the TLAC rule.
The failure of a large banking organization that is a party to a material amount of third-party QFCs could pose a substantial risk to the stability of the financial system. Specifically, it is likely that many of that institution's QFC counterparties would respond to the institution's default by immediately liquidating their collateral and seeking replacement trades with third-party dealers, which could cause fire sale effects and propagate financial stress to other firms that hold similar assets by depressing asset prices. The proposed restriction on third-party QFCs would mitigate this threat to financial stability for covered entities under both MPOE and SPOE strategies. In the case of a successful SPOE resolution, covered entities' operating subsidiaries, which may be parties to large quantities of QFCs, should remain solvent and not fail to meet any ordinary course payment or delivery obligations. Therefore, assuming that the cross-default provisions of the QFCs engaged in by the operating subsidiaries of covered entities are appropriately structured, their QFC counterparties generally would have no contractual right to terminate or liquidate collateral on the basis of the covered entity's entry into resolution proceedings. The proposed restrictions also would support successful MPOE resolution as they would encourage covered entities to migrate any external QFC activity currently being conducted at the covered entity level to the relevant operating subsidiaries, a structure that would be better aligned with the activities of the underlying subsidiaries and will enable, in the case of IDI subsidiaries, the direct application of statutory QFC stay provisions provided under the FDI Act with regard to such QFCs. This migration of covered entity QFCs to the subsidiary level should simplify resolution proceedings and enable continuity of necessary QFC activities in resolution. Further, a covered entity itself would have, subject to the exceptions discussed below, no further QFCs with external counterparties, if any, and so the covered entity's entry into resolution proceedings could result in limited or no direct defaults on QFCs and related fire sales, assuming the covered entity complies with the cross-default and upstream guarantee restrictions discussed below. The proposed restriction on third-party QFCs would therefore materially diminish the fire sale risk and contagion effects associated with the failure of a covered entity.
The proposal would only apply prospectively to new agreements entered into after the post-transition period effective date of a final rule. The proposed rule would also exempt certain contracts from the prohibition on third-party QFCs for covered HCs. These exemptions, which are also are being proposed for U.S. GSIBs and U.S. IHCs of foreign GSIBs, are discussed further below and would apply to certain underwriting agreements, fully paid structured share repurchase agreements, and employee and director compensation agreements.
The proposal would prohibit a covered entity from guaranteeing (including by providing credit support for) any liability between a direct or indirect subsidiary of the covered entity and an external counterparty if the covered entity's insolvency or entry into resolution (other than resolution under Title II of the Dodd-Frank Act) would directly or indirectly provide the subsidiary's counterparty with a default right. The proposal defines the term “default right” broadly. Guarantees by covered entities of subsidiary liabilities, in the case of covered HCs, and of affiliates, in the case of covered IHCs, that are not subject to such cross-default rights would be unaffected by the proposal. The proposal would only apply prospectively to new agreements established after the effective date of a final rule.
This proposal would improve the resolvability and resilience of covered entities that have adopted MPOE and SPOE strategies. The proposed requirements would support the ability of a covered entity's subsidiaries to continue to operate normally or undergo an orderly wind-down upon the covered entity's entry into resolution. For example, an obstacle to resolution would occur if a covered entity's entry into resolution or insolvency operated as a default by the subsidiary and empowered the subsidiary's counterparties to take default-related actions, such as ceasing to perform under the contract or liquidating collateral. Were subsidiary QFC counterparties to take such actions, the subsidiary could face liquidity, reputational, or other stress that could undermine its ability to continue operating normally, including by placing short-term funding strain on the subsidiary. This could have destabilizing effects, even for a subsidiary of a covered entity with an MPOE resolution strategy as it could erode the franchise or market value of the subsidiary and pose obstacles to its orderly resolution or wind-down. The proposed prohibition would also complement other work that has been done to facilitate GSIB resolution through the stay of cross-defaults, including the agencies' final rule imposing restrictions on QFCs and the ISDA Protocol.
The prohibition on entry by covered entities into guarantee arrangements covering subsidiary liabilities that contain cross-default rights would exempt guarantees subject to a rule of the Board restricting such cross-default rights or any similar rule of another U.S. Federal banking agency.
The proposed rule would prohibit covered entities from having outstanding liabilities that are subject to a guarantee from any direct or indirect subsidiary of the holding company (upstream guarantees). Both MPOE and SPOE resolution strategies are premised on the assumption that a covered entity's operating subsidiaries face no claims from the creditors of the holding company as those subsidiaries either continue to operate normally or undergo separate resolution proceedings. This arrangement could be undermined if a liability of the covered entity is subject to an upstream guarantee because the effect of such a guarantee is to expose the guaranteeing subsidiary (and, ultimately, its creditors) to the losses that would otherwise be imposed on the holding company's creditors. A prohibition on upstream guarantees would facilitate both MPOE and SPOE resolution strategies by increasing the certainty that the covered entity's eligible external LTD holders will be exposed to loss separately from the creditors of a covered entity's subsidiaries.
Upstream guarantees do not appear to be common among covered entities. Section 23A of the Federal Reserve Act already limits the ability of an IDI to issue guarantees on behalf of its parent holding company.
Similarly, the proposed rule prohibits covered entities from issuing an instrument if the holder of the instrument has a contractual right to offset the holder's liabilities, or the liabilities of an affiliate of the holder, to any of the covered entity's subsidiaries against the covered entity's liability under the instrument. The prohibition includes all such offset rights regardless of whether the right is provided in the instrument itself. Such offset rights are another device by which losses that are expected to flow to the covered entity's external LTD holders in resolution could instead be imposed on operating subsidiaries and their creditors.
For covered HCs, the proposed rule would limit the amount of non-contingent liabilities to third parties (
The purpose of this requirement is to limit the amount of liabilities that are not common equity tier 1 capital, additional tier 1 capital, or eligible LTD that would rank at either the same priority as or junior relative to eligible LTD in a bankruptcy or resolution proceeding. This ensures that eligible LTD absorbs losses prior to almost all other liabilities of the covered entity and mitigates the legal risk that non-LTD creditors of a failed covered entity object to or otherwise complicate the imposition of losses in bankruptcy on the class of creditors that includes the eligible LTD of the covered entity. As a practical matter, the cap also would result in a significant portion of a covered entity's unsecured liabilities being composed of eligible LTD, which is preferable because eligible LTD has the features discussed above that more readily absorb loss and facilitate a simpler resolution relative to other types of unsecured debt.
The proposal would not subject a covered entity to this cap if the covered entity elects to subordinate all of its eligible LTD to all of the covered entity's other liabilities. Subordinating all of a covered entity's eligible LTD also would address the risk that non-LTD creditors might object to or otherwise complicate imposing losses on investors in eligible LTD. Permitting covered entities a choice between adhering to the cap on unrelated liabilities or instead contractually subordinating all eligible LTD to all of the covered entity's other liabilities provides greater flexibility in choosing how to comply with the proposed rule.
The proposed calibration of 5 percent is consistent with the 5 percent calibration for the similar cap on unrelated liabilities that applies to the parent holding companies of U.S. GSIBs and U.S. IHCs of foreign GSIBs.
Under the proposed rule, the set of liabilities that would count towards the unrelated liabilities cap for a resolution covered IHC would be different than the liabilities that would count towards the cap for non-resolution covered IHCs (discussed below) because resolution covered IHCs are permitted to issue eligible LTD externally to third parties. The cap for resolution covered IHCs applies to unrelated liabilities owed to parent and sister affiliates, as well as to unaffiliated third parties, because these IHCs have the option to issue external LTD that will be expected to bear losses in the resolution covered IHC's individual resolution proceeding and that may rank at either the same priority as or senior to such unrelated liabilities. Thus, these firms may owe significant amounts of unrelated liabilities to their FBO parents or another affiliate that would remain outstanding when the IHC enters resolution, because such entities are not anticipated to support the IHC under the resolution plan of the parent FBO.
The cap on unrelated liabilities for non-resolution covered IHCs does not include liabilities owed to foreign affiliates because for such entities, the eligible LTD held by foreign affiliates should, in a resolution scenario, convert to equity of the covered IHC, either through actions of the parent or the Board. Therefore, in contrast to resolution covered IHCs, concern about liabilities owed to the FBO parent or other affiliated parties is minimal.
In 2021, the agencies adopted an amendment to the capital rule that required U.S. GSIBs, their subsidiary depository institutions, and Category II banking organizations to make certain deductions from regulatory capital for investments in LTD issued by U.S. GSIBs under the Board's TLAC rule to meet the minimum TLAC requirements.
Distress at a covered entity or IDI that issues externally, and the associated write-down or conversion into equity of its eligible LTD, could have a direct negative impact on the capital of investing banking organizations, potentially at a time when such banking organizations may themselves be experiencing financial stress. Requiring that U.S. GSIBs, U.S. GSIB subsidiaries, and Category II banking organizations apply the deduction framework to the LTD of a covered entity or IDI that issues externally would discourage these banking organizations from investing in such instruments, and would thereby help to reduce both interconnectedness within the financial system and systemic risk. Therefore, the proposal would expand the current deduction framework in the capital rule for U.S. GSIBs, U.S. GSIB subsidiaries, and Category II banking organizations to also apply to eligible external LTD issued by covered entities and mandatory or permitted externally issuing IDIs to meet the minimum LTD requirement set forth in this proposal by amending the capital rule's definition of covered debt instrument. The expanded deduction framework would apply to all legacy external LTD, including externally issued LTD of an internally issuing IDI that was issued prior to the date that the notice of the final rule resulting from this proposal is published in the
The agencies propose to provide a transition period for covered entities and covered IDIs that would be subject to the rule when it is finalized, and a transition period for covered entities and covered IDIs that become subject to the rule after it is finalized. The purpose of these proposed transition periods is to minimize the effect of the implementation of the proposal on covered entities and covered IDIs, as well as on credit availability and credit costs in the U.S. economy.
The agencies propose to provide covered entities and covered IDIs three years to achieve compliance with the final rule. The three-year transition period would be the same for all covered IDIs, regardless of whether a covered IDI is required to issue internally to a parent or externally. Three years would provide covered entities and covered IDIs adequate time to make necessary arrangements to comply with the final rule without creating undue burden that would have unreasonable adverse impacts for covered entities and covered IDIs. The agencies may accelerate or extend this transition period in writing for the covered IDIs for which they are the appropriate Federal banking agency, and the Board may accelerate or extend this transition period in writing for covered entities.
Over that three-year period, covered entities and covered IDIs would need to meet 25 percent of their LTD requirements by one year after finalization of the rule, 50 percent after two years of finalization, and 100 percent after three years. This required phase-in schedule would apply to covered entities and covered IDIs that are subject to the rule beginning on the effective date of the finalized rule, and would likewise apply upon a firm becoming subject to the rule sometime after finalization. The proposed rule would provide additional clarifications regarding the three-year transition period to prevent evasion of the rule. The three-year transition period would not restart for a covered IDI that changes charters. For example, a national bank subject to the OCC's proposed rule would not have an additional three years to transition into compliance with the FDIC's proposed rule if the national bank changes its charter to a state-chartered savings association. Likewise, the holding company of such a bank would not have an additional three years to transition to the Board's rule for SLHCs. Covered entities that transition from being subject to the proposed LTD requirement to the requirements applicable to U.S. GSIBs or U.S. IHCs controlled by foreign GSIBs that are codified in the Board's existing TLAC rule would have three years to comply with those requirements. However, during that three-year period, such entities would be required to continue to comply with the LTD requirement and other requirements of the proposed rule. That is, a covered entity that is subject to the proposed rule and then becomes subject to the TLAC rule must continue to satisfy the minimum LTD and other requirements of the proposed rule during the three-year transition period for the TLAC rule. During this transition period, the covered entity would be required to issue new eligible LTD if necessary to maintain the minimum eligible LTD requirement set forth in the proposed rule.
In 2017, the Board finalized a TLAC and LTD requirement for the top-tier parent holding companies of domestic U.S. GSIBs (TLAC HCs) and IHCs of foreign GSIBs (TLAC IHCs and, together with TLAC HCs, “TLAC companies”) to improve the resiliency and resolvability of TLAC companies and thereby reduce threats to financial stability.
Since adopting the TLAC rule in 2017, the Board has gained experience administering the rule, including by responding to questions from TLAC companies and monitoring compliance by TLAC companies with the rule. In light of that experience, the Board is proposing to make several amendments to the TLAC rule, as discussed in greater detail below. These amendments generally are technical or intended to improve harmony between provisions within the TLAC rule and address items that have been identified through the Board's administration of the TLAC rule.
The TLAC rule requires TLAC companies to maintain a minimum amount of TLAC and a minimum amount of eligible LTD.
When it adopted the TLAC rule, the Board stated that the purpose of the 50 percent haircut applied for purposes of the LTD requirement with respect to the amount of eligible LTD that is due to be paid between one and two years is to protect a TLAC company's LTD loss-absorbing capacity against a run-off period in excess of one year (as might occur during a financial crisis or other protracted stress period) in two ways. First, the 50 percent haircut requires TLAC companies that rely on eligible LTD that is vulnerable to such a run-off period (because it is due to be paid in less than two years) to maintain additional LTD loss-absorbing capacity. Second, it incentivizes TLAC companies to reduce or eliminate their reliance on LTD loss-absorbing capacity that is due to be paid in less than two years, since by doing so they avoid being required to issue additional eligible LTD in order to account for the haircut. A TLAC company could reduce its reliance on eligible LTD that is due to be paid in less than two years by staggering its issuance, by issuing eligible LTD that is due to be paid after a longer period, or by redeeming and replacing eligible LTD once the amount due to be paid falls below two years.
The Board is proposing to amend the TLAC rule to change the haircuts that are applied to eligible LTD for purposes of compliance with the TLAC requirement to conform to the haircuts that apply for purposes of the LTD requirement. Accordingly, the proposed rule would allow only 50 percent of the amount of eligible LTD with a maturity of one year or more but less than two years to count towards the TLAC requirement. This change would simplify the rule so that the same haircut regime applies across the TLAC
Staff analyzed the change in TLAC ratios that would be implied by this proposed 50 percent haircut on eligible LTD maturing between one and two years. Seventeen entities are currently subject to TLAC requirements, eight of which are U.S. GSIBs and nine of which are foreign GSIB IHCs. The staff analysis relied on data from the FR Y-9C as of March 2023. On this basis, overall aggregate TLAC at these seventeen GSIBs would decline by roughly $65 billion (some 2.7 percent) as a result of the proposed change to the eligible LTD haircut.
Based on these estimates, staff projects that all GSIBs would meet or nearly meet their TLAC requirements under the proposed change.
The agencies invite comment on the implications of the interaction of the proposal to modify the eligible LTD haircut with proposed changes to the agencies' capital rule under the Basel III proposal.
The Board proposes to amend the TLAC rule so that eligible LTD must be issued in minimum denominations for the same reasons discussed in section III.C.7 of this supplementary information section.
The TLAC rule applies clean holding company requirements to the operations of TLAC HCs to further improve their resolvability and the resiliency of their operating subsidiaries.
The Board explained that the QFC prohibition would mitigate the substantial risk that could be posed by the failure of a large banking organization that is a party to a material amount of third-party QFCs. First, the Board noted that TLAC HCs' operating subsidiaries, which are parties to large quantities of QFCs, are expected to remain solvent under an SPOE resolution and not expected to fail to meet any ordinary course payment or delivery obligations during a successful SPOE resolution. Therefore, assuming that the cross-default provisions of the QFCs engaged in by the operating subsidiaries of TLAC HCs are appropriately structured, their QFC counterparties generally would have no contractual right to terminate or liquidate collateral on the basis of the TLAC HC's entry into resolution proceedings. Second, the TLAC HCs themselves would be subject to a general prohibition on entering into QFCs with external counterparties, so their entry into resolution proceedings would not result in substantial QFC terminations and related fire sales. The restriction on third-party QFCs would therefore materially diminish the fire sale risk and contagion effects associated with the failure of a TLAC HC.
In its administration of the rule since it was finalized, the Board has gained experience with agreements that may constitute QFCs and which the Board believes may not present the risks intended to be addressed by the clean holding company requirements. Accordingly, the Board proposes to amend the clean holding company requirements so that TLAC HCs may enter into underwriting agreements, fully paid structured share repurchase agreements, and employee and director compensation agreements, each described below. The Board also proposes to amend the rule so that the Board may determine, upon request, that additional agreements are not subject to the QFC prohibition.
These changes would also be applied to the clean holding company requirements proposed for covered HCs, discussed in section VI.B of this supplementary information.
An underwriting agreement is an agreement between an issuer of securities, in this case, a U.S. GSIB, and one or more underwriters, dealers, brokers or other purchasers for the purpose of issuing or distributing securities of the issuer, whether by means of an underwriting syndicate or through an individual dealer or broker. These agreements generally will not represent a risk to the orderly resolution of a U.S. GSIB because the underwriter, not the U.S. GSIB, has the payment obligations in connection with the issuance of securities by the U.S. GSIB, which limits the potential adverse impact on the liquidity of the U.S. GSIB and, therefore, its resolvability.
Defined as an arrangement between an issuer (
A stock option represents the right of an employee to purchase a specific number of the issuer's (
The Board also proposes to reserve the authority to determine that additional agreements would not be subject to the QFC prohibition if the Board determines that exempting the agreement from the QFC prohibition would not pose a material risk to the orderly resolution of the U.S. GSIB or the stability of the U.S. banking or financial system. This would provide the Board flexibility to exempt other agreements from the QFC prohibition in the future. The Board expects it would delegate authority to act on these requests to staff.
The Board has long supported meaningful public disclosure by TLAC HCs. Public disclosures of a TLAC HC's activities and the features of its risk profile work in tandem with the regulatory and supervisory frameworks applicable to TLAC HCs by helping to support robust market discipline. In this way, meaningful public disclosures help to support the safety and soundness of TLAC HCs and the financial system more broadly.
The proposal would require a TLAC HC to make certain quantitative and qualitative disclosures related to the creditor ranking of the TLAC HC's liabilities. The proposal would not subject a banking organization that is a consolidated subsidiary of a TLAC HC to the proposed public disclosure requirements. The proposal would require a TLAC HC to comply with the same standards related to internal controls and verification of disclosures, as well as senior officer attestation requirements, as applied to the disclosure requirements of banking organizations under the Board's capital rule. A TLAC HC could leverage existing systems it has in place for other public disclosures, including those set forth in the agencies' regulatory capital rule.
The proposal would require that disclosures be made at least every six months on a timely basis following the disclosure as of date. In general, where a TLAC HC's fiscal year end coincides with the end of a calendar quarter, the Board would consider disclosures to be timely if they are made no later than the applicable SEC disclosure deadline for the corresponding Form 10-K annual report.
The last three years of the proposed disclosure would be required to be made publicly available (for example, included on a public website). Except as discussed below, management would have some discretion to determine the appropriate medium and location of the disclosures. Furthermore, a TLAC HC would have flexibility in formatting its public disclosures, subject to the requirements for using the disclosure template, discussed below.
The Board encourages management to provide the disclosure on the same public website where it provides other required disclosures. This approach, which is broadly consistent with current disclosure requirements, is intended to maximize transparency by ensuring that disclosure data is readily accessible to market participants while reducing burden on TLAC HCs by permitting a certain level of discretion in terms of how and where data are disclosed.
The purpose of the proposed disclosure requirement is to display in an organized fashion the priority of a TLAC HC's creditors. TLAC HCs may alter the formatting of the template to conform to publishing styles used by the TLAC HCs. However, the text set forth in the template must be used by the TLAC HC.
Table 1 to § 252.66, “Creditor ranking for resolution entity,” would require a TLAC HC to disclose information regarding the TLAC HC's creditor ranking individually and in aggregate at the TLAC HC's resolution entity. Specifically, the table would require a TLAC HC to identify and quantify liabilities and outstanding equity instruments that have the same or a junior ranking compared to all of the TLAC HC's eligible LTD, ranked by seniority in the event of resolution and by remaining maturity for instruments that mature.
In addition, the proposed rule would reserve the authority for the Board to require a TLAC company to maintain eligible LTD or TLAC instruments that are greater than or less than the minimum requirement currently required by the rule under certain circumstances. This reservation of authority would ensure that the Board could require a company entity to hold additional LTD or TLAC instruments if the company poses elevated risks that the rule seeks to address.
The Board also proposes to make technical changes to simplify the regulation text, where possible. Among other things, these technical changes would (i) move definitions that currently are shared between subparts G and P of Regulation YY to the common definition section in section 252.2 of Regulation YY; (ii) move the transition provisions for the certification provided by covered IHCs to the transition section of the TLAC rule; and (iii) eliminate instances where the regulation text referred to a number of years and a number of days, as not all years have 365 days. These changes are not intended to affect the substance of the rule.
The proposed rule would increase the amount of loss absorbing capacity in the event a covered IDI fails, thereby reducing costs to the DIF and increasing the likelihood of least-cost resolutions in which all deposits are transferred to an acquiring entity. As noted below, the experience in recent bank failures suggests that these benefits could be substantial.
The agencies examined the benefits and costs of the proposed rule. The economic analysis discussed here examines the proposal with an emphasis on a steady-state perspective, meaning that it evaluates the long run effect of the fully phased-in requirement. Because current borrowing practices of covered entities and covered IDIs may not be representative of long run behavior, the agencies consider the phased-in requirement relative to two alternative assumptions about the level of LTD that covered entities and covered IDIs would choose to maintain in the absence of the proposal. One approach (the “incremental shortfall approach”) assumes that the current reported principal amount of LTD issuance at covered entities and covered IDIs is a reasonable proxy for the levels of such debt that would be maintained in future periods in the absence of the proposed rule. An alternate approach (the “zero baseline approach”) assumes that covered entities and covered IDIs would, in the absence of the proposed rule, choose to maintain no instruments that satisfy the proposed rule's requirements in future periods. Under both forms of analysis, the agencies conclude that the proposal is likely to moderately increase funding costs for covered entities and covered IDIs because LTD—which is generally more expensive than the short-term funding that the agencies anticipate it would replace—would be required as part of the funding structure of a covered entity or covered IDI.
Under the incremental shortfall approach, the estimated steady-state cost of the proposal would derive from the additional LTD the covered entities would need to issue to meet any long-term shortfalls, which as described below would imply only a modest increase in funding costs. Under the zero baseline approach, the steady-state cost of the proposal is the anticipated cost associated with the full estimated amount of LTD that would be currently required if the regulation were fully phased-in. Under this more conservative zero baseline approach, the estimated decrease in profitability would be greater than under the incremental shortfall approach, though, as described below, the decrease is estimated to be moderate.
The primary benefit of the proposed rule is that it supports wider options for the orderly resolution of covered entities and covered IDIs in the event of their failure. Loss-absorbing LTD may facilitate the ability of the FDIC to resolve an IDI in a manner that minimizes loss to the DIF. By expanding resolution options available to regulators, the LTD requirement may also reduce the need to rely on merger-based resolutions that can potentially increase the systemic footprint of the acquiring institution or that may raise other types of concerns, such as those related to safety and soundness or consumer issues.
The proposed LTD requirement would apply to Category II, III, and IV banking organizations, including (i) IDIs with at least $100 billion in total consolidated assets that are consolidated by a covered entity or are subsidiaries of a foreign GSIB, and their affiliated IDIs and, (ii) IDIs with at least $100 billion in total consolidated assets that are not controlled subsidiaries of a further parent entity (mandatory externally issuing IDIs), and their affiliated IDIs, and (iii) IDIs with at least $100 billion in total consolidated assets and (a) that are consolidated subsidiaries of a company that is not a covered entity, a U.S. GSIB or a foreign GSIB subject to the TLAC rule, or (b) that are controlled but not consolidated by another company (permitted externally issuing IDIs) and the affiliated IDIs of the foregoing.
This impact assessment builds on organization-level analysis that focuses on the highest level of consolidation at which banking organizations within the scope of the proposal would be subject to its requirements.
The benefits of this proposal fall into two broad categories. First, LTD provides a “gone-concern” benefit that mitigates the spillovers, dislocations, and welfare costs that could arise from the failure of a covered entity. As noted in section I.A.2, by augmenting loss-absorbing capacity, LTD can provide firms and banking regulators greater flexibility in responding to the failure of covered entities and covered IDIs. The availability of eligible LTD may increase the likelihood of an orderly resolution for an IDI that fails and thereby help
The recent failures of SVB, SBNY, and First Republic highlight the risks posed by the failure of a covered IDI, including systemic contagion, as well as the challenges that the FDIC can face in executing an orderly resolution for covered IDIs. This proposal, if it had been in place and fully-phased-in when these failures occurred, would have provided billions of dollars of loss absorbing capacity. The agencies believe that the presence of a substantial layer of liabilities that absorbs losses ahead of uninsured depositors could have reduced the likelihood of those depositors running, might have facilitated resolution options that were not otherwise available, and could have made systemic risk determinations unnecessary.
Second, LTD provides a “going-concern” benefit by supporting resilience of covered entities and covered IDIs, further promoting financial stability. The proposed LTD requirement would improve the resilience of covered entities and covered IDIs by enhancing the stability of their funding profiles. Further, investors in LTD could also exercise market discipline over issuers of LTD, supporting market signals that will be of value to both regulators and market participants. From either perspective, the increased range of options for resolution resulting from the proposal could help to alleviate the possible contagion effects of one or more covered entities approaching default. This section examines these potential benefits in further detail.
If adopted, the proposed rule would help improve the likelihood that, in the event a covered IDI fails, a sufficient amount of non-deposit liabilities will be available to absorb losses that otherwise might be imposed on uninsured depositors in resolution (
More specifically, the agencies examined three channels by which an LTD requirement may provide gone-concern economic benefit.
First, the additional loss-absorbing capacity from LTD in resolution may increase the likelihood that some or all uninsured deposits are protected from losses, even under the least-cost test. This outcome can be beneficial because interruption of access to uninsured deposits and associated services, already harmful to deposit customers, may also have spillover effects that can adversely affect a broader set of economic activity (
Second, by providing additional loss-absorbing capacity, LTD may increase the likelihood that the least cost resolution option is one that does not involve a merger that results in a sizable increase in the systemic footprint or market concentration of the combined organization, thereby producing potential economic costs. By creating a substantially larger combined successor firm, a merger-based or sale-of-business-line acquisition by another large banking or nonbank financial firm may meaningfully increase the acquiring firm's systemic footprint. While the existing regulatory and supervisory framework is designed to address the expansion of systemic footprints, there may be unexpected costs to be borne by the public. However, increasing the likelihood that a different solution is the least cost resolution option could result in policymakers avoiding transactions that could raise other concerns.
Third, the loss-absorption afforded by LTD may lower the risk that multiple concurrent failures of covered entities or covered IDIs might occur and impose high costs on the DIF, necessitating higher assessments to refill it and potentially requiring other extraordinary actions to stabilize banking conditions.
The agencies analyzed two channels for going-concern benefits of the proposed rule. First, the establishment of an LTD requirement and the associated increase in loss-absorbing capacity improves the funding stability of covered entities and covered IDIs and provides firms and banking regulators greater flexibility in resolution. These features in turn further reinforce confidence in the safety of deposits at U.S. covered IDIs. For example, LTD may increase the likelihood of whole bank resolutions of covered IDIs, in which all deposits are transferred to acquiring entities. In this way, the agencies believe the proposal may also reduce the risk of sudden, large, and confidence-related deposit withdrawals (commonly known as bank runs) at covered IDIs. Liquidity transformation, a core banking activity, can make banks vulnerable to bank runs that harm uninsured depositors and may have negative externalities on the financial system and broader economy.
For the banking system, this strengthened resilience can reduce negative externalities associated with runs. Lowering the risk of runs at covered IDIs may reduce the risk of contagion, thereby reducing risk for the broader banking system. In addition, the increased resilience can reduce fire sale risk by discouraging bank runs on covered entities and covered IDIs that compel them to liquidate assets to meet withdrawals. The economic harms from these channels could be substantial for a run on a large banking organization. LTD requirements may deliver a significant reduction in run risk for
Second, the proposed LTD requirement may enhance market discipline with respect to covered entities and covered IDIs, incentivizing prudent behavior. The proposed LTD requirement would represent a substantial liability on covered entities' and covered IDIs' balance sheets that is subordinated to deposits, subject to credible threat of default risk, and whose value may be ascertained readily from market prices. If eligible LTD becomes a somewhat more common source of funding relative to instruments held by less sophisticated creditors, then it may strengthen market-based incentives for covered entities and covered IDIs to moderate excessive risk-taking. There is some evidence that TLAC-eligible debt securities are increasing market discipline of GSIBs.
The agencies believe that harnessing the power of markets to price LTD issued by covered entities and covered IDIs creates a mechanism for firms that take excess risks to appropriately face higher funding costs. These market disciplining effects are incremental to the risk sensitivity already present in DIF premiums. There is a substantial literature over recent decades exploring the potential for enhanced market discipline for large banks based on subordinated LTD. For example, DeYoung, Flannery, Lang and Sorescu (2001) argue that subordinated debt prices reflect the information available to market participants (such as public indicators of bank condition, management concerns, and potential expected loan losses). M. Imai (2007) shows that subordinated debt investors exerted market discipline over weak banks by requiring higher rates at weaker banks. Chen and Hasan (2011) show that subordinated debt requirements and bank capital requirements can be used as complements for mitigating moral hazard problems. The literature on subordinated bank debt does not always find historically that price signals from such debt led such banks to limit their growth or take action to improve their safety and soundness. The findings of the literature may also not be completely applicable because they generally consider more generic subordinated long debt, that is, without some of the key loss absorption features of eligible LTD under this proposal.
The agencies note that the scope for these effects is uncertain for a number of reasons including but not limited to potential lack of understanding and experience among market participants with LTD-based protection for deposits. However, the agencies believe the increased resiliency and market discipline afforded by the proposed LTD requirements provide meaningful additional financial stability benefits.
Under the FDIC's current regulations, any issuance of additional LTD associated with the proposed rule could reduce deposit insurance assessments for the IDIs of covered entities. Given the current framework for deposit insurance pricing, the FDIC estimates that the proposed rule could result in reductions in deposit insurance assessments for the covered IDIs of approximately $800 million per year, in aggregate. In light of the recent failures of three large banks, however, the FDIC will consider revisions to its large bank pricing methodology, including the treatment of unsecured debt and concentrations of uninsured deposits.
The agencies analyzed the cost impact of the proposed rule for the analysis population. This section details that analysis. First, it approximates the proposed requirements for the analysis population. Second, given these requirements, it estimates the shortfalls in eligible external LTD currently outstanding among firms in the analysis population. Third, it estimates how these requirements would shift bank funding behavior and the consequences of those shifts on bank funding costs. Finally, it discusses the potential implications of these costs.
Agency estimates of LTD requirements and shortfalls are based on organization-level time series averages for the Q4 2021-Q3 2022 period. More recent data are excluded from the sample. This is in part because shortfall estimates may be distorted by debt issuance carried out by covered entities and covered IDIs in anticipation of the rule following the Q4 2022 ANPR. Recent substitution away from deposits due to adverse banking conditions in early 2023 may also overstate the long run prominence of LTD in funding structures for these organizations. Time series averages are used to produce an estimate the agencies believe is more appropriate because it mitigates the variability in point-in-time cross section data.
According to this methodology, staff estimate that the total principal value of external LTD required of firms in the analysis population, irrespective of existing LTD, would be approximately $250 billion. Among Category II and III covered entities, the total requirement would be approximately $130 billion. For Category IV covered entities and externally issuing IDIs, the aggregate requirement would be approximately $120 billion. These requirements will form the basis for the cost estimates under the zero baseline approach.
For purposes of the incremental shortfall approach, the agencies estimate the level of future eligible LTD for the analysis population in the absence of the proposed rule as equal to the current level of outstanding LTD at the analysis population that is unsecured, has no exotic features, and is issued externally at any level of the organization (that is, either by a covered entity itself or a subsidiary IDI).
Based on averages for the Q4 2021-Q3 2022 period, the agencies estimate under the incremental shortfall approach that some firms would need to issue additional eligible external LTD over the long term in order to comply with the proposed rule. Staff estimate that the aggregate shortfall under the incremental approach in the analysis population is approximately $70 billion. For Category II and III covered entities, this total shortfall is approximately $20 billion. Among Category IV covered entities and externally issuing IDIs, the aggregate shortfall under the proposal is approximately $50 billion.
The agencies estimate that current average annual LTD issuance by U.S. banking organizations (with an initial term of two years or greater but not necessarily satisfying all qualifying characteristics of eligible external LTD under the proposed rule) is approximately $230 billion, including $70 billion by non-Category I firms. Depending on the term of eligible external LTD used to meet requirements under the proposed rule and how firms use early call features of these securities, the agencies anticipate that the annual issuance market for banking organization LTD will have to increase by five to seven percent.
Building on the requirement and shortfall estimates described above, the agencies evaluated the impact of the proposal on steady-state funding costs. Because LTD is generally more expensive than the short-term funding banking organizations could otherwise use, the proposal is likely to raise funding costs in the long run. This analysis assumes that firm assets are held fixed, and the proposed rule therefore permanently shifts firm liabilities to include less short-term funding and more LTD.
Based on market observables from the post-2008 period, the agencies estimate the eligible external LTD funding cost spread as the difference between yields on five-year debt and the national aggregate interest rate on bank non-jumbo three-month certificates of deposit (CDs).
The agencies estimate that the eligible external LTD requirement would increase pre-tax annual steady-state funding costs for the analysis population by $1.5 billion in the incremental shortfall approach.
Under the zero baseline approach, based on total eligible external LTD requirement quantities, the agencies estimate that the proposal would increase pre-tax annual steady-state funding costs by approximately $5.6 billion for the analysis population.
The agencies believe that the funding cost impact of the proposal is likely between the lower-end estimate from the incremental shortfall approach and the higher-end estimate from the zero baseline approach. The incremental shortfall approach may provide a more accurate near-term perspective on funding cost impact. However, even in the short run, this may underestimate the costs because the proxy for eligible external LTD in this analysis may not satisfy all of the proposal's requirements for eligible external LTD and, therefore, may overestimate the quantity of truly eligible external LTD outstanding among covered entities.
An increase in funding costs associated with the rule may be absorbed to varying degrees by stakeholders of covered entities and covered IDIs, including equity holders, depositors, borrowers, employees, or other stakeholders. Covered entities and covered IDIs could seek to offset the higher funding costs from an LTD requirement by lowering deposit rates or increasing interest rates on new loans. Alternatively, the higher funding costs could indirectly affect covered entities and covered IDIs' loan growth, or result in some migration of banking activity from covered entities and covered IDIs to other banks or nonbanks. The modest to moderate range of funding cost impacts presented above suggests a similarly limited scope for these types of indirect effects.
This analysis does not attempt to quantitatively assess the proposal's phase-in effects, such as changes in asset holdings or market conditions for long-term unsecured debt instruments, because the agencies do not possess the necessary information to do so. Estimates of the phase-in effects depend upon the future financial characteristics of each covered entity and covered IDI, future economic and financial conditions, and the decisions and behaviors of covered entities and covered IDIs. However, the agencies believe that, if the proposal is phased-in gradually, the transition-related costs and risks of the proposal's adoption are likely to be small relative to long-run effects. These considerations notwithstanding, this subsection provides a brief overview of potential phase-in effects.
Due to the considerable scope of the proposal, there is a risk that efforts by covered entities and covered IDIs to issue a large volume of LTD over a limited period could strain the market capacity to absorb the full amount of such issuance if issuance volume exceeds debt market appetite for LTD instruments.
Other simplifying assumptions that are appropriate for the long run perspective of the funding cost analysis may be less suited for the study of phase-in effects. Recall that the funding cost methodology treats the proposed requirement as a liability side substitution with assets held fixed. In the short run, covered entities are in fact likely to expand their balance sheets, to at least some degree, as a result of the proposed requirements. Under some circumstances this expansion could impose upward pressure on leverage ratios (presumably temporary). It may also take some time for covered entities and covered IDIs to invest the proceeds from sizable LTD issuance productively, which could add to the phase-in costs. Other steady-state simplifying assumptions about the migration of external LTD among entities within organizations and the prepositioning of resources at IDIs are likely to understate short-term disruption due to the proposal. Organizations most exposed to phase-in costs of this kind are those with limited existing external LTD issued out of their holding companies and those with limited internal LTD between their IDIs and holding companies.
The discussion in this section highlights a range of gone-concern and going-concern benefits that could derive from the LTD required by the proposal: providing additional coverage for losses and greater optionality in resolution events, and alleviating some of the pressures that could arise as a covered entity comes under significant stress.
In addition, the loss-absorbing capacity provided by the required LTD may provide savings to the DIF in the future relative to resolutions conducted without benefit of the additional loss absorbing capacity of the long term debt required by the proposed rule.
The direct costs of the proposal derive from the requirements that the LTD be both subordinated and longer term than current sources of funding. In total, these costs are estimated to be moderate. It is possible that alternate means exist to raise loss absorbing resources, such as subordinated debt of a shorter term, that could be less costly to covered entities and covered IDIs. Compared to the LTD requirements of the proposed rule, however, such alternatives would likely be less effective in providing a stable enough source of loss absorption to achieve the objectives of the proposal. The agencies have concluded that the direct loss absorption capacity of the LTD combined with the meaningful intangible benefits of the LTD described in this section justify the overall cost of the proposal.
Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (PRA).
The proposed rule contains revisions to current information collections subject to the PRA. To implement these requirements, the Board would revise and extend for three years the (1) Financial Statements for Holding Companies (FR Y-9; OMB No. 7100-0128), and (2) Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation YY (FR YY; OMB No. 7100-0350). In addition, the agencies, under the auspices of the FFIEC, would also propose related revisions to the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051; OMB Nos. 1557-0081; 3064-0052, and 7100-0036). The proposed revisions to the FFIEC reports will be addressed in a separate
Comments are invited on the following:
(a) Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
(b) The accuracy of the agencies estimates of the burden of the information collections, including the validity of the methodology and assumptions used;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Commenters may submit comments regarding any aspect of the proposed rule's collections of information, including suggestions for reducing any associated burdens, to the addresses listed under the
(1)
The proposed rule would also create a new line item and instruction to allow U.S. GSIBs to report certain information regarding their TLAC requirements. Specifically, a new line item would be created to allow a U.S. GSIB to report its deductions of investments in own other TLAC liabilities. The proposal would also make technical amendments to the FR Y-9C instructions relating to the calculation of the TLAC buffer (item 62a). The proposal also would amend line items that exclude “additional tier 1 minority interests” to exclude instead “tier 1 minority interests” to match the corresponding provision in the existing TLAC rule. The revisions are proposed to be effective as of the effective date of the final rule resulting from this proposal.
The Board estimates that revisions to the FR Y-9C would increase the estimated annual burden by 316 hours. The respondent count for the FR Y-9C would not change because of these changes. The draft reporting forms and instructions are available on the Board's public website at
(2)
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
The OCC estimates that the proposed rule would impact none of these small entities, as the scope of the rule only applies to banking organizations with total assets of at least $100 billion. Therefore, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of small entities.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
The Board is providing an IRFA with respect to the proposed rule. For the reasons described below, the Board does not believe that the proposal will have a significant economic impact on a substantial number of small entities. The Board invites public comment on all aspects of this IRFA.
The proposed rule would require covered entities and covered IDIs to maintain minimum levels of LTD funding in order to improve the resolvability of these firms in light of the risks that are posed when a covered entity or covered IDI fails. Further discussion of the rationale for the proposal is provided in section I.A of this
The agencies' objective in proposing this rule is to expand the options available to policymakers in resolving a failed covered entity and its covered IDI subsidiaries and thereby increase the likelihood that such a resolution will occur in an orderly fashion. By increasing the prospects for orderly resolutions of a failed covered entity and its covered IDI subsidiaries, the proposed rule is also intended to achieve the agencies' objective of promoting resiliency among banking organizations and safeguarding stability in the financial system.
The proposed rule would only apply to covered entities, which are Category II, III, and IV BHCs and SLHCs, as well as Category II, III, and IV U.S. IHCs of FBOs that are not global systemically important FBOs. The proposal would also apply to covered IDIs, which are IDIs that are not consolidated subsidiaries of U.S. GSIBs and that (i) have at least $100 billion in consolidated assets or (ii) are affiliated with IDIs that have $100 billion or more in consolidated assets.
Under regulations promulgated by the Small Business Administration (SBA), a small entity, for purposes of the RFA, includes a depository institution, a BHC, or an SLHC with total assets of $850 million or less (small banking organization).
The proposal would introduce a requirement that covered entities and covered IDIs issue and maintain minimum amounts of LTD that satisfies the eligibility conditions described in section V of this
With respect to the impact of the proposal on small banking organizations, as discussed above, the Board believes that no such small banking organizations will be subject to the proposal's compliance requirements. Because no small banking organizations will bear additional costs under the proposal, the Board believes that the proposal will not have a significant economic impact on a substantial number of small entities.
The agencies are not aware of any Federal rules that may be duplicative, overlap with, or conflict with the proposed rule.
The Board did not consider any significant alternatives to the proposed rule. The Board believes that requiring the availability of LTD funding at covered entities and covered IDIs is the best way to achieve the Board's objectives of safeguarding financial stability by ensuring the orderly resolution of covered entities and covered IDIs should such an entity fail.
The Regulatory Flexibility Act (RFA) generally requires an agency, in connection with a proposed rule, to prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities.
As described above in subsection A. “Scope of Application” of sections III and IV of this
The FDIC invites comments on all aspects of the supporting information provided in this RFA section.
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
The agencies request comment on any administrative burdens that the proposed rule would place on depository institutions, including small depository institutions, and their customers, and the benefits of the proposed rule that the agencies should consider in determining the effective date and administrative compliance requirements for a final rule.
Section 722 of the Gramm-Leach-Bliley Act
• Have the agencies presented the material in an organized manner that meets your needs? If not, how could this material be better organized?
• Are the requirements in the notice of proposed rulemaking clearly stated? If not, how could the proposed rule be more clearly stated?
• Does the proposed rule contain language that is not clear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the proposed rule easier to understand? If so, what changes to the format would make the proposed rule easier to understand?
• What else could the agencies do to make the proposed rule easier to understand?
The OCC has analyzed the proposed rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation).
The OCC has determined this proposed rule is likely to result in the expenditure by the private sector of $100 million or more in any one year (adjusted annually for inflation). The OCC has prepared an impact analysis and identified and considered alternative approaches. When the proposed rule is published in the
The Providing Accountability Through Transparency Act of 2023 (12 U.S.C. 553(b)(4)) requires that a notice of proposed rulemaking include the internet address of a summary of not more than 100 words in length of a proposed rule, in plain language, that shall be posted on the internet website under section 206(d) of the E-Government Act of 2002 (44 U.S.C. 3501 note).
In summary, the bank regulatory agencies request comment on a proposal to improve the resolvability and resilience of large banking organizations. The proposal would require certain banking organizations to maintain outstanding a minimum amount of long-term debt that could absorb losses in resolution. The proposal would also impose requirements on the corporate practices of certain holding companies to improve their resolvability, and apply a stringent capital treatment to large banking organizations' holdings of long-term debt issued by other banking
The proposal and the required summary can be found at
(All Agencies)
[AGENCY AUTHORITY].
(a)
(i) Has $100 billion or more of total consolidated assets, as reported on the [BANK's] most recent Call Report; and
(ii) Is a consolidated subsidiary of:
(A) A depository institution holding company that is subject to a long-term debt requirement set forth in § 238.182 or § 252.62 of this title and that is not a global systemically important BHC; or
(B) A U.S. intermediate holding company that is subject to a long-term debt requirement set forth in § 252.162 of this title.
(2)
(i) A [BANK] is subject to the requirements of this part if the [BANK]:
(A) Is not a consolidated subsidiary of a depository institution holding company or U.S. intermediate holding company that is subject to a long-term debt requirement set forth in § 238.182, 252.62, or § 252.162 of this title; and
(B) Has total consolidated assets, calculated based on the average of the [BANK's] total consolidated assets for the four most recent calendar quarters as reported on the Call Report, equal to $100 billion or more. If the [BANK] has not filed the Call Report for each of the four most recent calendar quarters, total consolidated assets is calculated based on its total consolidated assets, as reported on the Call Report, for the most recent quarter or average of the most recent quarters, as applicable.
(ii) After meeting the criteria in paragraphs (a)(2)(i)(A) and (B) of this section, a [BANK] continues to be subject to the requirements of this part pursuant to paragraph (a)(2) of this section until the [BANK] has less than $100 billion in total consolidated assets, as reported on the Call Report, for each of the four most recent calendar quarters.
(3)
(b)
(1) 25 percent of the amount required under § __.3 by one year after the date on which the [BANK] first becomes subject to this part, [OTHER AGENCIES' LONG-TERM DEBT REQUIREMENT]; and
(2) 50 percent of the amount required under § __.3 by two years after the date on which the [BANK] first becomes subject to this part, [OTHER AGENCIES' LONG-TERM DEBT REQUIREMENT].
(c)
For purposes of this part, the following definitions apply:
(1) Owns, controls, or holds with the power to vote 25 percent or more of a class of voting securities of the company; or
(2) Consolidates the company for financial reporting purposes.
(1)
(i) Is paid in, and issued by the [BANK] to, and remains held by, a person that is not an affiliate of the [BANK], unless the affiliate controls but does not consolidate the [BANK];
(ii) Is not secured, not guaranteed by the [BANK] or an affiliate of the [BANK], and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more dates that are specified in the instrument or in the event of:
(A) A receivership, insolvency, liquidation, or similar proceeding of the [BANK]; or
(B) A failure of the [BANK] to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the [BANK's] credit quality, but may have an interest rate that is adjusted periodically independent of the [BANK's] credit quality, in relation to general market interest rates or similar adjustments;
(vii) Is not a structured note;
(viii) Does not provide that the instrument may be converted into or exchanged for equity of the [BANK]; and
(ix) Is not issued in denominations of less than $400,000 and must not be exchanged for smaller denominations by the [BANK]; and
(x) Is contractually subordinated to claims of depositors and general unsecured creditors in a receivership, for purposes of 12 U.S.C. 1821(d)(11)(A)(iv), or any similar proceeding.
(2)
(i) Is paid in, and issued by the [BANK] to, and remains held by, a person that is not an affiliate of the [BANK], unless the affiliate controls but does not consolidate the [BANK];
(ii) Is not secured, not guaranteed by the [BANK] or an affiliate of the [BANK], and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the [BANK's] credit quality, but may have an interest rate that is adjusted periodically independent of the [BANK's] credit quality, in relation to general market interest rates or similar adjustments;
(vi) Is not a structured note;
(vii) Does not provide that the instrument may be converted into or exchanged for equity of the [BANK]; and
(viii) Would represent a claim in a receivership or similar proceeding that is subordinated to a deposit.
(1)
(i) Is paid in, and issued by the [BANK];
(ii) Is not secured, not guaranteed by the [BANK] or an affiliate of the [BANK], and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more dates that are specified in the instrument or in the event of:
(A) A receivership, insolvency, liquidation, or similar proceeding of the [BANK]; or
(B) A failure of the [BANK] to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the [BANK's] credit quality, but may have an interest rate that is adjusted periodically independent of the [BANK's] credit quality, in relation to general market interest rates or similar adjustments;
(vii) Is not a structured note;
(viii) Is issued to and remains held by a company:
(A) Of which [BANK] is a consolidated subsidiary; and
(B) In the case of a [BANK] that is a consolidated subsidiary of a U.S. intermediate holding company, that is domiciled in the United States;
(ix) Does not provide that the instrument may be converted into or exchanged for equity of the [BANK]; and
(x) Is contractually subordinated to claims of depositors and general unsecured creditors in a receivership, for purposes of 12 U.S.C. 1821(d)(11)(A)(iv), or any similar proceeding.
(2)
(i) Is paid in, and issued by the [BANK] to, and remains held by, a person that is not an affiliate of the [BANK], unless the affiliate controls but does not consolidate the [BANK];
(ii) Is not secured, not guaranteed by the [BANK] or an affiliate of the [BANK], and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the [BANK's] credit quality, but may have an interest rate that is adjusted periodically independent of the [BANK's] credit quality, in relation to general market interest rates or similar adjustments;
(vi) Is not a structured note;
(vii) Does not provide that the instrument may be converted into or exchanged for equity of the [BANK]; and
(viii) Would represent a claim in a receivership or similar proceeding that is subordinated to a deposit.
(1) Means a debt instrument that:
(i) Has a principal amount, redemption amount, or stated maturity that is subject to reduction based on the performance of any asset, entity, index, or embedded derivative or similar embedded feature;
(ii) Has an embedded derivative or similar embedded feature that is linked to one or more equity securities, commodities, assets, or entities;
(iii) Does not specify a minimum principal amount that becomes due and payable upon acceleration or early termination; or
(iv) Is not classified as debt under GAAP.
(2) Notwithstanding paragraph (1) of this definition, an instrument is not a structured note solely because it is one or both of the following:
(i) A non-dollar-denominated instrument, or
(ii) An instrument whose interest payments are based on an interest rate index.
(1) For a [BANK] that has completed the parallel run process and received notification from the [AGENCY] pursuant to [AGENCY AA NOTIFICATION PROVISION], the greater of:
(i) Standardized total risk-weighted assets as defined in [AGENCY CAPITAL RULE DEFINITIONS]; and
(ii) Advanced approaches total risk-weighted assets as defined in [AGENCY CAPITAL RULE DEFINITIONS]; and
(2) For any other [BANK], standardized total risk-weighted assets as defined in [AGENCY CAPITAL RULE DEFINITIONS].
(a)
(1) 6 percent of the [BANK's] total risk-weighted assets;
(2) If the [BANK] is required to maintain a minimum supplementary leverage ratio, 2.5 percent of the [BANK's] total leverage exposure; and
(3) 3.5 percent of the [BANK's] average total consolidated assets.
(b)
(i) One hundred (100) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the [BANK] in greater than or equal to two years;
(ii) Fifty (50) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the [BANK] in greater than or equal to one year and less than two years; and
(iii) Zero (0) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the [BANK] in less than one year.
