Natural Resources Conservation Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
National Telecommunications and Information Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Mine Safety and Health Administration
Federal Aviation Administration
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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Federal Communications Commission.
Correcting amendments.
The Federal Communications Commission (Commission) is correcting a final rule that appeared in the
Effective January 22, 2025, except for the amendment to § 25.261 in amendatory instruction 3, which is delayed indefinitely. The Commission will publish a document in the
Clay DeCell, 202-418-0803.
On December 13, 2024, the Commission published a final rule amending paragraphs (d) and (e) of § 25.261 and announcing an effective date of those amendments of January 13, 2025. However, the amendment to paragraph (d) of § 25.261 requires approval of the Office of Management and Budget under the Paperwork Reduction Act before it can become effective, as stated elsewhere in the final rule. In addition, the amendment to paragraph (e) of § 25.261 adds a cross-reference to paragraph (d) of that section, which is not yet effective. To correct this effective date error, this document reverts the text of paragraphs (d) and (e) of § 25.261 and adds a delayed instruction to re-insert the rule amendments adopted in the final rule after the Commission announces OMB approval and the effective date of the amendments to paragraphs (d) and (e) of § 25.261.
Satellites.
Accordingly, 47 CFR part 25 is corrected by making the following correcting amendments:
47 U.S.C. 154, 301, 302, 303, 307, 309, 310, 319, 332, 605, and 721, unless otherwise noted.
The revision reads as follows:
(e)
(d)
(1) Compatibility showings must contain the following elements:
(i) A demonstration that the later-round system will cause no more than 3 percent time-weighted average degraded throughput of the link to the earlier-round system, for links with a baseline link availability of 99.0 percent or higher at a C/N threshold of 0 dB;
(ii) A demonstration that the later-round system will cause no more than 0.4 percent absolute change in link availability to the earlier-round system using a C/N threshold value of 0 dB, for links with a baseline link availability of 99.0 percent link availability or higher; and
(iii) With respect to an earlier-round system that has not yet satisfied its 50 percent deployment milestone pursuant to § 25.164(b)(1), the compatibility showing may consider only 50 percent deployment of the earlier-round system; if the 50 percent deployment milestone has been satisfied, the showing must consider 100 percent deployment of the authorized system.
(2) Compatibility showings will be placed on public notice pursuant to § 25.151(a)(13).
(3) While a compatibility showing remains pending before the Commission, the submitting NGSO FSS licensee or market access recipient may commence operations on an unprotected, non-interference basis with respect to the operations of the system that is the subject of the showing.
(4) A later-round NGSO FSS system will be required to conform its operations to its compatibility showing submitted for the protection of an earlier-round system to the extent necessary to protect the actual number of deployed and operating space stations of the earlier-round system.
(e)
Federal Communications Commission.
Petition for reconsideration.
Petition for Reconsideration (Petition) has been filed in the Commission's proceeding by Robert McAllan, CEO, and Rich Morena, COO/CFO, on behalf of Press Communications, LLC.
Oppositions to the Petition must be filed on or before February 6, 2025. Replies to oppositions to the Petition must be filed on or before February 18, 2025.
Federal Communications Commission, 45 L Street NE, Washington, DC 20554.
Thomas Nessinger, Media Bureau, Audio Division, (202) 418-2700,
This is a summary of the Commission's document, Report No. 3222, released December 30, 2024. The full text of this document can be accessed online via the Commission's Electronic Comment Filing System at:
Natural Resources Conservation Service, U.S. Department of Agriculture (USDA).
Notice of Intent (NOI) to prepare a Supplemental Environmental Impact Statement (SEIS).
The Natural Resources Conservation Service (NRCS) Washington State Office, in coordination with the U.S. Bureau of Reclamation (Reclamation) and the Washington State Department of Ecology (Ecology), announces its intent to prepare an SEIS for the Odessa Subarea Special Study Project. The SEIS is necessary to evaluate modification of a component of Alternative 4A that would install a buried pipeline irrigation across lands that were not evaluated in FEIS. Installation of this pipeline would require blasting which was not addressed in FEIS. The intended effect of this action would result in the most economically viable way of providing surface water irrigation to specific cultivated lands in the Study Area in lieu of groundwater irrigation. The SEIS will examine an irrigation delivery system designated East Low Canal (EL) 11.8 that would serve approximately 7,638 acres of land currently served by groundwater in the northeastern portion of the East Columbia Basin Irrigation District (ECBID) in Grant County. NRCS is accepting comments regarding significant issues, potential alternatives, information, and analyses relevant to the proposed action from all interested individuals, Federal and State agencies, and Tribes.
We will consider comments that are received by February 21, 2025. We will consider comments received after this period to the extent possible.