(2) For purposes of paragraph (b)(1) of this section, the date on which principal is due to be paid on an outstanding eligible debt security is calculated from the earlier of:
(i) The date on which payment of principal is required under the terms governing the instrument, without respect to any right of the holder to accelerate payment of principal; and
(ii) The date the holder of the instrument first has the contractual right to request or require payment of the amount of principal, provided that, with respect to a right that is exercisable on one or more dates that are specified in the instrument only on the occurrence of an event (other than an event of a receivership, insolvency, liquidation, or similar proceeding of the [BANK], or a failure of the [BANK] to pay principal or interest on the instrument when due), the date for the outstanding eligible debt security under this paragraph (b)(2)(ii) will be calculated as if the event has occurred.
(3) After applying notice and response procedures in the same manner as the notice and response procedures in [AGENCY NOTICE PROVISION], the [AGENCY] may order a [BANK] to exclude from its outstanding eligible long-term debt amount any debt security with one or more features that would significantly impair the ability of such debt security to take losses.
Administrative practice and procedure, Banks, banking, Federal Reserve System, Investments, National banks, Reporting and recordkeeping requirements, Savings association.
Administrative practice and procedure, Capital, National banks, Reporting and recordkeeping requirements, Risk, Savings associations.
Administrative practice and procedure, Banks, banking, Capital, Federal Reserve System, Holding companies, Reporting and recordkeeping requirements, Risk.
Administrative practice and procedure, Banks, banking, Federal Reserve System, Reporting and recordkeeping requirements, Securities.
Administrative practice and procedure, Banks, banking, Federal Reserve System, Holding companies, Reporting and recordkeeping requirements, Securities.
Administrative practice and procedure, Banks, banking, Credit, Federal Reserve System, Holding companies, Investments, Qualified financial contracts, Reporting and recordkeeping requirements, Securities.
Administrative practice and procedure, Banks, banking, Confidential business information, Investments, Reporting and recordkeeping requirements, Savings associations.
Administrative practice and procedure, Banks, banking, Capital, Confidential business information, Investments, Reporting and recordkeeping requirements, Savings associations, State banking.
The proposed adoption of the common rules by the agencies, as modified by agency-specific text, is set forth below:
For the reasons set forth in the common preamble and under the authority of 12 U.S.C. 93a and 5412(b)(2)(B), the Office of the Comptroller of the Currency proposes to amend chapter I of title 12, Code of Federal Regulations, as follows:
12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and Pub. L. 116-136, 134 Stat. 281.
(1) Both:
(i) Issued by a depository institution holding company that is subject to a long-term debt requirement set forth in §§ 238.182 or 252.62 of this title, as applicable, or a subsidiary of such depository institution holding company; and
(ii) An eligible debt security, as defined in §§ 238.181 or 252.61 of this title, as applicable, or that is pari passu or subordinated to any eligible debt security issued by the depository institution holding company; or
(2) Both:
(i) Issued by a U.S. intermediate holding company or insured depository institution that is subject to a long-term debt requirement set forth in § 54.3 of this chapter or §§ 216.3, 252.162, or 374.3 of this title, as applicable, or a subsidiary of such U.S. intermediate holding company or insured depository institution; and
(ii) An eligible external debt security, as defined in § 54.2 of this chapter or § 216.2, § 252.161, or § 374.2 of this title, as applicable, or that is pari passu or subordinated to any eligible external debt security issued by the U.S. intermediate holding company or insured depository institution.
(3) Issued by a global systemically important banking organization, as defined in § 252.2 of this title other than a global systemically important BHC; or issued by a subsidiary of a global systemically important banking organization that is not a global systemically important BHC, other than a U.S. intermediate holding company subject to a long-term debt requirement set forth in § 252.162 of this title; and where,
(i) The instrument is eligible for use to comply with an applicable law or regulation requiring the issuance of a minimum amount of instruments to absorb losses or recapitalize the issuer or any of its subsidiaries in connection with a resolution, receivership, insolvency, or similar proceeding of the issuer or any of its subsidiaries; or
(ii) The instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition; for purposes of this paragraph (3)(ii) of this definition, if the issuer may be subject to a special resolution regime, in its jurisdiction of incorporation or organization, that addresses the failure or potential failure of a financial company and any instrument described in paragraph (3)(i) of this definition is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument, then an instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition if that instrument is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument ahead of or proportionally with any instrument described in paragraph (3)(i) of this definition; and
(4) Provided that, for purposes of this definition,
(c)
(i) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own common stock instruments from its common equity tier 1 capital elements to the extent such instruments are not excluded from regulatory capital under § 3.20(b)(1);
(ii) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own additional tier 1 capital instruments from its additional tier 1 capital elements;
(iii) A national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own tier 2 capital instruments from its tier 2 capital elements; and
(iv) An advanced approaches national bank or Federal savings association must deduct an investment in the national bank's or Federal savings association's own covered debt instruments from its tier 2 capital elements, as applicable. If the advanced approaches national bank or Federal savings association does not have a sufficient amount of tier 2 capital to effect this deduction, the national bank or Federal savings association must deduct the shortfall amount from the next higher (that is, more subordinated) component of regulatory capital.
(h) * * *
(3) Adjustments to reflect a short position. In order to adjust the gross long position to recognize a short position in the same instrument under paragraph (h)(1) of this section, the following criteria must be met:
(iii) For an investment in a national banks' or Federal savings association's own capital instrument under paragraph (c)(1) of this section, an investment in the capital of an unconsolidated financial institution under paragraphs (c)(4) through (6) and (d) of this section (as applicable), and an investment in a covered debt instrument under paragraphs (c)(1), (5), and (6) of this section:
(A) The national bank or Federal savings association may only net a short position against a long position in an investment in the national bank's or Federal savings association's own capital instrument or own covered debt instrument under paragraph (c)(1) of this section if the short position involves no counterparty credit risk;
For the reasons set forth in the common preamble, the Board proposes to amend chapter II of title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904, 3906-3909, 4808, 5365, 5368, 5371, 5371 note, and sec. 4012, Pub. L. 116-136, 134 Stat. 281.
(1) Both:
(i) Issued by a depository institution holding company that is subject to a long-term debt requirement set forth in § 238.182 or § 252.62 of this chapter, as applicable, or a subsidiary of such depository institution holding company; and
(ii) An eligible debt security, as defined in § 238.181 or § 252.61 of this chapter, as applicable, or that is pari passu or subordinated to any eligible debt security issued by the depository institution holding company; or
(2) Both:
(i) Issued by a U.S. intermediate holding company or insured depository institution that is subject to a long-term debt requirement set forth in § 216.3 or § 252.162 of this chapter or § 54.3 or § 374.3 of this title, as applicable, or a subsidiary of such U.S. intermediate holding company or insured depository institution; and
(ii) An eligible external debt security, as defined in § 216.2 or § 252.161 of this chapter or § 54.2 or § 374.2 of this title, as applicable, or that is pari passu or subordinated to any eligible external debt security issued by the U.S. intermediate holding company or insured depository institution; or
(3) Issued by a global systemically important banking organization, as defined in § 252.2 of this chapter, other
(i) The instrument is eligible for use to comply with an applicable law or regulation requiring the issuance of a minimum amount of instruments to absorb losses or recapitalize the issuer or any of its subsidiaries in connection with a resolution, receivership, insolvency, or similar proceeding of the issuer or any of its subsidiaries; or
(ii) The instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition; for purposes of this paragraph (3)(ii), if the issuer may be subject to a special resolution regime, in its jurisdiction of incorporation or organization, that addresses the failure or potential failure of a financial company, and any instrument described in paragraph (3)(i) of this definition is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument, then an instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition if that instrument is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument ahead of or proportionally with any instrument described in paragraph (3)(i) of this definition; and
(4) Provided that, for purposes of this definition,
5 U.S.C. 552, 559; 12 U.S.C. 1462, 1462a, 1463, 1464, 1467, 1467a, 1468, 5365; 1813, 1817, 1829e, 1831i, 1972; 15 U.S.C. 78
(a)
(b)
(c)
(1) 25 percent of the amount required under § 238.182 by one year after the date on which the covered company first becomes subject to this subpart or part 252, subpart G of this chapter;
(2) 50 percent of the amount required under § 238.182 by two years after the date on which the covered company first becomes subject to this subpart or part 252, subpart G of this chapter.
(d)
For purposes of this subpart:
(1) Means any:
(i) Right of a party, whether contractual or otherwise (including rights incorporated by reference to any other contract, agreement or document, and rights afforded by statute, civil code, regulation and common law), to liquidate, terminate, cancel, rescind, or accelerate the agreement or transactions thereunder, set off or net amounts owing in respect thereto (except rights related to same-day payment netting), exercise remedies in respect of collateral or other credit support or property related thereto (including the purchase and sale of property), demand payment or delivery thereunder or in respect thereof (other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure), suspend, delay, or defer payment or performance thereunder, modify the obligations of a party thereunder or any similar rights; and
(ii) Right or contractual provision that alters the amount of collateral or margin that must be provided with respect to an exposure thereunder, including by altering any initial amount, threshold amount, variation margin, minimum transfer amount, the margin value of collateral or any similar amount, that entitles a party to demand the return of any collateral or margin transferred by it to the other party or a custodian or that modifies a transferee's right to reuse collateral or margin (if such right previously existed), or any similar rights, in each case, other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure; and
(2) Does not include any right under a contract that allows a party to terminate the contract on demand or at its option at a specified time, or from time to time, without the need to show cause.
(1)
(i) Is paid in, and issued by the covered company to, and remains held by, a person that is not an affiliate of the covered company;
(ii) Is not secured, not guaranteed by the covered company or a subsidiary of the covered company, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more dates that are specified in the instrument or in the event of:
(A) A receivership, insolvency, liquidation, or similar proceeding of the covered company; or
(B) A failure of the covered company to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered company's credit quality, but may have an interest rate that is adjusted periodically independent of the covered company's credit quality, in relation to general market interest rates or similar adjustments;
(vii) Is not a structured note;
(viii) Does not provide that the instrument may be converted into or exchanged for equity of the covered company; and
(ix) Is not issued in denominations of less than $400,000 and must not be exchanged for smaller denominations by the covered company; and
(2)
(i) Is paid in, and issued by the covered company or an insured depository institution that is a consolidated subsidiary of the covered company to, and remains held by, a person that is not an affiliate of the covered company;
(ii) Is not secured, not guaranteed by the covered company or a subsidiary of the covered company, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered company's credit quality, but may have an interest rate that is adjusted periodically independent of the covered company's credit quality, in relation to general market interest rates or similar adjustments;
(vi) Is not a structured note; and
(vii) Does not provide that the instrument may be converted into or exchanged for equity of the covered company's.
(1) Means a debt instrument that:
(i) Has a principal amount, redemption amount, or stated maturity that is subject to reduction based on the performance of any asset, entity, index, or embedded derivative or similar embedded feature;
(ii) Has an embedded derivative or similar embedded feature that is linked to one or more equity securities, commodities, assets, or entities;
(iii) Does not specify a minimum principal amount that becomes due upon acceleration or early termination; or
(iv) Is not classified as debt under GAAP.
(2) Notwithstanding paragraph (1) of this definition, an instrument is not a structured note solely because it is one or both of the following:
(i) An instrument that is not denominated in U.S. dollars; or
(ii) An instrument where interest payments are based on an interest rate index.
(1) For a covered company that has completed the parallel run process and received notification from the Board pursuant to § 217.121(d) of this chapter, the greater of—
(i) Standardized total risk-weighted assets as defined in § 217.2 of this chapter; and
(ii) Advanced approaches total risk-weighted assets as defined in § 217.2 of this chapter; and
(2) For any other covered company, standardized total risk-weighted assets as defined in § 217.2 of this chapter.
(a)
(1) Six percent of the covered company's total risk-weighted assets;
(2) If the covered company is required to maintain a minimum supplementary leverage ratio under part 217 of this chapter, 2.5 percent of the covered company's total leverage exposure; and
(3) 3.5 percent of the covered company's average total consolidated assets.
(b)
(i) One hundred (100) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered company in greater than or equal to two years;
(ii) Fifty (50) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered company in greater than or equal to one year and less than two years; and
(iii) Zero (0) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered company in less than one year.
(2) For purposes of paragraph (b)(1) of this section, the date on which principal is due to be paid on an outstanding eligible debt security is calculated from the earlier of:
(i) The date on which payment of principal is required under the terms governing the instrument, without respect to any right of the holder to accelerate payment of principal; and
(ii) The date the holder of the instrument first has the contractual right to request or require payment of the amount of principal, provided that, with
(3) After notice and response proceedings consistent with part 263, subpart E of this chapter the Board may order a covered company to exclude from its outstanding eligible long-term debt amount any debt security with one or more features that would significantly impair the ability of such debt security to take losses.
(c)
(a)
(1) Issue any debt instrument with an original maturity of less than one year, including short term deposits and demand deposits, to any person, unless the person is a subsidiary of the covered company;
(2) Issue any instrument, or enter into any related contract, with respect to which the holder of the instrument has a contractual right to offset debt owed by the holder or its affiliates to a subsidiary of the covered company against the amount, or a portion of the amount, owed by the covered company under the instrument;
(3) Enter into a qualified financial contract with a person that is not a subsidiary of the covered company, except for a qualified financial contract that is:
(i) A credit enhancement;
(ii) An agreement with one or more underwriters, dealers, brokers, or other purchasers for the purpose of issuing or distributing the securities of the covered company, whether by means of an underwriting syndicate or through an individual dealer or broker;
(iii) An agreement with an unaffiliated broker-dealer in connection with a stock repurchase plan of the covered company, where the covered company enters into a forward contract with the broker-dealer that is fully prepaid and where the broker-dealer agrees to purchase the issuer's stock in the market over the term of the agreement in order to deliver the shares to the covered company;
(iv) An agreement with an employee or director of the covered company granting the employee or director the right to purchase a specific number of shares of the covered company at a fixed price within a certain period of time, or, if such right is to be cash-settled, to receive a cash payment reflecting the difference between the agreed-upon price and the market price at the time the right is exercised; and
(v) Any other agreement if the Board determines that exempting the agreement from the prohibition in this paragraph (a)(3) would not pose a material risk to the orderly resolution of the covered company or the stability of the U.S. banking or financial system.
(4) Enter into an agreement in which the covered company guarantees a liability of a subsidiary of the covered company if such liability permits the exercise of a default right that is related, directly or indirectly, to the covered company becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding other than a receivership proceeding under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381 through 5394) unless the liability is subject to requirements of the Board restricting such default rights or subject to any similar requirements of another U.S. Federal banking agency; or
(5) Enter into, or otherwise begin to benefit from, any agreement that provides for its liabilities to be guaranteed by any of its subsidiaries.
(b)
(i) Common equity tier 1 capital (excluding any common equity tier 1 minority interest);
(ii) Additional tier 1 capital (excluding any tier 1 minority interest); and
(iii) Outstanding eligible long-term debt amount as calculated pursuant to § 238.182(b).
(2) For purposes of this paragraph (b), an unrelated liability is any noncontingent liability of the covered company owed to a person that is not an affiliate of the covered company other than:
(i) The instruments included in the covered company's common equity tier 1 capital (excluding any common equity tier 1 minority interest), the covered company's additional tier 1 capital (excluding any common equity tier 1 minority interest), and the covered company's outstanding eligible external LTD amount as calculated under § 238.182(a);
(ii) Any dividend or other liability arising from the instruments set forth in paragraph (b)(2)(i) of this section;
(iii) An eligible debt security that does not provide the holder of the instrument with a currently exercisable right to require immediate payment of the total or remaining principal amount; and
(iv) A secured liability, to the extent that it is secured, or a liability that otherwise represents a claim that would be senior to eligible debt securities in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5390(b)) and the Bankruptcy Code (11 U.S.C. 101
(c)
Whenever necessary for an insured depository institution that is a consolidated subsidiary of a covered company to satisfy the minimum long-term debt requirement set forth in § 216.3(a) of this chapter, or § 54.3(a) or § 374.3(a) of this title, if applicable, the covered company or any subsidiary of the covered company of which the insured depository institution is a consolidated subsidiary must purchase eligible internal debt securities, as defined in § 216.2 of this chapter, or § 54.2 or § 374.2 of this title, if applicable, from the insured depository institution in the amount necessary to satisfy such requirement.
12 U.S.C. 321-338a, 481-486, 1467a, 1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1844(c), 3101
(1) For a bank holding company, or a U.S. intermediate holding company, that has completed the parallel run process and received notification from the Board pursuant to § 217.121(d) of this chapter, the greater of—
(i) Standardized total risk-weighted assets as defined in § 217.2 of this chapter; and
(ii) Advanced approaches total risk-weighted assets as defined in § 217.2 of this chapter; and
(2) For any other bank holding company or U.S. intermediate holding company, standardized total risk-weighted assets as defined in § 217.2 of this chapter.
(a)
(b)
(1) In the case of a global systemically important BHC, three years after the date on which the company becomes a global systemically important BHC.
(2) In the case of a covered BHC that is not a global systemically important BHC, the later of:
(i) [THREE YEARS AFTER THE DATE OF THE FINAL RULE PUBLISHED IN THE
(ii) Three years after the date on which the company becomes subject to this part or to part 238, subpart T of this chapter.
(c)
(1) 25 percent of the amount required under § 252.62 by one year after the date on which the covered BHC first becomes subject to this subpart or part 238, subpart T of this chapter; and
(2) 50 percent of the amount required under § 252.62 by two years after the date on which the covered BHC first becomes subject to this subpart or part 238, subpart T of this chapter.
(d)
(e)
For purposes of this subpart:
(1)
(i) Right of a party, whether contractual or otherwise (including rights incorporated by reference to any other contract, agreement, or document, and rights afforded by statute, civil code, regulation, and common law), to liquidate, terminate, cancel, rescind, or accelerate the agreement or transactions thereunder, set off or net amounts owing in respect thereto (except rights related to same-day payment netting), exercise remedies in respect of collateral or other credit support or property related thereto (including the purchase and sale of property), demand payment or delivery thereunder or in respect thereof (other than a right or operation of a contractual provision arising solely from
(ii) Right or contractual provision that alters the amount of collateral or margin that must be provided with respect to an exposure thereunder, including by altering any initial amount, threshold amount, variation margin, minimum transfer amount, the margin value of collateral or any similar amount, that entitles a party to demand the return of any collateral or margin transferred by it to the other party or a custodian or that modifies a transferee's right to reuse collateral or margin (if such right previously existed), or any similar rights, in each case, other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure; and
(2) Does not include any right under a contract that allows a party to terminate the contract on demand or at its option at a specified time, or from time to time, without the need to show cause.
(1)
(i) Is paid in, and issued by the covered BHC to, and remains held by, a person that is not an affiliate of the covered BHC;
(ii) Is not secured, not guaranteed by the covered BHC or a subsidiary of the covered BHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more dates that are specified in the instrument or in the event of:
(A) A receivership, insolvency, liquidation, or similar proceeding of the covered BHC; or
(B) A failure of the covered BHC to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered BHC's credit quality, but may have an interest rate that is adjusted periodically independent of the covered BHC's credit quality, in relation to general market interest rates or similar adjustments;
(vii) Is not a structured note;
(viii) Does not provide that the instrument may be converted into or exchanged for equity of the covered BHC; and
(ix) In the case of a debt instrument issued on or after [DATE OF PUBLICATION OF FINAL RULE IN THE
(2)
(i) Is paid in, and issued by the global systemically important BHC;
(ii) Is not secured, not guaranteed by the global systemically important BHC or a subsidiary of the global systemically important BHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the global systemically important BHC's credit quality, but may have an interest rate that is adjusted periodically independent of the global systemically important BHC's credit quality, in relation to general market interest rates or similar adjustments;
(v) Is not a structured note; and
(vi) Does not provide that the instrument may be converted into or exchanged for equity of the global systemically important BHC.
(3)
(i) Is paid in, and issued by the covered BHC or an insured depository institution that is a consolidated subsidiary of the covered BHC to, and remains held by, a person that is not an affiliate of the covered BHC;
(ii) Is not secured, not guaranteed by the covered BHC or a subsidiary of the covered BHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered BHC's or insured depository institution's credit quality, but may have an interest rate that is adjusted periodically independent of the covered BHC's or insured depository institution's credit quality, in relation to general market interest rates or similar adjustments;
(vi) Is not a structured note; and
(vii) Does not provide that the instrument may be converted into or exchanged for equity of the covered BHC or an insured depository institution that is a consolidated subsidiary of the covered BHC.
(1) Means a debt instrument that:
(i) Has a principal amount, redemption amount, or stated maturity that is subject to reduction based on the performance of any asset, entity, index, or embedded derivative or similar embedded feature;
(ii) Has an embedded derivative or similar embedded feature that is linked to one or more equity securities, commodities, assets, or entities;
(iii) Does not specify a minimum principal amount that becomes due upon acceleration or early termination; or
(iv) Is not classified as debt under GAAP.
(2) Notwithstanding paragraph (1) of this definition, an instrument is not a structured note solely because it is one or both of the following:
(i) An instrument that is not denominated in U.S. dollars; or
(ii) An instrument where interest payments are based on an interest rate index.
(a)
(1) The global systemically important BHC's total risk-weighted assets multiplied by the sum of 6 percent plus the global systemically important BHC's GSIB surcharge (expressed as a percentage); and
(2) 4.5 percent of the global systemically important BHC's total leverage exposure.
(b)
(1) 6 percent of the total risk-weighted assets of the covered BHC that is not a global systemically important BHC;
(2) 2.5 percent of the leverage exposure of the covered BHC that is not a global systemically important BHC, if the covered BHC is required to maintain a minimum supplementary leverage ratio under part 217 of this chapter; and
(3) 3.5 percent of the average total consolidated assets of the covered BHC that is not a global systemically important BHC.
(c)
(1) A covered BHC's outstanding eligible external long-term debt amount is the sum of:
(i) One hundred (100) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered BHC in greater than or equal to two years;
(ii) Fifty (50) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered BHC in greater than or equal to one year and less than two years; and
(iii) Zero (0) percent of the amount due to be paid of unpaid principal of the outstanding eligible debt securities issued by the covered BHC in less than one year.
(2) For purposes of paragraph (c)(1) of this section, the date on which principal is due to be paid on an outstanding eligible debt security is calculated from the earlier of:
(i) The date on which payment of principal is required under the terms governing the instrument, without respect to any right of the holder to accelerate payment of principal; and
(ii) The date the holder of the instrument first has the contractual right to request or require payment of the amount of principal, provided that, with respect to a right that is exercisable on one or more dates that are specified in the instrument only on the occurrence of an event (other than an event of a receivership, insolvency, liquidation, or similar proceeding of the covered BHC, or a failure of the covered BHC to pay principal or interest on the instrument when due), the date for the outstanding eligible debt security under this paragraph (c)(2)(ii) will be calculated as if the event has occurred.
(3) After notice and response proceedings consistent with 12 CFR part 263, subpart E, the Board may order a covered BHC to exclude from its outstanding eligible long-term debt amount any debt security with one or more features that would significantly impair the ability of such debt security to take losses.
(d)
(a)
(1) 18 percent of the global systemically important BHC's total risk-weighted assets; and
(2) 7.5 percent of the global systemically important BHC's total leverage exposure.
(b)
(1) The global systemically important BHC's common equity tier 1 capital (excluding any common equity tier 1 minority interest);
(2) The global systemically important BHC's additional tier 1 capital (excluding any tier 1 minority interest); and
(3) The global systemically important BHC's outstanding eligible external long-term debt amount as calculated pursuant § 252.62(c).
(c)
(1)
(2)
(i)
(A) The global systemically important BHC's net income, calculated in accordance with the instructions to the FR Y-9C, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and
(B) The average of the global systemically important BHC's net income, calculated in accordance with the instructions to the FR Y-9C, for the four calendar quarters preceding the current calendar quarter.
(ii)
(iii)
(iv)
(v)
(3)
(A) 18 percent; minus
(B) The ratio (expressed as a percentage) of the global systemically important BHC's additional tier 1 capital (excluding any tier 1 minority interest) to its total risk-weighted assets; and minus
(C) The ratio (expressed as a percentage) of the global systemically important BHC's outstanding eligible external long-term debt amount as calculated in § 252.62(c) to total risk-weighted assets.
(ii) Notwithstanding paragraph (c)(3)(i) of this section, if the ratio (expressed as a percentage) of a global systemically important BHC's external total loss-absorbing capacity amount as calculated under paragraph (b) of this section to its risk-weighted assets is less than or equal to 18 percent, the global systemically important BHC's external TLAC risk-weighted buffer level is zero.
(4)
(ii) A global systemically important BHC with an external TLAC risk-weighted buffer level that is greater than the external TLAC risk-weighted buffer and an external TLAC leverage buffer level that is greater than 2.0 percent, in accordance with paragraph (c)(5) of this section, is not subject to a maximum external TLAC risk-weighted payout amount or a maximum external TLAC leverage payout amount.
(iii) Except as provided in paragraph (c)(4)(iv) of this section, a global systemically important BHC may not make distributions or discretionary bonus payments during the current calendar quarter if the global systemically important BHC's:
(A) Eligible retained income is negative; and
(B) External TLAC risk-weighted buffer level was less than the external TLAC risk-weighted buffer as of the end of the previous calendar quarter or external TLAC leverage buffer level was less than 2.0 percent as of the end of the previous calendar quarter.
(iv) Notwithstanding the limitations in paragraphs (c)(4)(i) through (iii) of
(v)(A) A global systemically important BHC is subject to the lowest of the maximum payout amounts as determined under § 217.11(a)(2) of this chapter, the maximum external TLAC risk-weighted payout amount as determined under this paragraph (c), and the maximum external TLAC leverage payout amount as determined under this paragraph (c).
(B) Additional limitations on distributions may apply to a global systemically important BHC under §§ 225.4, 225.8, and 263.202 of this chapter.
(5)
(i)
(ii)
(iii)
(
(
(B) Notwithstanding paragraph (c)(5)(iii) of this section, if the ratio (expressed as a percentage) of a global systemically important BHC's external total loss-absorbing capacity amount as calculated under paragraph (b) of this section to its total leverage exposure is less than or equal to 7.5 percent, the global systemically important BHC's external TLAC leverage buffer level is zero.
(a)
(1) Issue any debt instrument with an original maturity of less than one year, including short term deposits and demand deposits, to any person, unless the person is a subsidiary of the covered BHC;
(2) Issue any instrument, or enter into any related contract, with respect to which the holder of the instrument has a contractual right to offset debt owed by the holder or its affiliates to a subsidiary of the covered BHC against the amount, or a portion of the amount, owed by the covered BHC under the instrument;
(3) Enter into a qualified financial contract with a person that is not a subsidiary of the covered BHC, except for a qualified financial contract that is:
(i) A credit enhancement;
(ii) An agreement with one or more underwriters, dealers, brokers, or other purchasers for the purpose of issuing or distributing the securities of the covered BHC, whether by means of an underwriting syndicate or through an individual dealer or broker;
(iii) An agreement with an unaffiliated broker-dealer in connection with a stock repurchase plan of the covered BHC, where the covered BHC enters into a forward contract with the broker-dealer that is fully prepaid and where the broker-dealer agrees to purchase the covered BHC's stock in the market over the term of the agreement in order to deliver the shares to the covered BHC;
(iv) An agreement with an employee or director of the covered BHC granting the employee or director the right to purchase a specific number of shares of the covered BHC at a fixed price within a certain period of time, or, if such right is to be cash-settled, to receive a cash payment reflecting the difference between the agreed-upon price and the market price at the time the right is exercised; and
(v) Any other agreement for which the Board determines that exempting the agreement from the prohibition in this paragraph (a)(3) would not pose a material risk to the orderly resolution of the covered BHC or the stability of the U.S. banking or financial system.
(4) Enter into an agreement in which the covered BHC guarantees a liability of a subsidiary of the covered BHC if such liability permits the exercise of a default right that is related, directly or indirectly, to the covered BHC becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding other than a receivership proceeding under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381 through 5394) unless the liability is subject to requirements of the Board restricting such default rights or subject to any similar requirements of another U.S. Federal banking agency; or
(5) Enter into, or otherwise begin to benefit from, any agreement that provides for its liabilities to be guaranteed by any of its subsidiaries.
(b)
(i) In the case of a global systemically important BHC, 5 percent of the covered BHC's external total loss-absorbing capacity amount, as calculated under § 252.63(b); and
(ii) In the case of a covered BHC that is not a global systemically important BHC, 5 percent of the sum of the covered BHC's:
(A) Common equity tier 1 capital (excluding any common equity tier 1 minority interest);
(B) Additional tier 1 capital (excluding any tier 1 minority interest); and
(C) Outstanding eligible external long-term debt amount as calculated pursuant to § 252.62(c).
(2) For purposes of paragraph (b)(1) of this section, an unrelated liability is any non-contingent liability of the covered BHC owed to a person that is not an affiliate of the covered BHC other than:
(i) The instruments included in the covered BHC's common equity tier 1 capital (excluding any common equity tier 1 minority interest), the covered BHC's additional tier 1 capital (excluding any common equity tier 1 minority interest), and the covered BHC's outstanding eligible external LTD amount as calculated under § 252.62(a) or § 252.62(b), as applicable;
(ii) Any dividend or other liability arising from the instruments described in paragraph (b)(2)(i) of this section;
(iii) An eligible debt security that does not provide the holder of the instrument with a currently exercisable right to require immediate payment of the total or remaining principal amount; and
(iv) A secured liability, to the extent that it is secured, or a liability that otherwise represents a claim that would be senior to eligible debt securities in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5390(b)) and the Bankruptcy Code (11 U.S.C. 101
(c) A covered BHC is not subject to paragraph (b) of this section if all of the
Whenever necessary for an insured depository institution that is a consolidated subsidiary of a covered BHC to satisfy the minimum long-term debt requirement set forth in § 216.3(a) of this chapter, or § 54.3(a) or § 374.3(a) of this title, if applicable, the covered BHC or any subsidiary of the covered BHC of which the insured depository institution is a consolidated subsidiary must purchase eligible internal debt securities, as defined in § 216.2 of this chapter, or § 54.2 or § 374.2 of this title, if applicable, from the insured depository institution in the amount necessary to satisfy such requirement.
(a)
(2) A global systemically important BHC must provide the disclosure required by paragraph (a)(1) of this section:
(i) In the offering documents for all of its eligible debt securities issued after the global systemically important BHC becomes subject to this subpart; and
(ii) Either:
(A) On the global systemically important BHC's website; or
(B) In more than one public financial report or other public regulatory reports, provided that the global systemically important BHC publicly provides a summary table specifically indicating the location(s) of this disclosure.
(b)
(2)
(A) On the global systemically important BHC's website; or
(B) In more than one public financial report or other public regulatory reports, provided that the global systemically important BHC publicly provides a summary table specifically indicating the location(s) of this disclosure.
(ii) A global systemically important BHC must make a public disclosure required by paragraph (b)(1) of this section publicly available for at least three years after the public disclosure is initially made.
(3)
(4)
(ii) The table required by paragraph (b)(1) of this section must include a separate column for each category of liability or equity instrument issued by the global systemically important BHC that:
(A) Is reported on the global systemically important BHC's balance sheet as a liability of, or equity instrument issued by, the global systemically important BHC; and
(B) Would represent a claim with a priority equal to or less than the claim represented by the global systemically important BHC's most senior class of eligible debt security under the Bankruptcy Code (11 U.S.C. 101
(C) Notwithstanding paragraphs (b)(4)(ii)(A) and (B), liabilities or equity instruments issued by the global systemically important BHC that would have the same ranking under the Bankruptcy Code (11 U.S.C. 101
(iii) The columns for each ranking position must be reported in the table in order from most junior claim level to most senior claim level.
(5)
(i) The amount required by row 2 equals the total balance sheet amount associated with the global systemically important BHC's liabilities and outstanding equity instruments in the applicable column.
(ii) For purposes of row 3, “excluded liabilities” refers to liabilities reported in row 2 that are:
(A) Derivative liabilities;
(B) Structured notes;
(C) Liabilities not arising through a contract, including tax liabilities;
(D) Liabilities which that have a greater priority than senior unsecured creditors under the Bankruptcy Code (11 U.S.C. 101
(E) Any liabilities that, under the laws of the United States or any State applicable to the global systemically important BHC, may not be written down or converted into equity by a resolution authority or bankruptcy court without giving rise to material risk of successful legal challenge or valid compensation claims.
(iii) For purposes of rows 3 through 5, “TLAC” refers to outstanding external total loss-absorbing capacity amount as defined in § 252.63(b).
(a)
(1) Is controlled by a global systemically important foreign banking organization; or
(2) Is not controlled by a global systemically important foreign banking organization and is a Category II U.S. intermediate holding company, Category III U.S. intermediate holding company, or a Category IV U.S. intermediate holding company.
(b)
(i) In the case of a covered IHC controlled by a global systemically important foreign banking organization, three years after the date on which the company becomes a covered IHC controlled by a global systemically important foreign banking organization; and
(ii) In the case of a covered IHC that is not controlled by a global systemically important foreign banking organization, the later of:
(A) Three years after the [DATE OF FINALIZATION OF PROPOSED RULE]; or
(B) Three years after the date on which the company becomes a covered IHC.
(2) A covered IHC must comply with the requirements of § 252.164 before:
(i) In the case of a covered IHC controlled by a global systemically important foreign banking organization, two years after the date on which the company becomes a covered IHC; and
(ii) In the case of a covered IHC that is not controlled by a global systemically important foreign banking organization, six months after the date on which the company becomes a covered IHC.
(c) Notwithstanding paragraph (b) of this section, a covered IHC that is not controlled by a global systemically important foreign banking organization must have an outstanding eligible long-term debt amount that is no less than:
(1) 25 percent of the amount required under § 252.162 by one year after the date on which the covered IHC first becomes subject to this subpart; and
(2) 50 percent of the amount required under § 252.162 by two years after the date on which the covered IHC first becomes subject to this subpart.
(d)
(1) During the three-year period set forth in paragraph (b)(1)(i) of this section, a covered IHC must continue to comply with the requirements of this subpart that applied to the covered IHC the day before the date on which the covered IHC became controlled by a foreign global systemically important banking organization; and
(2) The last certification provided by a covered IHC pursuant to § 252.164 will be treated as the initial certification required by the covered IHC pursuant to § 252.164 the day it becomes controlled by a global systemically important foreign banking organization.
(e)
For purposes of this subpart:
(i) Right of a party, whether contractual or otherwise (including rights incorporated by reference to any other contract, agreement or document, and rights afforded by statute, civil
(ii) Right or contractual provision that alters the amount of collateral or margin that must be provided with respect to an exposure thereunder, including by altering any initial amount, threshold amount, variation margin, minimum transfer amount, the margin value of collateral or any similar amount, that entitles a party to demand the return of any collateral or margin transferred by it to the other party or a custodian or that modifies a transferee's right to reuse collateral or margin (if such right previously existed), or any similar rights, in each case, other than a right or operation of a contractual provision arising solely from a change in the value of collateral or margin or a change in the amount of an economic exposure; and
(2) Does not include any right under a contract that allows a party to terminate the contract on demand or at its option at a specified time, or from time to time, without the need to show cause.
(1)
(i) Is paid in, and issued by the covered IHC to, and remains held by, a person that does not directly or indirectly control the covered IHC and is not a wholly owned subsidiary;
(ii) Is not secured, not guaranteed by the covered IHC or a subsidiary of the covered IHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more dates that are specified in the instrument or in the event of:
(A) A receivership, insolvency, liquidation, or similar proceeding of the covered IHC; or
(B) A failure of the covered IHC to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered IHC's credit quality, but may have an interest rate that is adjusted periodically independent of the covered IHC's credit quality, in relation to general market interest rates or similar adjustments;
(vii) Is not a structured note;
(viii) Does not provide that the instrument may be converted into or exchanged for equity of the covered IHC; and
(ix) In the case of a debt instrument issued on or after [DATE OF PUBLICATION OF FINAL RULE IN THE
(2)
(i) Is paid in, and issued by the covered IHC to, and remains held by, a person that does not directly or indirectly control the covered IHC and is not a wholly owned subsidiary;
(ii) Is not secured, not guaranteed by the covered IHC or a subsidiary of the covered IHC, and not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered IHC's credit quality, but may have an interest rate that is adjusted periodically independent of the covered IHC's credit quality, in relation to general market interest rates or similar adjustments;
(v) Is not a structured note; and
(vi) Does not provide that the instrument may be converted into or exchanged for equity of the covered IHC; and
(3)
(i) Is paid in, and issued by the covered IHC or an insured depository institution that is a consolidated subsidiary of the covered IHC to, and remains held by, a person that is not an affiliate of the covered IHC;
(ii) Is not secured, not guaranteed by the covered IHC or a subsidiary of the covered IHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not have a credit-sensitive feature, such as an interest rate that is reset periodically based in whole or in part on the covered IHC's or insured depository institution's credit quality, but may have an interest rate that is adjusted periodically independent of the covered IHC's or insured depository institution's credit quality, in relation to general market interest rates or similar adjustments;
(vi) Is not a structured note; and
(vii) Does not provide that the instrument may be converted into or exchanged for equity of the covered IHC or an insured depository institution that is a consolidated subsidiary of the covered IHC.
(i) Is paid in, and issued by the covered IHC;
(ii) Is not secured, not guaranteed by the covered IHC or a subsidiary of the covered IHC, and is not subject to any other arrangement that legally or economically enhances the seniority of the instrument;
(iii) Has a maturity of greater than or equal to one year from the date of issuance;
(iv) Is governed by the laws of the United States or any State thereof;
(v) Does not provide the holder of the instrument a contractual right to accelerate payment of principal or interest on the instrument, except a right that is exercisable on one or more
(A) A receivership, insolvency, liquidation, or similar proceeding of the covered IHC; or
(B) A failure of the covered IHC to pay principal or interest on the instrument when due and payable that continues for 30 days or more;
(vi) Is not a structured note;
(vii) Is issued to and remains held by a company that is incorporated or organized outside of the United States, and directly or indirectly controls the covered IHC or is a wholly owned subsidiary; and
(viii) Has a contractual provision that is approved by the Board that provides for the immediate conversion or exchange of the instrument into common equity tier 1 of the covered IHC upon issuance by the Board of an internal debt conversion order.
(1) Means a debt instrument that:
(i) Has a principal amount, redemption amount, or stated maturity that is subject to reduction based on the performance of any asset, entity, index, or embedded derivative or similar embedded feature;
(ii) Has an embedded derivative or other similar embedded feature that is linked to one or more equity securities, commodities, assets, or entities;
(iii) Does not specify a minimum principal amount that becomes due and payable upon acceleration or early termination; or
(iv) Is not classified as debt under GAAP.
(2) Notwithstanding paragraph (1) of this definition, an instrument is not a structured note solely because it is one or both of the following:
(i) A non-dollar-denominated instrument, or
(ii) An instrument whose interest payments are based on an interest rate index.
(a)
(1) Six percent of the covered IHC's total risk-weighted assets;
(2) If the covered IHC is required to maintain a minimum supplementary leverage ratio, 2.5 percent of the covered IHC's total leverage exposure; and
(3) 3.5 percent of the covered IHC's average total consolidated assets.
(b)
(1) A covered IHC's outstanding eligible covered IHC long-term debt amount is the sum of:
(i) One hundred (100) percent of the amount due to be paid of unpaid principal of the outstanding eligible covered IHC debt securities issued by the covered IHC in greater than or equal to two years; and
(ii) Fifty (50) percent of the amount due to be paid of unpaid principal of the outstanding eligible covered IHC debt securities issued by the covered IHC in greater than or equal to one year and less than two years;
(iii) Zero (0) percent of the amount due to be paid of unpaid principal of the outstanding eligible covered IHC debt securities issued by the covered IHC in less than one year.
(2) For purposes of paragraph (b)(1) of this section, the date on which principal is due to be paid on an outstanding eligible covered IHC debt security is calculated from the earlier of:
(i) The date on which payment of principal is required under the terms governing the instrument, without respect to any right of the holder to accelerate payment of principal; and
(ii) The date the holder of the instrument first has the contractual right to request or require payment of the amount of principal, provided that, with respect to a right that is exercisable on one or more dates that are specified in the instrument only on the occurrence of an event (other than an event of a receivership, insolvency, liquidation, or similar proceeding of the covered IHC, or a failure of the covered IHC to pay principal or interest on the instrument when due), the date for the outstanding eligible covered IHC debt security under this paragraph (b)(2)(ii) will be calculated as if the event has occurred.
(3) After notice and response proceedings consistent with 12 CFR part 263, subpart E, the Board may order a covered IHC to exclude from its outstanding eligible covered IHC long-term debt amount any debt security with one or more features that would significantly impair the ability of such debt security to take losses.
(c)
(a) The Board may issue an internal debt conversion order if:
(1) The Board has determined that the covered IHC is in default or danger of default; and
(2) Any of the following circumstances apply:
(i) A foreign banking organization that directly or indirectly controls the covered IHC or any subsidiary of the top-tier foreign banking organization has been placed into resolution proceedings (including the application of statutory resolution powers) in its home country;
(ii) The home country supervisor of the top-tier foreign banking organization has consented or not promptly objected after notification by the Board to the conversion or exchange of the eligible internal debt securities of the covered IHC; or
(iii) The Board has made a written recommendation to the Secretary of the Treasury pursuant to 12 U.S.C. 5383(a) regarding the covered IHC.
(b) For purposes of paragraph (a) of this section, the Board will consider:
(1) A covered IHC in default or danger of default if
(i) A case has been, or likely will promptly be, commenced with respect to the covered IHC under the Bankruptcy Code (11 U.S.C. 101
(ii) The covered IHC has incurred, or is likely to incur, losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the covered IHC to avoid such depletion;
(iii) The assets of the covered IHC are, or are likely to be, less than its obligations to creditors and others; or
(iv) The covered IHC is, or is likely to be, unable to pay its obligations (other than those subject to a bona fide dispute) in the normal course of business; and
(2) An objection by the home country supervisor to the conversion or exchange of the eligible internal debt securities to be prompt if the Board receives the objection no later than 24 hours after the Board requests such consent or non-objection from the home country supervisor.
(a)
(b)
(c)
(d)
(e)
(f)
(2) A covered IHC identified as a non-resolution covered IHC pursuant to paragraph (b) of this section or determined by the Board to be a non-resolution covered IHC pursuant to paragraph (e) of this section must comply with the requirements in this subpart applicable to a non-resolution covered IHC one year after such identification or determination, unless such time period is extended by the Board in its discretion.
(a)
(1) 18 percent of the resolution covered IHC's total risk-weighted assets;
(2) If the Board requires the resolution covered IHC to maintain a minimum supplementary leverage ratio, 6.75 percent of the resolution covered IHC's total leverage exposure; and
(3) Nine (9) percent of the resolution covered IHC's average total consolidated assets.
(b)
(1) 16 percent of the non-resolution covered IHC's total risk-weighted assets;
(2) If the Board requires the non-resolution covered IHC to maintain a minimum supplementary leverage ratio, 6 percent of the non-resolution covered IHC's total leverage exposure; and
(3) Eight (8) percent of the non-resolution covered IHC's average total consolidated assets.
(c)
(i) The covered IHC's common equity tier 1 capital (excluding any common equity tier 1 minority interest) held by a company that is incorporated or organized outside of the United States and that directly or indirectly controls the covered IHC;
(ii) The covered IHC's additional tier 1 capital (excluding any tier 1 minority interest) held by a company that is incorporated or organized outside of the United States and that directly or indirectly controls the covered IHC; and
(iii) The covered IHC's outstanding eligible covered IHC long-term debt amount as calculated in § 252.162(b).
(2) A resolution covered IHC's covered IHC total loss-absorbing capacity amount is equal to the sum of:
(i) The covered IHC's common equity tier 1 capital (excluding any common equity tier 1 minority interest);
(ii) The covered IHC's additional tier 1 capital (excluding any tier 1 minority interest); and
(iii) The covered IHC's outstanding eligible covered IHC long-term debt amount as calculated in to § 252.162(b).
(d)
(1)
(2)
(i)
(A) The covered IHC's net income, calculated in accordance with the instructions to the FR Y-9C, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and
(B) The average of the covered IHC's net income, calculated in accordance
(ii)
(iii)
(3)
(A) 16 percent for a non-resolution covered IHC, and 18 percent for a resolution covered IHC; minus
(B) The ratio (expressed as a percentage) of the covered IHC's outstanding eligible covered IHC long-term debt amount as calculated in § 252.162(b) to total risk-weighted assets; minus
(C) For a covered IHC that is:
(
(
(ii) Notwithstanding paragraph (d)(3)(i) of this section, with respect to a resolution covered IHC, if the ratio (expressed as a percentage) of the resolution covered IHC's covered IHC total loss-absorbing capacity amount, as calculated under § 252.165(a), to the resolution covered IHC's risk-weighted assets is less than or equal to, 18 percent, the covered IHC's covered IHC TLAC buffer level is zero.
(iii) Notwithstanding paragraph (d)(3)(i) of this section, with respect to a non-resolution covered IHC, if the ratio (expressed as a percentage) of the non-resolution covered IHC's covered IHC total loss-absorbing capacity amount, as calculated under § 252.165(b), to the covered IHC's risk-weighted assets is less than or equal to 16 percent, the non-resolution covered IHC's covered IHC TLAC buffer level is zero.
(4)
(ii) A covered IHC of a global systemically important foreign banking organization with a covered IHC TLAC buffer level that is greater than the covered IHC TLAC buffer is not subject to a maximum covered IHC TLAC payout amount.
(iii) Except as provided in paragraph (d)(4)(iv) of this section, a covered IHC of a global systemically important foreign banking organization must not make distributions or discretionary bonus payments during the current calendar quarter if the covered IHC's:
(A) Eligible retained income is negative; and
(B) Covered IHC TLAC buffer level was less than the covered IHC TLAC buffer as of the end of the previous calendar quarter.
(iv) Notwithstanding the limitations in paragraphs (d)(4)(i) through (iii) of this section, the Board may permit a covered IHC of a global systemically important foreign banking organization to make a distribution or discretionary bonus payment upon a request of the covered IHC, if the Board determines that the distribution or discretionary bonus payment would not be contrary to the purposes of this section, or to the safety and soundness of the covered IHC. In making such a determination, the Board will consider the nature and extent of the request and the particular circumstances giving rise to the request.
(v) A covered IHC of a global systemically important foreign banking organization is subject to the lowest of the maximum payout amounts as determined under § 217.11(a)(2) of this chapter and the maximum covered IHC TLAC payout amount as determined under this paragraph (d).
(vi) Additional limitations on distributions may apply to a covered IHC of a global systemically important foreign banking organization under §§ 225.8 and 263.202 of this chapter.
(a)
(1) Issue any debt instrument with an original maturity of less than one year, including short term deposits and demand deposits, to any person, unless the person is an affiliate of the covered IHC;
(2) Issue any instrument, or enter into any related contract, with respect to which the holder of the instrument has
(3) Enter into a qualified financial contract that is not a credit enhancement with a person that is not an affiliate of the covered IHC;
(4) Enter into an agreement in which the covered IHC guarantees a liability of an affiliate of the covered IHC if such liability permits the exercise of a default right that is related, directly or indirectly, to the covered IHC becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding other than a receivership proceeding under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381 through 5394) unless the liability is subject to requirements of the Board restricting such default rights or subject to any similar requirements of another U.S. Federal banking agency; or
(5) Enter into, or otherwise benefit from, any agreement that provides for its liabilities to be guaranteed by any of its subsidiaries.
(b)
(i) In the case of a covered IHC controlled by a global systemically important foreign banking organization, 5 percent of the covered IHC's total loss-absorbing capacity amount, as calculated under § 252.165(c); and
(ii) In the case of a covered IHC that is not controlled by a global systemically important foreign banking organization, 5 percent of the covered IHC's:
(A) Common equity tier 1 capital (excluding any common equity tier 1 minority interest);
(B) Additional tier 1 capital (excluding any tier 1 minority interest); and
(C) Outstanding eligible long-term debt amount as calculated pursuant to § 252.162(b).
(2) For purposes of paragraph (b)(1) of this section, an unrelated liability includes:
(i) With respect to a non-resolution covered IHC, any non-contingent liability of the non-resolution covered IHC owed to a person that is not an affiliate of the non-resolution covered IHC other than those liabilities specified in paragraph (b)(3) of this section, and
(ii) With respect to a resolution covered IHC, any non-contingent liability of the resolution covered IHC owed to a person that is not a subsidiary of the resolution covered IHC other than those liabilities specified in paragraph (b)(3) of this section.
(3)(i) The instruments included in the covered IHC's common equity tier 1 capital (excluding any common equity tier 1 minority interest), the covered IHC's additional tier 1 capital (excluding any common equity tier 1 minority interest), and the covered IHC's outstanding eligible external LTD amount as calculated under § 252.162(a);
(ii) Any dividend or other liability arising from the instruments described in paragraph (b)(3)(i) of this section;
(iii) An eligible covered IHC debt security that does not provide the holder of the instrument with a currently exercisable right to require immediate payment of the total or remaining principal amount; and
(iv) A secured liability, to the extent that it is secured, or a liability that otherwise represents a claim that would be senior to eligible covered IHC debt securities in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5390(b)) and the Bankruptcy Code (11 U.S.C. 101
(c)
Whenever necessary for an insured depository institution that is a consolidated subsidiary of a covered IHC to satisfy the minimum long-term debt requirement set forth in § 216.3(a) of this chapter, or § 54.3(a) or § 374.3(a) of this title, if applicable, the covered IHC or any subsidiary of the covered IHC of which the insured depository institution is a consolidated subsidiary must purchase eligible internal debt securities, as defined in § 216.2 of this chapter, or § 54.2 or § 374.2 of this title, if applicable, from the insured depository institution in the amount necessary to satisfy such requirement.