We invite you to submit comments in response to this notice. You may submit your comments through the method below:
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•
All comments received will be posted without change and made publicly available on the project web page
Jules Riley, telephone: (509) 507-0178; email:
Individuals who require alternative means for communication should contact the U.S. Department of Agriculture (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).
The project area is located within the Odessa Subarea in Adams, Franklin, Grant, and Lincoln Counties, Washington. The Reclamation and Ecology 2012 Final EIS (FEIS) was published in a local newspaper on August 31, 2012. Reclamation selected Alternative 4A, the Modified Partial-Replacement-Banks with Limited Spring Diversion Scenario. This alternative delivers surface water from the Columbia Basin Project (CBP) to irrigated lands that currently rely on declining groundwater supply in the Odessa Subarea Special Study Area (Study Area).
The primary purpose for the proposed action is to maintain economic viability by providing surface water from CBP to replace groundwater from declining wells currently used for irrigation in the Study Area. Watershed planning is authorized under the Watershed Protection and Flood Prevention Act of 1954 (Pub. L. 83-566), as amended, and the Flood Control Act of 1944 (Pub. L. 78-534). This SEIS will analyze a distribution system route that traverses lands not included in the 2012 FEIS Study Area.
This action is needed to address declining groundwater supply in the Study Area and avoid economic loss to the region's agricultural sector. Located in central Washington State, ECBID is the largest irrigation district in the State, with authorization to irrigate 472,000 acres. Currently, 167,365 acres are irrigated and managed by 4,500 landowners within CBP. Additionally, ECBID provides infrastructure to deliver irrigation surface water for 87,638 acres associated with the Odessa Groundwater Replacement Program.
Under Alternative 4A, ECBID would provide CBP surface water for irrigation to replace groundwater irrigation to approximately 70,000 acres of lands north and south of I-90. The proposed action is essential to deliver CBP water to lands currently irrigated with groundwater. The 2012 FEIS conceptually analyzed alternatives for alignments that would deliver surface water from CBP to the lands to be served by the proposed EL 11.8 distribution system, specifically within alternatives analyzed in detail and not selected.
Water delivery to these lands was proposed to be served by a new canal, designated the East High Canal. With the selection of Alternative 4A as the preferred alternative, the East High Canal was not chosen for construction to service those lands. However, due to the flexibility afforded in the 2012 FEIS, and due to the irrigator's need for surface water in that area, a new alignment was subsequently designed from EL to ensure the delivery of surface water to the area.
The lands that will be analyzed in the SEIS Study Area include a mix of undeveloped and agricultural lands within the Odessa Groundwater Management Subarea and the Odessa Subarea Special Study Area boundaries in Grant County. A portion of the lands that the distribution system would cross from EL to the delivery point were not analyzed in the 2012 FEIS Study Area,
If selected as the SEIS preferred alternative after finalization of the SEIS, EL 11.8 would become a component of Alternative 4A. This would be formalized by amending the NRCS 2024 ROD for Alternative 4A to include this distribution system. A map of the EL 11.8 distribution system is available at:
Estimated Federal funds required for the construction of the proposed action that would become a component of Alternative 4A will exceed $25 million. Consistent with section 2 of the Watershed Protection and Flood Prevention Act of 1954, (16 U.S.C. 1002), given that the Federal construction cost are estimated to be greater than $25 million, the Agriculture, Nutrition and Forestry Committee of the Senate and the Committee on Agriculture of the House of Representatives will be notified that the Chief of NRCS plans to authorize this project for implementation.
The SEIS objective is to formulate and evaluate alternatives for the avoidance of economic loss to the region's agricultural sector along with impacts to domestic and municipal water supplies. The SEIS will analyze a distribution system route that was not included in Alternative 4A for delivery of surface water from the CBP to replace groundwater irrigation in lands in the Odessa Subarea Special Study Area. The SEIS is expected to evaluate two alternatives: one no action alternative and one action alternative.
The alternatives that may be considered for detailed analysis include:
•
•
If the proposed action is chosen as the preferred alternative in the supplemental EIS, it will become a component of Alternative 4A.
The SEIS will be prepared as required by section 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA, (42 U.S.C. 4332(2)(C))); the Council on Environmental Quality Regulations (40 CFR parts 1500 through 1508); and NRCS regulations that implement NEPA in 7 CFR part 650.
Resource concerns for the scope of resource effects analysis for the SEIS will be similar to that documented in the 2012 FEIS. The SEIS will analyze construction and operational impacts on the previously unanalyzed area that the EL 11.8 distribution system will cross, and the effects of blasting (noise and vibration) in the blast effect zone that will be used to construct the distribution system. Additionally, NRCS solicited comments from the public and coordinated with agency and tribal interested parties during the 2024 FEIS adoption process to ascertain relevant resource concerns. Environmental resources in the project area consist of the natural and human-made environment. Resource concerns to be identified and addressed in the SEIS include: the presence of Endangered Species Act (ESA)-listed species including candidate species; biological resources such as shrub-steppe habitat; geology and soils; noise and vibration related to potential blasting during construction; and cultural resources.
The following permits, authorizations, or consultation processes are anticipated to be required or have previously been fully addressed as noted below:
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•
•
•
•
•
•
A draft SEIS (DSEIS) will be prepared and circulated for review and comment by agencies, Tribes, consulting parties, and the public for 45 days as required by the regulations in 40 CFR 1503.1, 1502.20, 1506.11, and 1502.17, and 7 CFR 650.13. The DSEIS is anticipated to be published in the
NRCS will decide whether to implement or withdraw the proposed action alternatives as evaluated in the SEIS. A DSEIS will be completed and will be publicly available for comments. The Responsible Federal Official (RFO) and decision-maker for NRCS is the Washington State Conservationist. Reclamation, as a cooperating Federal agency, will make a decision to issue its own ROD in a similar manner. The decision-maker and RFO for Reclamation is the Regional Director, Columbia-Pacific Northwest Region.
Public scoping is not a requirement for an SEIS (40 CFR 1502.9 (d)(3)). Public scoping was conducted for the 2012 FEIS and is documented in the 2012 FEIS and associated ROD. For the 2024 adoption of the FEIS, NRCS solicited public comments and conducted agency and tribal outreach and coordination. Comments received, including the names and addresses of those who commented, are part of the public record and are documented in the NRCS 2024 ROD for the FEIS adoption.
NRCS invites agencies, Tribes, consulting parties, and individuals that have special expertise, legal jurisdiction, or interest to provide written comments concerning the scope of the analysis and identification of potential alternatives, information, and analyses relevant to the Proposed Action.
The information about historic and cultural resources within the area potentially affected by the proposed project will assist NRCS in identifying and evaluating impacts to such resources in the context of both NEPA and NHPA.
NRCS will invite Native American Tribes to consult on a government-to-government basis in accordance with the regulations in 36 CFR 800.2 and 800.3, Executive Order 13175, and other policies. Tribal concerns, including impacts on Indian trust assets and potential impacts to cultural resources and historic properties, will be given due consideration.
This document is published as specified by the NEPA regulations regarding publication of an NOI to issue a SEIS (40 CFR 1501). Watershed planning is authorized under the Watershed Protection and Flood Prevention Act of 1954, as amended and the Flood Control Act of 1944.
The title and number of the Federal Assistance Program as found in the Assistance Listing
Executive Order 12372, “Intergovernmental Review of Federal Programs,” requires consultation with State and local officials that would be directly affected by proposed Federal financial assistance. The objectives of the Executive Order are to foster an intergovernmental partnership and a strengthened federalism, by relying on State and local processes for State and local government coordination and review of proposed Federal financial assistance and direct Federal development. This project is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials.
In accordance with Federal civil rights law and 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 USDA TARGET Center at (202) 720-2600 (voice and telephone) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any phone). 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.
On September 18, 2024, Merck, Sharp & Dohme LLC submitted a notification of proposed production activity to the FTZ Board for its facility within Subzone 49Y, in Rahway, New Jersey.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction.
The U.S. Department of Commerce (Commerce) published notice in the
Thomas Cloyd, Office VII, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1246.
On January 14, 2025, Commerce published in the
In the
The merchandise subject to this investigation is properly classified under subheadings 2818.10.2010 and 2818.10.2090 of the Harmonized Tariff Schedule of the United States (HTSUS). Other merchandise subject to the current scope, including when incorporated into the abovementioned downstream articles, may be classified under HTSUS subheadings 2818.10.1000, 2818.20.0000, 2818.30.0000, 3824.99.1100, 3824.99.1900, 6805.10.0000, 6805.20.0000, 6805.30.1000, 6805.30.5000, 6804.22.1000, 6804.22.4000, 6804.22.6000, 8204.12.0000, 8474.90.0010, 8474.90.0020, 8474.90.0050, and 8474.90.0090. Although the HTSUS statistical reporting numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
For a full description of the scope of this investigation, revised to reflect the correction specified above,
This notice is issued and published in accordance with sections 732 and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.203(c).
The merchandise covered by this investigation is sol gel alumina-based ceramic abrasive grains which are comprised of minimum 94% aluminum oxide (Al2O3), and may contain other compounds, including, but not limited to, titanium dioxide, silicon dioxide, calcium oxide, sodium superoxide, ferric oxide, magnesium oxide, di-aluminum magnesium tetroxide, lanthanum oxide, lanthanum magnesium oxide, zirconium dioxide, or zirconium carbonate. Grain sizes of sol gel alumina-based ceramic abrasive grains range from 0.85 mm to 0.0395 mm (which corresponds to American National Standards Institute (ANSI) grit sizes from 20 to 280).