(a) A resolution covered IHC that is controlled by a global systemically important foreign banking organization that has any outstanding eligible external debt securities must publicly disclose a description of the financial consequences to unsecured debtholders of the resolution covered IHC entering into a resolution proceeding in which the resolution covered IHC is the only entity in the United States that would be subject to the resolution proceeding.
(b) A resolution covered IHC must provide the disclosure required by paragraph (a) of this section:
(1) In the offering documents for all of its eligible external debt securities issued after the covered IHC becomes controlled by a global systemically important foreign banking organization; and
(2) Either:
(i) On the resolution covered IHC's website; or
(ii) In more than one public financial report or other public regulatory reports, provided that the resolution covered IHC publicly provides a summary table specifically indicating the location(s) of this disclosure.
For the reasons set forth in the common preamble, the Federal Deposit Insurance Corporation proposes to amend chapter III, subchapter b of title 12, Code of Federal Regulations as follows:
12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831
(1) Both:
(i) Issued by a depository institution holding company that is subject to a long-term debt requirement set forth in
(ii) An eligible debt security, as defined in § 238.181 or § 252.61 of this title, as applicable, or that is pari passu or subordinated to any eligible debt security issued by the depository institution holding company; or
(2) Both:
(i) Issued by a U.S. intermediate holding company or insured depository institution that is subject to a long-term debt requirement set forth in § 374.3 of this chapter or § 54.3, § 216.3, or § 252.162 of this title, as applicable, or a subsidiary of such U.S. intermediate holding company or insured depository institution; and
(ii) An eligible external debt security, as defined in § 374.2 of this chapter or § 54.2, § 216.2, or § 252.161 of this title, as applicable, or that is pari passu or subordinated to any eligible external debt security issued by the U.S. intermediate holding company or insured depository institution; or
(3) Issued by a global systemically important banking organization, as defined in § 252.2 of this title other than a global systemically important BHC; or issued by a subsidiary of a global systemically important banking organization that is not a global systemically important BHC, other than a U.S. intermediate holding company subject to a long-term debt requirement set forth in § 252.162 of this title; and where,
(i) The instrument is eligible for use to comply with an applicable law or regulation requiring the issuance of a minimum amount of instruments to absorb losses or recapitalize the issuer or any of its subsidiaries in connection with a resolution, receivership, insolvency, or similar proceeding of the issuer or any of its subsidiaries; or
(ii) The instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition; for purposes of this paragraph (3)(ii) of this definition, if the issuer may be subject to a special resolution regime, in its jurisdiction of incorporation or organization, that addresses the failure or potential failure of a financial company and any instrument described in paragraph (3)(i) of this definition is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument, then an instrument is pari passu or subordinated to any instrument described in paragraph (3)(i) of this definition if that instrument is eligible under that special resolution regime to be written down or converted into equity or any other capital instrument ahead of or proportionally with any instrument described in paragraph (3)(i) of this definition; and
(4) Provided that, for purposes of this definition,
(c) * * *
(1)
(i) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own common stock instruments from its common equity tier 1 capital elements to the extent such instruments are not excluded from regulatory capital under § 324.20(b)(1);
(ii) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own additional tier 1 capital instruments from its additional tier 1 capital elements;
(iii) An FDIC-supervised institution must deduct an investment in the FDIC-supervised institution's own tier 2 capital instruments from its tier 2 capital elements; and
(iv) An advanced approaches FDIC-supervised institution must deduct an investment in the institution's own covered debt instruments from its tier 2 capital elements, as applicable. If the advanced approaches FDIC-supervised institution does not have a sufficient amount of tier 2 capital to effect this deduction, the institution must deduct the shortfall amount from the next higher (that is, more subordinated) component of regulatory capital.
(h) * * *
(3) * * *
(iii) For an investment in an FDIC-supervised institution's own capital instrument under paragraph (c)(1) of this section, an investment in the capital of an unconsolidated financial institution under paragraphs (c)(4) through (6) and (d) of this section (as applicable), and an investment in a covered debt instrument under paragraphs (c)(1), (5), and (6) of this section:
By order of the Board of Governors of the Federal Reserve System.
By order of the Board of Directors.
Federal Deposit Insurance Corporation (FDIC).
Notice of proposed rulemaking and request for comment.
The FDIC is seeking comment on a proposal to revise its current rule that requires the submission of resolution plans by insured depository institutions (IDIs) with $50 billion or more in total assets. The proposal would modify the current rule by revising the requirements regarding the content and timing of resolution submissions as well as interim supplements to those submissions provided to the FDIC by IDIs with $50 billion or more in total assets in order to support the FDIC's resolution readiness in the event of material distress and failure of these large IDIs. IDIs with $100 billion or more in total assets will submit full resolution plans, while IDIs with total assets between $50 and $100 billion will submit informational filings. The proposed rule would also enhance how the credibility of resolution submissions will be assessed, expand expectations regarding engagement and capabilities testing, and explain expectations regarding the FDIC's review and enforcement of IDIs' compliance with the rule.
Comments must be received by November 30, 2023.
You may submit comments on the notice of proposed rulemaking, identified by RIN 3064-AF90, by any of the following methods:
•
•
•
•
Elizabeth Falloon, Senior Advisor, Division of Complex Institution Supervision and Resolution, 202-898-6626,
The FDIC's regulation “Resolution plans required for insured depository institutions with $50 billion or more in total assets,
This proposal builds on the FDIC's more than a decade-long experience implementing the current rule, providing guidance and feedback to CIDIs, and leveraging the content of submissions for the development of resolution strategies by the FDIC. Through this process, the FDIC has gained a better understanding of the challenges of resolving CIDIs and the importance of resolution plans and other related submissions to facilitate the FDIC's readiness in the event of a failure of one of these CIDIs. Part of the challenge arises from the wide range of business models and structures among CIDIs. While some of these CIDIs are engaged largely in traditional banking activities, with nearly all assets and activities conducted within the CIDI or its subsidiaries (the bank chain), others conduct significant non-banking activities. Many of the CIDIs have a broker-dealer subsidiary or affiliate that provides services to bank customers. The CIDIs subject to the current rule also include banks primarily engaged in a particular business segment, such as credit card services, as well as U.S. IDIs that are part of large foreign banking organizations. There is no one-size-fits-all resolution approach for these institutions; rather, the FDIC must be prepared to execute a range of resolution options, recognizing the trade-offs among those options. The FDIC's development of resolution strategies—and its assessment of the options and trade-offs that inform them—benefit from the CIDI's knowledge of its own firm, an understanding of the CIDI's relevant capabilities, and an awareness of the impediments to executing an orderly resolution of the CIDI. Across the different CIDI business models and structures, there are a variety of factors that increase the challenges and complexity of resolution in the event of the failure of these large banks. These factors include deposit profile as well as size and organizational complexity.
In general, the CIDIs tend to have a more significant proportion of uninsured deposits as compared to smaller banks. In the aggregate, more than 42 percent of deposits of IDIs over $50 billion in total assets are uninsured. High ratios of uninsured deposits increase resolution challenges, as was recently demonstrated in the failures of three large banks in the spring of 2023; Silicon Valley Bank (SVB), Signature Bank and First Republic Bank (First Republic). All were over $100 billion in size,
The failures of SVB and Signature Bank on March 10 and 12, 2023, respectively were primarily caused by illiquidity precipitated by contagion effects, especially those resulting from withdrawals by uninsured depositors at unprecedented speed and volumes. The withdrawals were prompted in part by news of stress amplified through social media and other channels. As a result, the FDIC's resolution preparation runway and ability to market pre-failure were severely compressed. For both IDIs, the FDIC established a bridge depository institution (BDI) to continue bank operations during a brief marketing period. Less than two months following those failures, First Republic was placed in receivership and sold; although First Republic had a similar profile of largely uninsured deposits, it was able to manage its liquidity for several weeks prior to failure. With additional time to market First Republic pre-failure, the FDIC was able to transfer all of the assets and liabilities to a single acquirer without the necessity of establishing a BDI, although the FDIC stood ready to exercise the authority to form a BDI if needed.
In addition, the FDIC lacked important resolution planning information to facilitate marketing the IDIs. While SVB and First Republic had filed their first resolution plans just a few months before their failures, the
In addition to increasing the risk of a precipitous liquidity failure, a high level of uninsured deposits also increases resolution complexity in other ways. Under the FDI Act, any transaction using FDIC assistance—including where assistance is provided in connection with the establishment of a BDI—must meet the least-cost test, absent a systemic risk exception. Under the least-cost test, the cost to the deposit insurance fund (DIF) as a result of any sale needs to be less than the cost to the DIF from simply liquidating the bank's assets and paying off insured deposits. Where the proportion of insured deposits is very low, potential costs to the DIF of paying out insured depositors and liquidating is low relative to any other option in resolution. In the case of SVB and Signature Bank, a systemic risk exception to the least-cost test was necessary to protect uninsured depositors to maintain franchise value and mitigate adverse effects on economic conditions or financial stability, including the risk of contagion to other IDIs.
Size of an IDI also can significantly impact the resolution options available to the FDIC under the FDI Act, as well as provide a marker for other resolution challenges, such as organizational complexity and higher levels of uninsured deposits. In particular, as IDIs increase in size, the likelihood of a timely sale to a single acquirer diminishes. Currently, there are 45 IDIs with at least $50 billion in total assets and 31 over $100 billion. As a group, these CIDIs represent approximately $13.8 trillion in total deposits. While a closing weekend sale may be an option in some cases, its availability cannot be assumed in view of the size, complexity, and potential speed of failure of a CIDI. This is particularly true for the largest CIDIs with $100 billion or more in total assets because the pool of potential acquirers for these institutions is extremely limited, and the complexity of any possible transaction is increased. While there is a larger pool of possible acquiring institutions for CIDIs in the $50 to $100 billion total asset range, some of these institutions engage in highly complex activities and pose similar levels of operational complexity as those over $100 billion in total assets. As such, these activities must be identified and considered when contemplating resolution strategies.
Thus, this proposal addresses two distinct groups of CIDIs based on size, with differing corresponding obligations for each group under the proposed rule.
The first group comprises those IDIs with $100 billion or more in total assets (group A CIDIs). The proposed rule would require group A CIDIs to submit full resolution plans containing an identified strategy appropriate to the CIDI for its orderly and efficient resolution, as well as providing all other content elements described in the proposed rule. The second group comprises those IDIs with at least $50 billion but less than $100 billion in total assets (group B CIDIs). The proposed rule would require resolution submissions from group B CIDIs in the form of an informational filing. The informational filing would not require development of an identified strategy for resolution nor the demonstration of capabilities necessary to produce valuations needed in assessing the least-cost test. All CIDIs would be required to participate in engagement and capabilities testing regarding matters related to their resolution submissions.
Based upon these considerations, and the FDIC's experience in planning for and executing bank resolutions since the adoption of the current rule, the FDIC is proposing changes intended to make the resolution submissions more useful and appropriately focused on the resolution challenges presented by both group A CIDIs and group B CIDIs.
Specifically, this proposal would:
• Clarify and enhance resolution submission requirements applicable to IDIs with $50 billion or more in total assets, including resolution plans submitted by group A CIDIs and informational filings submitted by group B CIDIs;
• Require each group A CIDI to provide an identified strategy for resolution that ensures timely access to insured deposits, maximizes value from the sale or disposition of assets, minimizes any losses realized by creditors of the group A CIDI in resolution, and addresses potential risks of adverse effects on U.S. economic conditions or financial stability;
• Clarify requirements with respect to the assumptions for the failure scenario used by group A CIDIs in the resolution plan submission and reserve the ability of the FDIC to provide additional parameters for the failure scenario for all group A CIDIs or specific individual group A CIDIs in future plan submission cycles;
• Strengthen resolution submission content elements and associated requirements regarding capabilities to support optionality available to the FDIC and ensure that the FDIC's development of resolution strategies reflects considerations related to the characteristics of the individual CIDI and potential challenges that could be faced in resolution;
• Refine the requirements for group A CIDIs with respect to least-cost analysis and focus on ensuring that the FDIC has the building blocks and capabilities it needs to undertake the least-cost test in resolution in the event of failure of a group A CIDI;
• Adjust the frequency of resolution submissions to accommodate a two-year cycle that includes engagement and capabilities testing as well as periodic interim supplements containing specified resolution submission content items;
• Establish an enhanced credibility standard for resolution submissions and clarify the process for review and feedback to identify and address weaknesses in resolution submissions and enforce the rule;
• Establish a requirement for informational filings to be submitted by group B CIDIs that is focused on information most important and appropriate for resolution of those CIDIs, and establish a credibility standard appropriate to the informational filings; and
• Codify certain aspects of guidance and feedback previously issued to IDIs subject to the current rule.
In finalizing this proposal, the FDIC proposes to supersede all prior guidance and feedback related to the current rule.
The proposed rule retains the approach of the current rule in requiring each group A CIDI to develop a strategy for resolution that is appropriate for its size, complexity, and risk profile. However, the FDIC is mindful that the scenario for failure of a large, complex IDI cannot be predicted and could occur across a wide range of circumstances, both idiosyncratic to the institution and with respect to the greater economy. The FDIC will need to determine the strategy most appropriate to the scenario at the time, which may or may not be the strategy described in the group A CIDI's resolution plan.
While approximately 95 percent of the resolutions conducted by the FDIC since 2007 involved the sale of the IDI's
Although the FDIC believes that the proposed requirement to develop a scenario using a BDI will enable the FDIC to adopt a strategic approach with useful optionality to support resolution in most cases, the FDIC is aware that for some group A CIDIs, the structure and profile of the institution may suggest that another resolution strategy is better suited to the goals described in the proposed rule. In such a case, the group A CIDI may use a different identified strategy that best meets the goals established in the proposed rule, such as a payout and liquidation of the bank, or a BDI to a different exit option. The proposed rule would not, however, permit the CIDI's identified strategy to be simply a sale of substantially all assets and liabilities over closing weekend. As noted, the FDIC cannot rely upon the availability of that strategy for group A CIDIs. In addition, its use as an identified strategy would provide less benefit to the FDIC in terms of information upon which to build optionality, as compared to a BDI strategy or liquidation. Regardless of the identified strategy used, the proposed rule would seek information and analysis that would inform the decisions that would be made by the FDIC at the time of an actual failure, and development of the strategic approaches appropriate to the actual scenario. The FDIC's goals in resolution are unchanged from those expressed in the current rule, and the proposed rule would seek to embed them more explicitly in an enhanced credibility standard and reflect them more fully in the requirements for resolution submission content. In order to meet the goals of an orderly resolution that is least-costly to the DIF, protects depositors, and maximizes return, the FDIC must have an understanding of the obstacles to an individual IDI's resolution—and potential mitigants to those obstacles—including the impact of separation of the IDI from its parent company and affiliates and the impact on the business of the IDI and the continuity of its critical services. Because the use of a BDI may be a likely approach in many scenarios, an important focus of the proposed rule is the information, analysis, and capabilities necessary to establish and stabilize a BDI, including valuation information and capabilities that would support the FDIC's least-cost test analysis in evaluating a BDI strategy against other options.
The proposed rule requires a more limited informational filing from group B CIDIs, and does not require group B CIDIs to develop a resolution strategy or submit certain other content elements. The FDIC believes that the approach taken for group B CIDI requirements appropriately recognizes the additional complexity and greater resolution challenges applicable to the group A CIDIs. The threshold of $100 billion in total assets—which is also used in the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (Dodd-Frank Act)
Finally, the proposed rule would establish an expectation of complete resolution submissions by the CIDIs biennially. This biennial submission cycle is intended to balance the need for up-to-date information the time that it takes for CIDIs to prepare a complete submission, and to allow for thorough plan review, engagement and capabilities testing to supplement that review. In order to facilitate the FDIC's planning and readiness, CIDIs would be required to provide current information in non-submission years through an interim supplement that would include limited specified information that would be provided in years where a complete submission is not required.
The current rule was proposed in 2010 and became effective in 2012;
In 2014, the FDIC provided further clarification, guidance, and direction for the preparation of subsequent CIDI resolution plans with a focus on the failure scenario, resolution strategies, least-cost analysis, and identified obstacles to be discussed in the
After several plan submission cycles, in 2018 the FDIC announced a moratorium (moratorium) on the rule's requirements for all institutions pending completion of a new rulemaking.
Following the issuance of the ANPR, the FDIC continued to further develop its thinking regarding resolution planning for large IDIs and how to maximize the FDIC's resolution readiness. In 2020-2021, the FDIC undertook targeted engagement with select CIDIs on their 2018 plan submissions, a step consistent with the enhanced emphasis on engagement and capabilities testing envisioned under the ANPR.
In January 2021, the FDIC Board took action to lift the moratorium on the resolution plan requirement for CIDIs with $100 billion or more in assets
In addition to enacting and implementing the current rule, the FDIC has instituted several rulemakings that support its mission as deposit insurer to make timely insured deposit payments and, as resolution authority, to resolve a failed IDI in the manner that is least costly to the DIF. These separate rulemakings address certain difficulties the FDIC could face in the closing of a large, complex IDI, and include
Separate from the FDI Act and the current rule's requirements, section 165(d) of the Dodd-Frank Act mandates that certain bank holding companies and nonbank financial companies (covered companies) submit resolution plans (DFA resolution plans) for the rapid and orderly resolution of the covered company under the U.S. Bankruptcy Code.
In November 2019, the Board of Governors of the Federal Reserve System (FRB) and the FDIC published a joint final rule (section 165(d) rule)
While the current rule and the section 165(d) rule both require planning for the resolution of large, complex financial institutions, to minimize the cost and disruption of failures, there are some noteworthy differences between the section 165(d) rule requirements and the current rule. Most fundamentally, the section 165(d) rule requirements are focused on financial stability and mitigating systemic risk. The current rule's requirements, by contrast, are focused on the FDIC's ability to resolve a particular IDI. This focus includes two critical priorities: (1) that insured depositors have access to their cash in an orderly fashion and as quickly as possible; and (2) that the FDIC must
Another difference between the section 165(d) rule requirements and the current rule is that the section 165(d) rule focuses on the entire banking organization, including the holding company and nonbank affiliates and envisions a resolution under the U.S. Bankruptcy Code.
In keeping with the complementary purposes of the current rule and the section 165(d) rule, in developing this proposal, the FDIC has been mindful of the guidance that the FDIC and the FRB anticipate developing to help certain firms further develop their DFA resolution plans. That guidance is expected to be specifically addressed to Category II and Category III banking organizations,
Recent events underscore the importance of robust resolution planning in advance of failure, particularly for these large and complex CIDIs. The speed of bank runs has been accelerated by advances in banking technology that allow deposits to move electronically, with no need to stand in line or wait for physical checks or bills. Advances in communications technology allow a message to reach hundreds of millions of screens instantaneously. In the case of SVB, the speed of the run was the fastest and largest withdrawal of deposits in a single day in the nation's history. From a resolution planning perspective, this new reality underscores the need for effective resolution planning long before a bank's failure is on the horizon.
Like the current rule, the proposed rule would apply to all IDIs with $50 billion or more in total assets. Under the proposed rule, however, the requirements pertaining to group A CIDIs (
Each group A CIDI would be required to periodically submit a resolution plan to the FDIC, including an identified resolution strategy for its resolution under an identified failure scenario. The development of this strategy, together with a description and analysis of institution-specific information and capabilities relevant to resolution, will facilitate the FDIC's ability to resolve a group A CIDI across a range of scenarios in a manner that ensures timely access to insured deposits, maximizes value from the sale or disposition of assets, minimizes any losses realized by creditors of the CIDI in resolution, and addresses potential risk of adverse effects on U.S. economic conditions or financial stability, while minimizing the cost of the resolution to the DIF. The resolution plan would be assessed based on the credibility of the resolution strategy as well as with respect to other information, analysis and capabilities included and described in the resolution plan. Each group A CIDI would also be required to participate in engagement and capabilities testing as described below in section III.C.
Each group B CIDI would be required to periodically submit an informational filing to the FDIC that would consist of the informational content required under the proposed rule, but would not include the requirement for the development of an identified strategy as described in section III.A.3.a below, or the requirement to develop capabilities necessary to produce valuations needed in assessing the least-cost test and provide the related content described in section III.A.3.d below. The informational filing would assist the FDIC in developing its own resolution strategy for the firm. Each group B CIDI would be required to participate in engagement and capabilities testing as described below in section III.C.
Since the current rule's enactment in 2012, the FDIC has observed that the annual plan submission requirement has been challenging for both the CIDIs and the FDIC. An annual submission cycle does not allow the FDIC sufficient time to thoroughly review CIDIs' submissions and develop meaningful feedback, nor does it provide sufficient time for CIDIs to incorporate that feedback into their subsequent submissions. Moreover, an annual cycle limits the opportunity for meaningful engagement between the FDIC and a CIDI between submissions. As discussed in section III.C below, the FDIC expects engagement and capabilities testing to be significant components of the resolution planning process under the proposed rule. At the same time, the FDIC is aware of the importance of up-to-date submissions, particularly as CIDIs continue to change, in some cases rapidly. In the case of rapid liquidity failures, which are more likely for large banks as reflected in the failures of spring 2023, timely information on hand is needed to support a short period to prepare for resolution, including establishment of a BDI and marketing the IDI franchise and the franchise components.
To balance these considerations, going forward, the FDIC proposes to establish a submission schedule that provides adequate time for review of a submission and the development of feedback; engagement and capabilities testing; and the CIDI's development of content for the next resolution submission that is responsive to feedback, as well as requiring limited interim supplements to provide timely updates of the most critical information.
Accordingly, under proposed § 360.10(c)(1), each CIDI would provide a complete resolution submission to the FDIC every two years, with the submission of a limited interim supplement every other year. The interim supplement is intended to provide critical up-to-date information that will update certain limited elements of submission content. In considering what information should be included in the supplement, the FDIC intends to limit the information to the most essential data elements that are can be efficiently updated year over year to maximize the utility of the information to the FDIC, while limiting the burden to CIDIs of the interim supplement requirement.
The FDIC retains the discretion to alter the submission dates upon written notice to the CIDI. Consistent with past practice, the FDIC expects to provide notice of a different schedule in a timely fashion to accommodate appropriate time for preparation of the submission.
Under the proposed submission schedule, the FDIC would create two submission cohorts of group A CIDIs, comprising roughly the same number of CIDIs, with each cohort to file a complete resolution plan on a date that will be specified by the FDIC every other year, beginning at least 270 days from the effective date of the final rule. This approach would allow for improved workflow and efficiency, would permit the FDIC to create filing cohorts of group A CIDIs with like characteristics to support horizontal analysis across the submission cohort, and would further support engagement and capabilities testing. Section III.E.8 below discusses in more detail the proposed approach to transition to filing under the amended rule's requirements after it is finalized.
All group B CIDIs would be in the same cohort, with an initial filing date at least 270 days from the effective date of the final rule.
The proposed rule would retain in modified form the existing section of the current rule concerning the provision of information in the event of material changes to CIDIs between resolution submissions. Proposed § 360.10(c)(4)(i) would retain the requirement of the current rule that a CIDI must provide the FDIC with a notice and explanation no later than 45 days after certain events. The proposed rule also would retain the current rule's exemption from this requirement if the date on which the CIDI would be required to submit the notice would be within 90 days before the date on which the CIDI is required to provide a regular submission. The proposed rule would, however, modify the set of events triggering the notice requirement. Proposed § 360.10(c)(4)(i) would replace the current trigger—a “material event”—with “material change.” Under the current rule, a “material event” is “any event, occurrence, change in conditions or circumstances or other change that results in, or could reasonably be foreseen to have, a material effect on the resolution plan of the CIDI.”
Under proposed § 360.10(c)(2), an IDI that becomes a CIDI after the effective date of the final rule would be required to provide its initial submission upon the date specified in writing by the FDIC, which would be no earlier than 270 days after the insured depository institution became a CIDI. The current rule provides that an IDI that becomes a CIDI after April 1, 2012, must submit its initial resolution plan no later than the following July 1, provided such date occurs no earlier than 270 days after the date it became a CIDI.
The proposed rule would clarify aspects of the current rule concerning when an IDI becomes, or ceases to be, a CIDI. The proposed rule also would address a CIDI moving between group A and group B.
First, the proposed rule would retain the approach taken in the current rule, that an IDI is deemed to be a CIDI based upon whether it has crossed the threshold of $50 billion based on the average of the total assets as shown on its four most recent reports of Condition and Income. For clarity, the proposed rule would expressly address the event of an increase in size due to merger or acquisition of assets, which is not explicitly addressed in the current rule. Proposed § 360.10(b) would provide that in the case of an IDI whose total assets have increased as the result of a merger, acquisition, combination, or similar transaction, the status of the IDI as a CIDI or a group A CIDI will be based upon the date of the consummation of the merger, acquisition, combination or other transaction. While the four quarter average protects against the possibility that firms move quickly in and out of the rule's scope, growth by merger and acquisition tends not to be transitory, and the combined IDI should become subject to the rule promptly, based upon its combined balance sheet.
In addition, the proposed rule would add clarity about when an IDI ceases to be a CIDI. The current rule defines a CIDI as an IDI with $50 billion or more in total assets, but does not specifically address how and when an IDI ceases being a CIDI.
Like the current rule, the proposed rule would require a CIDI to develop a strategy for resolution that is appropriate for its size, complexity, and risk profile. As noted, however, this requirement would apply only to group A CIDIs and not to group B CIDIs. Since the current rule was issued in 2012, the FDIC and CIDIs have been through multiple resolution plan submission cycles, allowing the FDIC to further its resolution readiness and strategic planning for the resolution of CIDIs. In reviewing and evaluating options for resolution of CIDIs, the FDIC has considered a variety of resolution strategies across the range of CIDIs. This has informed the approach in the proposed rule and the parameters provided as to the expectations for the development of an identified strategy.
The current rule requires the resolution plan to provide a “strategy for the sale or disposition of the deposit franchise, including branches, core business lines and major assets of the CIDI in a manner that ensures that depositors receive access to their
In guidance and the preamble to the current rule, the FDIC has provided insight regarding strategies to be considered by CIDIs as they prepare their resolution plans, including a cash payment of insured deposits, a purchase and assumption agreement with an insured depository institution to assume only insured or all deposits, a purchase and assumption agreement with multiple insured depository institutions in which branches are broken up and sold separately, and a transfer of insured deposits to a BDI. Over time, the FDIC provided additional guidance and feedback with respect to the development of a strategy that includes transfer of assets and liabilities to, and the various options for exit from, a BDI, including through a multiple acquirer exit, initial public offering, or other capital markets transaction.
The proposed rule would require each group A CIDI to provide an identified strategy, which would describe the resolution from the point of failure through the sale or disposition of the group A CIDI's franchise, (including all of its significant business lines and segments and all of its major assets) in a manner that meets the credibility standard set forth in the proposed rule.
The strategic option that the FDIC considers most likely to be implemented for the group A CIDIs across the widest range of scenarios is the establishment of a BDI that can continue the operations of the CIDI. Generally, a BDI approach will allow the continuity of business operations and thereby preserve franchise value, and will allow time for restructuring and marketing to facilitate the sale or disposition of the business lines and related assets, while providing insured depositors with prompt access to their accounts. Accordingly, the proposed rule would establish the BDI approach as the default identified strategy. A BDI strategy must provide for the establishment and stabilization of a BDI and an exit strategy from the bridge, such as a multiple acquirer exit involving the regional breakup of the group A CIDI or sale of business segments, an orderly wind down of certain business lines and asset sales, an exit via restructuring and subsequent initial public offering or other capital markets transaction, or another exit strategy appropriate to the size, structure and complexity of the CIDI.
In addressing the establishment of the BDI, the proposed rule would not require that a resolution plan demonstrate that the identified strategy be the least-costly to the DIF of all available strategies; in particular, it would not be required to demonstrate that it would be less costly to the DIF than liquidation. Similarly, it would not be required to demonstrate satisfaction of the chartering condition set forth in section 11(n)(2)(A) of the FDI Act such as by demonstrating that the amount which is reasonably necessary to operate the BDI will not exceed the amount which is reasonably necessary to save the cost of liquidating the IDI.
In addressing the stabilization of the BDI, the identified strategy may assume continuation of Federal Home Loan Bank advances and the availability of short-term liquidity advances from the DIF to meet temporary liquidity needs, provided that the identified strategy provides for timely repayment of those funds. The identified strategy should not assume use of the DIF to avoid losses to creditors of the BDI; all DIF advances must be made through a loan with an assured means of timely repayment.
Recognizing that the BDI approach may not be optimal for all group A CIDIs, the proposed rule would permit a different identified strategy if that different strategy would best address prong (i) of the credibility criteria (discussed in section III.B.1 below), could reasonably be executed by the FDIC across a range of likely failure scenarios, and would be more appropriate for the size, complexity and risk profile of the specific group A CIDI. An alternative identified strategy under the proposed rule could include transferring some but not all business lines and assets to a BDI and liquidating others in a receivership. For some group A CIDIs, a cash payment of insured deposits
Regardless of the identified strategy, under the proposed rule, any identified strategy would be required to include meaningful optionality for execution across a range of scenarios and provide the information and analysis that would inform the decisions that would be made by the FDIC at the time of an actual failure that could support optionality for the FDIC in undertaking a resolution of the CIDI following its material stress and failure. Meaningful optionality reflects an expectation that an identified strategy be flexible so that it can be adapted to a change in the failure scenario or an unexpected obstacle to its execution. The nature and extent of meaningful optionality will vary based upon the size and complexity of the CIDI. For instance, a relatively smaller and less complex CIDI with a focus on traditional banking may identify only a breakup between two business lines, or the spinoff or sale of a separable business unit. For the largest or most complex CIDIs, meaningful optionality might include alternatives such as a breakup by business lines and a regional breakup, or by sale of one or more identified franchise components as options for a sale of the IDI franchise.
Unlike the current rule, the proposed rule would expressly provide that the identified strategy may not be based
The proposed rule would streamline and clarify the framework for development of the failure scenario under which group A CIDIs develop an identified strategy. This scenario, known as the “failure scenario,” would be also used in connection with valuation analysis. Under the current rule, resolution plans are required to “take into account that failure of the CIDI may occur under the baseline, adverse and severely adverse economic conditions developed by the FRB pursuant to 12 U.S.C. 5365(i)(1)(B).”
The proposed rule also would incorporate more specific requirements concerning the circumstances assumed to lead to the CIDI's failure. In the FDIC's more than ten years of experience of reviewing resolution plans under the Dodd-Frank Act and the current rule, the FDIC has learned that the submission is most valuable when it is based on the assumption that the CIDI has experienced material financial distress such that its failure is a result of the depletion of capital and/or liquidity. While the resolution strategy may be based on an idiosyncratic event or action, including a series of compounding events, the firm should justify all assumptions, consistent with the conditions of the economic scenario. Where the identified strategy assumes the sale of franchise components or a multiple acquirer exit, the resolution plan should take into account all issues surrounding its ability to sell in market conditions present in the applicable economic condition at the time of sale. To ensure that the resolution plan addresses the challenges that may occur in a wider range of scenarios, the proposed rule would require the identified strategy to be based on a failure scenario that demonstrates that the CIDI is experiencing material financial distress.
More specifically, the failure scenario would be required to assume and demonstrate that the CIDI experienced a deterioration of its asset base and that its high quality assets have been depleted or pledged due to increased liquidity requirements from counterparties and deposit outflows. While the immediate cause of failure may be based on liquidity shortfalls, the failure scenario also should consider the likelihood of the depletion of capital and losses in the assets of the CIDI, which may include embedded losses that have been realized but may not have been recognized by the CIDI for financial reporting purposes. The failure scenario must assume that the U.S. parent holding company is in bankruptcy, as this is often the case in a bank failure, and is consistent with the approach taken in DFA resolution plans. This proposed failure scenario requirement draws upon the requirement that a DFA resolution plan must assume that the firm has experienced material financial distress.
While the FDIC anticipates that the proposed approach to the scenario for CIDI resolution planning would facilitate development of an identified strategy and other plan information that is most useful to the FDIC across a range of scenarios, the FDIC is aware that likely failure scenarios are different for CIDIs with different business models, balance sheets, and risks. In addition, in future plan reviews, the FDIC might find value in focusing on particular kinds of failure scenarios, such as a rapid failure due to a run on uninsured deposits or deposits associated with a particular line of business; or cyber or other operational risks; or other risks that focus on particular business lines. For that reason, the proposed rule includes flexibility for the FDIC to devise specific failure scenario assumptions, with respect to macroeconomic conditions or the precipitating cause of failure, for individual CIDIs, for cohorts of CIDIs, or for all group A CIDIs in future resolution plan submissions. Any specific failure scenarios would be communicated in writing, at least twelve months before the next resolution plan is due.
The proposed rule would introduce a number of new defined terms and modify others, while other terms will be unchanged from the current rule. The proposed new and revised defined terms are as follows:
In an effort to collect information that would better help the FDIC prepare to resolve a CIDI and to ensure that all CIDIs have key resolvability capabilities, the proposed rule would make a number of changes to the information a CIDI must submit to the FDIC in its resolution submission. Many of these proposed changes would incorporate and codify guidance the FDIC previously provided to CIDIs. The proposed changes would delete certain submission requirements, and modify others, in ways that may increase or lessen the type and amount of information required with respect to those content elements. The rule, as proposed, would supersede all prior guidance.
Except where otherwise noted, the following discusses the content requirements for both group A CIDIs' resolution plans and group B CIDIs' informational filings.
The proposed rule would introduce the requirement to identify all regulated subsidiaries, a new defined term discussed above in section III.A.3.c. The FDIC is seeking this information because it would assist the FDIC in identifying entities with capital, liquidity, and other requirements, and in assessing these entities' capital and liquidity needs when it is resolving a CIDI using a BDI. The proposed rule would modify the requirement in the current rule that core business lines be
The proposed rule would also revise the current rule by requiring that the resolution submission describe whether any core business line draws additional value from, or relies on, the operations of the parent company or a parent company affiliate, and identify whether any such operations are cross-border. This information would support and inform the FDIC's analysis of the impact of breakup of the CIDI from its parent company and parent company affiliates.
As noted below, elements of the current rule's organizational structure; legal entities; core business lines and branches subpart would be incorporated into other provisions of the proposed rule, including the discussion of the deposit base and key personnel, in order to improve the organizational structure of the rule as proposed.
While some CIDIs' operational structures are relatively simple, with the majority of assets and operations within the CIDI, others are significantly more complex. Even where the structure is relatively simple, there may be significant services, licenses, contracts, or operations—even those whose asset value is relatively small, that the CIDI uses that would impact the ability to establish and operate a BDI while the parent company and parent company affiliate are in bankruptcy or other resolution. These complexities include not only the challenge of continuity of critical services, but also the economic viability of the BDI as a going concern upon separation from the parent company, and the impact on BDI's franchise value. In the proposed revisions to the rule, this section has been revised to focus on whether the IDI, and therefore the BDI, can be a viable stand-alone entity from the point of view of economic value and viability of business lines. The issues related to continuity of critical services provided by or through the parent company and parent company affiliates would be discussed and addressed in the critical services discussion below.
The proposed rule would require a discussion of foreign deposits, and identification of deposits dually payable in the U.S., which is relevant to the determination of priority of payments in resolution.
The proposed rule would also require information about deposit sweep arrangements with affiliates and unaffiliated parties, which would inform the FDIC about interconnections and assist in assessing depositor behavior; a CIDI would also have to identify the contracts governing those arrangements. The proposed rule would also require information about reporting capabilities for omnibus, sweep and pass-through accounts. Understanding those capabilities and the accuracy and timeliness of deposit reporting by accountholder is important for these deposits where the information for deposit insurance determinations is not maintained on the CIDI's systems.
In addition to requiring information about the deposit structure, the proposed rule would require information regarding key depositors, which would be defined in the proposed rule as depositors that hold or control the largest deposits (whether in one account or in multiple accounts) that collectively are material to one or more core business lines. Identification of key depositors is important to evaluation of strategic options in resolution, and to understanding the relationships between key depositors and other services provided by the CIDI or its parent company or parent company affiliates. Each key depositor must be identified by name, line of business and geographic location, where that information is known.
Finally, the proposed rule would require information about the relationship of deposit segments to core business lines and franchise components. In a multiple acquirer sale, the deposits related to a particular franchise component must be readily identified to facilitate the separation and sale of the franchise component along with the associated liabilities.
The proposed rule would expand on the information required by the current rule at 12 CFR 360.10(c)(2)(iii), and would incorporate and clarify guidance the FDIC previously provided on this topic. As explained in section III.A.3.c, the definition of “critical services” would remain largely the same as in the current rule, but the proposed rule would require a resolution submission to explain the criteria by which critical services are identified in order to provide to the FDIC additional context and understanding to the CIDI's approach to this content element.
The proposed rule would also introduce the defined term “critical services support,” which are the resources necessary to support the provision of critical services, including systems, technology infrastructure, data, key personnel, intellectual property, and facilities. CIDIs' past resolution plans did not consistently address these elements, which are mentioned in various places throughout the current rule. Bringing together this information in a defined term and expressly stating the relationship to critical services is expected to provide additional clarity and promote consistency in the approach to these elements. For this reason, the proposed rule would consolidate informational elements relevant to critical services that are separated in various parts of the current rule, and incorporate and codify prior guidance,
The proposed rule would also require that a CIDI identify critical services provided by the parent company or a parent company affiliate as well as the physical locations and jurisdictions of critical service providers and critical services support that are located outside of the United States. The proposed rule would also require that a CIDI map critical services to material entities that provide those services directly or indirectly through third parties, and to the material entities, core business lines, and franchise components supported by those critical services. Further, the proposed rule would make express the requirement for information about the critical services and critical services support that may be at risk of interruption if the CIDI fails, as well as the CIDI's approach for continuing critical services in the event of its failure, and information about the contracts governing the provision of such services.
The proposed rule would also require a CIDI to provide information about its process for collecting and monitoring the contracts governing critical services and critical services support. Providing information about the systems that store these contracts and how this information is stored (
The information that would be provided in response to this subpart, which would incorporate guidance previously provided by the FDIC,
Further, the proposed rule would require a CIDI to provide a recommended approach for retaining key personnel during its resolution. A framework for, for example, specifying retention bonuses and other incentives to help retain key personnel could help the FDIC facilitate a program that could help minimize disruptions when a CIDI is in resolution.
This proposed subpart would provide information that the FDIC believes will be critical in developing strategic options and meaningful optionality for resolution of a group A CIDI. The FDIC has previously described franchise components as the “building blocks” of resolution options.
For some CIDIs, particularly the largest and most complex CIDIs, the pool of possible acquirers is limited and the challenges associated with a sale of the IDI franchise to a single acquirer are the greatest. The multiple acquirer exit is more likely to be the most appropriate approach for such a CIDI. The multiple acquirer exit, a newly defined term in the proposed rule, would be a strategy for disposition of going concern elements of the group A CIDI where a single acquirer transaction is not available, thereby avoiding a potentially disruptive and value-destroying liquidation of the failed CIDI. The time required for a multiple acquirer exit or another exit option that requires significant restructuring may require restructuring and divestiture options that present greater obstacles than those presented in addressing separability of the franchise components. For group A CIDIs, restructuring and divestiture options should include those necessary to the identified strategy, as well as currently separable and marketable franchise components that provide additional optionality. For example, if the identified strategy includes a multiple acquirer exit from the BDI, the restructuring and divestiture options should include the parts of the CIDI to be divested as part of a regional breakup of the CIDI's IDI franchise or sale of business segments, in addition to identifying currently separable and marketable franchise components that would provide additional optionality.
The proposed rule would require a description of the extent to which franchise components are currently separable, which would be supported by a description of all significant impediments and obstacles to execution of a divestiture of a franchise component, including legal, regulatory, or cross-border challenges, as well as operational challenges. It would also require that a CIDI be able to demonstrate capabilities necessary to ensure that franchise components are separable and marketable in resolution. While the proposed rule would not set an express standard for separability of a franchise component, identification of franchise components that are readily and quickly separable promptly after failure and stabilization of the BDI will provide useful optionality and may facilitate a brief bridge period.
While the goal is to provide optionality to the FDIC in marketing the failed CIDI, the number and nature of separable, marketable franchise components will vary based upon the size and complexity of the CIDI. The proposed rule would also require that resolution submissions provide information relating to, among other things, key assumptions underpinning each franchise component divestiture.
The proposed rule would set forth basic informational elements required for each franchise component, including identification of responsible senior management and metrics depicting each franchise component's size and significance. The metrics the FDIC would expect a CIDI to provide may include total revenue, net income, percentage market share and, if applicable and available, total assets and liabilities.
The proposed rule also would require a description of the CIDI's capabilities and processes to initiate marketing of the franchise component, and to provide a description of necessary actions and a timeline for the divestiture, which would be supported by a description of the key underlying assumptions. The proposed rule would require the CIDI to identify the process it would use to identify prospective bidders for such franchise components. The FDIC makes every effort to market failed banks—and their assets and business segments—as widely as possible. A requirement that CIDIs provide analysis on identification of prospective bidders of franchise components would support that effort. In addition to describing the process for identification of prospective bidders, identification of prospective bidders would also be helpful.
The proposed rule would incorporate and clarify the informational requirements with respect to capabilities to establish a virtual data room promptly in the run-up to or upon failure of the bank, which must include the data elements sufficient to permit a bidder to provide an initial bid on the IDI franchise or the CIDI's franchise components. While the proposed rule is not prescriptive in length of time within which a data room must be able to be populated, the capabilities should support a very short time frame and not rely upon a stabilized BDI to extend the time necessary. The proposed rule would require a description of the length of time and any challenges or obstacles to providing complete and accurate information necessary to support a competitive bid, with an expectation that this time frame will be brief and measured in days.
The proposed list of content elements is indicative and not comprehensive; the specific information and data that would be appropriate and sufficiently detailed to support prompt and competitive bids would vary among CIDIs. For instance, deposit data and information elements might include a complete, current deposit trial balance reconciled to the general ledger, a description of the largest depositor relationships, information regarding sweeps and brokered deposits and other data useful to inform a bid. Loan and lending operations information might include a loan tape or loan trial balance reconciled to the general ledger, loan portfolio file samplings, underwriting policies, information regarding real estate owned, and key lending relationships. Where the CIDI has non-traditional business lines, the information provided should be appropriate to the sale of those elements as franchise components or as part of the IDI franchise. The data and information as a whole should support a sale of the IDI franchise as a whole, while providing optionality for the sale of separable franchise components.
Finally, to effectuate a timely sale of a failed IDI, the FDIC must have access and control of data in a virtual data room. Historically, the FDIC has established a virtual data room controlled by the FDIC and migrated the information into that virtual data room. The proposal seeks information as to how the CIDI could support that process, either through providing sufficient access and controls to the CIDI's virtual data room to the FDIC as receiver for the failed IDI, or by establishing a process to timely and securely migrate all data to an FDIC-controlled virtual data room.
Because many of the CIDIs have a broker-dealer subsidiary or parent company affiliate, the proposed rule would also contain a provision specifically addressing content related to a broker-dealer. That is not intended to exclude or limit information related to other non-banking activities such as insurance or asset management.
For all resolution plans submitted in 2022 or to be submitted in 2023, the FDIC has exempted the CIDIs from addressing how the strategies described in the resolution plan could be demonstrated to be the least costly to the DIF of all possible methods for resolving the CIDI. The FDIC granted these exemptions after having concluded that the current rule's requirement resulted in submissions that provided limited utility to the FDIC relative to the burden of producing the relevant information and analysis. However, the FDIC is required under the FDI Act to determine in all cases whether the proposed resolution strategy is least costly to the DIF as compared to other available strategic options, including liquidation. While the FDIC has experience in this analysis, the determination of costs for a BDI strategy, absent a bid price to establish value, is an element that varies by an IDI's businesses and by the failure scenario. Thus, rather than requiring CIDIs to demonstrate, on an
Under the proposed rule, group A CIDIs would be required to demonstrate the capabilities necessary to produce valuations that the FDIC can use to conduct the statutorily required least-cost analysis on its own at the time of an actual failure. To demonstrate valuation capabilities, a group A CIDI would be required to describe its valuation process in its resolution plan and include a valuation analysis that includes a range of quantitative estimates of value as an appendix to its resolution plan. While both of these components would be required under the proposed rule, the FDIC would not make a credibility determination as to the identified strategy based on the valuation information provided in response to this requirement. There would be no requirement to compare that valuation estimate to liquidation or other possible resolution strategies.
The proposed valuation analysis included in the resolution plan would require that a group A CIDI provide a narrative description of how it values its franchise components, and the IDI as a whole, including its approach to gathering information needed to support its analysis and its ability to produce updated and timely valuation information. An appendix to the resolution plan would also be required to include a valuation analysis, including a range of quantitative estimates of value, based upon its assumed failure scenario and identified strategy. Where a multiple acquirer exit is chosen as the preferred BDI exit, the analysis would be required to provide valuation estimates based on the net present value of proceeds that may be received under an enterprise valuation based on the disposition of the group A IDI franchise and a sum-of-the-parts analysis that values each IDI franchise component separately. In preparing estimates of value, the group A CIDI would need to consider appropriate valuation approaches and assess whether the valuation should reflect the results of one valuation method or a combination of methods, and provide support for the methods chosen and why other valuation methods were deemed inappropriate. In determining whether one or more valuation approach is appropriate, the CIDI should consider the nature of the business lines of the CIDI as a whole as well as of the particular franchise components that are part of the identified strategy. The valuation approaches should be appropriate to the complexity and size of the CIDI, and the identified strategy. As appropriate, the group A CIDI would be required to discuss the relevance and weight given to the different valuation approaches and methods used.
Under the proposed rule, the valuation analysis also would need to include a qualitative and quantitative analysis of the destruction of franchise value that may result from not transferring any uninsured deposits to a BDI, including a narrative describing any options to mitigate franchise value destruction at different levels of loss to uninsured depositors. To the extent necessary to provide a meaningful quantitative analysis, the group A CIDI would be instructed to make such adjustments to the failure scenario used in the identified strategy to demonstrate the impact on value where losses invade the depositor class in the loss waterfall. The group A CIDI would need to provide a discussion of the assumptions that underlie the analysis, including a brief narrative explanation of factors such as assumptions with respect to depositor behavior. Useful analysis may also consider potential depositor loss levels of 5 percent, 10 percent, and 15 percent. One option that would be permissible under the proposed rule as a possible mitigant to reduce the impact of losses to uninsured depositors is the payment of an advance dividend to uninsured depositors, in an amount reasonably expected to be fully repaid to the FDIC from the disposition of assets during the resolution process.
Section 13(c)(4) of the FDI Act requires any resolution action to be the least-costly to the DIF of all possible resolution options (including payout and liquidation) and directs the FDIC to conduct the least-cost analysis.
In particular, the focus of this element of the proposed rule would be on the relationship of QFCs to the CIDI's core business lines and franchise components, and how these transactions are integrated with other services provided to customers. The proposed rule would require CIDIs to provide information about their booking models for risk, and how QFCs are used to manage hedging or liquidity needs. This information would help the FDIC to make decisions with respect to transferring QFCs to a BDI, and to better understand the impact of any decision not to transfer certain QFCs. The FDIC has, in the past, exempted this content element for certain CIDIs, with the view that for certain firms, understanding the CIDI's use of QFCs is not a significant element in resolution planning. However, the importance of QFC activities to a line of business is not determined solely on the basis of notional values and varies with the business of the firm. Accordingly, the proposed rule would require this information for all CIDI resolution submissions, with the expectation that where the activity is limited the burden of providing the information will consequently be limited as well.
The proposed rule would maintain the requirement that a CIDI provide financial statements for each material entity, and add this requirement with regard to regulated subsidiaries. The proposed rule would also maintain that audited financial statements should be provided where they are available. The FDIC has found that this information is helpful in developing options for sale of franchise components and understanding the financial structure of the organization, and that this information is complementary to the unconsolidated balance sheet and consolidating schedules.
Accordingly, the proposed rule would build on the current rule's requirement, located at 12 CFR 360.10(c)(2)(xiv), that a CIDI identify each payment, clearing, and settlement system of which the CIDI is a member or that it indirectly accesses by limiting such identification to each system (including financial market utilities) that is a critical service or a critical service support. The proposed rule would also require CIDIs to map payment, clearing, and settlement system memberships and access (including through correspondent and agent banks or intermediaries) to legal entities, core business lines, and franchise components. CIDIs would also be required to describe the services provided by these systems, including the value and volume of activities on a per-provider basis.
The proposed rule would also require CIDIs to describe payment, clearing, and settlement services they provide as an intermediary, agent, or correspondent bank that are material in terms of revenue to or value of any franchise component or core business line. The information that the proposed rule would require would help the FDIC be aware of these important relationships in resolution and to better understand any impact of interruption of those systems or services.
Accordingly, the proposed rule would require all CIDIs to provide more detail than is required by the current rule under 12 CFR 360.10(c)(2)(xv). Information regarding the composition of the liabilities of the CIDI and its material entities, including whether the liabilities are publicly issued, and information about maturity and call rights and, where applicable, indenture trustees would be required.
The proposed rule would also build upon the current rule and prior guidance regarding required information about funding. Specifically, the proposed rule would require that a resolution submission describe the current processes used to identify the liquidity and capital needs and resources available to each CIDI subsidiary that is a material entity,
While this information should be provided by all CIDIs, the level of information provided would be expected to vary based on the size and complexity of the CIDI. For the smaller group B CIDIs, this information may be fairly limited, perhaps only a particular market or sector where the CIDI has a significant presence. Conversely, for the largest group A CIDIs, systemic impact is a significant focus of DFA resolution plans. As discussed below with respect to the credibility assessment of an identified strategy, where the DFA resolution plan of the CIDI's parent company contains relevant analysis and information with respect to the risk of potential adverse effects on U.S. financial stability arising from the failure of a subsidiary group A CIDI, the inclusion of that information by cross-reference is permitted under proposed paragraph (c)(6).
In general, in the proposed rule, cross-border elements are addressed in connection with the relevant content areas in various subparts. Specifically,
The proposed rule would also require that a resolution submission identify regulatory or other impediments to divestiture, transfer, or continuation of foreign branches, subsidiaries or offices while the CIDI is in resolution, including regarding retention or termination of personnel, or impediments or necessary actions to transfer the CIDI's interest in the entity, such as approvals or restrictions on transfer of a license or other authorization.