Shapes include but are not limited to angular, sharp, extra sharp, blocky, splintery, round stripped, triangular or shaped like extruded rods or stars.
Ceramic abrasive grains have unique crystalline structures that impart certain advanced properties, such as their extreme hardness and strength ranging between 16 and 22 gigapascals by the Vickers Diamond Indent Method, high melting point (2050 °C), and a single- or multi-phase microstructure, which may contain multiple phases, having crystalline sizes ranging from 0.05 to 30 μm. These ceramic abrasive grains include but are not limited to blue, white, white-translucent, or off-white opaque colors.
Sol gel alumina-based ceramic abrasive grains are covered by the scope of this investigation, whether or not incorporated into downstream articles, including but not limited to, abrasive papers, grinding wheels, grinding cylinders, and grinding discs. When incorporated into downstream articles, only the sol gel alumina-based ceramic abrasive grains component of such articles is covered by the product scope, and not the downstream product as a whole.
The merchandise subject to this investigation is properly classified under subheadings 2818.10.2010 and 2818.10.2090 of the Harmonized Tariff Schedule of the United States (HTSUS). Other merchandise subject to the current scope, including when incorporated into the abovementioned downstream articles, may be classified under HTSUS subheadings 2818.10.1000, 2818.20.0000, 2818.30.0000, 3824.99.1100, 3824.99.1900, 6805.10.0000, 6805.20.0000, 6805.30.1000, 6805.30.5000, 6804.22.1000, 6804.22.4000, 6804.22.6000, 8204.12.0000, 8474.90.0010, 8474.90.0020, 8474.90.0050, and 8474.90.0090. Although the HTSUS statistical reporting numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) finds that narrow woven ribbons with woven selvedge (ribbons) from Taiwan were sold in the United States at less than normal value during the period of review (POR) September 1, 2022, through August 31, 2023.
Applicable January 22, 2025.
Paul Senoyuit, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6106.
On October 10, 2024, Commerce published in the
The merchandise covered by this
This review covers the mandatory respondents Hao Shyang Ind. Co. Ltd. (Hao Shyang) and Lung Che Ribbons Enterprises Co., Ltd. (Lung Che). As discussed in the
We determine the following estimated weighted-average dumping margins exist for the POR:
Normally, Commerce discloses to interested parties the calculations of the final results of an administrative review within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of the notice of the final results in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(1), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review.
For companies subject to this review, Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protection order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation subject to sanction.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction.
The U.S. Department of Commerce (Commerce) published notice in the
Suresh Maniam, Office I, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1603.
On January 14, 2025, Commerce published in the
In the
The merchandise subject to this investigation is properly classified under subheadings 2818.10.2010 and 2818.10.2090 of the Harmonized Tariff Schedule of the United States (HTSUS). Other merchandise subject to the current scope, including when incorporated into the abovementioned downstream articles, may be classified under HTSUS subheadings 2818.10.1000, 2818.20.0000, 2818.30.0000, 3824.99.1100, 3824.99.1900, 6805.10.0000, 6805.20.0000, 6805.30.1000, 6805.30.5000, 6804.22.1000, 6804.22.4000, 6804.22.6000, 8204.12.0000, 8474.90.0010, 8474.90.0020, 8474.90.0050, and 8474.90.0090. Although the HTSUS statistical reporting numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
For a full description of the scope of this investigation, revised to reflect the correction specified above,
This notice is issued and published in accordance with sections 702 and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.203(c).
The merchandise covered by this investigation is sol gel alumina-based ceramic abrasive grains which are comprised of minimum 94% aluminum oxide (Al2O3), and may contain other compounds, including, but not limited to, titanium dioxide, silicon dioxide, calcium oxide, sodium superoxide, ferric oxide, magnesium oxide, di-aluminum magnesium tetroxide, lanthanum oxide, lanthanum magnesium oxide, zirconium dioxide, or zirconium carbonate. Grain sizes of sol gel alumina-based ceramic abrasive grains range from 0.85 mm to 0.0395 mm (which corresponds to American National Standards Institute (ANSI) grit sizes from 20 to 280).
Shapes include but are not limited to angular, sharp, extra sharp, blocky, splintery, round stripped, triangular or shaped like extruded rods or stars.
Ceramic abrasive grains have unique crystalline structures that impart certain advanced properties, such as their extreme hardness and strength ranging between 16 and 22 gigapascals by the Vickers Diamond Indent Method, high melting point (2050 °C), and a single- or multi-phase microstructure, which may contain multiple phases, having crystalline sizes ranging from 0.05 to 30 μm. These ceramic abrasive grains include but are not limited to blue, white, white-translucent, or off-white opaque colors.
Sol gel alumina-based ceramic abrasive grains are covered by the scope of this investigation, whether or not incorporated into downstream articles, including but not limited to, abrasive papers, grinding wheels, grinding cylinders, and grinding discs. When incorporated into downstream articles, only the sol gel alumina-based ceramic abrasive grains component of such articles is covered by the product scope, and not the downstream product as a whole.
The merchandise subject to this investigation is properly classified under subheadings 2818.10.2010 and 2818.10.2090 of the Harmonized Tariff Schedule of the United States (HTSUS). Other merchandise subject to the current scope, including when incorporated into the abovementioned downstream articles, may be classified under HTSUS subheadings 2818.10.1000, 2818.20.0000, 2818.30.0000, 3824.99.1100, 3824.99.1900, 6805.10.0000, 6805.20.0000, 6805.30.1000, 6805.30.5000, 6804.22.1000, 6804.22.4000, 6804.22.6000, 8204.12.0000, 8474.90.0010, 8474.90.0020, 8474.90.0050, and 8474.90.0090. Although the HTSUS statistical reporting numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of incidental harassment authorization.
NMFS has received a request from Trident Seafoods Corporation (Trident) for the re-issuance of a previously issued incidental harassment authorization (IHA) with the only change being effective dates. The initial IHA authorized take of six species of marine mammals, by Level B harassment only, incidental to construction associated with the Bunkhouse Dock replacement project in Kodiak, Alaska. The project has been delayed and none of the work covered in the initial IHA has been conducted. The scope of the activities and anticipated effects remain the same, authorized take numbers are not changed, and the required mitigation, monitoring, and reporting remains the same as included in the initial IHA. NMFS is, therefore, issuing a second identical IHA to cover the incidental take analyzed and authorized in the initial IHA.
The initial IHA was effective from March 1, 2024, through February 28, 2025. Trident has requested re-issuance with new effective dates of March 1, 2025, through February 28, 2026.
An electronic copy of the final 2024 IHA previously issued to Trident, Trident's application, and the
Rachel Wachtendonk, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On March 12, 2024, NMFS published final notice of our issuance of an IHA authorizing take of marine mammals incidental to the Bunkhouse Dock replacement project in Kodiak, Alaska (89 FR 17820). The effective dates of that IHA were March 1, 2024, through February 28, 2025. On November 6, 2024, Trident informed NMFS that the project was delayed. None of the work identified in the initial IHA (
The planned activities (including mitigation, monitoring, and reporting), authorized incidental take, and anticipated impacts on the affected stocks are the same as those analyzed and authorized through the previously issued IHA.
The purpose of Trident's construction project is to remove the degraded dock and replace it with a new structure to provide safe housing and waterfront infrastructure for seafood processing. The location, timing, and nature of the activities, including the types of equipment planned for use, are within scope of those described in the initial IHA. The mitigation and monitoring are also as prescribed in the initial IHA.
Species that are expected to be taken by the planned activity include humpback whale (
We refer to the documents related to the previously issued IHA, which include the
Trident will conduct activities as analyzed in the initial 2024 IHA. As described above, the number of authorized takes of the same species and stocks of marine mammals are identical to the numbers that were found to meet
Based on the information contained here and in the referenced documents, NMFS has determined the following: (1) the required mitigation measures will effect the least practicable impact on marine mammal species or stocks and their habitat; (2) the authorized takes will have a negligible impact on the affected marine mammal species or stocks; (3) the authorized takes represent small numbers of marine mammals relative to the affected stock abundances; and (4) Trident's activities will not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
Accordingly, NMFS has determined that the issuance of the IHA qualifies to be categorically excluded from further NEPA review. This action is consistent with categories of activities identified in CE B4 of the Companion Manual for NAO 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion.
Section 7(a)(2) of the Endangered Species Act (ESA) of 1973 (ESA: 16 U.S.C. 1531
NMFS is authorizing take of the Mexico-North Pacific distinct population segment (DPS) of humpback whale, and the western DPS of the Steller sea lion, which are listed as threatened or endangered under the ESA. The NMFS AKRO issued a Biological Opinion under section 7 of the ESA on the issuance of an IHA to Trident under section 101(a)(5)(D) of the MMPA by NMFS OPR. The biological opinion concluded that the action is not likely to jeopardize the continued existence of the listed species.
NMFS has issued an IHA to Trident for in-water construction activities associated with the specified activity from March 1, 2025, through February 28, 2026. All previously described mitigation, monitoring, and reporting requirements from the initial 2024 IHA are incorporated.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; extension of comment period.
Notice is hereby given that the National Marine Fisheries Service is extending the public comment period associated with the notice of receipt for an application for a permit to import bottlenose dolphins (
The comment period for the notice published on December 20, 2024, at 89 FR 104107, is extended. Written comments must be received on or before March 20, 2025.