The proposed rule would delete the current rule's requirement to identify and discuss any disaster recovery or other backup plans;
The Statement exempted all CIDIs from including information required by this subpart, but in reflecting on resolution plan submissions received, the FDIC has found that information regarding exercises, such as simulations, tabletops, or other tools for self-assessment of resolution plans, processes, and capabilities is helpful to the FDIC. The assessment would be limited to requiring CIDIs to describe contingency planning or exercises they have done or plan to do; it would not require CIDIs to conduct these types of activities, so the associated burden would be limited.
In addition to the changes already noted, the proposed rule would delete the following subparts in the current rule:
As noted above in section II, the current rule was adopted in 2011 through an interim final rule and finalized the following year.
The size of an institution significantly impacts the FDIC's options for resolution. A significant constraint on the FDIC's ability to resolve large institutions is the limited set of institutions that could acquire an entire large institution. In the FDIC's experience, generally an institution of significantly greater size is the most likely potential acquirer of a failed IDI. In light of the fact that the group B CIDIs are smaller than the group A CIDIs, there are more potential acquirers. The FDIC is obligated by statute to find the least-costly resolution, which may well be a whole-bank sale immediately at failure. However, despite group B CIDIs' smaller size, that option may not be available. Where there is no acquirer for a transaction that meets the least-cost requirement, the establishment of a BDI may be necessary, either to facilitate a whole-bank sale or a range of other exit options.
A group B CIDI is a very large institution, and resolving such an institution will pose significant challenges. In order to be able to complete a sale at closing, the FDIC would need much of the same information regarding the group B CIDI and its operations as the FDIC is seeking regarding group A CIDIs. However, the FDIC wishes to better balance the burden on group B CIDIs and proposes exempting informational filings from including the following informational elements: Identified strategy (proposed § 360.10(d)(1)), Failure scenario (proposed § 360.10(d)(2)), Executive summary (proposed § 360.10(d)(3)), and Valuation to facilitate FDIC's assessment of least-costly resolution method (proposed § 360.10(d)(12)). The FDIC believes exempting these informational elements from group B CIDIs' informational filings strikes the right balance between providing the FDIC with information needed to facilitate resolution planning efforts and calibrating the compliance burden. Furthermore, the engagement provision of the proposed rule would provide the FDIC with an avenue to establish ongoing dialogue with institutions regarding the informational filing's content, including how the information may be considered when vetting potential resolution strategies.
The FDIC is proposing a new requirement for CIDIs to submit limited interim supplements in the years that a CIDI is not required to provide a resolution submission. This interim supplement is intended to provide current and accurate information regarding a limited subset of the resolution submission content items, focusing on those informational elements where more current information is especially useful, and where updating and producing that information can be accomplished with limited burden year over year. While the purpose of the interim supplement is to update and supplement information, the FDIC is proposing to require complete information for each content item in each interim supplement regardless of whether the information has changed from the CIDI's previous resolution submission for ease of access in the event of a CIDI failure. This interim supplement requirement is separate and distinct from the proposed requirements related to notice of material change under proposed paragraph (c)(4) or engagement and capabilities testing under proposed paragraph (g) and would not in any way limit those requirements.
Under proposed paragraph (e)(1), each CIDI would be required to submit an interim supplement to the FDIC on the one-year anniversary (or the first business day after the one-year anniversary if the anniversary falls on a non-business day) of the CIDI's most recent resolution submission, as determined by the proposed resolution submission timing requirements under proposed paragraph (c), unless the CIDI receives written notice from the FDIC establishing a different interim supplement submission date. No interim supplement would be required in a year in which a CIDI makes a timely resolution submission. The FDIC notes that the discussion of transition below in section III.E.8 describes the expectation that CIDIs that are not in the first cohort of CIDIs to file a resolution submission under amended § 360.10 would be required to supplement and update their most recent resolution submission under the current regulation—until they are required to file a resolution submission under amended § 360.10.
Under proposed paragraph (e)(2), each CIDI would be required to file interim supplements that address each of the content items required under proposed paragraph (e)(3), as discussed below. The information that is submitted for each content item would need to be current as of the date of the end of the most recent fiscal quarter prior to the submission date for the interim supplement. Any material changes from information provided for any particular content item in the CIDI's most recent resolution submission would need to be identified and explained. The FDIC may also ask a CIDI to include additional content items in the interim supplement that would be required for the CIDI's resolution submissions under proposed paragraph (d).
Proposed paragraph (e)(3) lists the content items that would be required to be addressed in each interim supplement. Proposed paragraph (e)(3) cross-references proposed paragraph (d) in order to emphasize that the listed information to be provided is intended to be exactly the same as the cross-referenced content required under proposed paragraph (d). In many cases, the interim supplements need to include only a portion of information required to be included in a resolution submission for a particular content items. In identifying content for the interim supplement, the FDIC focused on information that is most essential to the FDIC's resolution planning, that can be more readily produced, and/or that is relatively likely to change year over year. For those reasons, the FDIC generally did not include detailed analysis, mapping, or rationale and explanation identifying the content elements—and the portions of those content elements—to be included in the interim supplements. The FDIC retains the discretion to add or eliminate elements from the interim supplement. That is to ensure that the interim supplements remain useful and include the most important information, and can evolve based on lessons learned. The FDIC expects to provide timely notice of any changes to the content expectations for the next interim supplement of at least six months.
As with the proposed resolution submission requirements, the FDIC is proposing to include the interim supplement requirement in order to help ensure that the FDIC has timely information for key content items that will assist the FDIC with planning for potential CIDI resolutions with the expectation that improved planning will lead to more efficient and potentially less costly resolutions for failed CIDIs. In the event of a CIDI's failure more than a year after a CIDI's resolution submission, it would be beneficial for the FDIC to have updated information regarding the subset of content items that are included in the proposed interim supplement requirement. This updated information would be beneficial to the resolution process whether it indicates a change in the information for the content item from the previous resolution submission or confirms that the information in the resolution submission remains accurate.
The FDIC is also cognizant of the burden on CIDIs that may result from providing the proposed interim supplements and, in order to minimize that burden, is proposing to require the interim supplements to include only a subset of the resolution submission content requirements. This subset comprises fewer than half of the content items that would be included for resolution submissions under the proposed resolution submission requirements and, for many of the interim submission content items, only a portion of the content required for those elements. The FDIC has limited the proposed required content items and believes the proposed interim submission requirement strikes the right balance to provide the FDIC with valuable updated information to assist with resolution planning and CIDI resolution while limiting burden on the CIDIs in providing the updated information.
The FDIC anticipates there would be benefit from clarifying the standard for credibility associated with resolution plan submissions and CIDI participation in engagement and capabilities testing. The express definition of credibility in the current rule is primarily focused on the quality of the information in the plan,
As proposed, the credibility standard would have two prongs. The identified strategy would be assessed against the first prong set forth in proposed § 360.10(f)(1)(i),
The first prong of the proposed credibility standard expressly includes the requirement that the identified strategy must address potential risks of adverse effects on U.S. economic conditions or financial stability. The history of the past several decades, including as demonstrated in the spring of 2023, makes clear that failure in the banking system can be contagious. The effects of failure of one large financial institution can propagate quickly and strongly to others through the vast array of interconnections that presently exist amongst various types of financial entities. To the extent that failure is disorderly those effects are magnified; to the extent it can be managed and controlled those risks are mitigated. This is especially true for a large, complex IDI, and the failure of such an institution, unless properly managed, is more likely to pose a serious risk to the financial stability of the domestic banking system (and, increasingly, the global financial system). This risk is likely to increase with size. For such institutions, Congress has provided the FDIC the flexibility, under certain important conditions, to depart from the restrictions of the least-cost-test in the interests of reducing adverse effects on financial stability. However, Congress made clear that use of the systemic risk exception is intended to be an extraordinary event. The FDIC seeks to avoid the use of the systemic risk exception.
Accordingly, understanding and mitigating the impact on U.S. economic conditions and financial stability in resolution is an important consideration in resolution planning for large, complex IDIs. While the credibility standard does not include a requirement that the identified strategy demonstrate that it is the least-costly to the DIF, the FDIC cannot assume the availability of the systemic risk exception to the least-cost test in the event of a failure of a large, complex IDI requiring resolution under the FDI Act. Ensuring that the CIDI can be resolved without the need for extraordinary support from the DIF is a resolution planning objective. At the same time, the FDIC is cognizant that some CIDIs have critical operations identified in their affiliates' DFA resolution plans, are highly interconnected with other financial institutions, or have dominant market share in certain geographic regions or market segments, or their resolution could be disruptive to the U.S. economy or financial stability in other ways. The proposed rule would require the resolution submission to identify those effects. Addressing the impact of the identified strategy on U.S. economic conditions and financial stability by identifying those impacts and identifying mitigants to them is an important component of the credibility assessment of an identified strategy
The requirement that the CIDI plan “address” the potential risk of adverse effects on U.S. economic conditions or financial stability is intended to require that the identified strategy take into account the potential for risks to U.S. economic conditions or financial stability arising from the execution of the strategy. Those risks should be described in the resolution submission, and the identified strategy should include specified actions that would mitigate those risks so that reliance on a systemic risk exception would not be a necessary element of planning.
The FDIC has considered the particular challenges with respect to the requirement that the identified strategy address the potential for risks to U.S. economic conditions or financial stability for the largest and most systemic group A CIDIs, specifically the group A CIDIs that are subsidiaries of U.S. global systemically important banking organizations (U.S. GSIBs) as defined by rules promulgated by the FRB.
Despite this progress, the availability or success of a single point of entry strategy cannot be assured in all circumstances, and the possibility of a resolution of a CIDI that is part of a U.S. GSIB cannot be eliminated. Thus, the FDIC believes that it is appropriate to require group A CIDIs within these banking organizations to develop comprehensive resolution plans that include an identified strategy that meets the requirements of the prong (i) standard, as described in the proposed rule, to support the FDIC's resolution readiness in the event that a CIDI within such a banking organization should fail. While these CIDIs may have a particular challenge in addressing the risks their identified strategy may present to the U.S. economy and financial stability, where the DFA resolution plan of the CIDI's parent company contains relevant analysis and information with respect to the risk of potential adverse effects on U.S. financial stability arising from the failure of a subsidiary group A CIDI, the inclusion of that information by cross-reference is permitted under proposed (c)(6). In addition, where the strategy for the rapid and orderly resolution
The second prong of the credibility standard requires that the resolution submission be supported with observable and verifiable capabilities. Capabilities may be supported by analysis and information provided in the resolution submission, and assessed through capabilities testing as well as through assessments conducted by the IDIs and described in the submission. While the proposed rule would not be prescriptive with respect to capabilities, it would contain the express requirement that a CIDIs' capabilities are sufficient to support key elements, namely, capabilities necessary to ensure continuity of critical services in resolution, capabilities necessary to ensure that franchise components are separable and marketable, and, with respect to group A CIDIs, capabilities necessary to produce valuations needed in assessing the least-cost test. The purpose of not describing or prescribing specific capabilities is to have each group A CIDI consider its own business, operations, and identified strategy as the foundation for identifying the needed capabilities and how they are demonstrated for the CIDI's particular businesses and its resolution plan.
There are, however, certain capability expectations for some or all CIDIs that can reasonably be inferred from the content requirements of the resolution submission as described in the proposed rule,
Even though the language in the credibility standard regarding access to insured deposits is proposed to be changed to “timely access to insured deposits,” this does not represent a change in the FDIC's long-standing goal of providing access to insured deposits within one business day of the institution's failure (two business days if the failure occurs on a day other than Friday). For some categories of deposit accounts, however, such as trust accounts or other accounts with many beneficial owners, additional due diligence is needed for an insurance determination, which can require additional time. While the recordkeeping and information technology capabilities required by 12 CFR part 370 should significantly expedite an insurance determination for a CIDI with more than two million deposit accounts, and the FDIC has improved its systems and processes with respect to all institutions, there will remain some portion of accounts for which additional due diligence is required. Accordingly, the language has been revised to align more closely to the statutory requirement that payment of insured deposits shall be made “as soon as possible.”
Similar to the current rule, proposed § 360.10(f)(2) would maintain a process for resolution submission review and credibility assessment. The proposed rule makes no change to the current rule with respect to coordination with supervisors in connection with this review process: the FDIC would review a resolution submission in consultation with the appropriate Federal banking agency for the CIDI and for its parent company. If, after consultation with any such appropriate Federal banking agency (or agencies), the FDIC were to determine that a CIDI's resolution submission is not credible, the FDIC would notify the CIDI in writing of such determination. The writing would include a description of the weaknesses in the resolution submission that resulted in the determination.
The current rule includes, as part of the review process, provision for a brief 30-day review to determine whether the plan satisfies minimum informational requirements. The FDIC then would either acknowledge acceptance of the plan for review or return the plan if the FDIC determines that it is incomplete or that substantial additional information is required to facilitate the plan's review.
Proposed § 360.10(f)(3) also provides, similar to the current rule, that within 90 days of being notified by the FDIC that a resolution submission is not credible, or such shorter or longer period as the FDIC may determine, a CIDI must submit to the FDIC a revised resolution submission that addresses any weaknesses identified by the FDIC and discusses in detail the revisions made to address such weaknesses.
In the current rule, if the resolution plan of a CIDI is found by the FDIC to be not credible, the FDIC provides a notice to the CIDI identifying the aspects of the resolution plan that the FDIC has determined to be deficient and the CIDI's revised resolution plan must address those deficiencies. In the proposal, the FDIC must provide a notice including a description of the weaknesses in the resolution submission that resulted in the determination that the resolution submission is not credible, and the revised resolution submission by the CIDI must address those weaknesses. Here, the term weakness is used in the proposal rather than deficiency to distinguish the proposal from the language utilized in the section 165(d) rule regarding the FDIC's findings in a submission and to clarify that the review process and criteria between the proposed rule and the section 165(d) rule are different and separate from each other.
Even though it is not directly addressed in the current rule, the FDIC has historically provided written feedback to CIDIs concerning their resolution plans. The proposed § 360.10 (f)(5) explicitly provides that, following its review of a resolution submission—either a resolution plan or an informational filing—the FDIC may provide feedback on a resolution submission, and the FDIC expects that it generally will provide initial feedback within a year of a resolution submission. Under the proposed rule, this initial feedback notice could identify areas of engagement and, in the case of group A CIDIs, capabilities testing between the FDIC and the CIDI. The FDIC may include a written notice with respect to the credibility of the resolution plan submission within this initial feedback, or can defer that determination until after any engagement and, if applicable, capabilities testing.
In certain cases, it may be apparent based solely on a review of the resolution plan that the identified strategy is not credible as required by proposed paragraph (f)(1)(i) of the proposed rule. A resolution submission may, for example, fail to include required information, which may result in a finding following the FDIC's review that the resolution submission is not credible based on proposed paragraph (f)(1)(ii).
In other cases, a credibility finding may not be possible until the conclusion of engagement and capabilities testing with a CIDI. For example, a review of a resolution submission may indicate that the CIDI has certain required capabilities. It may only become apparent following the conclusion of engagement and capabilities testing exercises that the CIDI was unable to demonstrate those capabilities. Such a case could lead to the FDIC making a determination that the resolution submission is not credible based upon information provided by the engagement and capabilities exercises. As noted above in section III.B.2 in the discussion of resolution submission review and credibility determination, the FDIC may make a credibility finding at any time throughout the review and engagement and capabilities testing process and may include such findings together with an initial feedback letter following resolution submission review, together with a conclusion letter following engagement or capabilities testing, or as an independent communication to the CIDI.
The FDIC proposes to modify the current rule to provide more clarity concerning the FDIC's expectations for engagement between CIDIs and the FDIC. The FDIC has found that direct engagement with the knowledgeable staff at a CIDI has significant value in promoting FDIC understanding of the content of a resolution submission and the application of the information to both the identified strategy and other strategic options that will be useful to
Capabilities testing also has proven useful to validate the information and capabilities described in a CIDI's resolution plan and to understand how those capabilities may apply across a range of scenarios and strategic options that the FDIC may be called upon to implement. The proposed rule contains express language that in both engagement and capabilities testing, the FDIC may seek to understand how information or assumptions may change based on possible changes to a scenario, or to test capabilities under a different set of assumptions than used in the identified strategy in a group A CIDI's resolution plan submission. The FDIC believes that the proposed amendments would clarify the FDIC's expectations with respect to engagement and capabilities testing.
In general, the FDIC expects to conduct engagement and capabilities testing in a manner consistent with the FDIC's examination practices, to the extent appropriate to the nature of the engagement and capabilities testing. For example, the FDIC would, as appropriate, provide the particular scope for an engagement exercise, establish a schedule, and provide a conclusion letter at the end of the engagement exercise.
In a biennial submission cycle the FDIC expects that engagement with group A CIDIs will occur on a selective basis but does not expect to engage with any group A CIDI more than once in each two-year cycle. Because informational filings by group B CIDIs do not include the development of an identified strategy and other elements of a group A resolution plan submission, the FDIC expects the engagement with group B CIDIs to be a key component of its resolution planning for such firms, and will expect to engage with every group B CIDI in each cycle. In addition, the FDIC expects that capabilities testing for each group A and group B CIDI will occur no more than once per two-year cycle.
While the FDIC generally expects that engagement or capabilities testing with a particular CIDI would occur no more than once during a two-year submission cycle, the FDIC also believes that it is important to preserve the flexibility to undertake engagement and capabilities testing with a CIDI as frequently as needed and whenever prudent, based on the circumstances of the particular CIDI. In some instances no engagement or capabilities testing may be necessary during a two-year cycle, while in other cases, such as after changes at the CIDI or as the result of varying economic conditions, more frequent engagement and capabilities testing may be warranted. In addition to formal engagement and capabilities testing, the FDIC could also have other interactions with the CIDI, such as questions during the submission review process, or conversations regarding changes or updates to information or resolvability. This proposed provision is generally consistent with the current rule, although prior guidance had limited the FDIC's engagement and capabilities testing to once per firm per submission cycle.
Paragraph (d)(1) of the current rule
Proposed paragraph (g)(1) would require each CIDI to provide the FDIC such information and access to such personnel of the CIDI as the FDIC in its discretion determines is relevant to any of the provisions of proposed § 360.10 (defined as “engagement”). This will allow the FDIC to focus engagement on the information and capabilities most relevant to a CIDI's resolution submission and the nature of the business and particular resolution challenges applicable to that CIDI. This engagement requirement is similar to the requirement in current § 360.10(d)(1)
The proposed removal of the provision in the current rule that focuses engagement on the “ability of the CIDI to implement the resolution plan”
Proposed paragraph (g)(1) would also require that the personnel a CIDI makes available for engagement purposes have sufficient expertise and responsibility to address the informational and data requirements of the engagement. The FDIC proposes to include this requirement to ensure that the CIDI personnel can effectively and efficiently participate in the engagement to achieve the goals of the engagement.
Current § 360.10(d)(2) requires each CIDI, within a reasonable period of time as determined by the FDIC, to demonstrate its capability to produce promptly, in a time frame and format acceptable to the FDIC, the information and data underlying the CIDI's resolution plan.
The FDIC proposes to amend current § 360.10(d)(2) to provide more clarity as to the FDIC's expectations for CIDI capabilities testing. Proposed paragraph (g)(2) would require each CIDI, at the discretion of the FDIC, to demonstrate that it can actually perform the capabilities described, or required to be described, in a resolution submission, including the ability to provide the information, data, and analysis underlying the resolution submission and that these capabilities are adaptable to a range of scenarios. Proposed paragraph (g)(2) would also require that a CIDI perform capabilities testing promptly and provide the results in a time frame and format acceptable to the FDIC. This capabilities testing requirement is similar to the requirement in current § 360.10(d)(2),
Examples of the capabilities that a CIDI could be required to demonstrate might include identification of key employees and key critical services, as well as capabilities to meet the requirements of the proposed rule with respect to mapping, such as mapping critical services to material entities. The FDIC might also test capabilities that are necessary to key elements of the resolution submission content, such as continuity of operations, franchise component separation and marketing. An example of such a capabilities test might be the establishment of a virtual due diligence room for one or more franchise components or for the IDI franchise as a whole, which is a capability that is critical to the marketing efforts that are essential in resolution. For group A CIDIs, a capabilities test might require the development of valuation analysis required under the proposed rule under the identified scenario or an alternative scenario. These examples are only provided for illustrative purposes and do not in any way restrict the general proposed paragraph (g)(2) requirement that capabilities testing can involve any capability described or required to be described in a resolution submission.
The FDIC is proposing the revised capabilities testing requirements in order to help ensure that the capabilities that a CIDI identifies as part of a resolution submission, or that are required to be in the resolution submission under proposed § 360.10(d), are actually in place in the event of the CIDI's failure. Resolution submissions are intended to assist the FDIC with efficiently and effectively resolving a CIDI in a way that preserves value and minimizes disruption, and it would impede this goal if the capabilities underlying a resolution submission were not actually available when needed. Requiring a CIDI to be able to demonstrate any identified or required capabilities helps the FDIC ensure that the capabilities would be available in the event of a resolution, which would in turn help with the resolution process.
The FDIC proposes to add a new paragraph (g)(3) to address a conclusion letter that the FDIC may at its discretion provide at the conclusion of any engagement or capabilities testing exercise. This letter may identify areas for further attention by the CIDI or other feedback. The FDIC intends for any identified areas to help guide a CIDI's improvements to its resolution planning and submissions. As noted above in section III.B.2 in the discussion of resolution submission review and credibility determination, the FDIC may make a credibility finding at any time throughout the review or engagement and capabilities testing processes and may include such findings together with an initial feedback letter following submission review, together with a conclusion letter following engagement or capabilities testing, or as an independent communication to the CIDI.
The FDIC notes that providing a conclusion letter for an engagement or capabilities testing exercise does not in any way limit the FDIC's ability to commence further engagement or capabilities testing with the same CIDI.
The proposed rule would add a new paragraph (k) to proposed § 360.10 regarding enforcement authorities for any potential violation of the requirements of proposed § 360.10. While proposed paragraph (k) would be a new addition to proposed § 360.10, the FDIC emphasizes that the new paragraph would not constitute a substantive change to existing § 360.10 and that proposed § 360.10(k) would not add any new enforcement authority or power to the FDIC's or any other Federal banking agency's current enforcement capabilities.
Under proposed paragraph (f)(4), if a CIDI's resolution submission were found to be not credible and the CIDI were to fail to submit the revised resolution submission within the required time-period or the FDIC were to determine that the revised resolution
Proposed § 360.10(k) would reiterate the existing enforcement authorities and powers in order to clearly notify CIDIs that any violation of a requirement of proposed § 360.10 would constitute a violation of a regulation that may subject the offending CIDI to enforcement remedies available to the appropriate Federal banking agency under section 8 of the FDI Act and, where applicable, the FDIC under paragraph (t) of that section.
These enforcement authorities and powers would not be modified by this proposal. Nothing in proposed paragraph (k) is intended to limit in any way the powers or authorities of any Federal banking agency.
The proposed § 360.10(c)(5) retains the current rule's requirement that a CIDI's board of directors approve the submission, and that this approval be noted in the board's minutes. For an insured branch, the proposed rule would allow a submission to be approved by a delegee acting under the express authority of the board, and would require such delegation of authority to be noted in the board's minutes. This proposed change would better facilitate insured branch approval at a level commensurate with the requirement applicable to IDIs and still ensure senior officials remain responsible for the quality and timeliness of the submission.
The current rule provides that in its resolution plan, a CIDI may incorporate data and other information from a DFA resolution plan filed by its parent company.
The proposed § 360.10(c)(6)(i) would expand the sources from which incorporation in a resolution submission is permitted, adding the most recently submitted resolution submission by the CIDI or an affiliate of the CIDI; a regulatory filing by the CIDI with the FDIC; and a publicly-available regulatory filing by the CIDI or any of its affiliates with any Federal or State regulator. The CIDI would be able to incorporate this information or analysis without seeking the authorization for disclosure of FDIC confidential information required under 12 CFR part 309. These changes would potentially reduce the costs to CIDIs of preparing resolution submissions without reducing the quality of information provided to the FDIC. Moreover, the proposed change would not increase the administrative burden of the FDIC or CIDIs because the proposed additional sources are limited to information already available to the FDIC. As proposed, the rule would allow incorporation of material from other sources—but not incorporation by reference. The FDIC has found that it is beneficial to have all of the relevant information in one place, so information can be incorporated—via appendices or inclusion in a resolution submission through well-identified excerpts—but not simply a reference to another source. The proposed rule includes certain proposed requirements about the format and process for incorporation of information from other sources and would require certification that the information or analysis remains accurate in all respects that are material to the CIDI's resolution submission. The information required by the section 165(d) rule pertaining to the specified CIDI must be readily distinguishable from any extraneous parent company (or parent company affiliate) information and the CIDI resolution plan should describe any material differences. The information or analysis must also clearly indicate the source and as-of date. As an example, incorporated financial information with dates differing from the prescribed CIDI resolution plan financial date would be acceptable if the dates are clearly reflected and the differences are not material.
These proposed changes would incorporate into the revised rule certain elements of the guidance provided by the FDIC in 2021.
The proposed § 360.10(h)(1) would require that a CIDI's resolution submission use, to the greatest extent possible, financial information as of the most recent fiscal year-end for which the CIDI has financial statements or, if financial information from more recent financial statements would more accurately reflect the CIDI's operations as of the date of the submission, financial information as of that more recent date. The current rule does not detail the required timeliness of financial information to be used in a submission. During the time in which the FDIC has been administering the current rule, a number of questions have
Proposed § 360.10(h)(2) provides that a CIDI's resolution submission and interim supplement must include an index of each content requirement required to be included in that resolution submission or interim supplement to every instance of its location in the submission or supplement. This would be a new requirement. Indexing would facilitate the FDIC's review of these materials and help ensure clear understanding by both a CIDI and the FDIC of where particular content may be found. Doing so may reduce the need for follow-up questions by FDIC staff during review of resolution submissions and interim supplements.
Proposed § 360.10(h)(3) adds to the current rule a provision that would allow CIDIs that are affiliates to submit a single, combined resolution submission or interim supplement, so long as all affiliated CIDIs submitting the combined submission or supplement are within the same CIDI group, whether group A or group B. The combined submission or supplement would be required to satisfy the content requirements for each CIDI's separate submission or supplement, as applicable, and the CIDIs would need to ensure that the FDIC would be able to readily identify the portions of a combined submission or supplement that comprise each CIDI's separate submission or supplement. The proposed change would incorporate into the rule guidance provided by the FDIC in 2021 for CIDIs with $100 billion or more in total assets.
The proposed rule, like the current rule, would require that each CIDI divide its resolution submission into a public section and a confidential section. The only notable difference in the proposed rule from the current rule with respect to resolution plans is that the proposed rule would require a description in the public section, at a high level, of the group A CIDI's identified strategy. The purpose of this proposed change is to align the public section with proposed changes to the substantive contents of the confidential section of a resolution plan. For all resolution plans submitted in 2022 or to be submitted in 2023, the FDIC has exempted the CIDIs from including this information, but the proposed rule would include a comparable requirement aligned with the requirement for the development of an identified strategy in the current rule.
The requirement to include a public section would not apply to interim supplements required under proposed paragraph (e), as the interim supplements are updates of information included in the confidential section of a resolution submission.
The FDIC is proposing a new paragraph (j) titled “Extensions and exemptions,” which would include the requirements of current § 360.10(d)(3) and (4)
Proposed new paragraph (j)(1) would be titled “Extension” and would allow the FDIC, on its own initiative or upon written request, to extend, on a case-by-case basis, any of the time frames or deadlines in proposed § 360.10. This is largely the same provision as current § 360.10(d)(3), but would not be limited to “the implementation and updating time frames”
Proposed new paragraph (j)(2) would be titled “Waiver” and would allow the FDIC, on its own initiative or upon written request, to exempt a CIDI from one or more of the requirements of proposed § 360.10. This proposed provision is identical to current § 360.10(d)(4).
Subsequent submissions by these CIDIs would be subject to the requirements of the amended rule following its effective date.
Because resolution plans submitted in 2023 will be prepared and submitted under the current rule, they will be evaluated under the current rule. However, recognizing that the amended rule may go into effect soon after these resolution plans are submitted, the FDIC anticipates that feedback given upon review of those resolution plans would focus on current rule elements that would remain relevant under the amended rule. Further, following the effective date of the final rule, the FDIC does not anticipate conducting engagement and capabilities testing on these resolution plans as contemplated in the Statement. Instead, FDIC staff would expect to offer to hold meetings with CIDIs to discuss the FDIC's expectations for future submissions under the amended rule and to respond to questions from the CIDIs.
The next resolution plan submission date for group A CIDIs would be set pursuant to the amended rule. The FDIC expects that about half of the group A CIDIs would file their first resolution plans under the amended rule on or before a date approximately not less than 270 days from the effective date of the final rule or as otherwise established pursuant to the amended rule. The other half of the group A CIDIs would file their first resolution plans under the amended rule on or before a date within two years of the effective date of the final rule or as otherwise established pursuant to the amended rule. Under this approach, some group A CIDIs would have more and some would have less than two years between their last filing under the current rule and their first filing under the amended rule. The FDIC would endeavor to provide group A CIDIs at least 270 days' notice of their first filing date under the amended rule.
In any calendar year that a CIDI does not provide a resolution submission, it would be required to provide an interim supplement as described in the proposed rule. Any CIDI that is not in the first cohort of CIDIs filing a resolution submission following the effective date of the final rule would be expected to provide an interim supplement on or before the first resolution submission filing date under the amended rule.
As previously discussed, the proposed rule would amend resolution plan submission requirements for all CIDIs and would establish two tiers of submission requirements to reflect the size and complexity of CIDIs. Group A CIDIs, which are IDIs with $100 billion or more in total assets, would be required to submit resolution plans that comply with all of the content requirements of the revised rule, including the development of an identified strategy for the resolution of the CIDI, and to participate in engagement and capabilities testing. Group B CIDIs, which are IDIs with total assets of at least $50 billion but less than $100 billion, would be required to submit an informational filing containing information on resolution planning and readiness, and to participate in engagement and capabilities testing. The following describes the expected costs and benefits of the proposed rule, as they would apply to the groups of affected IDIs, and other economic impacts.
Since the adoption of the current rule in 2012, the FDIC has provided guidance and feedback to CIDIs about the FDIC's expectations regarding various elements of resolution plan content under the rule. In 2018, the
Under the approach outlined in the Statement, CIDIs with $100 billion or more in total assets are expected to submit a resolution plan once during the succeeding three-year period. In addition, pursuant to the Statement, the FDIC communicated that it would provide exemptions to all CIDIs that are required to file resolution plans (the group A CIDIs) from the obligation to include certain categories of content in their future resolution plan submissions. The exemptions that the Statement indicated would be provided to all group A CIDIs are: least-costly resolution method,
As explained in the Statement, on a case-by-case basis, the FDIC also provided exemptions to certain CIDIs for their next resolution plan submissions for certain additional categories of content required by the current rule: off-balance sheet exposures; collateral pledged; trading, derivatives, and hedges; unconsolidated balance sheet and consolidated schedules; payment, clearing, and settlement systems; capital structure and funding sources; affiliate funding, transactions, accounts, exposures, and concentrations; and cross-border elements.
The Statement also:
(1) Established a process for a CIDI to request additional exemptions;
(2) Maintained the requirement that a resolution plan take into account that the CIDI's failure may occur under the severely adverse economic conditions developed by the Board of Governors of the Federal Reserve System pursuant to 12 U.S.C. 5365(i)(1)(B), but communicated that CIDIs would be exempted from the requirement to take into account baseline and adverse economic conditions for their resolution plan submissions;
(3) Explained the FDIC's intention to conduct regular engagement and capabilities testing; and
(4) Permitted CIDIs to incorporate by reference into their resolution plans information from other sources, including the DFA resolution plans of a CIDI's parent company, a resolution plan submitted previously by the CIDI or its affiliate, a regulatory filing with the FDIC by the CIDI, and a publicly-available regulatory filing by the CIDI or any of its affiliates with any Federal or State regulator.
These changes were taken into account in the FDIC's most recent estimates of total annual labor hours and costs associated with recordkeeping, reporting, and disclosure compliance requirements for the current rule as implemented following the Statement.
If adopted, the proposed rule will increase regulatory compliance costs for group A CIDIs due to a variety of proposed changes to resolution plan content and proposed changes with respect to engagement and capabilities testing, as well as the expected increased frequency of submissions and the proposed new requirement of interim supplements between submissions. The proposed rule will increase such costs by requiring certain content that was expected to be exempted for all or some of these CIDIs as explained in the Statement, by modifying certain other content requirements, and by modifying the expectations for engagement and capabilities testing. Group A CIDIs would be defined in the proposed rule as IDIs with $100 billion or more in total assets based upon the average of the institution's four most recent Reports of Condition and Income. As of the quarter ending December 31, 2022, the FDIC insured 4,715 depository institutions, of which 31 reported total average assets of $100 billion or more over their four most recent Reports of Condition and Income. Therefore, for the purposes of this analysis the FDIC estimates that 31 FDIC-insured depository institutions would be classified as group A CIDIs and directly affected by the proposed rule, if adopted.
The following content elements, which the Statement indicated would be exempted for all CIDIs, are included in the proposed rule or replaced by requirements of similar purpose.
Unlike the intention expressed in the Statement, the proposed rule would not include the expectation of routine exemption of certain content on a case-by-case basis. Rather, all group A CIDIs would be required to include all content required by the revised rule if and to the extent those elements are relevant to their organization and businesses. For example, the Statement of provided an exemption for content relating to the parent company and parent company affiliates for a CIDI without a holding company. However, under the proposed rule, the resolution plan would simply provide the relevant information (
The proposed rule would codify and build upon certain elements of the Statement. The content items which were exempted pursuant to the Statement for all or some CIDIs are included in the proposed rule, with only limited exceptions. The proposed rule would eliminate the following content requirements that were exempted for all CIDIs, including the group A CIDIs, pursuant to the Statement:
In addition, while the Statement expressly permitted incorporation by reference of relevant information provided in the DFA resolution plans and various other regulatory filings, the proposed rule would allow incorporation of that information, but would require that it be replicated in the resolution submission.
The proposed rule would address the instances in which a CIDI would be required to notify the FDIC about a significant change. Specifically, under the proposed rule, CIDIs would be required to provide the FDIC with a notice of “material change” to its organizational structure, core business lines, size, or complexity (such as via a merger), acquisition or divestiture of assets or similar transaction that may have significant impact on the identified strategy. There would be no change to burden as a result of this requirement, which is consistent with prior practice and burden estimates.
Taken overall, the proposed changes to required plan content are likely to result in cost increases for group A CIDIs associated with the preparation of their resolution plans, but would improve the utility of resolution plans for the FDIC's planning and readiness for the resolution of group A CIDIs.
In August of 2021, the FDIC updated its estimates of the total annual labor hours and costs associated with reporting compliance requirements of the current rule in light of the resolution planning expectations expressed in the Statement. The updated applicable reporting burden estimates as of August 2021 are: (1) reporting burden of 57.6 hours per billion dollars in assets for each resolution plan submission by a CIDI that had previously submitted a plan with over $100 billion in total assets that is affiliated with a U.S. GSIB; (2) reporting burden of 48 hours per billion dollars in total assets for each resolution plan submission by a CIDI that had previously submitted a plan with over $100 billion in total assets that is not affiliated with a U.S. GSIB; and (3) reporting burden of 14,400 total hours for each resolution plan submission by a CIDI with over $100 billion in total assets (irrespective of U.S. GSIB affiliation) that has never submitted a resolution plan previously.
Based on the FDIC's experience with the current requirements and expectations relative to those in the proposed rule, the FDIC estimates that the proposed changes would increase the reporting requirements for CIDIs. The FDIC estimates that the labor hours needed by group A CIDIs to comply with the reporting requirements of each resolution plan submission following their initial submission under the proposed rule will be 72 hours per billion dollars in assets, an approximately 25 percent increase from the 57.6 hours per billion dollars in assets estimated following the Statement for group A CIDIs affiliated with U.S. GSIBs; and an approximately 50 percent increase from the 48 hours per billion dollars in assets estimated following the Statement for group A CIDIs that are not affiliated with U.S. GSIBs.
Additionally, the FDIC estimates that group A CIDIs that are first-time filers will incur approximately 16,000 labor hours to comply with the reporting requirements of their first resolution plan submission based on the proposed
Finally, the proposed rule introduces a new requirement for group A and group B CIDIs to submit interim supplements in years where a resolution submission is not required. These submissions consist of a limited set of critical information that can be effectively updated year over year to help maximize the utility of resolution-related information to the FDIC. Specifically, these supplements would require a CIDI to provide the most up-to-date information, in whole or in part, for the following content elements: (1) organizational structure; (2) overall deposit activities (partial); (3) critical cervices (partial); (4) key personnel (partial); (5) franchise components (partial); (6) asset portfolios (partial); (7) off-balance-sheet exposures; (8) unconsolidated balance sheet; (9) payment, clearing, and settlement systems (partial); (10) capital structure and finding sources (partial); (11) cross-border elements; and (12) management information systems (partial). After a review of the content requirements for these supplementary filings, the FDIC estimates that group A and group B CIDIs will incur approximately 24 hours per billion dollars in assets associated with the submission of an interim supplement to the FDIC. The FDIC expects that this submission would be biennial,
As previously discussed, group B CIDIs are defined in the proposed rule as IDIs with at least $50 billion but less than $100 billion, in total assets based on the average of the institution's most recent Reports of Condition and Income. As of the quarter ending December 31, 2022, the FDIC insured 4,715 depository institutions, of which 14 reported total assets of $50 billion or more, but less than $100 billion, over their four most recent Reports of Condition and Income. Therefore, for the purposes of this analysis, the FDIC estimates that 14 FDIC-insured depository institutions would be classified as group B CIDIs and directly affected by the proposed rule.
While group B CIDIs are required to provide resolution plans to the FDIC under the current rule, they are currently still subject to the FDIC's moratorium on resolution plan submissions and have not had to provide such submissions since 2018.
This analysis of the estimated compliance costs of the proposed rule (in conjunction with the lifting of the moratorium) for group B CIDIs is predicated on the assumption that all of the proposed filing requirements are new filing requirements for group B CIDIs, resulting in relatively high initial compliance efforts associated with implementation. Most CIDIs that would be categorized as group B CIDIs under the proposed rule have not provided resolution plans of any kind to the FDIC. For those CIDIs that have filed previously, the significant passage of time since that filing, taken together with the significant changes to the applicable informational filing requirements for group B CIDIs under the proposed rule, suggest that it is appropriate to consider them to be first-time filers for the purposes of assessing compliance costs.
Under the proposed rule, each group B CIDI would submit an informational filing to the FDIC, and the FDIC could then engage with each group B CIDI to obtain additional information relevant to the FDIC's own resolution planning or to clarify data and analysis in the informational filing. Under the proposed rule, an informational filing for a group B CIDI would differ from a resolution plan for group A CIDIs in that group B CIDIs submitting an informational filing would not be required to include an identified strategy and apply that strategy to a failure scenario, or be subject to review of the credibility of the identified strategy. In addition, an informational filing would not be required to include
The FDIC estimates that the proposed rule, if adopted, would pose reporting requirements of 7,200 labor hours for the initial informational filing of a group B CIDI. For informational filings in subsequent cycles, the FDIC estimates that the proposed rule would pose reporting requirements of approximately 67 hours per billion dollars in assets.
The FDIC arrived at these estimates by analyzing the content requirements for informational filings required to be submitted by group B CIDIs compared to those for full resolution plans required of group A CIDIs. Specifically, the proposed rule excludes elements pertaining to the creation, application, and review of an identified strategy, and to valuation to support least-cost test analysis for informational filings for group B CIDIs compared to resolution planning requirements for group A CIDIs. FDIC staff does not believe that this reduction in content elements results will have an effect on the estimated reporting burden for initial plan filings for a group B CIDI, but will
As discussed above, this analysis of the estimated compliance costs of the proposed rule is relative to a baseline scenario which includes burden estimates under the Statement, the existing moratorium on filing requirements for group B CIDIs, and the use of a triennial, rather than a biennial, filing cycle. If adopted, the proposed rule would have four primary effects: change in filing cadence, change in content requirements for group A CIDIs, change in content requirements for group B CIDIs, and the establishment of an interim supplement. The realized effects of the proposed rule are a function of filing dates, filing types, as well as the changes in filing content requirements for group A and B CIDIs discussed in detail above. To control for such changes and assess the marginal effect of the primary aspects of the proposed rule relative to the current baseline, the FDIC analyzed projected filings by CIDIs over a six-year period beginning in 2025. The following discussion addresses each of these primary effects so as to illustrate their marginal contribution to the aggregate effect.
Future changes in assets for existing individual CIDIs is difficult to accurately estimate. Therefore, for the purposes of this analysis, the FDIC assumes that the total assets reported by existing individual CIDIs for the quarter ending December 31, 2022, will remain constant throughout the period of analysis, notwithstanding assumptions made by the FDIC on the number of new group A and group B CIDIs in each filing cycle (discussed below).
As discussed above in section III.A.2.a, the proposed rule would change the filing cycle from triennial to biennial. To isolate the effect of the potential change from a triennial to a biennial filing cycle, the FDIC compared projected compliance costs of the current triennial filing cycle, as outlined in the Statement, to the costs of those same compliance requirements on a biennial basis. Over the six-year period of analysis, the FDIC estimates that the labor hours expended by CIDIs to comply with a biennial filing cycle would increase by an average of 150 thousand hours (28 percent) annually. Assuming a wage estimate of $109.32 an hour,
As previously discussed, the FDIC estimates that the labor hours needed by group A CIDIs to comply with the reporting requirements of the proposed rule for first-time resolution plan submissions will be 16,000 hours, and each subsequent resolution plan submission will be 72 hours per billion dollars in assets. Over the six-year period of analysis beginning in 2025 the FDIC assumes there to be 6 first-time group A plan submission filers—or 2 first-time filers per biennial filing cycle—based on a review of bank asset data from 2017 to 2022.
For group A CIDIs submitting resolution plans in the upcoming and subsequent biennial filing cycles, the FDIC estimates that, over the six-year period of analysis, the changes within the proposed rule solely related to the group A content requirements will result in an average increase in reporting burden hours of approximately 141 thousand hours annually (26 percent). Assuming a wage estimate of $109.32 an hour,
As previously discussed, the FDIC estimates that the labor hours needed by group B CIDIs to comply with the reporting requirements of the proposed rule for first-time informational filings will be 7,200 hours and each subsequent informational filing will be 67 hours per billion dollars in assets. Over the six-year period of analysis beginning in 2025, the FDIC estimates there to be 20 first-time group B plan submission filers. As discussed above, the FDIC considers all existing group B CIDIs to be “new filers” in the upcoming filing cycle and assumes two new group B CIDIs to file for the first time in each subsequent filing cycle, based on a review of bank asset data from 2017 to 2022.
Therefore, to illustrate the effect of the proposed rule solely related to changes in filing requirements for group B CIDIs this analysis compares current compliance requirements, as outlined in the Statement, to the projected reporting compliance costs for group B CIDIs, as outlined in the proposed rule, on a biennial basis.
The FDIC estimates that, over the six-year period of analysis, the proposed rule would result in an average increase in reporting burden hours of approximately 44,000 hours annually (eight percent). Using a wage rate of $109.32 an hour,
As discussed above in section III.A.3.e, the proposed rule introduces a new requirement for group A and group B CIDIs to submit an interim supplement for the years that they do not submit resolution plans or informational filings. The FDIC estimates that group A and group B CIDIs submitting an interim supplement will incur an hourly burden of approximately 24 hours per billion dollars in assets. Using this estimate over the six-year period of analysis, the requirement for annual interim supplements would result in an estimated average annual increase of approximately 197,000 hours and 12,000 hours for group A and group B CIDIs, respectively. Using a wage estimate of $109.32 an hour,
As previously discussed, the FDIC proposes to modify the current rule to provide more clarity concerning the FDIC's expectations for engagement between CIDIs and the FDIC. It is the FDIC's current practice to seek greater understanding of a resolution submission and the application of the information to all strategic options that will be useful to the FDIC in implementing a resolution strategy, as explained in the Statement and in the NPR.
The FDIC expects to engage with group A CIDIs on a selective basis, depending on the complexity of resolution issues and the completeness of resolution submissions, among other factors. Further, the FDIC assumes, based on supervisory experience, that it will engage with about half of the group A CIDIs in each plan submission cycle. For the purposes of this analysis, the FDIC expects capabilities testing to be generally undertaken once per two-year submission cycle. The FDIC estimates that group A and group B CIDIs will incur one labor hour per billion in total assets and two labor hours per billion in total assets, respectively, to comply with the engagement requirements of the proposed rule. The FDIC believes that the engagement requirements of the proposed rule, if adopted, would result in an estimated reduction of one labor hour per billion in total assets for group A CIDIs, relative to the Statement, due to more selective engagement practices driven by the change to a biennial filing cycle. Further, the FDIC estimates that group A and group B CIDIs will incur one labor hour per billion in total assets to comply with the capabilities testing requirements of the proposed rule. To maintain consistency with the estimation approach taken in the Statement, the estimate of labor hours for both engagement and capabilities testing was included in the prior estimates of 72 labor hours per billion in total assets for resolution plan content requirements of group A CIDIs and 67 hours per billion in total assets for group B CIDIs.
Taken together, the total estimated marginal effect of the proposed change to a biennial filing cycle, content changes for group A CIDIs, content changes for group B CIDIs, requirements for Interim Supplements, and consideration of engagement and capabilities testing, in the proposed rule on group A and B CIDIs, over the six-year analysis period, would result in an average increase in reporting burden hours of approximately 544 thousand annually. At an estimated wage rate of $109.32
This analysis illustrates that the estimated costs of the proposed rule are likely to be small. The FDIC compared the average annual estimated reporting compliance costs to the reported total annual noninterest expenses for all CIDIs and compliance costs did not exceed five percent as a percentage of noninterest expenses for any CIDI.
As previously discussed, the proposed rule, if adopted, would increase the amount of information CIDIs produce and furnish to the FDIC for the purposes of resolution planning. In the years since the adoption of the current rule in 2012, the FDIC has learned which aspects of the resolution planning process are most valuable and gained a greater understanding of the resources that CIDIs expend in meeting the requirements and expectations to comply with the current rule. The FDIC does not have the information necessary to quantify the benefits to the DIF associated with the increase in the amount of resolution planning information for CIDIs, and consideration of that information. However, the FDIC believes that requiring CIDIs to regularly submit more information on their resolution readiness capabilities would be expected to reduce the costs to the DIF in the event of a failure of such an institution because this information would help the FDIC be more prepared to resolve these CIDIs.
Because some of the methodologies used to estimate reporting costs—for subsequent plan filings and interim supplements—above are based on the number of labor hours per billions of dollars in total assets, it is possible for a CIDI's estimated compliance cost to change solely due to fluctuations in asset size. The FDIC acknowledges that economic trends resulting in, or contributing to, changes in banking industry assets generally would have an impact on the estimates described above, but believes that these potential changes in compliance costs are likely to be modest relative to the size of the IDIs affected by the proposed rule.
CIDIs would likely incur some regulatory costs, in addition to the reporting costs presented above, to transition their internal systems and processes in order to comply with the
Finally, the FDIC does not believe that any additional costs incurred as a result of the proposed rule would have significant adverse impact on the provision of banking services such as originating and servicing loans, processing payments, or various financial market activities that the CIDIs may be involved in. This analysis illustrates that estimated reporting costs in future years only comprise approximately 0.015 percent of current (
In summary, the FDIC believes that the proposed rule would result in public benefits by improving the FDIC's ability to effect timely and cost-effective resolutions of large, complex insured institutions. The FDIC estimates the proposed rule would result in average annual compliance cost increases of approximately $59.5 million over the six-year analysis period—which spans three filing cycles under the proposed rule.
The FDIC considered several alternatives while developing the proposed rule. The FDIC first considered leaving the current rule unchanged. The FDIC rejected this alternative because it believes the proposed rule would improve the value of resolution submissions and provide additional clarity to CIDIs as to the requirements of the rule by incorporating elements of prior guidance. The value of these resolution submissions would be greatly increased to both the FDIC and CIDIs given the proposed rule intends to reflect the lessons learned from resolution planning under the current rule, including the iterative approaches to refinement and clarification through guidance and feedback since the current rule's issuance, and provide a complete and clear set of requirements with respect to resolution planning submissions, review, feedback and credibility. The proposed rule also would bolster and clarify the FDIC's approach to engagement and capabilities testing in a manner useful both to the CIDIs and the FDIC. Additionally, the proposed rule would formalize the expectation of a three-year submission cycle, providing time for deeper engagement and capabilities testing and more opportunities for feedback to the CIDI from plan review and from engagement and capabilities testing to be more comprehensively integrated into both the submission and the day-to-day business of the CIDI.
The FDIC also considered the groupings of IDIs that would be covered under the proposed rule and how the requirements should differ for each, if at all. Possibilities included continuing the current rule's requirement to require resolution plans for all CIDIs over $50 billion in total assets; no longer requiring any resolution submission from the group of CIDIs with $50 to 100 billion in total assets; or tiering requirements based on size or other factors. One alternative considered was to group CIDIs with $100 billion or more in total assets into cohorts with different requirements, and reducing content expectations for CIDIs that have between $100 and $250 billion in total assets that do not have identified complexity factors such as significant cross-border operations or large off-balance sheet derivatives activities. As discussed in the introduction to this preamble, the limited pool of possible acquirers and the complexity of the transaction greatly diminishes the likelihood of a sale of any group A CIDI in a closing weekend or single transaction out of a BDI. Since this challenge applies to all CIDIs with $100 billion or more in total assets, the FDIC has determined that the information and analysis required under the proposed rule is appropriate for all group A CIDIs, with an emphasis on establishment and stabilization of a BDI and an exit in which the IDI is sold to one or more acquirers, to provide optionality to the FDIC in preparing for resolution. While the group A CIDIs vary in size and complexity, the CIDIs themselves are best suited to determine how to address content elements in a manner appropriate to their organization and business lines.
The FDIC considered various alternatives with respect to CIDIs that have between $50 and $100 billion in total assets,
The FDIC then considered what type of content should be included in each resolution plan or informational filing. The FDIC reviewed past submissions as well as prior feedback and guidance to identify the most useful content to support the FDIC's ability to resolve a CIDI efficiently and effectively in the event that a CIDI experiences material financial distress and failure. The proposal would clarify the type of information the FDIC is seeking in order to help facilitate CIDIs' efficient development of resolution submissions. The inclusion of a more clearly defined expectation for an identified strategy for CIDIs with over $100 billion in total assets and a more clearly defined credibility standard should assist in assuring resolution plans are more finely tuned to the unique complexities of each group A CIDI. The reductions in resolution submission content requirements for CIDIs with $50 to $100 billion in total assets are designed to appropriately adjust the requirements to the challenges presented by group B CIDIs. For this reason, under the proposed rule they would submit only informational filings and not resolution plans.
The FDIC also considered a three-year submission cycle instead of the proposed two-year submission cycle. A three-year submission cycle, which is the current approach under the Statement, would allow additional time for engagement and capabilities testing; however, the FDIC believes that the enhanced timeliness of the resolution plans received on a two-year submission cycle outweighs the incremental benefit gained from additional engagement and capabilities testing over a longer submission cycle. The FDIC did not strongly consider maintaining the current rule's one-year submission cycle because through experience, the FDIC has found that a one-year submission cycle is not efficient for either the FDIC or the CIDIs because it does not allow sufficient time for review, feedback and incorporation of feedback into the next submission. The use of a two-year cycle should also allow adequate time for CIDIs to plan their resolution submission preparation cycles, and
The FDIC then considered, however, whether some of the benefits of timely information annually could be retained in a manner less burdensome for the IDIs and more useful to the FDIC by requiring limited interim supplements to the biennial submissions. Based on experience from the bank failures of 2023, key information submitted in a two-year cycle may become dated. First, CIDIs continue to change, and in some cases that happens in a time frame shorter than two years. Second, in the case of rapid liquidity failures, the time frame to prepare for resolution is compressed, heightening the need for accurate and timely information. To keep resolution planning information accurate and timely, the FDIC is proposing that each CIDI would submit a limited interim supplement in years in which a complete submission is not required. The interim supplement is intended to provide critical up-to-date information for a limited number of the most essential data elements of the complete submission. In considering alternative data elements, the FDIC sought to maximize the utility of the information needed to resolve a CIDI efficiently and effectively, while limiting the burden to CIDIs of an interim supplement.
In accordance with the requirements of the Paperwork Reduction Act (PRA),
The proposed rule would modify the current filing cycle cadence from triennial to biennial, which will result in some CIDIs submitting multiple times across a given 3-year PRA renewal cycle. On content, the proposal would modify the current rule by establishing revised requirements regarding the content and timing of resolution submissions provided to the FDIC by IDIs with $50 billion or more in total assets to support the FDIC's resolution readiness in the event of material distress and failure of these large IDIs. IDIs with $100 billion or more in total assets will submit full resolution plans, while IDIs with total assets between $50 and $100 billion will submit informational filings with fewer requirements. Additionally, the proposed rule requires group A and group B CIDIs to submit interim supplements to the FDIC on years where they are not expected to file full plans or information filings. The proposed rule would also enhance how the credibility of resolution submissions will be assessed, expand expectations regarding engagement and capabilities testing, and explain expectations regarding the FDIC's review and enforcement of IDIs' compliance with the rule. The proposed revisions for the NPR represent an increase of 482,312 estimated annual burden hours from the PRA estimates in the 2021 collection, and an increase of 199,184 estimated annual burden hours from the PRA estimates in the 2018 collection. The FDIC proposes to revise this information collection as follows:
The Regulatory Flexibility Act (RFA) generally requires an agency, in connection with a proposed rule, to prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities.
The proposed rule amends resolution plan requirements for IDIs with over $50 billion in total average assets. Therefore, the proposed rule would apply only to institutions with $50 billion or more in total average assets. As of December 31, 2022, there are no small, FDIC-insured institutions with $50 billion or more in total average assets.
The FDIC invites comments on all aspects of the supporting information provided in this RFA section.
Section 722 of the Gramm-Leach-Bliley Act
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act of 1994
The Providing Accountability Through Transparency Act of 2023 (12 U.S.C. 553(b)(4)) requires that a notice of proposed rulemaking include the internet address of a summary of not more than 100 words in length of a proposed rule, in plain language, that shall be posted on the internet website under section 206(d) of the E-Government Act of 2002 (44 U.S.C. 3501 note).
In summary, the FDIC is proposing to modify its current rule that requires the submission of resolution plans by insured depository institutions with $50 billion or more in total assets. The proposal would modify the current rule by revising the requirements regarding the content and timing of resolution submissions as well as interim supplements to those submissions provided to the FDIC by IDIs with $50 billion or more in total assets in order to support the FDIC's resolution readiness in the event of material distress and failure of these large IDIs.
The proposal and the required summary can be found at
Bank deposit insurance, Banks, banking, Holding companies, National banks, Reporting and recordkeeping requirements, Savings associations.
For the reasons stated in the preamble, the Federal Deposit Insurance Corporation proposes to amend 12 CFR part 360 as follows:
12 U.S.C. 1811
(a)
(b)
(c)
(1)
(2)
(3)
(4)
(i) Each CIDI must provide the FDIC with a notice no later than 45 days after a change to the CIDI's organizational structure, core business, size, or complexity, for example by merger, acquisition or divestiture of assets, or similar transaction that may have significant impact on the identified strategy; a change in the CIDI's identification of material entities, critical services, or franchise components; or a change in the CIDI's capabilities described in the resolution submission (each, a “material change”). Such notice must describe the change and explain how the change constitutes a material change. The CIDI must address any change with respect to which it has provided notice pursuant to this paragraph (c)(4)(i) in the subsequent resolution submission submitted by the CIDI.
(ii)
(5)
(6)
(i)
(A) The most recent resolution submission submitted by the CIDI or an affiliate of the CIDI.
(B) The most recent DFA resolution plan of a company that is a CIDI affiliate.
(C) A regulatory filing by the CIDI with the FDIC.
(ii)
(A) The resolution submission seeking to incorporate information or analysis from other sources clearly indicates:
(
(
(B) The CIDI certifies that the information or analysis the CIDI is incorporating from other sources remains accurate in all respects that are material to the CIDI's resolution submission.
(d)
(1)
(i) Each resolution plan must include an identified strategy for the resolution of the CIDI in the event of its failure that meets the credibility criteria in paragraph (f)(1) of this section.
(ii) A CIDI must utilize as its identified strategy the formation and stabilization of a BDI that continues operation through the completion of the resolution and exit from the BDI unless the CIDI determines and demonstrates in its resolution plan why another strategy:
(A) would be more appropriate for the size, complexity, and risk profile of the CIDI;
(B) reasonably could be executed by the FDIC across a range of likely failure scenarios; and
(C) best addresses the credibility criteria described in paragraph (f)(1) of this section.
(iii) The identified strategy must include meaningful optionality for execution across a range of scenarios. The exit from the BDI may be through a multiple acquirer exit, or any other exit strategy following the stabilization of the operations of the BDI. The identified strategy may not be based upon a sale or other disposition to one or more acquirers over resolution weekend.
(2)
(i) may be applicable to all CIDIs or only specific individual CIDIs; and
(ii) may include additional conditions, such as different macroeconomic stress scenario information or assumptions with respect to the cause of failure. If the FDIC provides such additional or alternative parameters, the CIDI must use the additional or alternative parameters rather than the conditions specified in the previous paragraph, to the extent inconsistent with the conditions specified in the previous paragraph.
(3)
(i) A description of the key elements of the identified strategy;
(ii) An overview of the CIDI's core business lines and franchise components;
(iii) A description of each material change since the submission of its prior resolution plan (or affirmation that no such material change has occurred);
(iv) A discussion of the changes to the CIDI's previously submitted resolution plan resulting from any change in law or regulation, guidance or feedback from the FDIC, or material change; and
(v) A discussion of any actions taken by the CIDI since the submission of its prior resolution plan to further develop the quality or comprehensiveness of the information and analysis included in the resolution plan, including the identified strategy, or to improve its capabilities to develop and timely deliver that information and analysis.
(4)
(i) Identify and describe the CIDI's, the parent company's, and the parent company affiliates' legal and functional structures, including all material entities.
(ii) Identify and describe each of the CIDI's core business lines, including whether any core business line draws additional value from, or relies on the operations of, the parent company or a parent company affiliate, and identify any such operations that are cross-border. Provide information about the assets and annual revenue for each core business line, clearly identifying revenue to the CIDI.
(iii) Map franchise components to core business lines, and franchise components and core business lines to material entities and regulated subsidiaries.
(iv) Describe the CIDI's branch organization, both domestic and foreign, including the address and total domestic and foreign deposits of each branch.
(v) Identify each CIDI subsidiary that is one of the following entities (each a “regulated subsidiary”), and provide the address and asset size of each regulated subsidiary:
(A) A broker or dealer that is registered under the Securities Exchange Act of 1934 (15 U.S.C. 78a
(B) A registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;
(C) An investment company that is registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1
(D) An insurance company, with respect to insurance activities of the insurance company and activities incidental to such insurance activities, that is subject to supervision by a State insurance regulator;
(E) An entity that is subject to regulation by, or registration with, the Commodity Futures Trading Commission, with respect to activities conducted as a futures commission merchant, commodity trading adviser, commodity pool, commodity pool operator, swap execution facility, swap data repository, swap dealer, major swap participant, and activities that are incidental to such commodities and swaps activities;
(F) A corporation organized under section 25A of the Federal Reserve Act (12 U.S.C. 611
(G) Any legal entity that is organized under the law of any jurisdiction other than the United States and that is authorized or supervised by a regulatory authority of such jurisdiction in a manner generally comparable to the U.S. entities and authorities described in paragraph (d)(4)(v)(A) through(E) of this section, and shall include any subsidiary that takes deposits or conducts the business of banking under the laws of such jurisdiction.
(vi) Identify all of the CIDI's subsidiaries, offices, and agencies with cross-border operations associated with the operations of any core business line or franchise component. For each such subsidiary, office, or agency, provide metrics that appropriately depict its size and importance, and the location of
(5)
(6)
(7)
(i) Describe the CIDI's overall deposit activities including, among other things, insured and uninsured deposits, commercial deposits by business line, and unique aspects of the deposit base or underlying systems that may create operational complexity for the FDIC. Describe whether any types or groups of deposits are related to particular core business lines and franchise components, and if so, how they are identified on the records or systems of the CIDI.
(ii) Identify the total amount(s) of foreign deposits by jurisdiction and what percentage of foreign deposits is dually payable in the United States. Describe any relationship between foreign deposits and core business lines and sweep arrangements with foreign branches, subsidiaries, and affiliates.
(iii) Identify and describe deposit sweep arrangements, if any, that the CIDI has with the parent company, parent company affiliates, and third party entities, and identify contracts governing such sweep arrangements. Describe the CIDI's reporting capabilities on sweep deposits, including whether such reporting is automated and any data lag that would affect the accuracy of such reports. If the CIDI receives significant amounts of deposits through such sweep arrangements with the parent company or parent company affiliates, include a detailed discussion of such relationships and the business objectives of such sweep arrangements.
(iv) Identify all omnibus, sweep, and pass-through accounts, identifying the accountholder, the location of relevant contracts, and the system on which they are maintained. Provide a detailed discussion of the capabilities and timeliness of deposit reporting systems and capabilities of accountholders with respect to any omnibus, sweep, or pass-through accounts.
(v) Provide a report regarding the CIDI's depositors that hold or control the largest deposits (whether in one account or multiple accounts) that collectively are material to one or more business lines (“key depositors”). The report must identify key depositors by name and line of business and the amount of deposit of each key depositor, and for each key depositor identify other services provided by the CIDI to that depositor, such as lending, wealth management, brokerage services, or custody services. The resolution submission must describe how long it would take for the CIDI to generate such a report and the timeliness of the information provided.
(8)
(i) Identify and describe the CIDI's critical services and critical services support, including whether they are:
(A) provided by or through the CIDI or a CIDI subsidiary or branch (and further indicate whether those critical services or critical services support are ultimately provided by a third party entity), or
(B) provided by or through the parent company or a parent company affiliate (and further indicate whether those critical services or critical services support are ultimately provided by a third party entity).
(ii) Describe the CIDI's process for identifying critical services and critical services support. Describe the CIDI's process for collecting and monitoring the terms of contracts governing critical services and critical services support, and whether services provided pursuant to such contracts and associated costs can be segmented by the material entity, core business line, or franchise component that receives the critical service or critical service support.
(iii) Map critical services support to the entities that own, contract for, or employ them, and map critical services to the material entities, core business lines, and franchise components that they support.
(iv) Identify the physical locations and jurisdictions of critical service providers and critical services support that are located outside of the United States.
(v) Identify the critical services and critical services support that may be at risk of interruption in the event of the CIDI's failure and describe the process used to make this determination. Discuss potential obstacles to maintaining critical services that could occur in the event of the CIDI's failure and steps that could be taken to remediate or otherwise mitigate the risk of interruption, and describe the CIDI's approach for continuing critical services in the event of the CIDI's failure. Identify contracts for critical services that contain provisions that, upon the insolvency of the CIDI or the FDIC being appointed receiver of the CIDI, permit the service provider to stop providing services, to alter pricing, or to alter other terms of service.
(vi) Address obstacles and mitigants to the continuation of all critical services and critical services support provided by the parent company or a parent company affiliate, including:
(A) whether the CIDI and the parent company or parent company affiliate have entered into a written agreement and whether it has established a cost plus or arms' length pricing rate, and the processes used by the CIDI to identify and project liquidity needs associated with those costs; and
(B) the impact on continuity of critical services or critical services support provided by the parent company or a parent company affiliate if the parent company or parent company affiliate is in resolution under 11 U.S.C. 101
(9)
(i) Identify all key personnel by title, function, location, core business line, and employing entity.
(ii) Describe the CIDI's methodology for identifying key personnel.
(iii) Provide a recommended approach for retaining key personnel during the CIDI's resolution.
(iv) Identify all employee benefit programs provided to key personnel, including health insurance, defined contribution and defined benefit retirement programs, and any other
(10)
(i) Identify franchise components that are currently separable and marketable in a timely manner in resolution. For a resolution plan submission by a group A CIDI, the franchise components identified must be sufficient to implement the identified strategy and to provide meaningful optionality across a range of scenarios if the preferred approach is not available.
(ii) Provide metrics that depict the size and significance of each franchise component.
(iii) Identify by position the senior management officials of the CIDI who are primarily responsible for overseeing the business activities underlying the franchise component.
(iv) Describe the CIDI's current capabilities and process to initiate marketing of franchise components to potential third party acquirers, and describe the process by which the CIDI would identify prospective bidders for such franchise components.
(v) Describe the key assumptions (such as market conditions, available time to market assets, and anticipated client behaviors) underpinning each franchise component divestiture.
(vi) Describe any significant impediments and obstacles to execution, including significant legal, regulatory, or cross-border challenges as well as operational challenges, to the divestiture of each franchise component. This description must also address impediments and obstacles to maintaining internal operations (for example, shared services, information technology requirements, and human resources) and to maintaining access to financial market utilities. Identify the material actions that would be needed to facilitate the sale or disposition of each franchise component and, based on the CIDI's current capabilities, describe the projected time frame for preparation for and disposition of each franchise component.
(vii) If a CIDI subsidiary or a parent company affiliate is a broker-dealer that provides services to the CIDI or customers of the CIDI, describe such services and the integration of the broker-dealer with the CIDI's business and operations. Provide an analysis discussing the challenges that could arise if the CIDI were separated from the broker-dealer and actions to mitigate such challenges.
(viii) A resolution submission must describe the CIDI's current capabilities and processes to establish a virtual data room promptly in the run-up to or upon failure of the IDI that could be used to carry out sale of the IDI franchise and the CIDI's franchise components, including a description of the organizational structure of information within the virtual data room. Information in the virtual data room must support the ability of the FDIC to market and execute a timely sale or disposition of the IDI franchise or the CIDI's franchise components, be appropriate for a buyer to conduct due diligence for a timely sale or disposition of the IDI franchise or the CIDI's franchise components, and be sufficient to permit a bidder to provide a competitive bid on the IDI franchise or the CIDI's franchise components. A resolution submission must also describe expected access protocols and requirements for the FDIC to use the virtual data room in order to carry out the sale of the IDI franchise or the CIDI's franchise components, including the FDIC's ability to facilitate bidder due diligence, and describe how information populated within the virtual data room could be transferred to a virtual data room hosted by the FDIC. The resolution submission should identify the time required to capture all elements of information in the virtual data room, indicating number of days it would take to populate each category of information described below, and the process for each, including any potential obstacles or impediments in producing accurate, timely, and complete information in a useful format. The content of the virtual data room must include, but is not limited to:
(11)
(12)
(i) Provide a detailed description of the approaches the CIDI would employ for determining the values of the franchise components and the IDI franchise as a whole, including the underlying assumptions and rationale. Describe the CIDI's approach to the development of the information needed to support valuation analysis, including a description of the CIDI's current ability to produce updated information, timely if necessary, to support the FDIC's analysis to determine whether a resolution strategy would be the least costly to the Deposit Insurance Fund in the event of failure.
(ii) Provide the following valuation analysis based upon the scenario used in the development of the identified strategy, with such adjustments to the scenario as may be necessary to demonstrate the analysis required under paragraph (d)(12)(ii)(B):
(A) Valuation estimates based on the net present value of proceeds that may be received under an enterprise valuation based on the disposition of the IDI franchise, and where a multiple acquirer exit strategy is incorporated in the identified strategy, a sum-of-the-parts analysis. In determining these valuation estimates, the CIDI must consider appropriate valuation approaches, such as the income-based approach, asset-based approach, and
(B) A qualitative and quantitative analysis of the destruction of franchise value that may result from not transferring any uninsured deposits to the BDI, including a narrative describing any options to mitigate franchise value destruction where there is not a transfer of all deposits to a BDI, consideration of an advance dividend payment to depositors that takes into account the expected loss to depositors, and the impact of such an advance dividend on depositor behavior and preservation of franchise value at different levels of loss.
(iii) All content responding to paragraph (d)(12)(ii) of this section must be provided as an appendix to the resolution plan, including any analysis of liquidity and deposit runoff assumptions and factors underlying such runoff estimates.
(13)
(14)
(i) Describe the types of qualified financial contract transactions the CIDI is involved with in respect of its customers, which core business lines and franchise components with which such transactions are associated, and how the CIDI offsets position risk from such transactions. Identify customers of the CIDI that are counterparties to qualified financial contracts transactions with the CIDI that are significant in terms of gross notional amounts or volumes of transactions.
(ii) Describe the booking models for risk from derivative transactions, including whether customer-facing risk or other dealer-facing risk resides in the CIDI while the position risk hedging is performed by a parent company affiliate. Describe the CIDI's use of any “global risk book,” “remote bookings,” or “back-to-backs” booking model, identify the challenges these booking models present to the transfer or unwind of such related derivatives, and analyze approaches for addressing those challenges.
(iii) Describe how the CIDI uses qualified financial contracts to manage its hedging or liquidity needs, including specifying the hedged items (including underlying risk, cash flow, assets or liability being hedged) and the applicable core business line, as well as the approach used to mitigate such risks.
(iv) For each of paragraphs (d)(14)(i) through (iii) of this section, identify hedges that receive hedge accounting treatment, core business line-specific hedges, and reporting capabilities and practices for hedge accounting information and other end-user hedges.
(15)
(16)
(i) Identify each payment, clearing, and settlement system, including financial market utilities, of which the CIDI directly is a member or indirectly accesses that is a critical service or a critical service support. Map direct memberships in and indirect access to each such system, including through correspondent and agent banks or intermediaries, to the CIDI's legal entities, core business lines, and franchise components. Describe the services provided by such systems, including the value and volume of activities on a per-provider basis.
(ii) Describe services provided by the CIDI as an intermediary, agent, or correspondent bank with respect to payment, clearing, and settlement services that are material in terms of revenue to or value to any franchise component or core business line.
(17)
(i) Provide descriptions of the current processes used by the CIDI to identify the funding, liquidity, and capital needs of and resources available to each material entity that is a CIDI subsidiary or foreign branch. Describe the current capabilities of the CIDI to project and report its funding and liquidity needs (
(ii) Describe the composition of the liabilities of the CIDI including the types and amounts of short-term and long-term liabilities by type and term to maturity, secured and unsecured liabilities, and subordinated liabilities. Such descriptions must include whether such liabilities are held by affiliates, whether they are publicly issued, maturity, call rights, and, where applicable, indenture trustees.
(iii) Describe the material funding relationships and material inter-affiliate exposures between the CIDI and any CIDI subsidiary or foreign branch that is a material entity, including material inter-affiliate financial exposures, claims or liens, lending or borrowing lines and relationships, guaranties, deposits, and derivatives transactions.
(18)
(i) Describe material affiliate funding relationships, and material inter-affiliate exposures, including terms, purpose, and duration, that the CIDI or any CIDI subsidiaries have with the parent company or any parent company affiliate. Include in such description material affiliate financial exposures, claims or liens, lending or borrowing lines and relationships, guaranties, deposits, and derivatives transactions.
(ii) Identify the nature and extent to which the parent company or any parent company affiliate serves as a source of funding to the CIDI and CIDI subsidiaries, the terms of any contractual arrangements, including any capital maintenance agreements, the location of related assets, funds or deposits, and the mechanisms by which funds are transferred from the parent company to the CIDI and CIDI subsidiaries.
(19)
(20)
(21)
(22)
(i) Provide a detailed inventory and description of the key management information systems and applications, including systems and applications for risk management, accounting, and financial and regulatory reporting, as well as those used to provide the information required to be provided in the resolution submission, used by or for the benefit of the CIDI and CIDI subsidiaries. For each system or application the description must identify the legal owner or licensor, the personnel by title and legal entity employer needed to support and operate the system or application, the system or application's use and function, any core business line that uses the system or application, its physical location (if any), any related third-party contracts or service level agreements, any related software or systems licenses, and any other related intellectual property.
(ii) For any key management information system or application for which the CIDI or CIDI subsidiary is not the owner or licensor, describe both any obstacles to maintaining access to such system or application when the CIDI is in resolution, and approaches for maintaining access to such system or application when the CIDI is in resolution, including the projected costs of maintaining access when the CIDI is in resolution.
(iii) Describe the capabilities of the CIDI's processes and systems to collect, maintain, and produce the information and other data underlying the resolution submission. Identify all relevant management information systems and applications, and describe how the information is managed and maintained. Describe any deficiencies, gaps, or weaknesses in such capabilities and the actions the CIDI intends to take to address promptly any such deficiencies, gaps, or weaknesses, and the time frame for implementing such actions.
(23)
(24)
(i) Identify categories of key stakeholders addressed in the CIDI's communications plans including, but not limited to, counterparties, regulatory authorities, customers, and personnel.
(ii) Identify communication channels for each key stakeholder category and describe the logistics and limitations of the use of each communication channel.
(iii) Describe the procedures to generate contact lists for each key stakeholder category and estimate the time required to generate each list.
(iv) Describe procedures for coordinating communications across key stakeholder categories and communications channels, including cross-border communications, if any.
(25)
(26)
(27)
(e)
(1)
(2)
(i) Each CIDI must submit an interim supplement that address each of the content items required under paragraph (e)(3) of this section.
(ii) The information submitted for each content item must be current as of the end of the most recent fiscal quarter prior to the interim supplement. Material changes from information provided in the previous resolution submission must be identified and explained.
(3)
(i) the content required under paragraph (d)(4) of this section, “Organizational structure: legal entities; core business lines; and branches”;
(ii) from paragraph (d)(7) of this section, “Overall deposit activities,” the content required under paragraph (d)(7)(i), the first sentence of paragraph (d)(7)(ii), the first sentence of paragraph (d)(7)(iii), the first sentence of paragraph (d)(7)(iv) and the first two sentences of paragraph (d)(7)(v) of this section;
(iii) from paragraph (d)(8) of this section, “Critical services,” the content required under paragraphs (d)(8)(i) and (iv) of this section;
(iv) from paragraph (d)(9) of this section, “Key personnel,” the content required under paragraph (d)(9)(i) of this section;
(v) from paragraph (d)(10) of this section, “Franchise components,” the content required under paragraphs (d)(10)(i) through (iii) of this section;
(vi) from paragraph (d)(11) of this section, “Asset portfolios,” the content required under the first sentence of paragraph (d)(11) of this section;
(vii) the content required under paragraph (d)(13) of this section, “Off-balance-sheet exposures”, excluding the requirement to “map those exposures to core business lines, franchise components and material asset portfolios”;
(viii) the content required under paragraph (d)(15) of this section, “Unconsolidated balance sheet; entity financial statements”;
(ix) from paragraph (d)(16) of this section, “Payment, clearing, and settlement systems,” the content required under the first sentence of paragraph (d)(16)(i) of this section;
(x) from paragraph (d)(17) of this section, “Capital structure; funding sources,” the content required under the first sentence of paragraph (d)(17)(ii) of this section;
(xi) the content required under paragraph (d)(21) of this section, “Cross-border elements”;
(xii) from paragraph (d)(22) of this section, “Management information systems; software licenses; intellectual property,” the content required under paragraph (d)(22)(i) of this section; and
(xiii) any other content element expressly identified for the next interim supplement by the FDIC.
(f)
(1)
(i) The identified strategy would not provide timely access to insured deposits, maximize value from the sale or disposition of assets, minimize any losses realized by creditors of the CIDI in resolution, and address potential risk of adverse effects on U.S. economic conditions or financial stability; or
(ii) The information and analysis in the resolution submission is not supported with observable and verifiable capabilities and data and reasonable projections or the CIDI fails to comply in any material respect with the requirements of paragraph (d) or (e) of this section.
(2)
(3)
(4)
(5)
(g)
(1)
(2)
(3)
(4)
(h)
(1)
(2)
(3)
(i)
(1) Each resolution submission must be divided into a Public Section and a Confidential Section. Each CIDI must segregate and separately identify the Public Section from the Confidential Section. The Public Section must consist of an executive summary of the resolution plan that describes the business of the CIDI. For each CIDI, the Public Section must include, to the extent material to the CIDI's resolution submission:
(i) The names of material entities;
(ii) A description of core business lines;
(iii) Consolidated financial information regarding assets, liabilities, capital and major funding sources;
(iv) A description of derivative activities and hedging activities;
(v) A list of memberships in material payment, clearing, and settlement systems, including financial market utilities;
(vi) A description of foreign operations;
(vii) The identities of material supervisory authorities;
(viii) The identities of the principal officers;
(ix) A description of the corporate governance structure and processes related to resolution planning;
(x) A description of material management information systems; and
(xi) For group A CIDIs only, a description, at a high level, of the CIDI's identified strategy.
(2) The confidentiality of resolution submissions and interim supplements must be determined in accordance with applicable exemptions under the Freedom of Information Act (5 U.S.C. 552(b)) and the FDIC's Disclosure of Information Rules (12 CFR part 309).
(3) Any CIDI submitting a resolution submission, interim supplement, or related materials pursuant to this section that desires confidential treatment of the information submitted pursuant to 5 U.S.C. 552(b)(4) and the FDIC's Disclosure of Information Rules (12 CFR part 309) and related policies may file a request for confidential treatment in accordance with those rules.
(4) To the extent permitted by law, information comprising the Confidential Section of a resolution submission and the information comprising an interim supplement will be treated as confidential.
(5) To the extent permitted by law, the submission of any non-publicly available data or information under this section will not constitute a waiver of, or otherwise affect, any privilege arising under Federal or state law (including the rules of any Federal or state court) to which the data or information is otherwise subject. Privileges that apply to resolution submissions and related materials are protected pursuant to Section 18(x) of the FDI Act, 12 U.S.C. 1828(x).
(j)
(1)
(2)
(k)
By order of the Board of Directors.
Board of Governors of the Federal Reserve System (Board) and Federal Deposit Insurance Corporation (FDIC).
Proposed guidance; request for comments.
The Board and the FDIC (together, the agencies) are inviting comments on proposed guidance for the 2024 and subsequent resolution plan submissions by certain domestic banking organizations. The proposed guidance is meant to assist these firms in developing their resolution plans, which are required to be submitted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the Dodd-Frank Act), and the jointly issued implementing regulation (the Rule). The scope of application of the proposed guidance would be domestic triennial full filers (specified firms or firms), which are domestic Category II and III banking organizations. The proposed guidance is based on the agencies' review of the specified firms' 2021 and prior resolution plan submissions, as well as the agencies' experiences resolving several large domestic banking organizations, and would describe the agencies' expectations regarding several aspects of the specified firms' plans for an orderly resolution under the U.S. Bankruptcy Code. The agencies invite public comment on all aspects of the proposed guidance.
Comments must be received by November 30, 2023.
Interested parties are encouraged to submit written comments jointly to both agencies. Comments should be directed to:
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In general, all public comments will be made available on the Board's website at
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Section 165(d) of the Dodd-Frank Act
Triennial full filers under the Rule are required to file a resolution plan every three years, alternating between full and targeted resolution plans.
Implementation of the Rule has been an iterative process aimed at strengthening the resolution planning capabilities of financial institutions subject to the Rule. To assist the development of covered companies' resolution planning capabilities and plan submissions, the agencies have provided feedback on individual plan submissions, promulgated guidance to certain groups of covered companies, and issued answers to frequently asked questions. The agencies believe that guidance can help focus the efforts of similarly situated covered companies to improve their resolution capabilities and clarify the agencies' expectations for those filers' future progress. The agencies have issued guidance to: (a) U.S. global systemically important banks (GSIBs);
As the agencies previously indicated,
The proposed guidance also reflects the agencies' recent experience with Silicon Valley Bank (SVB), Signature Bank (SB), and First Republic Bank (First Republic). While SVB, SB, and First Republic were not required to file resolution plans under section 165(d) of the Dodd-Frank Act and the Rule, the effects of their failures illustrate that the failure of a large insured depository institution (IDI) may have serious adverse effects on financial stability in the United States.
The specified firms have adopted one of two resolution strategies: a single point of entry (SPOE) or multiple point of entry (MPOE) strategy. The SPOE and MPOE resolution plan strategies require firms to consider different risks and require different types of planning and development of capabilities for the execution of the respective strategies. The agencies do not prescribe a specific resolution strategy for any covered company, nor do the agencies identify a preferred strategy. The proposed guidance is not intended to favor one strategy or another. Specified filers may continue to submit resolution plans using the resolution strategies they believe would be most effective in achieving an orderly resolution of their firms, but a resolution plan must address the key vulnerabilities and support the underlying assumptions required to successfully execute the chosen resolution strategy.
Under an SPOE strategy for a U.S. firm, all material entity subsidiaries are recapitalized and provided with liquidity, if needed, so that only the top tier bank holding company (BHC) enters resolution. The MPOE approach entails multiple U.S. material entities entering separate resolution proceedings: any top-tier U.S. material entity holding company enters bankruptcy; any U.S. material entity IDI subsidiary is resolved separately under the Federal Deposit Insurance Act of 1950, as amended (the FDI Act); and other individual U.S. material entity subsidiaries separately enter bankruptcy (or another appropriate resolution regime) or are wound down. All of the specified firms presented an MPOE strategy in their 2021 targeted resolution plan submissions.
The agencies, as well as the Office of the Comptroller of the Currency, are issuing a proposed rule for comment that would require certain large IDI holding companies, U.S. intermediate holding companies of FBOs, and certain IDIs, to issue and maintain outstanding a minimum amount of long-term debt (LTD), among other proposed requirements.
The proposed guidance begins with the proposed scope and then is organized into several substantive
The proposed guidance for firms that adopt an SPOE resolution strategy is generally based on the 2019 GSIB Guidance, with certain modifications that reflect the specific characteristics of and potential risks posed by the failure of the specified firms. Successful execution of an SPOE strategy relies on the ability to provide sufficient capital and liquidity to material entities, a governance structure that can identify the onset of financial stress events, and the ability to ensure the timely execution of the strategy and to maintain continuity of operations throughout resolution.
The proposed guidance for firms that utilize an MPOE resolution strategy incorporates certain aspects of the 2019 GSIB Guidance that the agencies believe are applicable to large banking organizations, with modifications appropriate to this strategy and institutions with the characteristics displayed by the specified firms. For MPOE firms, the proposed guidance also omits aspects of the 2019 GSIB Guidance that would not apply in an MPOE resolution. The agencies are, however, proposing to clarify their expectations for specified firms that utilize an MPOE strategy that includes the resolution of a material entity that is a U.S. IDI. As discussed elsewhere in this proposal, the resolution of a large U.S. IDI under the FDI Act likely would pose substantial operational and legal challenges and complexities. Accordingly, the agencies believe that the resolution plans of firms whose resolution plans contemplate the separate resolution of a material entity that is a U.S. IDI would benefit from developing capabilities specific to and considering legal requirements regarding U.S. IDI resolution.
The agencies believe that each substantive area of the proposed guidance would play a part in helping to ensure that the specified firms can be resolved in an orderly manner. The proposed guidance would describe the agencies' expectations for each of these areas. In addition, the proposed guidance would consolidate items of feedback provided to a number of the specified firms in the past, thereby providing the public with one source of applicable guidance for the specified firms. The proposed guidance is not, however, intended to override the obligation of an individual specified firm to respond, in its next resolution plan submission, to pending items of individual feedback or any shortcomings or deficiencies identified or determined by the agencies in that specified firm's prior resolution plan submission. The proposed guidance also is not meant to limit specified firms' consideration of additional vulnerabilities or obstacles that might arise based on a firm's particular structure, operations, or resolution strategy, and that should be factored into the specified firm's resolution plan submission.
The proposed guidance concludes with information about the format and structure of a plan that applies equally to plans contemplating either an SPOE strategy or an MPOE strategy.
The agencies propose to apply the guidance to all domestic triennial full filers. The Board's tailoring framework provides clear, predictable scoping based on publicly reported quantitative data. As discussed above, the agencies believe that it is appropriate to provide resolution planning guidance to all domestic triennial full filers given issues identified in these firms' 2021 targeted resolution plans and considering lessons learned from recent events.
The agencies would like the specified firms to submit resolution plans that take into consideration the final version of the proposed guidance as soon as practicable. However, the agencies understand that the specified firms may need time to take into consideration the guidance when developing their resolution plans. In light of the timing of this proposal, the agencies are considering providing a short extension of the next resolution plan submission date for the specified firms, with the expectation that these plan submissions would be due sooner than one year after the proposed guidance is published in final form.
For specified firms with an SPOE resolution strategy, the agencies propose guidance substantially similar to the 2019 GSIB Guidance regarding capital. The ability to provide sufficient capital to material entities without disruption from creditors is important in order to ensure that material entities can continue to maintain operations as the firm is resolved. The proposal describes expectations concerning the appropriate positioning of capital and other loss-absorbing instruments (
The agencies are not proposing further expectations concerning capital to firms whose plans contemplate an MPOE resolution strategy, as an MPOE strategy assumes most material entities do not continue as going concerns upon entry into resolution.
For firms that adopt an SPOE resolution strategy, the agencies propose guidance substantially similar to the 2019 GSIB Guidance regarding liquidity. A firm's ability to reliably estimate and
For firms that adopt an MPOE resolution strategy, the agencies propose that a firm should have the liquidity capabilities necessary to execute its preferred resolution strategy, and its plan should include analysis and projections of a range of liquidity needs during resolution.
For firms using an SPOE resolution strategy, the agencies propose guidance that is substantially similar to the 2019 GSIB Guidance regarding governance mechanisms. An adequate governance structure with triggers that identify the onset, continuation, and increase of financial stress is important to ensure that there is sufficient time to allow firms to prepare for resolution, and to ensure the timely execution of the resolution strategy. The governance mechanisms section proposes expectations that firms have playbooks that describe the board and senior management actions necessary to execute the firm's preferred strategy. In addition, the proposal describes expectations that these firms have triggers that are linked to specific actions outlined in these playbooks to ensure the timely escalation of information to senior management and the board, to address the successful recapitalization of subsidiaries prior to the parent's bankruptcy, and to address how the firm would ensure the timely execution of a bankruptcy filing. The proposal also describes the expectations that firms identify and analyze potential legal challenges to the provision of capital and liquidity to subsidiaries that would precede the parent's bankruptcy filing under an SPOE resolution strategy, and any defenses and mitigants to such challenges.
The agencies do not propose issuing guidance on this topic to firms whose resolution plans contemplate an MPOE resolution strategy, as entry of many types of material entities, including IDIs, into resolution would be determined by criteria prescribed in statute or dependent to some extent on actions taken by regulatory authorities in implementing a statute.
The development and maintenance of operational capabilities is important to support and enable execution of a firm's preferred resolution strategy, including providing for the continuation of identified critical operations and preventing or mitigating adverse effects on U.S. financial stability. For firms that utilize an SPOE resolution strategy, the agencies propose adopting portions of the operational expectations of the 2019 GSIB Guidance and SR letter 14-1,
For specified firms that utilize an SPOE resolution strategy, the agencies propose substantively adopting the 2019 GSIB Guidance regarding legal entity rationalization and separability. It is important that firms maintain a structure that facilitates orderly resolution. To achieve this, the proposal states that a firm should develop and describe in their plans criteria supporting its resolution strategy and integrate them into day-to-day decision-making processes. The criteria would be expected to consider the best alignment of legal entities and business lines and facilitate resolvability as a firm's activities, technology, business models, or geographic footprint change over time. In addition, the proposed guidance provides that the firm should identify discrete operations that could be sold or transferred in resolution to provide meaningful optionality for the resolution strategy under a range of potential failure scenarios and include this information in their plans.
For firms that utilize an MPOE resolution strategy, the proposed guidance would clarify that the firms should have legal entity structures that support their preferred resolution strategy and describe those structures in their plans. The proposal also provides that to the extent a material entity IDI relies upon other affiliates during resolution, the firm should discuss its rationale for the legal entity structure and associated resolution risks and potential mitigants. In addition, the agencies propose that the firms include options for the sale, transfer, or disposal of significant assets, portfolios, legal entities, or business lines in resolution.
For example, the largest failed IDI in U.S. history, Washington Mutual Bank, had approximately $307 billion in assets. The DIF did not incur a loss associated with this failure in part because it benefitted from the FDIC's sale of the institution to an acquirer which had first engaged in exhaustive due diligence of the institution during a self-marketing effort conducted by the IDI prior to its failure. A more recent example, that of First Republic Bank, which was also acquired in an all-deposit transaction, illustrates that such a transaction can be difficult to effectuate. The FDIC invited 21 banks and 21 nonbanks to participate in the bidding process and received bids from only four bidders.
If no P&A transaction that meets the least-cost requirement can be accomplished at the time an IDI fails, the FDIC must pursue an alternative resolution strategy. The primary alternative resolution strategies for a failed IDI are: (1) a payout liquidation; or (2) utilization of a BDI. The FDIC conducts payout liquidations by paying insured deposits in cash or transferring the insured deposits to an existing institution or a new institution organized by the FDIC to assume the insured deposits (generally, a Deposit Insurance National Bank or DINB). In payout liquidations, the FDIC as receiver retains substantially all of the failed IDI's assets for later sale, and the franchise value of the failed IDI is lost.
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The agencies request comment on whether to provide guidance on derivatives and trading activities for specified firms that utilize an SPOE resolution strategy. Although the specified firms have limited derivatives and trading operations compared to the U.S. GSIBs, it remains important that their derivatives and trading activities can be stabilized and de-risked during resolution without causing significant disruption to U.S. markets. If the agencies were to provide guidance on derivatives and trading activities, the agencies likely would adopt aspects of the 2019 GSIB Guidance. The agencies do not anticipate providing derivatives and trading activities guidance to specified firms that utilize an MPOE resolution strategy.
In the 2019 GSIB Guidance, the agencies specified the particular covered companies to which the derivatives and trading activities guidance was directed. The agencies recognize that covered companies may move in and out of the triennial full filer category and want to ensure that the proposal would remain applicable and relevant regardless of which covered companies are considered triennial full filers at any moment in time.
This section states the agencies' preferred presentation regarding the format, assumptions, and structure of resolution plans. Plans should contain an executive summary, a narrative of the firm's resolution strategy, relevant technical appendices, and a public section as detailed in the Rule. The proposed format, structure, and assumptions are generally similar to those in the 2019 GSIB Guidance, except that the proposed guidance reflects the expectation that a firm should support any assumptions that it will have access to the Discount Window and/or other borrowings during the period immediately prior to entering bankruptcy and clarifies expectations around such assumptions and that firms should not assume the use of the systemic risk exception to the least-cost test in the event of a failure of an IDI requiring resolution under the FDI Act. In addition, for firms that adopt an MPOE resolution strategy, the proposal includes the expectation that a plan should demonstrate and describe how the failure event(s) results in material financial distress, including consideration of the likelihood of the diminution the firm's liquidity and capital levels prior to bankruptcy.
Certain provisions of the proposed guidance contain “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The agencies reviewed the proposed guidance and determined that it would revise the
Comments are invited on the following:
(A) Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
(B) the accuracy of the agencies' estimates of the burden of the information collections, including the validity of the methodology and assumptions used;
(C) ways to enhance the quality, utility, and clarity of the information to be collected;
(D) ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
(E) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Comments on aspects of this document that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to the addresses listed in the
The proposed guidance for triennial full filers using an SPOE strategy is based on the 2019 GSIB guidance (for domestic firms) and the 2020 FBO guidance (for foreign firms). It would clarify the agencies' expectations around capital, liquidity, governance mechanisms, and operations. The proposed guidance also would clarify expectations concerning management information systems capabilities and the identification of discrete separability options appropriate to the resolution strategy. Additionally, if finalized, the foreign banking organizations that adopt an SPOE resolution strategy should address how their U.S. resolution plan aligns with their group resolution plan.
The proposed guidance for triennial full filers using an MPOE resolution strategy addresses similar topics but reflects the risks of and capabilities needed for an MPOE resolution. The proposed guidance explains the agencies' expectations around liquidity and operational capabilities, and legal entity rationalization. The proposed guidance also provides clarified expectations related to the separate resolution of a U.S. IDI and to identification of discrete separability options. Foreign banking organizations that adopt an MPOE resolution strategy would have expectations related to governance mechanisms; the role of branches; and the group resolution plan.
The proposed guidance does not specify expectations around derivatives and trading activities.
Historically, the Board and the FDIC have split the respondents for purposes of PRA clearances. As such, the agencies will split the change in burden as well. As a result of this split and the proposed revisions, there is a proposed net increase in the overall estimated burden hours of 13,386 hours for the Board and 17,610 hours for the FDIC. Therefore, the total Board estimated burden for its entire information collection would be 216,853 hours and the total FDIC estimate burden for its entire information collection would be 211,300 hours.
The following table presents only the change in the estimated burden hours, as amended if the guidance were finalized, broken out by agency. The table does not include a discussion of the remaining estimated burden hours, which remain unchanged.
Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365(d)) requires certain financial companies to report periodically to the Board of Governors of the Federal Reserve System (the Board) and the Federal Deposit Insurance Corporation (the FDIC) (together, the agencies) their plans for rapid and orderly resolution in the event of material financial distress or failure. On November 1, 2011, the agencies promulgated a joint rule implementing the provisions of Section 165(d).
This document is intended to provide guidance to certain domestic financial companies required to submit Plans to assist their further development of a Plan for their 2024 and subsequent Plan submissions. Specifically, the guidance applies to any domestic covered company that is a triennial full filer under the Rule (specified firms).
In general, this document is organized around a number of key challenges in resolution (capital; liquidity; governance mechanisms; operational; legal entity rationalization and separability; and insured depository institution resolution, if applicable) that apply across resolution plans, depending on their strategy. Additional challenges or obstacles may arise based on a firm's particular structure, operations, or resolution strategy. Each firm is expected to satisfactorily address these vulnerabilities in its Plan. In addition, each topic of this guidance is separated into expectations for a specified firm that utilizes a single point of entry (SPOE) resolution strategy for its Plan and expectations for a specified firm that utilizes a multiple point of entry (MPOE) resolution strategy for its Plan.
Under the Rule, the agencies will review a Plan to determine if it satisfactorily addresses key potential challenges, including those specified below. If the agencies jointly decide that an aspect of a Plan presents a weakness that individually or in conjunction with other aspects could undermine the feasibility of the Plan, the agencies may determine jointly that the Plan is not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.
The firm should have the capital capabilities necessary to execute its resolution strategy, including the modeling and estimation process described below.
A firm's external LAC should be complemented by appropriate positioning of loss-absorbing capacity within the firm (
Finally, to the extent that pre-positioned resources at a material entity are in the form of intercompany debt and there are one or more entities between that material entity and the parent, the firm should structure the instruments so as to ensure that the material entity can be recapitalized.
The firm's RCEN methodology should use conservative forecasts for losses and risk-weighted assets and incorporate estimates of potential additional capital needs through the resolution period,
The agencies do not propose issuing guidance on this topic to firms whose Plans contemplate a MPOE resolution strategy.
The firm should have the liquidity capabilities necessary to execute its preferred resolution strategy. For resolution purposes, these capabilities should include having an appropriate model and process for estimating and maintaining sufficient liquidity at or readily available to material entities and a methodology for estimating the liquidity needed to successfully execute the resolution strategy, as described below.
Additionally, the RLAP methodology should take into account: (A) the daily contractual mismatches between inflows and outflows; (B) the daily flows from movement of cash and collateral for all inter-affiliate transactions; and (C) the daily stressed liquidity flows and trapped liquidity as a result of actions taken by clients, counterparties, key FMUs, and foreign supervisors, among others.
The firm's RLEN methodology should:
(A) Estimate the minimum operating liquidity (MOL) needed at each material entity to ensure those entities could continue to operate post-parent's bankruptcy filing and/or to support a wind-down strategy;
(B) Provide daily cash flow forecasts by material entity to support estimation of peak funding needs to stabilize each entity under resolution;
(C) Provide a comprehensive breakout of all inter-affiliate transactions and arrangements that could impact the MOL or peak funding needs estimates; and
(D) Estimate the minimum amount of liquidity required at each material entity to meet the MOL and peak needs noted above, which would inform the firm's board(s) of directors of when they need to take resolution-related actions.
The MOL estimates should capture material entities' intraday liquidity requirements, operating expenses, working capital needs, and inter-affiliate funding frictions to ensure that material entities could operate without disruption during the resolution. The peak funding needs estimates should be projected for each material entity and cover the length of time the firm expects it would take to stabilize that material entity. Inter-affiliate funding frictions should be taken into account in the estimation process.
The firm's forecasts of MOL and peak funding needs should ensure that material entities could operate post-filing consistent with regulatory requirements, market expectations, and the firm's post-failure strategy. These forecasts should inform the RLEN estimate,
The firm should have the liquidity capabilities necessary to execute its preferred resolution strategy. A Plan with an MPOE
The firm should demonstrate that key actions will be taken at the appropriate time in order to mitigate financial, operational, legal, and regulatory vulnerabilities. To ensure that these actions will occur, the firm should establish clearly identified triggers linked to specific actions for:
(A) The escalation of information to senior management and the board(s) to potentially take the corresponding actions at each stage of distress leading eventually to the decision to file for bankruptcy;
(B) Successful recapitalization of subsidiaries prior to the parent's filing for bankruptcy and funding of such entities during the parent company's bankruptcy to the extent the preferred strategy relies on such actions or support; and
(C) The timely execution of a bankruptcy filing and related pre-filing actions.
These triggers should be based, at a minimum, on capital, liquidity, and market metrics, and should incorporate the firm's methodologies for forecasting the liquidity and capital needed to operate as required by the preferred strategy following a parent company's bankruptcy filing. Additionally, the triggers and related actions should be specific.
Triggers linked to firm actions as contemplated by the firm's preferred strategy should identify when and under what conditions the firm, including the parent company and its material entities, would transition from business-as-usual conditions to a stress period and from a stress period to the recapitalization/resolution periods. Corresponding escalation procedures, actions, and timeframes should be constructed so that breach of the triggers will allow prerequisite actions to be completed. For example, breach of the triggers needs to occur early enough to ensure that resources are available and can be downstreamed, if anticipated by the firm's strategy, and with adequate time for the preparation of the bankruptcy petition and first-day motions, necessary stakeholder communications, and requisite board actions. Triggers identifying the onset of stress and recapitalization/resolution periods, and the associated escalation procedures and actions, should be discussed directly in the governance playbooks.
The analysis should include mitigants to the potential challenges to the planned Support. The Plan should identify the mitigant(s) to such challenges that the firm considers most effective. In identifying appropriate mitigants, the firm should consider the effectiveness of a contractually binding mechanism (CBM), pre-positioning of financial resources in material entities, and the creation of an intermediate holding company. Moreover, if the Plan includes a CBM, the firm should consider whether it is appropriate that the CBM should have the following:
(A) Clearly defined triggers;
(B) Triggers that are synchronized to the firm's liquidity and capital methodologies;
(C) Perfected security interests in specified collateral sufficient to fully secure all Support obligations on a continuous basis (including mechanisms for adjusting the amount of collateral as the value of obligations under the agreement or collateral assets fluctuates); and
(D) Liquidated damages provisions or other features designed to make the CBM more enforceable.
The firm also should consider related actions or agreements that may enhance the effectiveness of a CBM. A copy of any agreement and documents referenced therein (
The governance playbooks included in the Plan should incorporate any developments from the firm's analysis of potential legal challenges regarding the Support, including any Support approach(es) the firm has implemented. If the firm analyzed and addressed an issue noted in this section in a prior plan submission, the Plan may reproduce that analysis and arguments and should build upon it to at least the extent described above. In preparing the analysis of these issues, firms may consult with law firms and other experts on these matters. The agencies do not object to appropriate collaboration between firms, including through trade organizations and with the academic community, to develop analysis of common legal challenges and available mitigants.