The application and related documents are available online at
You may submit comments, identified by NOAA-NMFS-2024-0140, by any of the following methods:
•
•
Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division via one of the methods listed above. The request should set forth the specific reasons why a hearing on this amendment would be appropriate.
Jennifer Skidmore or Courtney Smith, Ph.D., (301) 427-8401.
On December 20, 2024 (89 FR 104107), the National Marine Fisheries Service (NMFS) published notice of a permit application submitted by the Clearwater Marine Aquarium, 249 Windward Passage, Clearwater, FL 33767 (Responsible Party: James Powell, Ph.D.,). The applicant is requesting to import up to five adult male bottlenose dolphins from Attica Zoological Park in Athina, Greece, to the Clearwater Marine Aquarium for public display. The requested duration of the permit is five years. In response to a request to extend the public comment period, NMFS is extending the public comment period for an additional 45 days.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 87 Assessment Webinar VI for Gulf of Mexico White, Pink, and Brown Shrimp.
The SEDAR 87 assessment process of Gulf of Mexico white, pink, and brown shrimp will consist of a Data Workshop, a series of assessment webinars, and a Review Workshop. See
The SEDAR 87 Assessment Webinar VI will be held Tuesday, February 11, 2025, from 1 p.m. until 5 p.m., Eastern Time.
Julie A. Neer, SEDAR Coordinator; (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) a series of assessment webinars, and (3) A Review Workshop. The product of the Data Workshop is a report that compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The assessment webinars produce a 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 product of the Review Workshop is an Assessment 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 during the Assessment Webinar VI are as follows:
Participants will review the assessment modeling work to date and provide recommendations to the analytic team.
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
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; modification of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA Regulations for Taking Marine Mammals Incidental to Construction of the Empire Wind Offshore Wind Project Offshore of New York, notification is hereby given that upon request from Empire Wind, LLC (Empire Wind), NMFS has modified a Letter of Authorization (LOA) issued to Empire Wind for the take of marine mammals incidental to activities associated with construction of the Empire Wind Offshore Wind Energy Project (hereafter known as the “Project”) in Federal and State waters offshore New York. Specifically, NMFS has modified the LOA Holder's name as well as mitigation and monitoring measures related to vessel strike avoidance, sound field verification reporting, and requirements for passive acoustic monitoring (PAM). NMFS has also made modifications to additional measures to improve clarify and better align with the Biological Opinion. NMFS has determined that these modifications do not change the findings made for the regulations and does not result in any change in the total estimated number of takes of marine mammals.
The modified LOA is valid through February 21, 2029.
The issued modified LOA may be obtained online at
Jessica Taylor, Office of Protected Resources, NMFS, (301) 427-8401.
The MMPA prohibits the “take” of marine mammals, with certain
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). If such findings are made, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to as “mitigation”); and requirements pertaining to the monitoring and reporting of such takings.
NMFS promulgated a final rule in the
NMFS issued a LOA to Empire Wind on February 22, 2024, and published a notice of issuance in the
On December 4, 2024, NMFS received a request from Empire Wind to transfer the LOA to Empire Leaseholder LLC (Empire Leaseholder), an affiliate wholly owned by Empire Wind. To ensure safety during vessel transit, Empire Wind requested for NMFS to modify the LOA safety exemption language to include a provision for allowing deviations from the vessel strike avoidance requirements (LOA measure 3(b)) so Project vessels could maintain safe maneuvering speed when oceanographic, hydrographic, and/or meteorological conditions restrict vessel maneuverability. Empire Wind also requested revisions to the reporting timeline for bubble curtain performance and maintenance report for piles for which abbreviated sound field verification (SFV) monitoring is performed. These provisions will be more practicable and align with the Project's Biological Opinion, issued on September 8, 2023. In addition, Empire Wind requested for NMFS to allow the Pile Driving Mitigation and Monitoring Plan (PDMMP) to specify the number and location of PAM operators and to allow the PAM Plan to specify PAM operator protocols during foundation pile driving, instead of these requirements being specified in the LOA. NMFS determined none of these changes will affect the amount, the type of take authorized, or our findings as described in the final rule. Therefore, we have modified the attached LOA, specifically measures 3(b), 3(c)(7)(v), and 4(c)(2), thus fulfilling Empire Wind's request.