The agencies do not propose issuing guidance on this topic to firms whose Plans utilize a MPOE resolution strategy.
• Identifying clients,
• Mapping material entities, identified critical operations, core business lines, and key clients to both key FMUs and key agent banks; and
• Developing a playbook for each key FMU and key agent bank reflecting the firm's role(s) as a user and/or provider of PCS services.
The framework should address direct relationships (
• Description of the firm's relationship as a user with the key FMU or key agent bank and the identification and mapping of PCS services to material entities, identified critical operations, and core business lines that use those PCS services;
• Discussion of the potential range of adverse actions that may be taken by that key FMU or key agent bank when the firm is in resolution,
• Discussion of PCS-related liquidity sources and uses in business-as-usual (BAU), in stress, and in the resolution period, presented by currency type (with U.S. dollar equivalent) and by material entity.
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• Identification and mapping of PCS services to the material entities, identified critical operations, and core business lines that provide those PCS services, and a description of the scale and the way in which each provides PCS services;
• Identification and mapping of PCS services to key clients to whom the firm provides such PCS services and any related credit or liquidity offered in connection with such services;
• Discussion of the potential range of firm contingency arrangements available to minimize disruption to the provision of PCS services to its key clients, including the viability of transferring key client activity and any related assets, as well as any alternative arrangements that would allow the firm's key clients continued access to PCS services if the firm could no longer provide such access (
• Descriptions of the range of contingency actions that the firm may take concerning its provision of intraday credit to key clients, including analysis quantifying the potential liquidity the firm could generate by taking such actions in stress and in the resolution period, such as: (i) requiring key clients to designate or appropriately pre-position liquidity, including through prefunding of settlement activity, for PCS-related key FMU and key agent bank obligations at specific material entities of the firm (
• Descriptions of how the firm will communicate to its key clients the potential impacts of implementation of any identified contingency arrangements or alternatives, including a description of the firm's methodology for determining whether any additional communication should be provided to some or all key clients (
• Track the following items by: (i) material entity; and (ii) with respect to customers, counterparties, and agents and service providers, location and jurisdiction:
○ PCS activities, with each activity mapped to the relevant material entities, identified critical operations, and core business lines;
○ Customers and counterparties for PCS activities, including values and volumes of various transaction types, as well as used and unused capacity for all lines of credit;
○ Exposures to and volumes transacted with FMUs, nostro agents, and custodians; and
○ Services provided and service level agreements, as applicable, for other current agents and service providers (internal and external).
• Assess the potential effects of adverse actions by FMUs, nostro agents, custodians, and other agents and service providers, including suspension or termination of membership or services, on the firm's operations and customers and counterparties of those operations;
• Develop contingency arrangements in the event of such adverse actions;
• Quantify the liquidity needs and operational capacity required to meet all PCS obligations, including any change in demand for and sources of liquidity needed to meet such obligations.
• Be able to query and provide aggregate statistics for all qualified financial contracts concerning cross-default clauses, downgrade triggers, and other key collateral-related contract terms—not just those terms that may be impacted in an adverse economic environment—across contract types, business lines, legal entities, and jurisdictions;
• Be able to track both collateral sources (
• Have robust risk measurements for cross-entity and cross-contract netting, including consideration of where collateral is held and pledged;
• Be able to identify CUSIP and asset class level information on collateral pledged to specific central counterparties by legal entity on at least a t+1 basis;
• Be able to track and report on inter-branch collateral pledged and received on at least a t+1 basis and have clear policies explaining the rationale for such inter-branch pledges, including any regulatory considerations; and
• Have a comprehensive collateral management policy that outlines how the firm as a whole approaches collateral and serves as a single source for governance.
• Financial statements for each material entity (at least monthly);
• External and inter-affiliate credit exposures, both on- and off-balance sheet, by type of exposure, counterparty, maturity, and gross payable and receivable;
• Gross and net risk positions with internal and external counterparties;
• Guarantees, cross holdings, financial commitments and other transactions between material entities;
• Data to facilitate third-party valuation of assets and businesses, including risk metrics;
• Key third-party contracts, including the provider, provider's location, service(s) provided, legal entities that are a party to or a beneficiary of the contract, and key contractual rights (for example, termination and change in control clauses);
• Legal agreement information, including parties to the agreement and key terms and interdependencies (for example, change in control, collateralization, governing law, termination events, guarantees, and cross-default provisions);
• Service level agreements between affiliates, including the service(s) provided, the legal entity providing the service, legal entities receiving the service, and any termination/transferability provisions;
• Licenses and memberships to all exchanges and value transfer networks, including FMUs;
• Key management and support personnel, including dual-hatted employees, and any associated retention agreements;
• Agreements and other legal documents related to property, including facilities, technology systems, software, and intellectual property rights. The information should include ownership, physical location, where the property is managed and names of legal entities and lines of business that the property supports; and
• Updated legal records for domestic and foreign entities, including entity type and purpose (for example, holding company, bank, broker dealer, and service entity), jurisdiction(s), ownership, and regulator(s).
The firm should (A) maintain an identification of all shared services that support identified critical operations or core business lines;
SLAs should fully describe the services provided, reflect pricing considerations on an arm's-length basis where appropriate, and incorporate appropriate terms and conditions to (A) prevent automatic termination upon certain resolution-related events and (B) achieve continued provision of such services during resolution. The firm should also store SLAs in a central repository or repositories in a searchable format, develop and document contingency strategies and arrangements for replacement of critical shared services, and complete re-alignment or restructuring of activities within its corporate structure. In addition, the firm should ensure the financial resilience of internal shared service providers by maintaining working capital for six months (or through the period of stabilization as required in the firm's preferred strategy) in such entities sufficient to cover contract costs, consistent with the preferred resolution strategy.
The firm should identify all critical service providers and outsourced services that support identified critical operations or core business lines and identify any that could not be promptly substituted. The firm should (A) evaluate the agreements governing these services to determine whether there are any that could be terminated despite continued performance upon the parent's bankruptcy filing, and (B) update contracts to incorporate appropriate terms and conditions to prevent automatic termination upon commencement of any resolution proceeding and facilitate continued provision of such services. Relying on entities projected to survive during resolution to avoid contract termination is insufficient to ensure continuity. In the Plan, the firm should document the amendment of any such agreements governing these services.
• As users of PCS services:
○ Track the following items by: (i) material entity; and (ii) with respect to customers, counterparties, and agents and service providers, location and jurisdiction:
PCS activities, with each activity mapped to the relevant material entities, identified critical operations, and core business lines;
Customers and counterparties for PCS activities, including values and volumes of various transaction types, as well as used and unused capacity for all lines of credit;
Exposures to and volumes transacted with FMUs, nostro agents, and custodians; and
Services provided and service level agreements, as applicable, for other current agents and service providers (internal and external).
○ Assess the potential effects of adverse actions by FMUs, nostro agents, custodians, and other agents and service providers,
○ Develop contingency arrangements in the event of such adverse actions; and
○ Quantify the liquidity needs and operational capacity required to meet all PCS obligations, including intraday requirements.
• As providers of PCS services:
○ Identify their PCS clients and the services they provide to these clients, including volumes and values of transactions;
○ Quantify and explain time-sensitive payments; and
○ Quantify and explain intraday credit provided.
• Financial statements for each material entity (at least monthly);
• External and inter-affiliate credit exposures, both on- and off-balance sheet, by type of exposure, counterparty, maturity, and gross payable and receivable;
• Gross and net risk positions with internal and external counterparties;
• Guarantees, cross holdings, financial commitments and other transactions between material entities;
• Data to facilitate third-party valuation of assets and businesses, including risk metrics;
• Key third-party contracts, including the provider, provider's location, service(s) provided, legal entities that are a party to or a beneficiary of the contract, and key contractual rights (for example, termination and change in control clauses);
• Legal agreement information, including parties to the agreement and key terms and interdependencies (for example, change in control, collateralization, governing law, termination events, guarantees, and cross-default provisions);
• Service level agreements between affiliates, including the service(s) provided, the legal entity providing the service, legal entities receiving the service, and any termination/transferability provisions;
• Licenses and memberships to all exchanges and value transfer networks, including FMUs;
• Key management and support personnel, including dual-hatted employees, and any associated retention agreements;
• Agreements and other legal documents related to property, including facilities, technology systems, software, and intellectual property rights. The information should include ownership, physical location, where the property is managed and names of legal entities and lines of business that the property supports; and
• Updated legal records for domestic and foreign entities, including entity type and purpose (for example, holding company, bank, broker dealer, and service entity), jurisdiction(s), ownership, and regulator(s).
The firm should: (A) maintain an identification of all shared services that support identified critical operations or are material to the execution of the resolution strategy; and (B) mitigate identified continuity risks through establishment of SLAs for all shared services supporting identified critical operations or are material to the execution of the resolution strategy. SLAs should fully describe the services provided and incorporate appropriate terms and conditions to: (A) prevent automatic termination upon certain resolution-related events; and (B) achieve continued provision of such services during resolution.
The firm should identify all critical service providers and outsourced services that support identified critical operations or are material to the execution of the resolution strategy. Any of these services that cannot be promptly substituted should be identified in a firm's Plan. The firm should: (A) evaluate the agreements governing these services to determine whether there are any that could be terminated despite continued performance upon the parent's bankruptcy filing; and (B) update contracts to incorporate appropriate terms and conditions to prevent automatic termination and facilitate continued provision of such services through resolution. Relying on entities projected to survive during resolution to avoid contract termination is insufficient to ensure continuity. In the Plan, the firm should document the amendment of any such agreements governing these services.
(A) Facilitate the recapitalization and liquidity support of material entities, as required by the firm's resolution strategy. Such criteria should include clean lines of ownership, minimal use of multiple intermediate holding companies, and clean funding pathways between the parent and material operating entities;
(B) Facilitate the sale, transfer, or wind-down of certain discrete operations within a timeframe that would meaningfully increase the likelihood of an orderly resolution of the firm, including provisions for the continuity of associated services and mitigation of financial, operational, and legal challenges to separation and disposition;
(C) Adequately protect the subsidiary insured depository institutions from risks arising from the activities of any nonbank subsidiaries of the firm (other than those that are subsidiaries of an insured depository institution); and Minimize complexity that could impede an orderly resolution and minimize redundant and dormant entities.
These criteria should be built into the firm's ongoing process for creating, maintaining, and optimizing its structure and operations on a continuous basis.
The firm's corporate structure and arrangements among legal entities should be considered and maintained in a way that facilitates the firm's resolvability as its activities, technology, business models, or geographic footprint change over time.
A firm's separability options should be actionable, and impediments to their execution and projected mitigation strategies should be identified in advance. Relevant impediments could include, for example, legal and regulatory preconditions, interconnectivity among the firm's operations, tax consequences, market conditions, and other considerations. To be actionable, divestiture options should be executable within a reasonable period of time.
In developing their options, firms should also consider potential consequences for U.S. financial stability of executing each option, taking into consideration impacts on counterparties, creditors, clients, depositors, and markets for specific assets.
Firms should have a comprehensive understanding of the entire organization and certain baseline capabilities. That understanding should include the operational and financial linkages among a firm's business lines, material entities, and identified critical operations. Additionally, information systems should be robust enough to produce the required data and information needed to execute separability options.
The level of detail and analysis should vary based on the firm's risk profile and scope of operations. A separability analysis should address the following elements:
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○ Options contemplating the sale, transfer, or disposal of significant assets, portfolios, legal entities or business lines.
○ Options that may permanently change the firm's structure or business strategy.
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○ The identity and position of the senior management officials of the company who are primarily responsible for overseeing execution of the separability option.
○ An estimated time frame for implementation.
○ A description of any impediments to execution of the option and mitigation strategies to address those impediments.
○ A description of the assumptions underpinning the option.
○ A plan describing the methods and forms of communication with internal, external, and regulatory stakeholders.
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○ A financial impact assessment that describes the impact of executing the option on the firm's capital, liquidity, and balance sheet.
○ A business impact assessment that describes the effect of executing the option on business lines and material entities, including reputational impact.
○ An identified critical operation impact assessment that describes how execution of the option may affect the provision of any identified critical operation.
○ An operational impact assessment and contingency plan that explains how operations can be maintained if the option is implemented; such an analysis should address internal operations (for example, shared services, IT requirements, and human resources) and access to market infrastructure (for example, clearing and settlement facilities and payment systems).
Further, the firm should have, and be able to demonstrate, the capability to populate in a timely manner a data room with information pertinent to a potential divestiture of the business (including, but not limited to, carve-out financial statements, valuation analysis, and a legal risk assessment).
Within the Plan, the firm should demonstrate how the firm's LER Criteria and implementation efforts support meeting the separability-related guidance above. The Plan should also provide the separability analysis noted above. Finally, the Plan should include a description of the firm's legal entity rationalization governance process.
A Plan should include options for the sale, transfer, or disposal of significant assets, portfolios, legal entities, or business lines in resolution that may be executed in a reasonable period of time. For each option, supporting analysis should include: an execution plan that includes an estimated time frame for implementation, a description of any impediments to execution of the option, and mitigation strategies to address those impediments; a description of the assumptions underpinning the option; a financial impact assessment that describes the impact of executing the option; and an identified critical operation impact assessment that describes how execution of the option may affect the provision of any identified critical operation. Information systems should be robust enough to produce the required data and information needed to execute the options.
If the Plan includes a strategy that contemplates the separate resolution of a U.S. IDI that is a material entity, the Plan should demonstrate how this could be achieved in a manner that is consistent with the overall objective of the Plan to substantially mitigate the risk that the failure of the specified firm would have serious adverse effects on financial stability in the United States while also complying with the statutory and regulatory requirements governing IDI resolution. More specifically,
• If the strategy is other than payout liquidation (
○ A Plan may demonstrate that a strategy involving an all-deposit BDI would be permissible under the least-cost test of the FDI Act by presenting an analysis which shows that the strategy results in no loss to the Deposit Insurance Fund (DIF) by demonstrating that the incremental estimated cost to the DIF by having the BDI assume all uninsured deposits is offset by the preservation of franchise value connected to the uninsured deposits after accounting for the amount of any loss-absorbing debt instruments and other liabilities subordinate to the depositor class that would be left behind in the receivership.
○ A Plan may demonstrate the feasibility of a strategy involving a BDI that assumes all insured deposits and a portion of uninsured deposits by providing an advance dividend to uninsured depositors for a portion of their deposit claim, as well as the basis for that dividend, and pursuant to which a loss to the DIF occurs, by presenting an analysis comparing the cost of the proposed strategy to the cost of payout liquidation and demonstrating:
The incremental estimated cost to the DIF created by the BDI's assumption of the portion of uninsured deposits assumed is offset by the franchise value preserved by maintaining the assumed uninsured deposits, after accounting for the amount of any long-term debt and other liabilities subordinate to the depositor class that would be left behind in the receivership;
The loss to the DIF under the proposed strategy (including the amounts paid by the DIF for more favorable treatment, relative to a payout liquidation, of a portion of uninsured deposits) is less than or equal to the loss to the DIF that would be incurred through a payout liquidation of the IDI; and
○ The deposit payout process for any uninsured deposits that remain in the receivership may be executed in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability.
• If the Plan's strategy envisions a payout liquidation for the IDI, with or without use of a Deposit Insurance National Bank or a paying agent, the Plan should demonstrate how the deposit payout and asset liquidation process would be executed in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability.
• In all cases, the Plan should show that implementation of the resolution, including the impact on depositors whose accounts are not transferred in whole or in part to the BDI, would not create the risk of serious adverse effects on U.S. financial stability.
Regardless of the IDI resolution strategy chosen, the Plan should assume asset valuations consistent with the severely adverse stress economic scenario and the IDI's condition as a failed institution, as referenced in “
With respect to exit from IDI resolution proceedings, a Plan could support the feasibility of an asset liquidation or BDI exit strategy by, for example, describing an actionable process, based on historical precedent or otherwise supportable projections, that winds down certain businesses, includes the sale of assets and deposits to multiple acquirers, or culminates in a capital markets transaction, such as an initial public offering or a private placement of securities.
1. The Plan should be based on the current state of the applicable legal and policy frameworks. Pending legislation or regulatory actions may be discussed as additional considerations.
2. The firm must submit a Plan that does not rely on the provision of extraordinary support by the United States or any other government to the firm or its subsidiaries to prevent the failure of the firm.
3. The firm should not assume that it will be able to sell identified critical operations or core business lines, or that unsecured funding will be available immediately prior to filing for bankruptcy.
4. The resolution strategy may be based on an idiosyncratic event or action, including a series of compounding events. The firm should justify use of that assumption, consistent with the conditions of the economic scenario.
5. Within the context of the applicable idiosyncratic scenario, markets are functioning and competitors are in a position to take on business. If a firm's Plan assumes the sale of assets, the firm should take into account all issues surrounding its ability to sell in market conditions present in the applicable economic condition at the time of sale (
6. For a firm that adopts an MPOE strategy, the Plan should demonstrate and describe how the failure event(s) results in material financial distress.
7. The firm should not assume any waivers of section 23A or 23B of the Federal Reserve Act in connection with the actions proposed to be taken prior to or in resolution.
8. The Plan should support any assumptions that the firm will have access to the Discount Window and/or other borrowings during the period immediately prior to entering bankruptcy. To the extent the firm assumes use of the Discount Window and/or other borrowings, the Plan should support that assumption with a discussion of the operational testing conducted to facilitate access in a stress environment, placement of collateral, and the amount of funding accessible to the firm. The firm may assume that its depository institutions will have access to the Discount Window only for a few days after the point of failure to facilitate orderly resolution. However, the firm should not assume its subsidiary depository institutions will have access to the Discount Window while critically undercapitalized, in FDIC receivership, or operating as a bridge bank, nor should it assume any lending from a Federal Reserve credit facility to a non-bank affiliate.
1. Any U.S.-based or non-U.S. affiliates, including any branches, that are significant to the activities of an identified critical operation.
2. Subsidiaries or foreign offices whose provision or support of global treasury operations, funding, or liquidity activities (inclusive of intercompany transactions) is significant to the activities of an identified critical operation.
3. Subsidiaries or foreign offices that provide material operational support in resolution (key personnel, information technology, data centers, real estate or other shared services) to the activities of an identified critical operation.
4. Subsidiaries or foreign offices that are engaged in derivatives booking activity that is significant to the activities of an identified critical operation, including those that conduct either the internal hedge side or the client-facing side of a transaction.
5. Subsidiaries or foreign offices engaged in asset custody or asset management that are significant to the activities of an identified critical operation.
6. Subsidiaries or foreign offices holding licenses or memberships in clearinghouses, exchanges, or other FMUs that are significant to the activities of an identified critical operation.
For each material entity (including a branch), the Plan should enumerate, on a jurisdiction-by-jurisdiction basis, the specific mandatory and discretionary actions or forbearances that regulatory and resolution authorities would take during resolution, including any regulatory filings and notifications that would be required as part of the preferred strategy, and explain how the Plan addresses the actions and forbearances. Describe the consequences for the covered company's resolution strategy if specific
The purpose of the public section is to inform the public's understanding of the firm's resolution strategy and how it works.
The public section should discuss the steps that the firm is taking to improve resolvability under the U.S. Bankruptcy Code. The public section should provide background information on each material entity and should be enhanced by including the firm's rationale for designating material entities. The public section should also discuss, at a high level, the firm's intra-group financial and operational interconnectedness (including the types of guarantees or support obligations in place that could impact the execution of the firm's strategy).
The discussion of strategy in the public section should broadly explain how the firm has addressed any deficiencies, shortcomings, and other key vulnerabilities that the agencies have identified in prior plan submissions. For each material entity, it should be clear how the strategy provides for continuity, transfer, or orderly wind-down of the entity and its operations. There should also be a description of the resulting organization upon completion of the resolution process.
The public section may note that the Plan is not binding on a bankruptcy court or other resolution authority and that the proposed failure scenario and associated assumptions are hypothetical and do not necessarily reflect an event or events to which the firm is or may become subject.
By order of the Board of Governors of the Federal Reserve System.
By order of the Board of Directors.
Board of Governors of the Federal Reserve System (Board) and Federal Deposit Insurance Corporation (FDIC).
Proposed guidance; request for comments.
The Board and the FDIC (together, the agencies) are inviting comments on proposed guidance for the 2024 and subsequent resolution plan submissions by certain foreign banking organizations. The proposed guidance is meant to assist these firms in developing their resolution plans, which are required to be submitted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the Dodd-Frank Act), and the jointly issued implementing regulation (the Rule). The scope of application of the proposed guidance would be foreign-based triennial full filers (specified firms or firms), which are foreign-based Category II and III banking organizations, and the guidance, if finalized, would supersede the joint
Comments must be received by November 30, 2023.
Interested parties are encouraged to submit written comments jointly to both agencies. Comments should be directed to:
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In general, all public comments will be made available on the Board's website at
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Section 165(d) of the Dodd-Frank Act
Triennial full filers under the Rule are required to file a resolution plan every three years, alternating between full and targeted resolution plans.
Implementation of the Rule has been an iterative process aimed at strengthening the resolution planning capabilities of financial institutions subject to the Rule. To assist the development of covered companies' resolution planning capabilities and plan submissions, the agencies have provided feedback on individual plan submissions, promulgated guidance to certain groups of covered companies, and issued answers to frequently asked questions. The agencies believe that guidance can help focus the efforts of similarly situated covered companies to improve their resolution capabilities and clarify the agencies' expectations for those filers' future progress. The agencies have issued guidance to (a) U.S. global systemically important banks (GSIBs),
As the agencies previously indicated,
The proposed guidance also reflects the agencies' recent experience with UBS Group AG's acquisition of Credit Suisse Group AG (CS) and, with respect to specified firms with large subsidiary insured depository institutions (IDIs), the resolutions of Silicon Valley Bank (SVB), Signature Bank (SB), and First Republic Bank (First Republic). The agencies' experience with CS illustrates the complexities that can arise in the case of acute stress involving large cross-border firms and the importance of resolution planning and coordination with home country authorities. Like CS, many of the specified firms are foreign GSIBs with a large presence in the United States, and the agencies recognize the importance of maintaining a comprehensive understanding of the U.S. operations of large FBOs. While SVB, SB, and First Republic were not required to file resolution plans under section 165(d) of the Dodd-Frank Act and the Rule, the effects of their failures illustrate that the failure of a large IDI may have serious adverse effects on financial stability in the United States.
The specified firms have adopted one of two U.S. resolution strategies: a U.S. single point of entry (U.S. SPOE) or U.S. MPOE strategy. Under a U.S. SPOE approach, only the top-tier U.S. material entity holding company enters bankruptcy and all U.S. material entity subsidiaries remain operating as a going concern. The U.S. MPOE approach entails multiple U.S. material entities entering separate resolution proceedings: any top-tier U.S. material entity holding company enters bankruptcy; any U.S. material entity IDI subsidiary is resolved separately under the Federal Deposit Insurance Act of 1950, as amended (the FDI Act); and other individual U.S. material entity subsidiaries separately enter bankruptcy (or another applicable resolution regime) or are wound down. The U.S. SPOE and U.S. MPOE resolution plan strategies require firms to consider different risks and require different types of planning and development of capabilities for the execution of the respective strategies. For their 2021 resolution plan submissions, some of the specified firms presented a U.S. SPOE strategy, but most of the specified firms presented a U.S. MPOE strategy.
The agencies do not prescribe a specific resolution strategy for any covered company, nor do the agencies identify a preferred strategy. The proposed guidance is not intended to favor one strategy or another. Specified filers may continue to submit resolution plans using the resolution strategies they believe would be most effective in achieving an orderly resolution of their firms, but a resolution plan must address the key vulnerabilities and support the underlying assumptions required to successfully execute the chosen resolution strategy.
With respect to the specified firms, the Rule requires the firm's U.S. resolution plan to address subsidiaries, branches, and agencies, and identified critical operations and core business lines, as applicable, that are domiciled in the United States or conducted in whole or material part in the United States.
The agencies, as well as the Office of the Comptroller of the Currency, are issuing a proposed rule for comment that would require certain large IDI holding companies, U.S. intermediate holding companies of FBOs, and certain IDIs, to issue and maintain outstanding a minimum amount of long-term debt (LTD), among other proposed requirements.
The proposed guidance begins with the proposed scope and then is organized into several substantive topical areas. Each substantive topic is bifurcated, with separate guidance for a U.S. SPOE resolution strategy and a U.S. MPOE resolution strategy. As discussed, each resolution strategy poses distinct risks and requires its own type of planning and capabilities development for executing the strategy. Accordingly, the proposed guidance would account for the different challenges posed by each approach.
The proposed guidance for firms that adopt a U.S. SPOE resolution strategy is generally based on the 2020 FBO Guidance or the associated proposal.
Some aspects of this proposal reflect expectations that were included in the 2020 Proposed FBO Guidance. For example, the proposal contains capital and liquidity pre-positioning expectations similar to the 2020 Proposed FBO Guidance, to better support U.S. SPOE strategies and in light of the LTD proposal. Although IDI subsidiaries of certain specified firms may be required under an LTD rule to have outstanding a minimum amount of prepositioned LTD, firms with a U.S. SPOE strategy should have a framework for determining the amount and allocation of resources among the firm's material entities. Similarly, for specified firms that adopt a U.S. SPOE strategy, the agencies are proposing governance mechanisms and separability expectations similar to those contained in the 2020 Proposed FBO Guidance. Governance mechanisms increase the likelihood that the U.S. SPOE strategy would be implemented at a point in the stress continuum prior to the firm having exhausted all financial resources, increasing the likelihood that the bankruptcy reorganization would be successful. Separability provides additional optionality to firms' U.S. SPOE strategies.
The proposed guidance for firms that utilize a U.S. MPOE resolution strategy
The agencies believe that each substantive area of the proposed guidance would play a part in helping to ensure that the specified firms can be resolved in an orderly manner. The proposed guidance would describe the agencies' expectations for each of these areas. In addition, the proposed guidance would consolidate items of feedback provided to a number of the specified firms in the past, thereby providing the public with one source of applicable guidance for the specified firms. The proposed guidance is not, however, intended to override the obligation of an individual specified firm to respond, in its next resolution plan submission, to pending items of individual feedback or any shortcomings or deficiencies identified or determined by the agencies in that specified firm's prior resolution plan submission. The proposed guidance also is not meant to limit specified firms' consideration of additional vulnerabilities or obstacles that might arise based on a firm's particular structure, operations, or resolution strategy, and that should be factored into the specified firm's resolution plan submission.
The proposed guidance concludes with information about the format and structure of a plan that applies equally to plans contemplating either a U.S. SPOE strategy or a U.S. MPOE strategy.
The agencies propose to apply the guidance to all foreign-based triennial full filers. The Board's tailoring framework provides clear, predictable scoping based on publicly reported quantitative data. As discussed above, the agencies believe that it is appropriate to provide resolution planning guidance to all foreign triennial full filers given issues identified in these firms' 2021 targeted resolution plans and considering lessons learned from recent events, including the agencies' experiences in connection with the events leading to UBS AG's acquisition of Credit Suisse, following the intervention of the Swiss authorities.
The agencies would like the specified firms to submit resolution plans that take into consideration the final version of the proposed guidance as soon as practicable. However, the agencies understand that the specified firms may need time to take into consideration the guidance when developing their resolution plans. In light of the timing of this proposal, the agencies are considering providing a short extension of the next resolution plan submission date for the specified firms, with the expectation that these plan submissions would be due sooner than one year after the proposed guidance is published in final form.
The agencies recognize that the preferred resolution outcome for many specified firms is a successful home country resolution using a global SPOE resolution strategy that does not involve the placement of any U.S. material entities into resolution. However, by law, U.S. resolution planning requirements require relevant FBOs to contemplate their resolution under the Bankruptcy Code.
U.S. operations of an FBO are often highly interconnected with the broader, global operations of the financial institution. To clarify the interaction between U.S. and global resolution strategies, the proposal outlines expectations for specified firms to describe the impact of executing the firm's global, group-wide resolution plan on the firm's U.S. operations and detail the extent to which resolution planning under the Rule relies on different assumptions, strategies, and capabilities from the global plan. A specified firm's broader resolvability framework is expected to consider the objectives of both the group-wide resolution strategy and the U.S. resolution strategy pursuant to the Rule, with complementary efforts to enhance resolvability across plans.
For specified firms with a U.S. SPOE resolution strategy, the agencies propose guidance substantially similar to the 2020 Proposed FBO Guidance regarding capital. The ability to provide sufficient capital to material entities without disruption from creditors is important in order to ensure that material entities can continue to maintain operations as the firm is resolved. The proposal describes expectations concerning the appropriate positioning of capital and other loss-absorbing instruments (
The agencies are not proposing further expectations concerning capital to firms whose plans contemplate a U.S. MPOE resolution strategy, as a U.S. MPOE strategy assumes most material entities do not continue as going concerns upon entry into resolution.
For firms that adopt a U.S. SPOE resolution strategy, the agencies propose guidance substantially similar to the 2020 Proposed FBO Guidance regarding liquidity. A firm's ability to reliably estimate and meet its liquidity needs prior to, and in, resolution is important to the execution of a firm's resolution strategy because it enables the firm to respond quickly to demands from stakeholders and counterparties, including regulatory authorities in other
For firms that adopt a U.S. MPOE resolution strategy, the agencies propose that a firm should have the liquidity capabilities necessary to execute its resolution strategy, and its plan should include analysis and projections of a range of liquidity needs during resolution.
For firms using a U.S. SPOE resolution strategy, the agencies propose guidance that is substantially similar to the 2020 Proposed FBO Guidance regarding governance mechanisms. An adequate governance structure with triggers that identify the onset, continuation, and increase of financial stress is important to ensure that there is sufficient time to communicate and coordinate with the foreign parent regarding the provision of financial support and other key actions. The governance mechanisms section proposes expectations that firms have playbooks that describe the board and senior management actions of the U.S. non-branch material entities that would be necessary in order to execute the firm's U.S. resolution strategy. In addition, the proposal describes expectations that these firms have triggers that are linked to specific actions outlined in these playbooks to ensure the timely escalation of information to both U.S. IHC and foreign parent governing bodies. The proposal also describes the expectations that firms identify and analyze potential legal challenges to planned U.S. IHC support mechanisms, and any defenses and mitigants to such challenges. To the extent the preferred global resolution strategy for the firm is a home country SPOE resolution, the governance mechanisms section proposes expectations that a firm design such mechanisms in a way that does not interfere with the execution of the global strategy.
For firms that adopt a U.S. MPOE resolution strategy, the agencies propose adopting governance mechanisms expectations to ensure communication and coordination between the governing body of the U.S. operations and the foreign parent for the purpose of facilitating preparations for an orderly resolution.
The development and maintenance of operational capabilities is important to support and enable execution of a firm's resolution strategy, including providing for the continuation of identified critical operations and preventing or mitigating adverse effects on U.S. financial stability. For firms that utilize a U.S. SPOE resolution strategy, the agencies propose adopting portions of the operational expectations of the 2020 FBO Guidance and SR letter 14-1,
For specified firms that utilize a U.S. SPOE resolution strategy, the agencies propose substantively adopting the 2020 FBO Guidance regarding legal entity rationalization and guidance that is substantially similar to the 2020 FBO Proposed Guidance regarding separability. It is important that firms maintain a structure that facilitates orderly resolution. To achieve this, the proposal states that a firm should develop and describe in their plans criteria supporting the U.S. resolution strategy and integrate them into day-to-day decision making processes. The criteria would be expected to consider the best alignment of legal entities and business lines and facilitate resolvability of U.S. operations as a firm's activities, technology, business models, or geographic footprint change over time. In addition, the proposed guidance provides that the firm should identify discrete U.S. operations that could be sold or transferred in resolution to provide meaningful optionality for the resolution strategy under a range of potential failure scenarios and include this information in their plans.
For firms that utilize a U.S. MPOE resolution strategy, the proposed guidance would clarify that the firms should have legal entity structures that support their U.S. resolution strategy and describe those structures in their plans. The proposal also provides that to the extent a material entity IDI relies upon other affiliates during resolution, the firm should discuss its rationale for the legal entity structure and associated resolution risks and potential mitigants. In addition, the agencies propose that the firms include options for the sale, transfer, or disposal of significant assets, portfolios, legal entities, or business lines in resolution.
For example, the largest failed IDI in U.S. history, Washington Mutual Bank, had approximately $307 billion in assets. The DIF did not incur a loss associated with this failure in part because it benefitted from the FDIC's sale of the institution to an acquirer which had first engaged in exhaustive due diligence of the institution during a self-marketing effort conducted by the IDI prior to its failure. A more recent example, that of First Republic Bank, which was also acquired in an all-deposit transaction, illustrates that such a transaction can be difficult to effectuate. The FDIC invited 21 banks and 21 nonbanks to participate in the bidding process and received bids from only 4 bidders.
If no P&A transaction that meets the least-cost requirement can be accomplished at the time an IDI fails, the FDIC must pursue an alternative resolution strategy. The primary alternative resolution strategies for a failed IDI are: (1) a payout liquidation; or (2) utilization of a BDI. The FDIC conducts payout liquidations by paying insured deposits in cash or transferring the insured deposits to an existing institution or a new institution organized by the FDIC to assume the insured deposits (generally, a Deposit Insurance National Bank or DINB). In payout liquidations, the FDIC as receiver retains substantially all of the failed IDI's assets for later sale, and the franchise value of the failed IDI is lost.
The proposed guidance would clarify the expectations for a firm adopting a U.S. MPOE resolution strategy with a material entity IDI to demonstrate how the IDI can be resolved in a manner that is consistent with the overall objective of the Plan to substantially mitigate the risk that the failure of the specified firm would have serious adverse effects on financial stability in the United States, while also adhering to the requirements of the FDI Act regarding failed bank resolutions without relying on the assumption that a systemic risk exception will be available. These expectations would not be applicable to firms adopting a U.S. SPOE resolution strategy because U.S. IDI subsidiaries of such firms would not be expected to enter resolution.
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The agencies request comment on whether to provide guidance on derivatives and trading activities for specified firms that utilize a U.S. SPOE resolution strategy. Although most of the specified firms have limited derivatives and trading operations compared to the U.S. GSIBs, it remains important that their derivatives and trading activities can be stabilized and de-risked during resolution without causing significant disruption to U.S. markets, particularly for firms with large U.S. broker-dealers. The agencies also are considering the resolution challenges that may be posed by transactions that originate from and may be managed in the U.S. but are booked outside of the U.S. If the agencies were to provide guidance on derivatives and trading activities, the agencies likely would adopt aspects of the 2020 Proposed FBO Guidance. The agencies do not anticipate providing derivatives and trading activities guidance to specified firms that utilize a U.S. MPOE resolution strategy.
U.S. branches of FBOs can play a critical role in a firm's U.S. operations and may present unique issues in a resolution of a specified firm's U.S. entities and operations. The agencies propose guidance that is similar to the 2020 FBO Guidance regarding branches. Under the proposal, specified firms would be expected to show how branches would continue to facilitate the firm's FMU access for identified critical operations and to meet funding needs. The proposal also outlines expectations that the specified firms analyze the effects on the firm's FMU access and identified critical operations of the cessation of operations of any U.S. branch that is a material entity.
This section states the agencies' preferred presentation regarding the format, assumptions, and structure of resolution plans. Plans should contain an executive summary, a narrative of the firm's resolution strategy, relevant technical appendices, and a public section as detailed in the Rule. The proposed format, structure, and assumptions are generally similar to those in the 2020 FBO Guidance, except that the proposed guidance reflects the expectation that a firm should support any assumptions that it will have access to the Discount Window and/or other borrowings during the period immediately prior to entering bankruptcy and clarifies expectations around such assumptions and that firms should not assume the use of the systemic risk exception to the least-cost test in the event of a failure of an IDI requiring resolution under the FDI Act. In addition, for firms that adopt a U.S. MPOE resolution strategy, the proposal includes the expectation that a plan should demonstrate and describe how the failure event(s) results in material financial distress of its U.S. operations, including consideration of the likelihood of the diminution the firm's liquidity and capital levels prior to bankruptcy.
Certain provisions of the proposed guidance contain “collections of information” within the meaning of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The agencies reviewed the proposed guidance and determined that it would revise the reporting revisions that have been previously approved by OMB under the Board's OMB control number 7100-0346 (Reporting Requirements Associated with Regulation QQ; FR QQ) and the FDIC's control number 3064-0210 (Reporting Requirements Associate with Resolution Planning). The Board has reviewed the proposed guidance under the authority delegated to the Board by OMB.
Comments are invited on the following:
(A) Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
(B) The accuracy of the agencies' estimates of the burden of the information collections, including the validity of the methodology and assumptions used;
(C) Ways to enhance the quality, utility, and clarity of the information to be collected;
(D) Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
(E) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Comments on aspects of this document that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to the addresses listed in the
The proposed guidance for triennial full filers using an SPOE strategy is based on the 2019 GSIB guidance (for domestic firms) and the 2020 FBO guidance (for foreign firms). It would clarify the agencies' expectations around capital, liquidity, governance mechanisms, and operations. The proposed guidance also would clarify expectations concerning management information systems capabilities and the identification of discrete separability options appropriate to the resolution strategy. Additionally, if finalized, the FBOs that adopt an SPOE resolution strategy should address how their U.S. resolution plan aligns with their group resolution plan.
The proposed guidance for triennial full filers using an MPOE resolution strategy addresses similar topics but reflects the risks of and capabilities needed for an MPOE resolution. The proposed guidance explains the agencies' expectations around liquidity and operational capabilities, and legal entity rationalization. The proposed guidance also provides clarified expectations related to the separate resolution of a U.S. IDI and to identification of discrete separability options. FBOs that adopt an MPOE resolution strategy would have expectations related to governance mechanisms; the role of branches; and the group resolution plan.
The proposed guidance does not specify expectations around derivatives and trading activities.
Historically, the Board and the FDIC have split the respondents for purposes of PRA clearances. As such, the agencies will split the change in burden as well. As a result of this split and the proposed revisions, there is a proposed net increase in the overall estimated burden hours of 13,386 hours for the Board and 17,610 hours for the FDIC. Therefore, the total Board estimated burden for its entire information collection would be 216,853 hours and the total FDIC estimate burden for its entire information collection would be 211,300 hours.
The following table presents only the change in the estimated burden hours, as amended if the guidance were finalized, broken out by agency. The table does not include a discussion of the remaining estimated burden hours,
Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365(d)) requires certain financial companies to report periodically to the Board of Governors of the Federal Reserve System (the Board) and the Federal Deposit Insurance Corporation (the FDIC) (together, the agencies) their plans for rapid and orderly resolution in the event of material financial distress or failure. On November 1, 2011, the agencies promulgated a joint rule implementing the provisions of Section 165(d).
This document is intended to provide guidance to certain foreign financial companies required to submit Plans regarding development of their respective U.S. strategies to assist their further development of a Plan for their 2024 and subsequent Plan submissions. Specifically, the guidance applies to any foreign-based covered company that is subject to Category II or III standards according to their combined U.S. operations in accordance with the Board's tailoring rule (specified firms).
The Plan for a specified firm would address a scenario where its U.S. operations experience material financial distress and the foreign parent is unable or unwilling to provide sufficient financial support for the continuation of U.S. operations, and at least the top tier U.S. IHC files for bankruptcy under Title 11, United States Code. Under such a scenario, the Plan should provide for the orderly resolution of the specified firm's U.S. material entities and operations.
In general, this document is organized around a number of key challenges in resolution (interaction with group resolution plan; capital; liquidity; governance mechanisms; operational; branches; legal
Recognizing that the preferred resolution outcome for the specified firms is often a successful SPOE home country resolution, a specified firm's Plan should describe the impact of executing the global resolution plan on U.S. operations. This description should include a discussion of the expected resolution strategy for the firm's U.S. entities and operations under the global resolution plan. In addition, a specified firm's resolvability work in the United States should consider both the objectives of the firm's group-wide resolution strategy and the Rule. Efforts to enhance the resolvability of U.S. operations and entities should be as complementary as practicable to the group-wide resolution strategy, while complying with the Rule. To the extent that the Plan relies on different assumptions, strategies, and capabilities, such as those used to project liquidity needs in resolution, from those necessary to execute the global strategy, the Plan should include a description of such differences.
The firm should have the capital capabilities necessary to execute its U.S. resolution strategy, including the modeling and estimation process described below.
Proceeds from a firm's U.S. IHC LAC should be appropriately positioned between the U.S. IHC and the subsidiaries of the U.S. IHC that are material entities (U.S. IHC subsidiaries), consistent with any applicable rules requiring prepositioned resources at U.S. IDIs in the form of long-term debt. After adhering to any requirements related to prepositioning long-term debt at IDIs, the positioning of a firm's remaining IHC LAC should balance the certainty associated with pre-positioning internal LAC directly at U.S. IHC subsidiaries with the flexibility provided by holding recapitalization resources at the U.S. IHC (contributable resources) to meet unanticipated losses at the U.S. IHC subsidiaries. That balance should take account of both pre-positioning at U.S. IHC subsidiaries and holding resources at the U.S. IHC, and the obstacles associated with each. With respect to material entities that are not subject to pre-positioning requirements, the firm should not rely exclusively on either full pre-positioning or U.S. IHC contributable resources to execute its U.S. resolution strategy, unless it has only one U.S. IHC subsidiary that is an operating subsidiary. The Plan should describe the positioning of internal LAC among the U.S. IHC and the U.S. IHC subsidiaries, along with analysis supporting such positioning.
Finally, to the extent that pre-positioned internal LAC at a U.S. IHC subsidiary is in the form of intercompany debt and there are one or more entities between the lender and the borrower, the firm should structure the instruments so as to ensure that the U.S. IHC subsidiary can be recapitalized.
The firm's RCEN methodology should use conservative forecasts for losses and risk-weighted assets and incorporate estimates of potential additional capital needs through the resolution period,
The agencies do not propose issuing guidance on this topic to firms whose Plans contemplate a U.S. MPOE resolution strategy.
The firm should have the liquidity capabilities necessary to execute its U.S resolution strategy, including those described below. For resolution purposes, these capabilities should include having an appropriate model and process for estimating and maintaining sufficient liquidity at—or readily available from the U.S. IHC to—U.S. IHC subsidiaries, and a methodology for estimating the liquidity needed to successfully execute the U.S. resolution strategy, as described below.
(A) Evaluate the funding requirements necessary to perform identified critical operations, including shared and outsourced services and access to financial market utilities (FMUs);
(B) Monitor liquidity reserves and relevant custodial arrangements by jurisdiction and material entity;
(C) Routinely test funding and liquidity outflows and inflows for U.S. non-branch material entities at the legal entity level
(D) Assess existing and potential restrictions on the transfer of liquidity between U.S. non-branch material entities;
(E) Develop contingency strategies to maintain funding for U.S. non-branch material entities and identified critical operations in the event of a disruption in the specified firm's current funding model.
The model
Additionally, the RLAP methodology should take into account for each of the U.S. IHC, U.S. IHC subsidiaries, and any branch that is a material entity (A) the daily contractual mismatches between their respective inflows and outflows; (B) their respective daily flows from movement of cash and collateral for all inter-affiliate transactions; and (C) their respective daily stressed liquidity flows and trapped liquidity as a result of actions taken by clients, counterparties, key FMUs, and foreign supervisors, among others.
In calculating its RLAP estimate, the U.S. IHC should calculate its liquidity position with respect to its foreign parent, branches and agencies, and other affiliates (together, affiliates) separately from its liquidity position with respect to third parties, and should not offset inflows from affiliated parties against outflows to external parties. In addition, a U.S. IHC should use cash-flow sources from its affiliates to offset cash-flow needs of its affiliates only to the extent that the term of the cash-flow source from its affiliates is the same as, or shorter than, the term of the cash-flow need of its affiliates.
The firm's RLEN methodology should:
A. Estimate the minimum operating liquidity (MOL) needed at each U.S. IHC subsidiary that is a material entity to ensure those entities could continue to operate, to the extent relied upon in the U.S. resolution strategy, after implementation of the U.S. resolution strategy and/or to support a wind-down strategy;
B. Provide daily cash flow forecasts by U.S. IHC subsidiary to support estimation of peak funding needs to stabilize each entity under resolution;
C. Provide a comprehensive breakout of all inter-affiliate transactions and arrangements that could impact the MOL or peak funding needs estimates for the U.S. IHC subsidiaries; and
D. Estimate the minimum amount of liquidity required at each U.S. IHC subsidiary to meet the MOL and peak needs noted above, which would inform the provision of financial resources from the foreign parent to the U.S. IHC, or if the foreign parent is unable or unwilling to provide such financial support, any preparatory resolution-related actions.
The MOL estimates should capture U.S. IHC subsidiaries' intraday liquidity requirements, operating expenses, working capital needs, and inter-affiliate funding frictions to ensure that U.S. IHC subsidiaries could operate without disruption during the resolution.
The peak funding needs estimates should be projected for each U.S. IHC subsidiary and cover the length of time the firm expects it would take to stabilize that U.S. IHC subsidiary. Inter-affiliate funding frictions should be taken into account in the estimation process.
The firm's forecasts of MOL and peak funding needs should ensure that U.S. IHC subsidiaries could operate through resolution consistent with regulatory requirements, market expectations, and the firm's post-failure strategy. These forecasts should inform the RLEN estimate,
For nonsurviving U.S. IHC subsidiaries, the firm should provide analysis and an explanation of how the material entity's resolution could be accomplished within a reasonable period of time and in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability. For example, if a U.S. IHC subsidiary that is a broker-dealer is assumed to fail and enter resolution under the Securities Investor Protection Act, the firm should provide an analysis of the potential impacts on funding and asset markets and on prime brokerage clients, bearing in mind the objective of an orderly resolution.
The firm should have the liquidity capabilities necessary to execute its U.S. resolution strategy. A Plan with a U.S. MPOE strategy should include analysis and projections of a range of liquidity needs during resolution, including intraday; reflect likely failure and resolution scenarios; and consider the guidance on assumptions provided in Section X, Format and Structure of Plans; Assumptions.
A firm should identify the governance mechanisms that would ensure that communication and coordination occur between the boards of the U.S. IHC or a U.S. subsidiary and the foreign parent to facilitate the provision of financial support, or if not forthcoming, any preparatory resolution-related actions to facilitate an orderly resolution.
In order to meet liquidity needs at the U.S. non-branch material entities, the firm may either fully pre-position liquidity in the U.S. non-branch material entities or develop a mechanism for planned foreign parent support, of any amount not pre-positioned, for the successful execution of the U.S. strategy. Mechanisms to support readily available liquidity may include a term liquidity facility between the U.S. IHC and the foreign parent that can be drawn as needed and as informed by the firm's RLEN estimates and liquidity positioning. To the extent the preferred global resolution strategy for the firm is a home country SPOE resolution, the mechanism should be designed so as to not interfere with the execution of that strategy. The Plan should include analysis of how the U.S. IHC/foreign parent facility is funded or buffered for by the foreign parent. The sufficiency of the liquidity should be informed by the firm's RLAP and RLEN estimates for the U.S. non-branch material entities. Additionally, the Plan should include analysis of the potential challenges to the planned foreign parent support mechanism and associated mitigants. Where applicable, the analysis should discuss applicable non-U.S. law and cross-border legal challenges (
The firm should be prepared to increase communication and coordination at the appropriate time in order to mitigate financial, operational, legal, and regulatory vulnerabilities. To facilitate this communication and coordination, the firm should establish clearly identified triggers linked to specific actions for:
(A) The escalation of information to U.S. senior management, U.S. risk committee and U.S. governing bodies to potentially take the corresponding actions as the U.S. operations experience material financial distress, leading eventually to the decision to implement the U.S. resolution strategy.
i. Triggers should identify when and under what conditions the U.S. material entities would transition from business-as-usual conditions to a stress period.
ii. Triggers should also take into consideration changes in the foreign parent's condition from business-as-usual conditions through resolution.
(B) The escalation of information to and discussions with the appropriate governing bodies to confirm whether the governing bodies are able and willing to provide financial resources to support U.S. operations.
i. Triggers should be based on the firm's methodology for forecasting the liquidity and capital needed to facilitate the U.S. strategy. For example, triggers may be established that reflect U.S. non-branch material entities' financial resources approaching RCEN/RLEN estimates, with corresponding actions to confirm the foreign parent's financial capability and willingness to provide sufficient support.
Corresponding escalation procedures, actions, and timeframes should be constructed so that breach of the triggers will allow prerequisite actions to be completed. For example, breach of the triggers needs to occur early enough to provide for communication, coordination, and confirmation of the provision of resources from the foreign parent.
Furthermore, the Plan should describe key motions to be filed at the initiation of any bankruptcy proceeding related to (as appropriate) asset sales and other non-routine matters.
A firm should identify the governance mechanisms that would ensure that communication and coordination occur between the governing body of the U.S. operations (for example, the boards of the U.S. IHC or a U.S. subsidiary) and the foreign parent to facilitate any preparatory resolution-related actions to facilitate an orderly resolution. The Plan should also detail the board and senior management actions of U.S. material entities that would be needed under the firm's U.S. resolution strategy.
The firm should be prepared to increase communication and coordination at the appropriate time in order to mitigate financial, operational, legal, and regulatory vulnerabilities. To facilitate this communication and coordination, the firm should establish clearly identified triggers linked to specific actions for the escalation of information to U.S. senior management, U.S. risk committee and U.S. governing bodies to potentially take the corresponding actions as the U.S. operations experience material financial distress, leading eventually to the decision to implement the U.S. resolution strategy. The triggers should:
A. Identify when and under what conditions the U.S. material entities would transition from business-as-usual conditions to a stress period.
B. Take into consideration changes in the foreign parent's condition from business-as-usual conditions through resolution.
• Identifying clients,
• Mapping U.S. material entities, identified critical operations, core business lines, and key clients of the firm's U.S. operations to both key FMUs and key agent banks; and
• Developing a playbook for each key FMU and key agent bank essential to an orderly resolution under its U.S. resolution strategy that reflects the firm's role(s) as a user and/or provider of PCS services.