In reviewing Empire Wind's request, NMFS also recognized the need to update additional measures to improve clarity and better align the LOA with the Biological Opinion. NMFS moved the safety exemption for foundation pile driving to the beginning of the foundation pile driving section (LOA measure 3 (c)) to clarify that this measure applies to all foundation pile driving activities. In addition, NMFS modified the language for the maximum hammer energies ((3)(c)(2)) and soft start requirements ((3)(c)(4)) to provide additional flexibility for application of these requirements in the field. NMFS made minor revisions to the language in the mitigation and monitoring sections to improve the clarity of the requirements. To better align with the Biological Opinion, NMFS made minor revisions to the language in the sound field verification (SFV) monitoring requirements (LOA measures 3(c)(13)). NMFS also clarified the Protected Species Observer (PSO) and PAM Operator experience qualification requirements in section 4(a) of the LOA for foundation installation, cable landfall construction/marina activities, and high-resolution geophysical (HRG) surveys. NMFS' evaluation of the requested and necessary additional LOA modifications indicated that these modifications would not change the amount or nature of anticipated impacts of activities on marine mammals. Specifically, none of the benefits of any of the mitigation or monitoring measures that have been modified here were considered quantitatively in the analyses (
NMFS has issued a modified LOA to Empire Wind authorizing the take, by harassment, of small numbers of marine mammals incidental to specified construction activities associated with the Project, which includes the modified mitigation, monitoring, and reporting measures discussed herein.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of incidental harassment authorization.
NMFS has received a request from the U.S. Navy (Navy) for the re-issuance of a previously issued incidental harassment authorization (IHA) with the only change being effective dates. The initial IHA authorized take of six species of marine mammals, by Level B harassment, and for take of harbor seals, gray seals, and harp seals by Level A harassment, incidental to construction associated with the New London Pier Extension Project at the Naval Submarine Base (SUBASE) New London in Groton, Connecticut. The project has been delayed and none of the work covered in the initial IHA has been conducted. The scope of the activities and anticipated effects remain the same, authorized take numbers are not changed, and the required mitigation, monitoring, and reporting remains the same as included in the initial IHA. NMFS is, therefore, issuing a second identical IHA to cover the incidental take analyzed and authorized in the initial IHA.
This IHA is effective from February 1, 2026, through January 31, 2027.
An electronic copy of the final 2024 IHA previously issued to the Navy, the Navy's application, and the
Rachel Wachtendonk, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the Marine Mammal Protection Act (MMPA; 16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On June 14, 2024, NMFS published final notice of our issuance of an IHA authorizing take of marine mammals incidental to the New London Pier Extension Project at Naval the SUBASE New London in Groton, Connecticut (89 FR 50565). The effective dates of that IHA were December 1, 2024, through November 30, 2025. On November 20, 2024, the Navy informed NMFS that the project was delayed. None of the work identified in the initial IHA (
The planned activities (including mitigation, monitoring, and reporting), authorized incidental take, and anticipated impacts on the affected stocks are the same as those analyzed and authorized through the previously issued IHA.
The purpose of this project is to extend the existing Pier 31 to provide two berths for a submarine platform that is approximately 80 ft longer than the existing submarines. The location, timing, and nature of the activities, including the types of equipment planned for use, are within scope of those described in the initial IHA. The mitigation and monitoring are also as prescribed in the initial IHA.
Species that are expected to be taken by the planned activity include Atlantic white-sided dolphin (
We refer to the documents related to the previously issued IHA, which include the
The Navy will conduct activities as analyzed in the initial 2024 IHA. As described above, the number of authorized takes of the same species and stocks of marine mammals are identical to the numbers that were found to meet the negligible impact and small numbers standards and authorized under the initial IHA and no new information has emerged that would change those findings. The new issued IHA includes identical required mitigation, monitoring, and reporting measures as the initial IHA, and there is no new information suggesting that our analysis or findings should change.
Based on the information contained here and in the referenced documents, NMFS has determined the following: (1) the required mitigation measures will effect the least practicable impact on marine mammal species or stocks and
This action is consistent with categories of activities identified in Categorical Exclusion B4 (incidental take authorizations with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS determined that the issuance of the initial IHA qualified to be categorically excluded from further National Environmental Policy Act review. NMFS has determined that the application of this categorical exclusion remains appropriate for this reissued IHA.
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA; 16 U.S.C. 1531
No incidental take of ESA-listed species is authorized or expected to result from this activity. Therefore, NMFS determined that formal consultation under section 7 of the ESA is not required for this action.
NMFS has issued an IHA to the Navy for in-water construction activities associated with the specified activity from February 1, 2026, through January 31, 2027. All previously described mitigation, monitoring, and reporting requirements from the initial 2024 IHA are incorporated.
In notice document 2024-30760, appearing on pages 105542 through 105553 in the issue of Friday, December 27, 2024, make the following correction:
On page 105552, at the bottom of the page, Figure 1 should appear as below.
The Corporation for National and Community Service.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Corporation for National and Community Service (operating as AmeriCorps) is proposing to reinstate an information collection.