The framework should address direct relationships (
Each playbook should provide analysis of the financial and operational impact to the firm's U.S. material entities and key clients of the firm's U.S. operations due to adverse actions that may be taken by a key FMU or a key agent bank and contingency actions that may be taken by the firm. Each playbook also should discuss any possible alternative arrangements that would allow continued access to PCS services for the firm's U.S. material entities, identified critical operations and core business lines, and key clients of the firm's U.S. operations, while the firm is in resolution under its U.S. resolution strategy. The firm is not expected to incorporate a scenario in which it loses key FMU or key agent bank access into its U.S. resolution strategy or its RLEN and RCEN estimates. The firm should continue to engage with key FMUs, key agent banks, and key clients of the firm's U.S. operations, and playbooks should reflect any feedback received during such ongoing outreach.
• Descriptions of the firm's relationship as a user, including through indirect access, with the key FMU or key agent bank and the identification and mapping of PCS services to the firm's U.S. material entities, identified critical operations, and core business lines that use those PCS services;
• Discussion of the potential range of adverse actions that may be taken by that key FMU or key agent bank when the firm is in resolution under its U.S. resolution strategy,
• Discussion of PCS-related liquidity sources and uses in business-as-usual (BAU), in stress, and in the resolution period, presented by currency type (with U.S. dollar equivalent) and by U.S. material entity.
○ PCS Liquidity Sources: These may include the amounts of intraday extensions of credit, liquidity buffer, inflows from FMU participants, and prefunded amounts of key clients of the firm's U.S. operations in BAU, in stress, and in the resolution period. The playbook also should describe intraday credit arrangements (
○ PCS Liquidity Uses: These may include margin and prefunding by the firm and key clients of the firm's U.S. operations, and intraday extensions of credit, including incremental amounts required during resolution.
○ Intraday Liquidity Inflows and Outflows: The playbook should describe the firm's ability to control intraday liquidity inflows and outflows and to identify and prioritize time-specific payments. The playbook also should describe any account features that might restrict the firm's ready access to its liquidity sources.
• Identification and mapping of PCS services to the firm's U.S. material entities, identified critical operations, and core business lines that provide those PCS services, and a description of the scale and the way in which each provides PCS services;
• Identification and mapping of PCS services to key clients of the firm's U.S. operations to whom the firm's U.S. material entities, identified critical operations, and core business lines provide such PCS services and any related credit or liquidity offered in connection with such services;
• Discussion of the potential range of firm contingency arrangements available to minimize disruption to the provision of PCS services to key clients of the firm's U.S. operations, including the viability of transferring activity and any related assets of key clients of the firm's U.S. operations, as well as any alternative arrangements that would allow the key clients of the firm's U.S. operations continued access to PCS services if the firm could no longer provide such access (
• Descriptions of the range of contingency actions that the firm may take concerning its provision of intraday credit to key clients of the firm's U.S. operations, including analysis quantifying the potential liquidity the firm could generate by taking such actions in stress and in the resolution period, such as (i) requiring key clients of the firm's U.S. operations to designate or appropriately pre-position liquidity, including through prefunding of settlement activity, for PCS-related key FMU and key agent bank obligations at specific material entities of the firm (
• Descriptions of how the firm will communicate to key clients of the firm's U.S. operations the potential impacts of implementation of any identified contingency arrangements or alternatives, including a description of the firm's methodology for determining whether any additional communication should be provided to some or all key clients of the firm's U.S. operations (
• Track the following items by (i) U.S. material entity and, (ii) with respect to customers, counterparties, and agents and service providers, by location and jurisdiction:
○ PCS activities, with each activity mapped to the relevant material entities, identified critical operations, and core business lines;
○ Customers and counterparties for PCS activities, including values and volumes of various transaction types, as well as used and unused capacity for all lines of credit;
○ Exposures to and volumes transacted with FMUs, nostro agents, and custodians; and
○ Services provided and service level agreements, as applicable, for other current agents and service providers (internal and external);
• Assess the potential effects of adverse actions by FMUs, nostro agents, custodians, and other agents and service providers, including suspension or termination of membership or services, on the firm's U.S. operations and customers and counterparties of those U.S. operations;
• Develop contingency arrangements in the event of such adverse actions;
• Quantify the liquidity needs and operational capacity required to meet all PCS
• Be able to query and provide aggregate statistics for all qualified financial contracts concerning cross-default clauses, downgrade triggers, and other key collateral-related contract terms—not just those terms that may be impacted in an adverse economic environment—across contract types, business lines, legal entities, and jurisdictions;
• Be able to track both collateral sources (
• Have robust risk measurements for cross-entity and cross-contract netting, including consideration of where collateral is held and pledged;
• Be able to identify CUSIP and asset class level information on collateral pledged to specific central counterparties by legal entity on at least a t+1 basis;
• Be able to track and report on inter-branch collateral pledged and received on at least a t+1 basis and have clear policies explaining the rationale for such inter-branch pledges, including any regulatory considerations; and
• Have a comprehensive collateral management policy that outlines how the firm as a whole approaches collateral and serves as a single source for governance.
In addition, as of the conclusion of any business day, the firm should be able to:
• Identify the legal entity and geographic jurisdiction where counterparty collateral is held;
• Document all netting and re-hypothecation arrangements with affiliates and external parties, by legal entity; and
• Track and manage collateral requirements associated with counterparty credit risk exposures between affiliates, including foreign branches.
At least on a quarterly basis, the firm should be able to:
• Review the material terms and provisions of International Swaps and Derivatives Association Master Agreements and the Credit Support Annexes, such as termination events, for triggers that may be breached as a result of changes in market conditions;
• Identify legal and operational differences and potential challenges in managing collateral within specific jurisdictions, agreement types, counterparty types, collateral forms, or other distinguishing characteristics; and
• Forecast changes in collateral requirements and cash and non-cash collateral flows under a variety of stress scenarios.
• Financial statements for each material entity (at least monthly);
• External and inter-affiliate credit exposures, both on- and off-balance sheet, by type of exposure, counterparty, maturity, and gross payable and receivable;
• Gross and net risk positions with internal and external counterparties;
• Guarantees, cross holdings, financial commitments and other transactions between material entities;
• Data to facilitate third-party valuation of assets and businesses, including risk metrics;
• Key third-party contracts, including the provider, provider's location, service(s) provided, legal entities that are a party to or a beneficiary of the contract, and key contractual rights (for example, termination and change in control clauses);
• Legal agreement information, including parties to the agreement and key terms and interdependencies (for example, change in control, collateralization, governing law, termination events, guarantees, and cross-default provisions);
• Service level agreements between affiliates, including the service(s) provided, the legal entity providing the service, legal entities receiving the service, and any termination/transferability provisions;
• Licenses and memberships to all exchanges and value transfer networks, including FMUs;
• Key management and support personnel, including dual-hatted employees, and any associated retention agreements;
• Agreements and other legal documents related to property, including facilities, technology systems, software, and intellectual property rights. The information should include ownership, physical location, where the property is managed and names of legal entities and lines of business that the property supports; and
• Updated legal records for domestic and foreign entities, including entity type and purpose (for example, holding company, bank, broker dealer, and service entity), jurisdiction(s), ownership, and regulator(s).
If a material entity provides shared services that support identified critical operations or core business lines, and the continuity of these shared services relies on the assumed cooperation, forbearance, or other non-intervention of regulator(s) in any jurisdiction, the Plan should discuss the extent to which the resolution or insolvency of any other group entities operating in that same jurisdiction may adversely affect the assumed cooperation, forbearance, or other regulatory non-intervention. If a material entity providing shared services that support identified critical operations or core business lines is located outside of the United States, the Plan should discuss how the firm will ensure the operational continuity of such shared services through resolution.
The firm should (A) maintain an identification of all shared services that support identified critical operations or core business lines; (B) maintain a mapping of how/where these services support its core business lines and identified critical operations; (C) incorporate such mapping into legal entity rationalization criteria and implementation efforts; and (D) mitigate identified continuity risks through establishment of service-level agreements (SLAs) for all shared services that support identified critical operations or core business lines.
SLAs should fully describe the services provided, reflect pricing considerations on an arm's-length basis where appropriate, and incorporate appropriate terms and conditions to (A) prevent automatic termination upon certain resolution-related events and (B) achieve continued provision of such services during resolution.
The firm should identify all critical service providers and outsourced services that support identified critical operations or core business lines and identify any that could not be promptly substituted. The firm should (A) evaluate the agreements governing these services to determine whether there are any that could be terminated upon commencement of any resolution despite continued performance, and (B) update contracts to incorporate appropriate terms and conditions to prevent automatic termination upon commencement of any resolution proceeding and facilitate continued provision of such services. Relying on entities projected to survive during resolution to avoid contract termination is insufficient to ensure continuity. In the Plan, the firm should document the amendment of any such agreements governing these services.
• As users of PCS services:
○ Track the following items by: (i) U.S. material entity; and (ii) with respect to customers, counterparties, and agents and service providers, location and jurisdiction:
PCS activities, with each activity mapped to the relevant material entities, identified critical operations, and core business lines;
Customers and counterparties for PCS activities, including values and volumes of various transaction types, as well as used and unused capacity for all lines of credit;
Exposures to and volumes transacted with FMUs, nostro agents, and custodians; and
Services provided and service level agreements, as applicable, for other current agents and service providers (internal and external).
○ Assess the potential effects of adverse actions by FMUs, nostro agents, custodians, and other agents and service providers, including suspension or termination of membership or services, on the firm's U.S. operations and customers and counterparties of those U.S. operations;
○ Develop contingency arrangements in the event of such adverse actions; and
○ Quantify the liquidity needs and operational capacity required to meet all PCS obligations, including intraday requirements.
• As providers of PCS services:
○ Identify their PCS clients of their U.S operations and the services they provide to these clients, including volumes and values of transactions;
○ Quantify and explain time-sensitive payments; and
○ Quantify and explain intraday credit provided.
• Financial statements for each material entity (at least monthly);
• External and inter-affiliate credit exposures, both on- and off-balance sheet, by type of exposure, counterparty, maturity, and gross payable and receivable;
• Gross and net risk positions with internal and external counterparties;
• Guarantees, cross holdings, financial commitments and other transactions between material entities;
• Data to facilitate third-party valuation of assets and businesses, including risk metrics;
• Key third-party contracts, including the provider, provider's location, service(s) provided, legal entities that are a party to or a beneficiary of the contract, and key contractual rights (for example, termination and change in control clauses);
• Legal agreement information, including parties to the agreement and key terms and interdependencies (for example, change in control, collateralization, governing law, termination events, guarantees, and cross-default provisions);
• Service level agreements between affiliates, including the service(s) provided, the legal entity providing the service, legal entities receiving the service, and any termination/transferability provisions;
• Licenses and memberships to all exchanges and value transfer networks, including FMUs;
• Key management and support personnel, including dual-hatted employees, and any associated retention agreements;
• Agreements and other legal documents related to property, including facilities, technology systems, software, and intellectual property rights. The information should include ownership, physical location, where the property is managed and names of legal entities and lines of business that the property supports; and
• Updated legal records for domestic and foreign entities, including entity type and purpose (for example, holding company, bank, broker dealer, and service entity), jurisdiction(s), ownership, and regulator(s).
The firm should (A) maintain an identification of all shared services that support identified critical operations or are material to the execution of the U.S. resolution strategy, and (B) mitigate identified continuity risks through
The firm should identify all critical service providers and outsourced services that support identified critical operations or are material to the execution of the U.S. resolution strategy. Any of these services that cannot be promptly substituted should be identified in a firm's Plan. The firm should: (A) evaluate the agreements governing these services to determine whether there are any that could be terminated upon commencement of any resolution despite continued performance; and (B) update contracts to incorporate appropriate terms and conditions to prevent automatic termination upon commencement of any resolution proceeding and facilitate continued provision of such services. Relying on entities projected to survive during resolution to avoid contract termination is insufficient to ensure continuity. In the Plan, the firm should document the amendment of any such agreements governing these services.
For any U.S. branch that is a material entity, the Plan should describe and demonstrate how the branch would continue to facilitate FMU access for identified critical operations and meet funding needs. For such a U.S. branch, the Plan should describe how it would meet supervisory requirements imposed by state regulators or the appropriate Federal banking agency, as appropriate, including maintaining a net due to position and complying with heightened asset maintenance requirements.
Specifically, application of the criteria should:
(A) Ensure that the allocation of activities across the firm's U.S. branches and U.S. non-branch material entities support the firm's U.S. resolution strategy and minimize risk to U.S. financial stability in the event of resolution;
(B) Facilitate the recapitalization and liquidity support of U.S. IHC subsidiaries, as required by the firm's U.S. resolution strategy. Such criteria should include clean lines of ownership and clean funding pathways between the foreign parent, the U.S. IHC, and U.S. IHC subsidiaries;
(C) Facilitate the sale, transfer, or wind-down of certain discrete operations within a timeframe that would meaningfully increase the likelihood of an orderly resolution in the United States, including provisions for the continuity of associated services and mitigation of financial, operational, and legal challenges to separation and disposition;
(D) Adequately protect U.S. subsidiary insured depository institutions from risks arising from the activities of any nonbank U.S. subsidiaries (other than those that are subsidiaries of an insured depository institution); and
(E) Minimize complexity that could impede an orderly resolution in the United States and minimize redundant and dormant entities.
These criteria should be built into the firm's ongoing process for creating, maintaining, and optimizing the firm's U.S. structure and operations on a continuous basis.
The firm's corporate structure and arrangements among U.S. legal entities should be considered and maintained in a way that facilitates the firm's resolvability as its activities, technology, business models, or geographic footprint change over time.
A firm's separability options should be actionable, and impediments to their projected mitigation strategies should be identified in advance. Firms should consider potential consequences for U.S. financial stability of executing each option, taking into consideration impacts on counterparties, creditors, clients, depositors, and markets for specific assets. The level of detail and analysis should vary based on a firm's risk profile and scope of operations. Additionally, information systems should be robust enough to produce the required data and information needed to execute separability options.
Further, the firm should have, and be able to demonstrate, the capability to populate in a timely manner a data room with information pertinent to a potential divestiture of the identified separability options (including, but not limited to, carve-out financial statements, valuation analysis, and a legal risk assessment). Within the Plan, the firm should demonstrate how the firm's LER Criteria and implementation efforts support meeting the separability-related guidance above. The Plan should also provide the separability analysis noted above. Finally, the Plan should include a description of the firm's legal entity rationalization governance process.
A Plan should include options for the sale, transfer, or disposal of U.S. significant assets, portfolios, legal entities, or business lines in resolution that may be executed in a reasonable period of time. For each option, supporting analysis should include: an execution plan that includes an estimated time frame for implementation, a description of any impediments to execution of the option, and mitigation strategies to address those impediments; a description of the assumptions underpinning the option; a financial impact assessment that describes the impact of executing the option; and an identified critical operation impact assessment that describes how execution of the option may affect the provision of any
If the Plan includes a strategy that contemplates the separate resolution of a U.S. IDI that is a material entity, the Plan should demonstrate how this could be achieved in a manner that is consistent with the overall objective of the Plan to substantially mitigate the risk that the failure of the specified firm would have serious adverse effects on financial stability in the United States while also complying with the statutory and regulatory requirements governing IDI resolution. More specifically,
• If the strategy is other than payout liquidation (
○ A Plan may demonstrate that a strategy involving an all-deposit BDI would be permissible under the least-cost test of the FDI Act by presenting an analysis which shows that the strategy results in no loss to the Deposit Insurance Fund (DIF) by demonstrating that the incremental estimated cost to the DIF by having the BDI assume all uninsured deposits is offset by the preservation of franchise value connected to the uninsured deposits after accounting for the amount of any loss-absorbing debt instruments and other liabilities subordinate to the depositor class that would be left behind in the receivership.
○ A Plan may demonstrate the feasibility of a strategy involving a BDI that assumes all insured deposits and a portion of uninsured deposits by providing an advance dividend to uninsured depositors for a portion of their deposit claim, as well as the basis for that dividend, and pursuant to which a loss to the DIF occurs, by presenting an analysis comparing the cost of the proposed strategy to the cost of payout liquidation and demonstrating:
The incremental estimated cost to the DIF created by the BDI's assumption of the portion of uninsured deposits assumed is offset by the franchise value preserved by maintaining the assumed uninsured deposits, after accounting for the amount of any long-term debt and other liabilities subordinate to the depositor class that would be left behind in the receivership;
The loss to the DIF under the proposed strategy (including the amounts paid by the DIF for more favorable treatment, relative to a payout liquidation, of a portion of uninsured deposits) is less than or equal to the loss to the DIF that would be incurred through a payout liquidation of the IDI; and
○ The deposit payout process for any uninsured deposits that remain in the receivership may be executed in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability.
• If the Plan's strategy envisions a payout liquidation for the IDI, with or without use of a Deposit Insurance National Bank or a paying agent, the Plan should demonstrate how the deposit payout and asset liquidation process would be executed in a manner that substantially mitigates the risk of serious adverse effects on U.S. financial stability.
• In all cases, the Plan should show that implementation of the resolution, including the impact on depositors whose accounts are not transferred in whole or in part to the BDI, would not create the risk of serious adverse effects on U.S. financial stability.
Regardless of the IDI resolution strategy chosen, the Plan should assume asset valuations consistent with the severely adverse stress economic scenario and the IDI's condition as a failed institution, as referenced in “
With respect to exit from IDI resolution proceedings, a Plan could support the feasibility of an asset liquidation or BDI exit strategy by, for example, describing an actionable process, based on historical precedent or otherwise supportable projections, that winds down certain businesses, includes the sale of assets and deposits to multiple acquirers, or culminates in a capital markets transaction, such as an initial public offering or a private placement of securities.
Executive Summary. The Plan should contain an executive summary consistent with the Rule, which must include, among other things, a concise description of the key elements of the firm's strategy for an orderly resolution. In addition, the executive summary should include a discussion of the firm's assessment of any impediments to the firm's U.S. resolution strategy and its execution, as well as the steps it has taken to address any identified impediments.
Narrative. The Plan should include a strategic analysis consistent with the Rule. This analysis should take the form of a concise narrative that enhances the readability and understanding of the firm's discussion of its strategy for an orderly resolution in bankruptcy or other applicable insolvency regimes (Narrative).
Appendices. The Plan should contain a sufficient level of detail and analysis to substantiate and support the strategy described in the Narrative. Such detail and analysis should be included in appendices that are distinct from and clearly referenced in the related parts of the Narrative (Appendices).
Public Section. The Plan must be divided into a public section and a confidential section consistent with the requirements of the Rule.
Other Informational Requirements. The Plan must comply with all other informational requirements of the Rule. The firm may incorporate by reference previously submitted information as provided in the Rule.
1. The Plan should be based on the current state of the applicable legal and policy frameworks. Pending legislation or regulatory actions may be discussed as additional considerations.
2. The firm must submit a Plan that does not rely on the provision of extraordinary support by the United States or any other government to the firm or its subsidiaries to prevent the failure of the firm.
3. The firm should not assume that it will be able to sell identified critical operations or core business lines, or that unsecured funding will be available immediately prior to filing for bankruptcy.
4. The U.S. resolution strategy may be based on an idiosyncratic event or action, including a series of compounding events. The firm should justify use of that assumption, consistent with the conditions of the economic scenario.
5. Within the context of the applicable idiosyncratic scenario, markets are functioning and competitors are in a position to take on business. If a firm's Plan assumes the sale of assets, the firm should take into account all issues surrounding its ability to sell in market conditions present in the applicable economic condition at the time of sale (
6. For a firm that adopts a U.S. MPOE strategy, the Plan should demonstrate and describe how the failure event(s) results in material financial distress of the U.S. operations.
7. The firm should not assume any waivers of section 23A or 23B of the Federal Reserve Act in connection with the actions proposed to be taken prior to or in resolution.
8. The Plan should support any assumptions that the firm will have access to the Discount Window and/or other borrowings during the period immediately prior to entering bankruptcy. To the extent the firm assumes use of the Discount Window and/or other borrowings, the Plan should support that assumption with a discussion of the operational testing conducted to facilitate access in a stress environment, placement of collateral and the amount of funding accessible to the firm. The firm may assume that its depository institutions will have access to the Discount Window only for a few days after the point of failure to facilitate orderly resolution. However, the firm should not assume its subsidiary depository institutions will have access to the Discount Window while critically undercapitalized, in FDIC receivership, or operating as a bridge bank, nor should it assume any lending from a Federal Reserve credit facility to a non-bank affiliate.
1. Any U.S.-based or non-U.S. affiliates, including any branches, that are significant to the activities of an identified critical operation conducted in whole or material part in the United States.
2. Subsidiaries or foreign offices whose provision or support of global treasury operations, funding, or liquidity activities (inclusive of intercompany transactions) is significant to the activities of an identified critical operation.
3. Subsidiaries or foreign offices that provide material operational support in resolution (key personnel, information technology, data centers, real estate or other shared services) to the activities of an identified critical operation.
4. Subsidiaries or foreign offices that are engaged in derivatives booking activity that is significant to the activities of an identified critical operation, including those that conduct either the internal hedge side or the client-facing side of a transaction.
5. Subsidiaries or foreign offices engaged in asset custody or asset management that are significant to the activities of an identified critical operation.
6. Subsidiaries or foreign offices holding licenses or memberships in clearinghouses, exchanges, or other FMUs that are significant to the activities of an identified critical operation.
7. For each material entity (including a branch), the Plan should enumerate, on a jurisdiction-by-jurisdiction basis, the specific mandatory and discretionary actions or forbearances that regulatory and resolution authorities would take during resolution, including any regulatory filings and notifications that would be required as part of the preferred strategy, and explain how the Plan addresses the actions and forbearances. Describe the consequences for the covered company's U.S. resolution strategy if specific actions in a non-U.S. jurisdiction were not taken, delayed, or forgone, as relevant.
The purpose of the public section is to inform the public's understanding of the firm's U.S. resolution strategy and how it works.
The public section should discuss the steps that the firm is taking to improve resolvability under the U.S. Bankruptcy Code. The public section should provide background information on each material entity and should be enhanced by including the firm's rationale for designating material entities. The public section should also discuss, at a high level, the firm's intra-group financial and operational interconnectedness (including the types of guarantees or support obligations in place that could impact the execution of the firm's strategy).
The discussion of strategy in the public section should broadly explain how the firm has addressed any deficiencies, shortcomings, and other key vulnerabilities that the agencies have identified in prior plan submissions. For each material entity, it should be clear how the strategy provides for continuity, transfer, or orderly wind-down of the entity and its operations. There should also be a description of the resulting organization upon completion of the resolution process.
The public section may note that the Plan is not binding on a bankruptcy court or other resolution authority and that the proposed failure scenario and associated assumptions are hypothetical and do not necessarily reflect an event or events to which the firm is or may become subject.
By order of the Board of Governors of the Federal Reserve System.
By order of the Board of Directors.
Office of the Secretary of Health and Human Services, HHS.
Notice.
This notice acknowledges the Secretary of the Department of Health and Human Services' (the Secretary's) receipt and review of the 2022 National Quality Forum Annual Report to Congress and the Secretary submitted by the consensus-based entity under a contract with the Secretary as mandated by the Social Security Act. The Secretary has reviewed and is publishing the report in the
Carrie Sena, (410) 786-8003.
The United States Department of Health and Human Services (HHS) has long recognized that a high functioning health care system that provides higher quality care requires accurate, valid, and reliable measurement of quality and efficiency. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275) added section 1890 of the Social Security Act (the Act), which requires the Secretary of HHS (the Secretary) to contract with a consensus-based entity (CBE) to perform multiple duties to help improve performance measurement. Section 3014 of the Patient Protection and Affordable Care Act (the Affordable Care Act) (Pub. L. 111-148) expanded the duties of the CBE to help in the identification of gaps in available measures and to improve the selection of measures used in health care programs. The Secretary extends his appreciation to the CBE in their partnership for the fulfillment of these statutory requirements.
In January 2009, a competitive contract was awarded by HHS to the National Quality Forum (NQF) to fulfill requirements of section 1890 of the Act. A second, multi-year contract was awarded again to NQF after an open competition in 2012. A third, multi-year contract was awarded again to NQF after an open competition in 2017. Section 1890(b) of the Act requires the following:
• The implementation of quality and efficiency measurement initiatives and the coordination of such initiatives with quality and efficiency initiatives implemented by other payers;
• Recommendations on an integrated national strategy and priorities for health care performance measurement;
• Performance of the CBE's duties required under its contract with the Secretary;
• Gaps in endorsed quality and efficiency measures, including measures that are within priority areas identified by the Secretary under the national strategy established under section 399HH of the Public Health Service Act (National Quality Strategy), and where quality and efficiency measures are unavailable or inadequate to identify or address such gaps;
• Areas in which evidence is insufficient to support endorsement of quality and efficiency measures in priority areas identified by the Secretary under the National Quality Strategy, and where targeted research may address such gaps; and
• The convening of multi-stakeholder groups to provide input on: (1) the selection of quality and efficiency measures from among such measures that have been endorsed by the CBE and such measures that have not been considered for endorsement by the CBE but are used or proposed to be used by
Section 50206(c)(1) of the Bipartisan Budget Act of 2018 (Pub. L. 115-123) amended section 1890(b)(5)(A) of the Act to require the CBE's annual report to the Congress to include the following: (1) an itemization of financial information for the previous fiscal year ending September 30th, including annual revenues of the entity, annual expenses of the entity, and a breakdown of the amount awarded per contracted task order and the specific projects funded in each task order assigned to the entity; and (2) any updates or modifications to internal policies and procedures of the entity as they relate to the duties of the CBE including specifically identifying any modifications to the disclosure of interests and conflicts of interests for committees, work groups, task forces, and advisory panels of the entity, and information on external stakeholder participation in the duties of the entity.
The statutory requirements for the CBE to annually report to the Congress and the Secretary also specify that the Secretary must review and publish the CBE's annual report in the
This
Across the country, many communities are facing immense challenges that have been exacerbated by public health emergencies including the opioid crisis, disasters related to climate change, and the COVID-19 pandemic. Throughout these recent crises and to prudently prepare for imminent threats the Department of Health and Human Services (HHS) must continue to focus on advancing equity and inclusion, strengthening public trust, and building meaningful engagement and learning across the health care system. By embedding the cross-cutting principles
HHS values the work of the consensus-based entity for performance measurement and our mutual commitment to promote a resilient, high value, and safe health care system for all Americans. In 2022, HHS supported the work conducted by the CBE to identify health care quality measurement priorities and to provide consensus-based recommendations about measures to use for assessing and improving quality. As the CBE in 2022, the NQF continued to use rigorous standards to review measures for quality measure endorsement and maintain highly reliable and scientifically sound measures across priority health care topic areas. As required by section 1890(b) of the Act, the NQF Measure Applications Partnership (MAP) provided input on measures under consideration for quality reporting and value-based purchasing programs across various settings including ambulatory, acute care, post-acute care and long-term care. Specifically, the MAP considered measures related to health equity, COVID-19, person-centered care, rural health, and care coordination. The MAP also deliberated over measures for potential removal from HHS programs. The MAP supported HHS and national priorities to keep measures that are of the highest-value, aligned across programs, prioritizing patient-reported outcome measures, digital measures, and those that reflect consideration of social determinants of health.
In 2022, the CBE also convened the Core Quality Measures Collaborative (CQMC), a public-private partnership with the Centers for Medicare and Medicaid Services (CMS) and America's Health Insurance Plans (AHIP), to maximize alignment of quality measures among public and private payers. The CBE established a Health Equity Workgroup that identified disparity-sensitive measures within the CQMC core sets and proposed approaches for future considerations to prioritize measures that address social determinants of health. In alignment with HHS priorities to advance data interoperability and digital measure use, the CQMC Digital Measurement Workgroup continued, in 2022, to identify ways to address barriers to using digital quality measures and supporting efforts to align data standards for measurement.
To support the CMS National Quality Strategy
In many ways, the CBE activities detailed in its 2022 Report to Congress enhanced quality measurement strategies that support HHS and national progress towards safe, accessible, value-based, and equitable care for individuals and communities. As our world and the demands on our health care system continue to evolve, HHS recognizes the increasing importance of varied experiences and perspectives, of consensus-based recommendations, and of evidence-based foundations that inform policies and strategies to improve the health care system. HHS looks forward to the continuity of activities with a new CBE, Battelle, who has extensive expertise and experience in collaborating with and engaging various health care partners to advance quality performance measurement.
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements.
In this Addendum, we are publishing the
Food and Nutrition Service (FNS), USDA.
Notice of proposed rulemaking.
The U.S. Department of Agriculture (the Department) is issuing this notice of proposed rulemaking to improve the Food and Nutrition Service's (FNS) Supplemental Nutrition Assistance Program (SNAP) quality control (QC) system as required in the Agriculture Improvement Act of 2018 (2018 Farm Bill). The proposed changes are intended to strengthen and improve the integrity and accuracy of the SNAP QC system and to better align SNAP with requirements in the Payment Integrity Information Act of 2019 (PIIA). These changes include a significant adjustment to the SNAP QC system that involves changes to Federal and State agency sampling processes, as well as changes to the active case review process. Quality Control case sampling and review processes are key aspects of the system used to annually assess SNAP payment error rates. The Department requests comment on this rule's proposed provisions.
Written comments must be received on or before November 20, 2023 to ensure their consideration.
The Food and Nutrition Service, USDA, invites interested persons to submit written comments on this proposed rule. Comments may be submitted in writing by one of the following methods:
John M., 703-457-7747, Food and Nutrition Service, 1320 Braddock Place, 5th Floor, Alexandria, Virginia 22314,
The Supplemental Nutrition Assistance Program (SNAP) is the nation's largest domestic food assistance program for Americans, reaching about 40 million people (approximately 12 percent of the nation's population) per month during fiscal year 2020.
Although the Federal government funds SNAP benefits, under 7 U.S.C. 2020(a)(1), State agencies are responsible for general program administration of SNAP within their States, including determining the eligibility of individuals and households to receive SNAP benefits and issuing monthly allotments of benefits.
However, given the large volume of SNAP cases, complexities of eligibility policies, and availability of State options, State agencies may issue overpayments or underpayments of SNAP allotments to participant households.
Pursuant to Section 16 of the Food and Nutrition Act of 2008, as amended (FNA), each State agency is responsible for monitoring and improving its administration of SNAP. A Quality Control (QC) system is necessary to help ensure State agencies measure improper payments and improve their administration of SNAP. SNAP QC reviews have four goals, identified at 7 CFR 275.10(b), which are to provide: (1) a systematic method of measuring the validity of the SNAP eligibility caseload; (2) a basis for determining all SNAP error rates; (3) a timely, continuous flow of information on which to base corrective action at all levels of administration; and (4) a basis for establishing State agency liability for payment errors that exceed the National performance measure pursuant to Section 16(c)(1)(C) of the FNA.
To comply with Section 16 of the FNA, State agencies conduct monthly reviews of a statistically representative sample of both participating SNAP households (active cases) and households for whom participation was denied, terminated, or suspended (negative cases). These reviews measure the accuracy of SNAP eligibility and ongoing allotment determinations and ultimately serve as the basis for the SNAP payment error rate (PER) and case and procedural error rate (CAPER).
On December 20, 2018, the President signed Public Law 115-334, the Agriculture Improvement Act of 2018 (2018 Farm Bill). Section 4013(b) of the 2018 Farm Bill required the Department to issue an interim final rule to: (1) ensure the SNAP QC system produces valid statistical results; (2) provide for the oversight of contracts entered into by a State agency to improve payment accuracy; (3) ensure the accuracy of data collected in the QC system; and (4) provide for the evaluation of the integrity of the QC system for a minimum of two State agencies per fiscal year. Section 4013(e) of the 2018 Farm Bill also required that cost sharing for State computerization costs be, in part, contingent on State agencies granting FNS access to all State computer systems containing documentation and evidence related to SNAP eligibility. The Department determined that the most effective way to meet the statutory requirements was to issue two rules: (1) an IFR for the non-discretionary provisions, which FNS believed were necessary to comply with the 2018 Farm Bill and would be effective immediately, and (2) a proposed rule for the additional, discretionary provisions to improve the integrity and data quality of SNAP QC. By doing so, the Department ensures that major discretionary changes to SNAP QC go through the full notice and comment process, which allows stakeholders an opportunity to be part of the rulemaking process.
The Department codified all the non-discretionary requirements in Section 4013(b) in SNAP regulations by publishing the interim final rule (IFR) titled, “Supplemental Nutrition Assistance Program: Non-Discretionary Quality Control Provisions of the Agricultural Improvement Act of 2018” on August 13, 2021 (86 FR 44575.
The SNAP QC review process precedes Federal improper payment laws, including the Payment Integrity Information Act of 2019 (PIIA) (Pub. L. 116-117.
The section that follow discusses challenges FNS faced and overcame that impacted the integrity of the QC system in the recent past; specifically, the challenges that occurred when State agencies introduced bias into the QC system's data. While FNS addressed the
In 2015, an audit of SNAP QC's error rate determination process by the Department's Office of Inspector General (OIG)),
To identify the full extent of the QC data reliability issues, FNS began QCIRs in April 2015 and completed reviews of all 53 State agencies by September 2016. The purpose of the QCIRs was to validate that State agency QC systems did not include bias, as bias impacts the integrity of the data. During these reviews, FNS was able to validate only 11 State agencies' QC systems for FY 2015 and found data integrity issues in the remaining 42 States. As a result, FNS was unable to use the States' QC data to establish State or national SNAP payment error rates for FY 2015 and FY 2016.
The findings from the reviews fell into four categories related to integrity in the QC system and aligned with ways to mitigate errors. The first category centered on inadequate documentation. FNS found more than half of the State agencies were not properly documenting information in the QC case file, as required in the SNAP QC Review Handbook (the FNS-310).
The second category concerned improper use of error review committees. State agencies may use error review committees after State quality control reviewers (SQCRs) transmit completed QC cases to FNS, to identify corrective actions that may be needed to improve the accuracy of eligibility and allotment determinations. However, State agencies are strictly prohibited from using error review committees prior to the SQCR transmission of completed QC cases to FNS. On August 1, 2005, after identifying concerns regarding the improper use of error review committees, FNS issued a policy memorandum
The third category of findings from the QCIRs related to the failure of more than half the State agencies to disclose complete case information to FNS, as required by 7 CFR 275.23(b). This finding included some State agencies refusing to give FNS access to their systems for auditing purposes, as required by Section 16(c)(4) of the FNA. Section 4013(a)(2) of the 2018 Farm Bill addressed this and required State agencies to give FNS access to their State systems for QC and oversight purposes. Section 4013(e)(2) of the 2018 Farm Bill required cost-sharing for computerization to be conditioned on State agencies being able to provide FNS access to their systems for audit and inspection purposes. The 2018 IFR codified the requirement to give FNS access, and this proposed rule includes the cost-sharing condition from Section 4013(e)(2) of the 2018 Farm Bill for State agencies to give FNS access.
The fourth category of findings from the QCIRs found that more than half of the State agencies were incorrectly interpreting and applying certification policy, sometimes intentionally, to mitigate QC errors. For example, during QC reviews, some State agencies were using an inappropriate number of weeks or months to determine a household's earned income. This approach led to the QC reviewer artificially increasing or decreasing the earned income amount of the household, with the goal of obtaining a result that more closely matched the amount used at the eligibility and allotment determination, thus mitigating the likelihood and potential impact of a payment error.
As a result of FNS's initial integrity findings in 2015, the Department of Justice (DOJ) began investigating State agencies for violations of Federal law in connection with the underreporting of SNAP QC payment errors. Between 2017 and 2021, DOJ settled with eight States for False Claims Act allegations of introducing bias into their QC processes. In addition, DOJ settled with a contracting company that provided QC support to all eight State agencies.
In January 2016, in response to early findings from the QCIRs, FNS issued a policy memorandum
In September 2016, after completing all QCIRs, FNS issued revisions to its primary QC case review policy manual, the FNS Handbook 310,
During the QCIRs, and while working with State agencies to address findings and resolve corrective action plans, FNS found the complex structure of QC reviews contributed to not only unintentional mistakes, but also to an environment that allowed for both the manipulation and mitigation of SNAP QC payment error findings. For instance, the QC review begins with an examination of the sample month circumstances for a household, which could be any month of the household's certification period. However, because of the complexity of Federal SNAP
Often it is not possible for SQCRs to complete cases due to difficulties associated with obtaining verifications for past months and securing household cooperation. For instance, to simplify administrative procedures, some State agencies have chosen to implement a policy that allows them to forego verification of shelter expenses at certification if the expenses are not questionable. In the QC system, there are no comparable options, and these expenses must always be verified. While certification rules allow for a waiver of the requirement to verify expenses that are not questionable,
The conclusion that the complexity of SNAP eligibility policy and the QC system's complexity played a major role in many of the integrity issues led FNS to explore ways to simplify and improve the QC review process. On June 1, 2018, the Department published a Request for Information (RFI) in the
FNS also conducted focus groups with stakeholders who work in State SNAP QC and certification policy, social science research partners with government programs, and hunger advocates on conceptual ideas for the proposed provisions in this rule. These focus groups assisted FNS in identifying areas of concern, particularly with changing the review focus to a narrower eligibility scope.
Additionally, during national and regional conferences, State and Federal staff verbally expressed to FNS an interest in narrowing the QC review to focus solely on the eligibility action to simplify the QC review and increase compliance with QC review requirements while still maintaining a focus on measuring the validity of critical State agency decisions. This narrowed focus is consistent with how other social safety net programs (
To assist the reader in understanding the review process changes being proposed, this section discusses how the QC review process is currently structured. The SNAP QC system
SQCRs must schedule and conduct face-to-face interviews with households selected for review in the active sample frame (7 CFR 275.12(c)(1)).
The review itself consists of an examination of a random month during a case's certification period, called the sample month (7 CFR 275.12(a). SQCRs verify all factors of eligibility and allotment issuance for that sample month and calculate an allotment amount based off that information, which is referred to as the household budget calculation (7 CFR 275.12(e)). They then compare that calculated amount to the amount that was issued to the household for that month This is called Comparison I. If Comparison I results in the household budget calculation producing an allotment amount for the sample month that is either over or under the household's authorized issuance amount for that month, in an amount that exceeds the current fiscal year's threshold for excluding small errors,
For all active frame cases,
FNS then works to validate the State agency findings. FQCRs, who are in FNS regional offices, review a subsample of the active cases reviewed by State agencies (7 CFR 275.3(d)(1)(i)). The subsample is comprised not only of cases State agencies complete, but also of
The PER is based on the difference between the amount of allotments issued to households and the amount those households should have received had their cases been processed correctly (7 CFR 275.23(b)). The overall PER is the sum of two breakdowns: underpayment and overpayment error rates. For CAPER, the review of negative actions considers procedural aspects of case processing in addition to whether the action to deny, suspend, or terminate a household was accurate. Procedural components of this review include timeliness of the action and accuracy of the household notification, among other things. The negative review results in a determination of whether the negative actions were valid or invalid (7 CFR 275.13(c)(1)). The CAPER is based on what percentage of the negative actions reviewed were invalid compared to the total number of negative actions processed by the State agency.
The rest of this preamble will share the Department's proposals for this rulemaking. The Department proposes to improve the SNAP QC active review process using lessons learned from the QCIRs, the OIG audit, the completion rate study on QC, the 2018 RFI
SNAP regulations require all SNAP State agencies to operate a QC system (7 CFR 275.10(a)). Although the 2018 IFR increased various reporting and recordkeeping requirements for State agencies to comply with the 2018 Farm Bill, the active review process for the SNAP QC system has remained relatively unchanged since February 1984 (49 FR 6292)
The proposed process would change the active case review to focus on eligibility actions instead of a random, point-in-time review for each case. This proposed change would eliminate the two-comparison allotment tests (Comparison I and Comparison II) from the QC review and instead focus on eligibility determinations, consider cases that a State agency cannot validate as total dollar errors, and alter the sampling and sampling plan requirements to correspond to the changed review focus.
To help the reader understand the flow of the proposed provisions that follow, the provisions are organized in the same order as existing regulations found in the Code of Federal Regulations at 7 CFR part 275. It is important to note, this is a proposed rule that requires public comment before a final rule may implement any changes to SNAP's QC system. The Department proposes the following provisions for comment.
Prior to discussing the provisions, the Department would like to convey that this rule is very technical in nature. The provisions discussed include specific detail about QC review processes and detailed statistical formulas necessary to carry out the QC process. The Department will continue to explain technical information throughout this proposed rule when able; however, in areas where precision and specific vocabulary are necessary to accurately convey the proposal, such as with statistical formulae, an explanation in more colloquial terms could result in an inaccurate portrayal of the proposed concepts. Thus, the technical language will remain.
In 7 CFR parts 271 and 275, the Department proposes to update or remove outdated and duplicative terminology and update currently applicable terminology to reflect the proposed review process. The following terms are no longer current: “negative case error rate” (or “negative error rate”) and “Immigration and Naturalization Services (INS).” Therefore, the Department proposes to change these to “case and procedural error rate (CAPER)”
The Department proposes to add a provision in the Staffing Standards section under 7 CFR 275.2(b) to specify the expectation that State agencies ensure the independence and objectivity of the merit staff performing QC case reviews. The QC integrity reviews found instances where State agency managers were putting undue influence on SQCRs to find that the eligibility worker's initial determination was correct, as opposed to independently focusing on the accuracy of the case, which is the purpose of the QC review. A separate audit completed by USDA OIG further supported these findings, as well as action by DOJ to settle allegations of violations of Federal law with eight State agencies. These findings provide substantial evidence that SQCRs reporting in the organizational structure to the same individuals responsible for overseeing eligibility determinations has an adverse effect on their ability to objectively review cases and determine errors. To address these issues and ensure the accuracy of the PER and CAPER estimates, the Department proposes to require a new provision in 7 CFR 275.2(b) that State agencies take proactive measures to ensure SQCRs work independently and are free from undue influence by ensuring the staff used to conduct QC reviews operate independently from those responsible for overseeing the eligibility determination process to ensure objective and accurate assessments of the Performance Reporting System. For example, QC staff would not have the same immediate supervisor or director as the eligibility staff.
In addition, the Department proposes to clarify the components that constitute prior knowledge for purposes of staff disqualification under 7 CFR 275.2(b). The focus on integrity and bias in SNAP's QC system generated concerns in State agencies about SQCRs unintentionally biasing the QC process. FNS has heard from State agencies, anecdotally, that QC workers were concerned that a staff person might know information about a household one of their colleagues was reviewing but felt that disclosing that information would be considered a prohibited practice. The Department proposes to address this issue by removing the current language at 7 CFR 275.2(b) and adding a modified provision to QC's Staffing Standards at 7 CFR 275.2(b)(2) clarifying that even though State agency staff must disqualify themselves from directly working on a QC review if they have prior knowledge of a household, they are allowed to participate in a QC review as a collateral contact
Section 4013(e)(2) of the 2018 Farm Bill—which amends Section 16(g)(1)(A) of the Food and Nutrition Act of 2008 (codified as 7 U.S.C. 2025(g)(1)(A))—specifies that cost sharing for computerization for systems is an allowable SNAP administrative expense only when, among other criteria, the Secretary determines the systems to be accessible to the Department for review and audit purposes. Therefore, to implement this statutory provision, in the paragraph at 7 CFR 275.2(d), the Department is requiring cost sharing for State agency system costs to be conditioned on, in part, FNS having access to all State agency records and systems in which those records are contained.
To be consistent with the changes proposed for State agency sampling in 7 CFR 275.11, discussed later in this rule, the Department proposes at 7 CFR 275.3(d)(1)(i)(A) to only have one minimum Federal subsampling calculation table to determine the Federal subsampling pull for the re-review of active cases. In addition to the change in Federal subsample size, the Department also proposes the Federal subsample be allocated across five strata in order to capture cases from each of the points in time where the State agency makes a determination to authorize or re-authorize benefits and to be consistent with the weighting that is proposed to determine the State agency's sampling frame. The five strata reflect all the possible action types and reporting periods. Since the reporting system and certification period length assigned at certification impact the number of reports that will end up in the sampling universe under the proposed sampling procedures, the five strata as well as weighting are used to ensure that all types of households are included in the sampling universe and to even out selection probabilities so that all cases have a chance to be selected for sampling in determining the SNAP PER. The five strata are based on the combination of action types (
The proposed changes to determine the Federal subsample would be necessary to determine State agency PERs based on the new proposed methodology. Under the proposed changes, the Federal subsample size would be determined using the following table:
Once the Federal subsample size
Currently, when there is a dispute between a State agency and FNS regarding a finding (whether a case was correct, overissued, underissued, or was ineligible as of the review date) or disposition (whether a case was complete, not subject to review, incomplete, or the case was deselected) of a QC case, the State agency may request arbitration from the FNS Arbitrator. FNS's Arbitrator is the SNAP Administrative and Judicial Review Branch. This Branch includes administrative review officers who serve as a neutral third party, as they do not directly work with SNAP certification policy or quality control. The disputes subject to arbitration are limited to disagreements over finding or disposition only and the arbitrator's decision on a case is considered final and not subject to subsequent appeal. Any other disagreements should be handled through an informal resolution process, which is separate from the arbitration process.
FNS issued a policy memorandum dated November 7, 2003, that provided procedures for arbitrating application processing timeliness (APT) disagreements when the APT measure was first introduced. FNS intended the memorandum to be temporary, covering FY 2003 only, but did not identify an expiration date. The preamble in the final rule, Quality Control Provisions of the Mickey Leland Childhood Hunger Relief Act (62 FR 29652
In addition, current regulations instruct State agencies to send arbitration requests to their FNS regional office, addressed to the attention of the FNS Arbitrator. Over time, FNS found that by providing the Arbitrator's contact information for State agencies to make direct arbitration requests, FNS was not only able to provide better customer service, but also have a more efficient request process. Therefore, the Department proposes to update its regulations at 7 CFR 275.3(d)(4)(iv) to require that a State agency send its request for arbitration directly to the FNS Arbitrator and copy the appropriate FNS regional office.
Currently, the universe (all cases with the possibility of being selected for the QC sample) for SNAP's active frame includes all households receiving SNAP allotments in any given sample month. Under this proposed rule, the active frame sample universe would no longer include all households receiving SNAP allotments in any given sample month. Instead, only those households that experienced an eligibility action—
Currently, at 7 CFR 275.11(a), State agencies have two options for designing their minimum QC sampling size: a standard or a reduced sample size. The Department proposes to remove the language about alternative sampling designs at 7 CFR 275.11(a)(2) since, unlike the current methodology, the proposed methodology would not be conducive to State agencies utilizing a reduced sample size due to issues with reliability of the estimates that would result from the sample size reduction. This would include the removal of alternative sampling related rules in subsections 7 CFR 275.11(a)(2)(iii) and 7 CFR 275.11(a)(2)(iv). In addition, the Department proposes to add language in section 7 CFR 275.11(a)(2)(ii) about the sample size selection to help State agencies ensure they follow the procedures set forth in subsections (b), (c), (d), (e), and (f).
Computer programs and systems that assist in selecting probability samples have progressed considerably since the publication of the current QC regulations in 1977. Now, systematic sampling is but one of the many possible ways to select a probability or random sample, and there are new statistical software tools available that can easily draw a random sample without using systematic sampling. The Department proposes to amend the recommendation at 7 CFR 275.11(a)(3) that State agencies should primarily utilize systematic sampling to also recommend that State agencies be open to considering other sampling software tools.
In addition, the Department proposes to revise the language at 7 CFR 275.11(a)(3), describing the proposed active sampling design. This revised language provides specific details about how State agencies would need to design their new sampling procedures
The Department proposes to simplify and standardize the active case review process by (1) eliminating the current allowance for choosing between two different possible sample sizes and (2) increasing the current sample size for active cases specified in 7 CFR 275.11(b)(1)(iii) by 30 percent. Increasing the overall sample size ensures that the new sampling design would deliver the same level of precision as the current sampling design by providing for sufficient sample sizes within each stratum. Without this increase in overall sample size and proper allocation among the strata, the new design would over-represent cases with shorter reporting periods and under-represent those with longer reporting periods. Having a larger overall sample size is necessary to ensure statistical validity of the sample, which results in a more precise PER estimate. The Department proposes to remove the choice of the other sample size option, currently described at 7 CFR 275.11(b)(1)(ii), because in order for the new sampling methodology to provide a basis for calculating a national PER, all States must follow the same sampling design; therefore, a second option is no longer appropriate. Given the proposed deletion of 7 CFR 275.11(b)(1)(ii), the Department proposes to re-designate the remaining paragraphs of 7 CFR 275.11(b)(1) that follow paragraph 7 CFR 275.11(b)(1)(i).
In the final rule published on June 11, 2010, titled, “Supplemental Nutrition Assistance Program: Quality Control Provisions of Title IV of Public Law 107-171” (75 FR 33422),
The Department implemented this change in FY 2012, and later began informally referring to the associated error rate as the case and procedural error rate, as opposed to the negative error rate, to reflect the change in focus. This practice of referring to the error rate for negative case reviews as CAPER continues today and is the commonplace term State agencies and FNS use. As such, the Department proposes to amend 7 CFR 275.11(b)(2)(i) to include the explanation that negative case reviews result in determining the “case and procedural error rate.”
The Department found State agencies typically utilize the minimum annual sampling size for their negative case samples. Just as with the proposed removal of the alternative active case sampling design discussed earlier, the Department proposes to amend 7 CFR 275.11(b)(2)(i) to remove the alternative design option for the negative sample size so that sample sizes are standard, provide more precision for error rate estimates, and align with the language used for the selection of active cases in 7 CFR 275.11(b)(1)(i).
Consistent with the proposed removal of alternative design options for both the active and negative sampling frames, the Department also proposes to remove the regulatory provisions at 7 CFR 275.11(b)(4) through 7 CFR 275.11(b)(4)(iii) since those paragraphs discuss the options for State agencies concerning alternative QC sampling sizes.
To ensure they select enough cases to review annually, State agencies often pull supplemental samples when they find they do not have enough cases to meet FNS requirements. FNS refers to this act of pulling a supplemental sample in current regulations at 7 CFR 275.11(c)(2) as a `correction.' Corrections can be necessary for many reasons but most often occur because some cases in the sample were later determined to be not subject to QC review or because an increase in the average monthly reviewable caseload necessitated an increase in monthly sample size. The Department proposes to amend the provisions regarding corrections at 7 CFR 275.11(c)(2) to clarify that the new procedures for sample size, sample selection, sample frame, and sample allocation in proposed paragraphs 7 CFR 275.11(b), (c), (e), and (g) are also applicable to corrections, or in other words, when State agencies pull additional cases to compensate for under sampling.
Current regulations at 7 CFR 275.11(e) allow State agencies a `choice' in what their sampling frame must include. The Department proposes to remove language concerning the `choice' of the sampling frame since the Department's proposed methodology requires State agencies to use a specific frame for sampling.
The Department proposes to change its active case sampling frame description at 7 CFR 275.11(e)(1) to include only households that either experienced an initial certification action, a recertification action, or were required to submit a required monthly, quarterly, or periodic report in the sampling month and an allotment is issued in the following month. As noted earlier, this simplified QC process would shift the review focus to when an eligibility action occurred rather than a review of a random month within a household's certification period.
The simplification of only reviewing the eligibility action would ease compliance with QC requirements for both recipients and SQCRs by eliminating the complex aspects of the current review process and by making the SNAP review consistent with other benefit programs' improper payment review procedures. The complexities of the current process can contribute to State agencies having low QC case review completion rates and to, the integrity issues discussed throughout this proposed rule.
Regulations at 7 CFR 275.11(f)(1) inform State agencies which cases they must exclude from their sampling frames. Consistent with proposed changes in this rule to the sampling frame, the Department is also proposing corresponding changes for those cases the State agency must exclude. The Department proposes to amend one condition and remove one condition from the current list of excludable households for review at 7 CFR 275.11(f)(1).
The Department proposes to amend the provision at 7 CFR 275.11(f)(1)(iv) that addresses the exclusion of a household appealing an adverse action when the review date falls within the time period covered by continuing participation pending a fair hearing, or in other words, the time the household continues to receive benefits while they await their fair hearing. Instead of the condition being “when the review date falls within the time period covered by continuing participation pending the hearing,” the Department proposes to exclude all cases under review where the household is appealing an adverse action for any of the sampled actions, since the benefit determination is subject to change based on the result of the appeal.
The Department also proposes to remove the condition for exclusion at 7 CFR 275.11(f)(1)(v) that indicates a household can be excluded when the household is receiving restored benefits but is not participating based upon an approved application. This condition no longer applies to the new proposed sampling method because only approved applications will be included in the sample. As such, only the instruction that, “Other households excluded from the active case universe during the review process are identified in 7 CFR 275.12(g)” would remain in this paragraph.
In order for the new sampling method to be reflective of the SNAP caseload, the Department proposes to add two new paragraphs at 7 CFR 275.11(g), entitled “Active sample allocation” and 7 CFR 275.11(h), entitled “Weighting,” which will describe how State agencies would allocate the sample across the strata defined in the new sampling design and compute the weights needed to make the sample representative of the sample universe/target population.
As described earlier, the Department proposes to add requirements at 7 CFR 275.11(g) for the active sample allocation so that active cases are allocated to five pre-defined strata. These five strata are based on the combination of action type (
In addition, the Department proposes to add a section, 7 CFR 275.11(h) “Weighting” to illustrate how to compute the weights needed to make the sample representative of the universe/target population. The new sampling design samples cases with unequal probabilities across the strata and, therefore, some cases have higher selection probabilities than others. State agencies must provide FNS the data necessary to compute the weights. To compensate for the unequal probabilities of selection across the strata, the Department is proposing the following formula for the weights W
State agencies would be responsible for providing to FNS the counts N
By focusing only on eligibility actions, the Department anticipates the information obtained through the modified QC review process will be more useful for program improvement purposes, as it will be focused on the main touchpoints of a SNAP case and will be collected closer in time to those touchpoints. Currently, SNAP's error rates are a combination of errors measured at random points of time within a household's certification period and at points of eligibility. By narrowing the review, FNS would issue an error rate derived from the time of most recent eligibility action for all cases reviewed. This would allow FNS to more accurately identify where errors are occurring and allow State agencies to correct more effectively the causes of error at certification or the point of most recent eligibility action. FNS would also be collecting information at a point in time that is closer to when many actions and their corresponding errors are occurring, making the monitoring of State agency performance timelier than is possible under the current QC system.
Under the new proposed methodology, the PER would be representative of points in time when households have an obligation to report or confirm their circumstances and attest the information is accurate. In addition, at those points in time, the State agency also has an obligation to verify those household circumstances and accurately determine the household's eligibility and benefit level. With this new approach, payment errors would specifically reflect errors made directly as a result of the benefit determination process, a connection that has proven challenging with the current review system due to the distance in time between the selected review month and the action causing the errors. By identifying errors in a timelier manner, FNS could raise deficiencies in program operations more quickly and effectively, and State agencies and FNS would be able to address the root causes of errors more quickly than under the current QC system.
Another significant impact of moving from a random “point in time” review of the present QC system to this modified “eligibility action-only” review is that FNS would no longer require SQCRs to re-create all of a household's sample month circumstances for a random month within a certification period. Currently, to review the sample month (which can be at any point in time during a household's certification period), SQCRs must collect and validate the household's circumstances for that new month, which most of the time does not exist in the case record, to determine whether the allotment they received that month is accurate for what they should have received based on those circumstances. In order to determine whether the sample month's allotment determination by the SQCR is accurate, the SQCR must often request information about household circumstances for the past months in between the sample month and the most recent certification month, if they are not one in the same, making the review process very complex and prone to inaccurately applying QC policy since it relies on the ability to collect information from SNAP households for, in some instances, a year or more in the past. The reason these are so challenging to obtain is that SNAP households do not always have stable incomes, bank accounts, and contracts with cellular phone carriers or other utility companies, for example, that
In the new approach, SQCRs would still be required to verify the household's circumstances for the sample month; however, the sample month would be the month the action took place, eliminating the need to look at previous months. As a result, the process would require fewer months to review, and much of the information a SQCR needs to verify the household's circumstances and determine the allotment's accuracy should already be available in the case record. In addition, if verifications do not already exist in the case record and SQCRs must either obtain this information from the SNAP household or collateral contacts, it would be less challenging for them to produce verification from the previous month or two than it would be for them to produce verification issued at some point in the previous four to twelve months, as is necessitated under the current system. Since this change would make obtaining verifications less challenging, compliance from households and collateral contacts will likely increase and SQCRs would be able to complete more of their QC case reviews, resulting in a more accurate PER.
Given the proposed change in review focus, FNS considered whether an ex parte review, in which the SQCR relies solely on the case record and does not contact the household, would be appropriate. FNS determined that relying solely on an ex parte review for QC reviews would not be appropriate for several reasons. First, the purpose of the QC review is to determine the accuracy of the allotment authorized by the State, and to accomplish that purpose, SQCRs must verify all household circumstances in the sample month. However, using allowable administrative flexibilities, many States choose to ease verification requirements at certification to reduce the administrative burden on applicants. As a result, verifications of all household circumstances may not be included in the case record and available for QC reviewers. Generally accepted government auditing standards (GAGAS) require reviewers to obtain sufficient, appropriate evidence to provide a reasonable basis for addressing review objectives and supporting their findings and conclusions.
This proposed review would still require a complete and independent review of the household's circumstances to assess whether the State agency accurately determined the household's eligibility and SNAP benefit amount. By focusing on the eligibility action and not on a random sample month, FNS hopes to place greater emphasis for corrective action on making more accurate benefit determinations through better documentation, verification, and accountability.
The change in review procedure would also eliminate the current SNAP QC Comparison I and Comparison II process when determining a QC case's reportable error (an error that is above the current fiscal year threshold for excluding small errors).
The process of reviewing a case in QC has several distinct components, including the household case record review, where the reviewer gathers information and evidence from the case record to determine what occurred in the case and to plan for the next fact-finding phase.
The Department proposes to amend the regulations at 7 CFR 275.12(b) to update the case record review provisions to reflect the new proposed review process. The proposed change specifies that the case record must include the initial certification or recertification application or, the monthly, quarterly, or periodic report, and QC worksheets applicable to the sample month determination. Documentation contained in the eligibility case record is allowable as verification, but only if the evidence used in the eligibility determination meets or exceeds QC verification standards found in the FNS Handbook 310. The Department also proposes to eliminate the requirement at 275.12(b) that reviewers examine the household issuance record for pertinent information if they cannot find the household's case record, as the case record review would be an essential component of the active review process. Under the proposed rule, situations where the case record could not be located would result in an incomplete case and, therefore, the total dollar amount issued would be reported as an error. Further discussion on incompletes becoming total dollar errors is in this preamble under the heading,
The purpose of this proposed change is two-fold. First, including dropped/incomplete cases in the error amount would strengthen integrity by acting as a deterrent against the types of dropped-case manipulation that previously led to unreliable State PER data reporting, discussed in the history part of this preamble. Second, by including dropped/incomplete cases now
The field investigation is another fact-finding phase of the QC review and includes interviewing the household and collateral contacts. Collateral contacts can include, for example, individuals, organizations, governmental agencies, and businesses that hold relevant information on the household's circumstances.
While conducting QCIRs, FNS staff found that State agencies do not widely use technology to collect documentary evidence during the field investigation phase. For example, while some SQCRs have access to digital scanners or cellular phone cameras to make electronic copies of verifications, many SQCRs have no access to these technologies during the field investigation or were not aware the use of electronic devices was a permissible way of obtaining documentary evidence that could not be brought back to the office.
Additionally, in the 2018 RFI,
FNS hopes that promoting the use of technology in regulations to collect documentary evidence from both households and collateral contacts would encourage State agencies to offer households better customer service by limiting the need to send in a physical copy of documentary evidence, a step that can prove challenging for many. Therefore, the Department proposes to amend paragraph 7 CFR 275.12(c) to provide that the use of technology is not only permitted, but encouraged, to obtain verification, including copies of documentary evidence from households and collateral contacts, so long as the privacy of the household and the information gathered are protected pursuant to applicable Federal and State privacy laws.
QC regulations currently require SQCRs to conduct a face-to-face personal interview for all households. Under current regulations at 7 CFR 275.12(c)(1), only specific circumstances allow telephone interviews to be used in lieu of face-to-face interviews for the QC field investigation. Seventy percent of State agency responses to the RFI
In considering the various comments provided by different stakeholders, the Department determined that switching to telephone interviews as the primary interview method will continue to meet the needs of the proposed QC review changes in this rule. As a result, the Department proposes to revise the QC personal interview regulation at 7 CFR 275.12(c)(1) to require that telephone interviews be the default interview format, and require that State agencies inform households that a face-to-face interview is an option available to them by request. This change will not only address the concerns brought forth by commenters but may also have a positive impact on State agency completion rates since the increased flexibility that telephone interviewing allows will provide more households the opportunity to comply with the QC review process. The reason the Department proposes standardizing the telephonic interview as the default interview mode as opposed to making it another interview option is to ensure fair treatment for all sampled households during the QC review process. In addition, because of this change, the Department proposes to eliminate the exception at 7 CFR 275.12(c)(1) available to remote, isolated households in Alaska because this proposed change will cause the exception to be unnecessary.
Regulations at 7 CFR 275.12(c)(1)(iii) require that, during the personal interview, reviewers must review with the household all documentary evidence in the household's possession and secure information about collateral sources of verification. The Department proposes to amend the provisions at 7 CFR 275.12(c)(1)(iii) to codify that during the personal interview, reviewers would also be required to review with the household all documentary evidence that is already in the case file and request new documentary evidence from the household, as needed. This is a best practice of State agencies and, by codifying this requirement, FNS seeks to ensure greater consistency in the interview process as well as accountability for the quality and scope of interviews, a vital component in the QC review process.
During, prior to, or after the personal interview, the SQCR may need to contact a collateral contact of the household who can be used as a source to verify household circumstances. Because State law might require an SQCR to obtain consent from the head of household to contact collateral contacts FNS codified the provision at 7 CFR 275.12(c)(1)(iv), which currently reads, “If required by the State, the reviewer shall obtain consent from the head of the household to secure collateral information.” However, FNS has since discovered the language of 7 CFR 275.12(c)(1)(iv) is being interpreted differently by States. For example, some States without such laws are still mandating consent be obtained, which has created roadblocks for SQCRs and resulted in preventing the SQCR from being able to complete cases. It is imperative that SQCRs accurately complete as many QC cases as possible without any unnecessary burdens. Therefore, the Department proposes to amend the language at 7 CFR 275.12(c)(1)(iv) to clarify its intent by linking obtaining consent to the presence of a State law.
Currently, regulations at 7 CFR 275.12(c)(2) require SQCRs to obtain verification from collateral contacts in all instances when adequate documentation is not available from the household. The current regulatory provision does not address situations when there is inadequate documentation in the case file. Therefore, the Department proposes to
According to Section 2(b) of the PIIA,
Regulations at 7 CFR 275.12(d) define a `variance' as a review finding that policy was applied incorrectly or that information verified as of the review date differs from the information used at the most recent certification action. The Department is also proposing to allow fewer opportunities for variance exclusion from the error analysis. There are two reasons for this proposal: (1) a more restrictive review focus in accordance with PIIA specifications on which errors are and are not considered payment errors; and (2) the change in review focus to reviewing only the household's eligibility determination versus a point in time analysis. As such, the Department proposes to eliminate regulations at 7 CFR 275.12(d)(2)(i), (iii), and (ix). These provisions are related to variances associated with countable income unable to be verified at the time of certification, changes in household circumstances that were not yet required to be reported as of the review date, and changes to child support orders that occurred after the most recent certification action, respectively, and no longer align with the new review focus. Provisions (ii) and (viii) regarding variances resulting from postponed verification for expedited service households and from incorrect written Federal policy, respectively, would be revised, as further discussed below, and references to Immigration and Naturalization Services (INS) would be updated.
FNS found in its QCIRs that inadequate documentation in household eligibility case records presents challenges for reviewers to complete cases, particularly in expedited service cases where verification of certain elements of eligibility is postponed. In these cases, the QC reviewer must rely solely on the eligibility case record to determine what verification was postponed and if any variances in benefits resulting from the postponed verification qualify to be excluded from the error rate calculation, called a variance exclusion. In these cases, a lack of required documentation should result in forfeiture of the variance exclusion since the reviewer cannot validate if regulatory requirements regarding verification were followed accurately. Current regulations are not clear that a lack of documentation means the exclusion does not apply, and some State agencies have used this ambiguity to apply the variance exclusion inappropriately. Therefore, the Department proposes to amend the language at 7 CFR 275.12(d)(2)(ii) to clarify that, for this exclusion to apply, the case record must include clear documentation indicating which elements of verification were postponed. Otherwise, if an eligibility worker does not sufficiently document an element to indicate they properly postponed it, the exclusion would not apply and any variances arising from errors related to the element would then be included in the error determination process.
The Department proposes to amend the current regulatory language at 7 CFR 275.12(d)(2)(viii) [re-designated as 7 CFR 275.12(d)(2)(vii)] regarding policy memoranda for clarity. Instead of specifying categories of policy memoranda, as exists now, the Department proposes to generalize the concept to be all-inclusive of SNAP policy memoranda issued.
The regulations at 7 CFR 275.12(d) define a variance as a review finding that policy was applied incorrectly or that information verified as of the review date differs from the information used at the most recent certification action while the regulations at 7 CFR 275.12(d)(1) and (2) further describe which variances are included in and excluded from the error analysis. Regulations at 7 CFR 275.12(d)(3) describe findings other than variances; however, there is currently no requirement to report these findings to a local office. When a SQCR does report a finding other than a variance, they do so through a notification comment that is sent along with the case's official QC results. The lack of a requirement to report these findings can lead SQCRs to bypass those issues, thereby reducing the local eligibility office's ability to determine whether a change in the case record is warranted following the QC review. This is important to address, because currently it is possible for a SQCR to learn information about a household's current circumstances that do not affect the sample month under review but could affect the household's ongoing SNAP allotment after the sample month. For example, a SQCR conducts an interview with a household in May for a case selected for the March sample month. During the interview, the SQCR finds that a household member recently started a new job that increased the household's earned income over the income limit for its household size but failed to report this information to the State agency within the required time frames. The new earnings are excludable from the review because they occurred after the sample month, but the household is required to report this change and it may impact the household's ongoing SNAP allotment in future months.
As a result, the Department is proposing to amend 7 CFR 275.12(d)(3) by adding that the State QC office would be required to notify the local office of these other findings in all cases, regardless of the error impact those deficiencies may have on the case. The Department believes this notification is essential to good management of the Program, because it provides information about inaccuracies in the case file to eligibility staff, enabling them to correct the issue, prevent future errors from occurring, and potentially provide improved customer service to households. The Department also proposes to remove the following examples from the same paragraph since the household would not have been eligible for benefits according to SNAP rules at 7 CFR 273, and therefore, any benefits issued to such households are considered improper payments under PIIA:
Currently, at 7 CFR 275.12(d)(3), State agencies have the discretion to act on findings other than error variances discovered during the review, which are pertinent to the SNAP household or the case record. Such findings may include, for example, the incorrect age of a household member that is unrelated to an element of eligibility and deficiencies in work registration procedural requirements, among others. The Department proposes to maintain this State agency discretion to act or not act on additional information discovered during the QC review.
Consistent with the changes made at 7 CFR 275.12(d)(3), where SQCRs would be required to document all variances discovered in the review and not just those causing a reportable error, the Department proposes to revise regulations at 7 CFR 275.12(f)(1) and (f)(2) to require reviewers include all variances in their individual review findings reports for both eligibility and basis of issuance variances, respectively. Changes in both sections would also remove the reference to `sample month', as this would be consistent with the shift in review focus from a point in time to the eligibility action under review.
As noted, proposed updates to the active review would be more reflective of improper payment requirements for PIIA, which requires a more thorough reporting of errors. Currently, FNS “charges” State agencies a penalty for having a low QC completion rate. This penalty is part of the calculation that determines the State agency's PER. This method is unique to SNAP. Other programs that report for PIIA, follow a different process, whereby any case they are unable to complete for QC results in a total dollar error. In SNAP, reviewers drop cases for which they cannot verify an element of eligibility or basis for the benefit amount. For instance, if a case indicates the household received earned income, and the household is unable to provide verification or a collateral contact that can validate the information, the reviewer drops the case as incomplete.
To be consistent with PIIA, the Department proposes to amend 7 CFR 275.12(g)(1) so that, as with other Federal programs, all cases that cannot be completed, regardless of the reason, would result in the reporting of an error for the total allotment issued for the action under review. The Department requests public comment for considerations of circumstances it should consider in implementing this policy.
The Department is also seeking feedback on whether there should be a threshold applied to completion rates in the proposed error rate calculation methodology, similar to the current percent completion threshold which requires a penalty be applied to a State agency's error rate if it fails to complete at least 98 percent of its minimum QC case load.
Current regulations at 7 CFR 275.12(g)(1)(ii) list instances in which the household's unwillingness to cooperate in completing a QC review has the effect of a refusal to cooperate. Those instances include when the household fails to respond to mail sent Certified Mail-Return Receipt Requested; when the household fails to attend an agreed upon interview; and when the household does not return a signed release of information after agreeing to do so or after receiving one through Certified Mail-Return Receipt Requested. FNS received input from State agencies through various meetings with the American Public Human Services Association (APHSA) that the use of certified mail is prohibitively expensive and that delivery and service issues with the United States Postal Service (USPS) have presented challenges even when using Certified Mail-Return Receipt Requested.
APHSA members requested reviewers be provided an opportunity to use a process similar to the Request for Contact (RFC) process used for unclear information, as found in 7 CFR 273.12(c)(3)(i)(A). FNS determined the use of a modified RFC process; whereby households that fail to respond to the request are suspended from SNAP for one month, with opportunity to verify their circumstances during that time, prior to having their SNAP participation terminated; is appropriate for QC purposes. This new process would be referred to as a request for quality control contact or RFQCC. Allowing a RFQCC will help State agencies complete cases and reduce the number of incomplete cases that, under the new process, would count as total dollar errors. The availability of this process will ensure integrity in the Program by encouraging households to cooperate with the QC process. It will also protect access to the Program for those households that do cooperate as required, as current regulations do not provide an additional month for the household to cooperate before the State must pursue termination of their participation. In addition, commonly known issues with mail delivery necessitate other allowable processes for States to utilize in gaining household cooperation. For that reason, the Department proposes to revise 7 CFR 275.12(g)(1)(ii) by reordering the examples and adding the previously mentioned RFQCC process as an alternative way to respond to households that either refuse or fail to ever respond to communication from State QC to cooperate with the QC review. Similar to the RFC process outlined in 7 CFR 273.12(c)(3)(i)(B)(2), if the household fails to respond to the RFQCC, the reviewer will inform the State and the State will send a notice of adverse action that suspends the household for one month to allow the household an opportunity to cooperate with QC prior to termination. If the household does not cooperate with QC by the deadline provided in the notice of adverse action, the reviewer must notify the State agency of the household's refusal and the State must follow through with terminating the household as stated at 7 CFR 275.12(g)(1)(ii).
The proposed review process would also require an update to regulations at 7 CFR 275.12(g)(2) regarding active cases that are not subject to review. The Department proposes to eliminate the current provisions at 7 CFR 275.12(g)(2)(iv) and 7 CFR 275.12(g)(2)(ix) pertaining to households receiving restored benefits and households not receiving benefits in the sampled month, because the provisions would no longer be relevant to the way cases would be sampled. In addition, 7 CFR 275.12(g)(2)(x) would be removed because all cases in which the household is unable to be reached for the QC review would result in a total dollar error amount for the eligibility action under review, as mentioned above, and, therefore, no longer be considered a case not subject to review. As a result of the proposed changes, the Department would also reorganize the section to accommodate the removals and additions.
In 2012, the Department changed the negative case review process in the final rule titled,
Consequently, the Department is proposing that a State agency would be required to implement a CAP when its CAPER is higher than the national CAPER for a given fiscal year. To do so, the Department proposes to amend 7 CFR 275.16(b)(2) by removing the phrase “of 1 percent or more in negative cases” and adding in its place the phrase “above the national average CAPER.” However, because FNS has received only limited and mainly anecdotal feedback from State agencies since the changes, the Department is seeking additional comments through this rulemaking regarding when State agencies would be required to implement a CAP to improve their CAPER.
The CAP requirement at 7 CFR 275.16(b)(4) for incomplete cases is another area that State agencies have questioned. A CAP is currently required whenever a State agency is unable to complete more than 5 percent of its annual QC caseload. The Department received comments to the 2018 RFI
Since this rule proposes to count the full allotment for incomplete cases as an error, the Department has concluded that the development of a separate CAP for active cases would be duplicative and unnecessary. This is due, in part, to the fact that an excess number of dropped cases would result in higher PERs and the Department has procedures, namely the liability and sanction process, to respond to high PERs.
For negative cases, current rules related to dispositioning a case as incomplete in the negative sample frame stipulate that State agencies may list as incomplete only those cases where the whole case file cannot be located. This largely stems from long-standing requirements that eligibility workers fully document their case files in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination. As a practical matter, the incidence of incomplete negative cases by State agencies is extremely low. For example, for FY 2019, there were no dropped cases in the negative sample frame.
For these reasons, the Department is proposing to remove the provision at 7 CFR 275.16(b)(4). As a result, current regulations at 7 CFR 275.16(b)(5) will be redesignated as 7 CFR 275.16(b)(4).
In 2013, FNS successfully implemented a web-based electronic QC review system (SNAP-QCS) for State agencies to input their QC case review data, including the documentary evidence to support case reviews. Therefore, the Department is proposing to require State agencies to use the Federally funded SNAP-QCS.
The primary purpose of SNAP-QCS is to provide a central location to house QC review cases which can be accessed at both the State and Federal levels. SNAP-QCS provides complete audit and status tracking for each case. All changes, beyond drafts, are available (where authorized) for comparison to prior iterations. SNAP-QCS contains edit check rules that prevent the submission by any user of information that violates business logic or other policy/regulatory guidance. In all cases, SNAP-QCS informs users of the nature of the rule violation in a manner that allows for correction of any such violation.
Since its inception, SNAP-QCS has replaced numerous State agency legacy systems. The system provides the following functionality: the creation of worksheets and review schedules (FNS 380, FNS-245 and FNS-380-1)
FNS requested comments in the 2018 RFI
The Department appreciates all comments submitted. Most State agency commenters who opposed the requirement to use SNAP-QCS did not have experience using the automated version of the system. The Department understands there is a learning curve when a new reviewer begins using SNAP-QCS. FNS anticipates that mandating the use of SNAP-QCS will improve data integrity and expects that the edit checks would assist in accurate data collection. Therefore, the Department proposes to mandate the use of SNAP-QCS at 7 CFR 275.21(b)(1). This includes using the Auto-FNS Form 380, FNS Form 380-1, and FNS Form 245, and upload all documentation necessary to understand the disposition and findings for each sampled case.
To accurately apply the new sampling method to determine State agency program performance, the Department proposes to amend the language at 7 CFR 275.23(b)(2)(i)(A) to clarify what the quantities y
To avoid confusion with the notation introduced in the new paragraph 7 CFR 275.11(g), Active sample allocation, the Department proposes to change the notation of “u” to “Z” in paragraph 7 CFR 275.23(b)(2)(i)(C). In addition, the Department proposes to remove and rephrase language about the quantity “Z” to make its definition clearer.
The assignment of error rates by FNS, whether for active or negative cases, has occurred only infrequently in the past. Typically, FNS made assignments because of extraneous circumstances beyond a State agency's control, such as when a large disaster impedes its ability to complete cases. However, situations do arise in which FNS must assign rates to State agencies due to other reasons. FNS assigned multiple State agency error rates in FY 2017 due to data integrity issues and found that greater clarity in regulations at 7 CFR 275.23(b)(2)(ii) is necessary. First, the Department proposes to amend the regulation to reflect the name change of the error rates for negative cases and clarify that assigned rates could be used in the determination of liability status, subject to 7 CFR 275.23(d). Second, the Department proposes to amend the paragraph by adding a statement at the end of the section to indicate that under no circumstance, would an assigned rate be eligible for appeal unless the rate resulted in a liability amount, per 7 CFR 275.23(d). While these clarifications are consistent with current practice and law, the Department maintains that the additional language adds emphasis.
The Department proposes to change the current penalties applied to State agencies that fail to complete 98 percent of their active QC caseload as described in 7 CFR 275.23(b)(2)(iii) by changing the application of the penalty to apply to any State agency that fails to sample the required minimum annual sample size, while also increasing the impact of the penalty. Since State agencies would report all active cases with a disposition of incomplete as a total dollar error for the sampled action under review, the Department believes there is a sufficient deterrent to past State agency practices of dispositioning cases as incomplete to avoid errors. Still, situations exist where a State agency may not sample the minimum sample size. For FY 2022, a total of seven States did not sample enough cases to meet the minimum regulatory requirement for active and negative sample frames. This could happen in situations beyond the control of the State agency, such as when a natural disaster impedes the State agency's ability to sample and complete its required QC reviews. This could also occur in situations that are within the State agency's control to prevent, such as when a State agency fails to sufficiently staff the QC unit and is subsequently unable to complete the required minimum sample size.
Specifically, the Department seeks input on the proposal to apply an adjustment penalty to a State agency's error rate when the State agency fails to sample enough cases to complete the minimum sample size in any given sample month, including the following: (1) if the changes proposed to the current penalty formula are sufficient and (2) whether FNS should distinguish in how it applies the penalty based on whether a State agency cannot sample its minimum sample size due to situations beyond its control.
Section 4013(d) of the 2018 Farm Bill removed the requirement for the Secretary to award performance bonus payments to State agencies and prohibited the Secretary from awarding performance bonuses in calendar year 2019 for FY 2018 performance. The 2018 Farm Bill also required the Department to establish performance criteria relating to actions taken to correct errors, reduce rates of error, improve eligibility determinations and any other indicators of effective administration determined by the Secretary.
To ensure SNAP performance bonuses are removed from regulations throughout 7 CFR 275.24, the Department proposes to amend current regulations at 7 CFR 275.24 with this rulemaking and replace that language with performance criteria, as directed by Congress pursuant to Section 4013(d)(3) of the 2018 Farm Bill. The performance criteria mirror current language at 7 CFR 275.24 but removes all references to bonuses and adjusts the language, grammar, and structure of the provision accordingly. The Department proposes these performance criteria because they mirror prior performance bonus criteria, which the Department believes, based on prior experience with performance bonuses, are informative measures of performance.
As one of the technical changes, the Department proposes to remove the fourth sentence in subparagraph 7 CFR 275.24(a)(3)(i) as it is no longer necessary to allow an exception to calculating the program access index rate for the State of California as the State converted its cash out program to allow households to receive SNAP. Therefore, the Department can use actual SNAP participant numbers for
The Department recognizes the significant sampling and active review changes will require lead time and technical assistance for State agencies to come into compliance for implementation. The Department is considering establishing an implementation date of two full fiscal years after publication of the final rule. For example, if a final rule were published in March of 2027, the Department would establish an implementation date of October of 2029. The Department seeks input on this implementation timeline.
To summarize, the simplification of the QC review is expected to benefit several stakeholders. Households would benefit from no longer having to provide verifications for multiple months in the certification period if their case is selected for QC review, SQCRs and FQCRs would have an equally robust but less complicated active case review to conduct, and the Department and Congress would benefit from both an improvement in the quality of information that comes out of the reviews and by being able to compare improper payments more effectively across government social safety net programs.
In addition, simplifying the QC review in the proposed manner would also allow State agencies to implement more timely corrective actions. Timely corrective actions should reduce the compounding impact of improper payments as State agencies would be able to correct systemic errors and implement policies or processes more immediately, thus improving customer service to recipients, State agencies, and the American taxpayer.
The Department acknowledges some of the most impactful changes for State agencies administering SNAP and households sampled for review include (1) the shift in review of the action that authorized the allotment; (2) the handling of cases that cannot be validated, and (3) the introduction of the RFQCC process. The Department asks for and welcomes comment on all provisions in this proposed rulemaking, and we also request comments on potential impacts, direct and indirect, of these changes on State agencies and SNAP households. The Department reiterates this is a proposed rule, and we will consider all comments provided before a final rule implements any changes to SNAP's QC system.
Executive Orders 12866, 13563, and 14094 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Under Executive Order 12866, as amended, OMB's Office of Information and Regulatory Affairs (OIRA) determines whether a regulatory action is significant and, therefore, subject to OMB review. This proposed rule has been determined to likely be significant under E.O. 12866, as amended, and is being reviewed by the Office of Management and Budget (OMB) in conformance with Executive Order 12866.
Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The analysis below outlines the impacts that the Department anticipates may result from this proposed rule, if finalized, and was prepared pursuant to the above-mentioned executive orders.
A regulatory impact analysis (RIA) must be prepared for rules which are determined to be significant under Section 3(f)(1) of E.O. 12866, as amended ($200 million or more in economic effects in any one year). USDA does not anticipate this proposed rule is likely to have an economic impact of $200 million or more in any one year, and therefore, does not meet the definition of significant under Section 3(f)(1) of E.O. 12866 as amended. This proposed rule will not impact SNAP participants' benefit levels. Overall household burden will increase due to the increase in case samples required by the new process, not by adding additional burden to individual households.
The Department expects several of the proposed rule provisions to impact State Administrative Expenses (SAE) or FNS administrative costs. The rule includes the following changes expected to have measurable impacts:
Below in Table E.1 is a summary of the combined impacts of these provisions on both State Agencies and the Federal Government. The
The net present value of costs to State and Federal governments over five years is $4,76 million at a seven percent discount rate and $5,01 million at a three percent discount rate. The net present value of costs to SNAP participants over five years is $203.0 thousand at a seven percent discount rate and $226.7 thousand at a three percent discount rate. Annualized in perpetuity, the government costs are $333.04 ($150.33) thousand per year at a seven (three) percent discount rate, and participant costs are $14.21 ($6.80) thousand per year at a seven (three) percent discount rate.
This rule change will result in substantive benefits for QC reviewers. By changing the active case review to focus on eligibility determinations (certifications, recertifications, and submission of required reports), the rule will result in the SNAP QC process being better aligned with how other Federal programs measure payment accuracy and with PIIA. The proposed changes are also expected to simplify QC reviews, which in turn will improve the quality of the reviews and of the information collected. The time spent by each caseworker in QC review is anticipated to drop from 8.98 to 6.33 hours per case, which will result in −$950.9 thousands in savings per year, even accounting for the expected increase in 13,649 QC reviews per year (see Table E.3). Simplifying the process and focusing on eligibility actions will also allow for more timely corrective actions.
These one-time implementation costs will total an estimated $4,367,700, of which $2,183,900 will be borne by the Federal Government and $2,183,900 borne by State Agencies.
The total annual administrative cost of the changes to the QC review process is estimated to be $214,100. Because some costs, such as help desk support and additional data storage, are not shared with State Agencies, the estimated cost to the Federal Government is $474,600. State Agencies are expected to save $260,500 annually due to the reduced case processing time.
As discussed previously, the changes to the case sampling procedures will result in an overall increase in the number of cases sampled each year, from 45,497 annually to 59,146 (an increase of 13,649 cases). As described in the Paperwork Reduction Act section of this proposed rule, the burden to an individual household selected for review is not expected to change and will remain about 30 minutes per household. However, since the number of cases selected will increase, overall household burden will also increase. The increase is expected to cost $49,477.6 annually (13,649 cases × .5 hours per case × minimum wage of $7.25).
While this proposed rule is expected to improve SNAP program integrity, it is
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies to analyze the impact of rulemaking on small entities and consider alternatives that would minimize any significant impacts on a substantial number of small entities. The entities impacted by this rule are State SNAP agencies that conduct QC reviews, which are not considered small entities for purposes of this analysis.
Pursuant to our review, the Department certifies that this rule will not have a significant impact on a substantial number of small entities.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and Tribal governments, and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local or Tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.
This rule does not contain Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local and Tribal governments, or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.
SNAP is listed in the Catalog of Federal Domestic Assistance under Number 10.551. For the reasons set forth in the Final Rule codified in 7 CFR part 3015, subpart V and the related Notice (48 FR 29115), this Program is excluded from the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials.
Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13121.
The Department has considered the impact of this proposed rule, with comment, on State and local governments and has determined that this rule does not have federalism implications. Therefore, under Section 6(b) of the Executive Order, a federalism summary is not required.
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations, or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, all applicable administrative procedures must be exhausted.
FNS has reviewed the proposed rule, Provisions to Improve the Supplemental Nutrition Assistance Program's QC System, in accordance with the Department Regulation 4300-004, Civil
Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. This regulation has possible Tribal implications, so consultation is required. FNS attended a Tribal consultation meeting on May 1, 2019, in Washington, DC and virtually to a Nevada meeting on December 6, 2022, where the changes to this rule were explained. No questions or concerns were brought to FNS's attention about this rule by any members of either meeting. If further consultation is requested, the Office of Tribal Relations will work with FNS to ensure quality consultation is provided.
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 1320), requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current, valid OMB control number. We are seeking a new OMB Control Number for these new, existing, and changing provisions in this rule and, once OMB approves the information collection request burden associated with this rulemaking, we will submit a request to merge the burden hours into their respective OMB Control Numbers. Once the merge is approved the newly assigned OMB control number can be discontinued. The current burden inventories for this collection are found in OMB-0584-0074, Expiration Date: 07/30/2025; 0584-0299, Expiration Date: 07/31/2023, and 0584-0303, Expiration Date: 1/31/2024. These changes are contingent upon OMB approval under the Paperwork Reduction Act of 1995. Additionally, when the information collection requirements have been approved, FNS will publish a separate action in the
Comments on the information collection in this proposed rule must be received by November 20, 2023.
Send comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also send a copy of your comments to John McCleskey, Branch Chief, Quality Control Branch, Program Administration and Nutrition Division, 1320 Braddock Place, 5th Floor; Alexandria, Virginia 22314. For further information, or for copies of the information collection requirements, please contact John McCleskey at the address indicated above. Comments are invited on: (1) whether the proposed collection of information is necessary for the proper performance of the Agency's functions, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the proposed information collection burden, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
All responses to this request for comments will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Component (1) Form FNS-380 [OMB Control Number: 0584-0074], is a SNAP worksheet used to determine eligibility and benefits for households selected for review in the QC sample of active SNAP cases. This form provides a systematic means of aiding the State's Quality Control Reviewer in analyzing the case record, planning and doing field investigation and gathering, comparing, analyzing and evaluating data. FNS estimates that while this rule will require thirty percent more cases (households) be reviewed for QC, the rule does not change the existing burden on households, and will effectively decrease the ongoing burden for 53 State agencies by 20,151 hours annually. In addition, in order to implement the changes of the rule in the first year, the rule will add 196,915.17 startup burden hours for State agencies. These startup hours include 40 hours of training for 263 State QC reviewers on just the new review procedures for active cases, 64 hours to train 371 reviewers on using both SNAPQCS's automated FNS 380 worksheet and the new review procedures for active cases, and FNS is including 2.75 hours of additional time for State agencies to complete the FNS 380 worksheet for each case review to properly review and document according to the new procedures for the active case review. The revised total ongoing burden associated with this rule for this component is 385,844.12 reporting and recordkeeping burden
Component (2) FNS 380-1 [OMB Control Number: 0584-0299], is SNAP's QC Review Schedule which collects QC and household characteristics data. The information needed to complete this form is obtained from the SNAP case record and State quality control findings. The information is used to monitor and reduce errors, develop policy strategies, and analyze household characteristic data. FNS estimates this rule will require 53 State agencies a revised total of 63,853.892 ongoing reporting and recordkeeping burden hours annually for this component of this collection. This is an increase of 14,735.33 burden hours. An estimated total of 742 additional startup hours are necessary for the first year's implementation of components within this collection for this rule. This startup includes 2 hours for 371 State QC reviewers to be trained on how to use SNAPQCS's automated FNS 380-1 worksheet. The revised total reporting and recordkeeping ongoing burden hours for the first year 64,595.89 hours.
Component (3) In the 275 regulations [OMB Control Number: 0584-0303], each State agency is required to develop a QC sampling plan that demonstrates the integrity of its case selection procedures. The QC system is designed to measure each State agency's payment error rate based on a statistically valid sample of SNAP cases. A State agency's payment error rate represents the proportion of cases that were reported through a QC review as being ineligible, overissued and underissued as well as the proportion of SNAP allotments that were either overissued or underissued to SNAP households. The FNS 311 Handbook is used by State agencies as a reference tool for creating their sampling plans. The current ongoing reporting and recordkeeping burden for this collection is 2,829 hours. FNS estimates this rule will require 53 State agencies a revised total of 2,829 ongoing reporting and recordkeeping hours and an additional 2,120 startup reporting burden hours for this first year of implementation of components within this rule. These startup hours include 40 hours for 53 State agency statisticians to update their State's sampling procedures to comply with the new sampling requirements of this rule. The first year of implementation for this component of the rule will require a total of 4,949 reporting and recordkeeping burden hours.
In total, FNS estimates this rule will decrease the overall ongoing burden associated with these three collections by 5,416 reporting burden hours. The overall total burden for these three components associated with the rule will require 53 State agencies, a total of 422,951 ongoing reporting and recordkeeping burden hours and 59,146 households 29,573 ongoing reporting burden hours annually. FNS also estimates this rule will require State agencies an additional 199,777.17 startup burden hours to implement the changes in this rule. Therefore, a grand total of 652,302 reporting and recordkeeping burden hours are estimated for this first year of implementation for this rule. This rule affects the three components of the QC process mentioned above, the use of (1) FNS forms 380, (2) FNS 380-1 and (3) the creation of the State QC Sampling plan attestation. The average burden per response and the annual startup and ongoing burden hours are explained below and summarized in the charts that follow.
The Department is committed to complying with the E-Government Act, 2002 to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
Grant programs—social programs, Reporting and recordkeeping requirements.
Grant programs—social programs, Reporting and recordkeeping requirements.
Accordingly, 7 CFR parts 271 and 275 are proposed to be amended as follows:
7 U.S.C. 2011-2036.
The revisions and additions read as follows:
7 U.S.C. 2011-2036.
(b)
(1) The State agency shall ensure that the staff used to conduct QC reviews operate independently from those responsible for overseeing the eligibility determination process to ensure objective and accurate assessments of the Performance Reporting System.
(2) The staff used to conduct QC reviews shall not have prior knowledge of either the household or the decision under review. Where there is prior knowledge, the reviewer must disqualify themselves. To ensure no prior knowledge on the part of QC or ME reviewers, local project area staff shall not be used to conduct QC or ME reviews; exceptions to this requirement concerning local level staff may be granted with prior approval from FNS. However, local personnel shall not, under any circumstances, participate in ME reviews of their own project areas. Prior knowledge is defined as having:
(i) Taken any part in the eligibility determination that has been made in the case;
(ii) Discussed the case with staff who participated in the decision; or
(iii) Personal knowledge of or acquaintance with persons in the case itself.
(3) Nothing in this part shall preclude a State-level staff person to be used as a collateral contact for purposes of the QC review. Such contact must, however, be limited to those same rules governing all other collateral contacts, including privacy-related rules, found in 7 CFR 273.2(f)(4)(ii).
(d) * * * Non-compliance with this requirement, as determined by the Secretary, may result in the suspension or disallowance of Federal reimbursements for costs of the administration of SNAP for the system(s) found to be out of compliance, pursuant to 7 CFR 277.16.
The revision and addition read as follows:
(d) * * *
(1) * * *
(i) FNS will select a subsample of a State agency's active cases, as follows:
(A) The Federal review sample for active cases is determined as follows:
(B) In the above formula, n' is the minimum number of Federal review sample cases which must be selected when conducting a validation review, except that FNS may select a lower number of sample cases if:
(
(
(C) The reduction in the number of Federal cases selected will be equal to the number of cases that would have been selected had the Federal sampling interval been applied to the State agency's shortfall in its required sample size. This number may not be exact due to random starts and rounding.
(D) In the above formula, N is the State agency's minimum active case sample size as determined in accordance with § 275.11(b)(1).
(E) Once the minimum Federal subsample size n′ is determined, the Federal subsample must be
(
(
(3)
(4) * * *
(i) * * *
(A) * * * No other types of disagreement are eligible for arbitration.
The revisions and additions read as follows
(a)
(1)
(2)
(i) Conform to principles of probability sampling; and (ii) Select an overall quality control sample size in accordance with paragraphs (b) through (f) of this section.
(3)
(b) * * *
(1)
(ii) In the formulas in paragraph (b)(1)(i) of this section, n is the required active case sample size. This is the minimum number of active cases subject to review which must be selected during the annual review period. One-twelfth of this value shall be selected each month, rounded to the next whole number (
(2)
(ii) The minimum number of negative cases to be selected and reviewed by a State agency during each annual review period shall be determined as follows:
(iii) In the formulas in paragraph (b)(2)(ii) of this section, n is the required negative sample size. This is the minimum number of negative cases subject to review which must be selected each review period.
(iv) In the formulas in paragraph (b)(2)(ii) of this section, N is the average monthly number of negative cases which are subject to quality control review (
(c) * * *
(1)
(2)
(e)
(1)
(f) * * *
(1)
(i) A household receiving Disaster-SNAP benefits under the authority of the Food and Nutrition Act of 2008, as amended, and the Robert T. Stafford Disaster Relief and Emergency Assistance Act;
(ii) A household which is under investigation for an intentional Program violation, including a household with a pending administrative disqualification hearing;
(iii) A household appealing an adverse action which was the result of an eligibility action taken during the sample month; or
(iv) Other households excluded from the active case universe during the review process are identified in 7 CFR 275.12(g).
(g)
(1) In table 3 to paragraph (g) introductory text, strata a through e have the following action types and reporting periods:
(i) Stratum a—Action type: initial certification or re-certification; Reporting period: less than 6 months;
(ii) Stratum b—Action type: redetermination based on a monthly, quarterly or periodic report; Reporting period: less than 6 months;
(iii) Stratum c—Action type: initial certification or recertification; Reporting period: 6 months;
(iv)
(v)
(2) State agencies shall allocate 10 percent of the sample to stratum a and 10 percent of the sample to stratum b. The remaining 80 percent of the sample should be allocated in a manner proportionate to the size of the strata in the sample universe as described in table 3 to paragraph (g) introductory text.
(3) If a State agency does not have stratum a or b or both, it shall allocate the full sample size proportionately to the size of the existing strata in the sample universe.
(4) In the formulas in table 3 to paragraph (g) introductory text, N represents the sample universe (
(5) Within each stratum the State agency shall select the designated number of cases at random or using a systematic method upon a random sort of the cases. If in any strata the number of cases to be sampled exceeds the actual number in the frame, the State shall select all of the cases in that stratum. For example, if the proposed sample size for stratum
(h)
State agencies are responsible for providing to FNS the counts N
The revisions and additions read as follows:
(a)
(b)
(c) * * * In obtaining documentary evidence and collateral contact verification, the State agency is encouraged to utilize technology to assist in the gathering of documentary evidence, however the State agency shall ensure it preserves the privacy and confidentiality of the household regardless of what technology it uses.
(1)
(iii) Request and review with the household documentary evidence in the case file, as well as documentary evidence that may be in the household's possession, and secure information about collateral sources of verification; and
(d) * * *
(2) * * *
(ii) * * * For this exclusion to apply, the case record must include documentation specifying the elements of eligibility for which verification was postponed.
(3)
(f) * * *
(1) * * * In addition, the reviewer shall code and report any other variances related to eligibility which were discovered and verified during the course of the review and the State agency shall notify the local office of all variances in elements of eligibility.
(2) * * * The reviewer shall code and report any other variances in the basis of issuance which were discovered and verified during the course of the review and the State agency shall notify local offices of all variances in elements of the basis of issuance.
(g) * * *
(1) * * * The total allotment issued, shall be coded and reported as an error when the case is reported as not complete.
(ii) If a household refuses to cooperate with the quality control reviewer and the State agency has taken other administrative steps to obtain that cooperation without obtaining it, the household shall be notified of the penalties for refusing to cooperate with respect to termination and reapplication and of the possibility that its case will be referred for investigation for willful misrepresentation. If a household refuses to cooperate after such notice, the reviewer must attempt to complete the case and shall report the household's refusal to the State agency for termination of its participation without regard for the outcome of that attempt. For a determination of refusal to be made, the household must be able to cooperate but clearly demonstrate that it will not take actions that it can take and that are required to complete the quality control review process. In certain circumstances, the household may demonstrate that it is unwilling to cooperate by not taking actions after having been given every reasonable opportunity to do so, even though the household or its members do not state that the household refuses to cooperate. Examples of when a household appears to be unwilling to cooperate with a QC review that have the effect of a refusal to cooperate shall include:
(A) The household does not attend an agreed upon interview with the reviewer and then does not contact the reviewer within 10 calendar days of the date of the scheduled interview to reschedule the interview.
(B) The household does not return a signed release of information statement to the reviewer within 10 calendar days of either agreeing to do so or receiving a request from the reviewer sent Certified Mail-Return Receipt Requested.
(C) The household does not respond to any communication sent from the reviewer, and either:
(
(
(
(
(D) In these and other situations, if there is any question as to whether the household has merely failed to cooperate, as opposed to refused to cooperate, the household shall not be reported to the State agency for termination.
(2) * * *
(i) Death of all members of a household if they died after the eligibility action but before the review could be undertaken or completed;
(ii) The household moved out of State after the eligibility action but before the review could be undertaken or completed;
(vi) A case incorrectly listed in the active frame; or
(vii) A household appealing the eligibility action under review.
(b) * * *
(1) The State agency shall use SNAP-QCS, FNS's automated, web-based QC System for State agency users, to input, edit, and upload supporting evidence and information necessary to understand the disposition and findings for all active and negative sampled cases.
The revisions read as follows:
(b) * * *
(2) * * *
(i) * * *
(A) Y
(B) Y
(b) * * *
(2) * * *
(ii) If FNS determines that a State agency has sampled incorrectly, estimated improperly, or has deficiencies in its QC data management system, FNS will correct the State agency's payment error rate and case and procedural error rate based upon a correction to that aspect of the State agency's QC system which is deficient. If FNS cannot accurately correct the State agency's deficiency, FNS will assign the State agency a payment error rate or case and procedural error rate based upon the best information available. After consultation with the State agency, the assigned payment error rate can then be used in a liability determination, if applicable per the rules governing liabilities at 7 CFR 275.23(d). State agencies shall have the right to appeal the assignment of an error rate in this situation in accordance with the procedures of part 283 of this chapter. State agencies assigned error rates that do not result in the determination of a liability amount, as discussed in 7 CFR 275.23(d), are not eligible for appeal.
(iii) Should a State agency fail to sample and disposition its required minimum annual sample size for the fiscal year, FNS shall adjust the State agency's regressed error rate using the following equations:
(A)
(B)
(c) * * * FNS shall determine and announce the national average payment error rate for the fiscal year by June 30 following the end of the fiscal year and shall determine and announce the national average case and procedural error rate for the fiscal year by September 30 following the end of the fiscal year. At those times, FNS shall notify all State agencies of their individual payment and case and procedural error rates, respectively, and payment error rate liabilities, if any.
(d) * * *
(1) * * * The national performance measure is the sum of the products of each State agency's payment error rate multiplied by that State agency's proportion of the total value of allotments issued for the fiscal year using the most recent issuance data available at the time the State agency is notified of its payment error rate. * * *
(a)
(1)
(i)
(ii) [Reserved]
(2)
(i) Most improved case and procedural error rate. FNS will assess the percentage point decrease in a State agency's case and procedural error rates, based on the comparison of the State agency's performance measurement year's validated quality control case and procedural error rates for the performance measurement year with to those of the previous fiscal year.
(ii) [Reserved]
(3)
(i)
(ii) [Reserved]
(4)
(i)
(ii)
(b) [Reserved]