Written comments must be submitted to the individual and office listed in the
You may submit comments, identified by the title of the information collection activity, by any of the following methods:
(1) Electronically through
(2) By mail sent to: AmeriCorps, Attention Melissa Gouge, 250 E Street SW, Washington, DC 20525.
(3) By hand delivery or by courier to the AmeriCorps mailroom at the mail address given in paragraph (2) above, between 9 a.m. and 4 p.m. eastern time, Monday through Friday, except Federal holidays.
Comments submitted in response to this notice may be made available to the public through
Melissa Gouge, 202-606-6736, or by email at
The previously approved information collection expired on 12/31/2022.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information 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. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; to develop, acquire, install and utilize technology and systems for the purpose of collecting, validating and verifying information, processing and maintaining information, and disclosing and providing information; to train personnel and to be able to respond to a collection of information, to search data sources, to complete and review the collection of information; and to transmit or otherwise disclose the information. All written comments will be available for public inspection on
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-27 and Policy Justification.
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* as defined in Section 47(6) of the Arms Export Control Act.
The Republic of Korea (ROK) has requested to buy six (6) T-700 GE 401C or 401D engines. Also included are spare engine containers; spare and repair parts; ferry support; publications and technical documentation; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $350 million.
This proposed sale will support the foreign policy goals and national security objectives of the U.S. by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region.
The proposed sale will improve the ROK's capability to perform anti-surface and anti-submarine warfare missions along with the capability to perform secondary missions including vertical replenishment, search and rescue, and communications relay. The ROK will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense. The ROK will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be the General Electric Company, located in Lynn, MA. There are no known offset agreements proposed in connection with this potential sale.
Implementation of the proposed sale will require eight U.S. Government and four contractor personnel to visit the ROK on a temporary basis for program technical oversight and support requirements, including program and technical reviews, as well as to provide training and maintenance support in country.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-22, Policy Justification, and Sensitivity of Technology.
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The Government of Germany has requested to buy AN/PRC-117 radios; AN/PRC-160 radios; spare and repair parts; support equipment; tools and test equipment; diagnostic equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor technical assistance; technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $281 million.
This proposed sale will support the foreign policy and national security of the U.S. by improving the security of a NATO Ally that is an important force for political and economic stability in Europe.
The proposed sale will improve interoperability between Germany and other NATO military forces and will increase secure communications effectiveness to help combat current and future threats. Germany will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be L3Harris Global Communications, Inc., Rochester, NY. There are no known offset agreements in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of U.S. Government or contractor representatives to Germany.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
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1. The AN/PRC-117 and AN/PRC-160 radios and their accessories are used to transmit and receive voice and data information using Type-1 encryption.
2. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
3. If a technologically advanced adversary were to obtain knowledge of the hardware and software elements, the information could be used to develop countermeasures or equivalent systems which might reduce system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that Germany can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to Germany.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-25, Policy Justification, and Sensitivity of Technology.
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The Republic of Korea has requested to buy five (5) BQM-177A Subsonic Sea-Skimming Aerial Targets (SSAT) for KDX-III Batch-II AEGIS Class Destroyers. Also included are GQM-163 target drones; classified books and other publications (technical and non-technical); test support; technical documentation; personnel training; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $170.6 million.
This proposed sale will support the foreign policy goals and national security objectives of the U.S. by improving the security of a major ally that is a force for political stability and economic progress in the Indo-Pacific region.
The proposed sale will improve the Republic of Korea's capability to meet current and future threats by performing Combat System Ship Qualification Trials (CSSQT) for its new KDX-III Batch-II AEGIS Class Destroyers. The KDX-III Batch-II CSSQT efforts will demonstrate the ship's ability to safely and effectively launch and control weapons, demonstrate proper integrated hardware operation, demonstrate system performance based on key requirements, and provide realistic training for the shipboard anti-air warfare firing teams. The Republic of Korea will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor for the BQM-177A SSAT will be Kratos Defense, Sacramento, CA, and Fort Walton Beach, FL. The principal contractor for the GQM-163A target drones will be Northrop Grumman, Chandler, AZ. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to the Republic of Korea.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
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1. The BQM-177A Subsonic Sea-Skimming Aerial Target (SSAT) is a subsonic target with capabilities to provide realistic threat representation. This aerial target replicates modern subsonic Anti-Ship Cruise Missile threats in support of fleet training and developmental, and operational testing of major Department of Defense and international weapon systems. The BQM-177A aerial targets support live-fire Test and Evaluation events for AEGIS, SM-6, SM-2, Rolling Airframe Missile (RAM), Evolved Sea Sparrow Missile (ESSM), and fleet training events. The BQM-177A assets for this potential sale will not be physically delivered to the Republic of Korea. They will remain in U.S. Navy (USN) custody and reserved as an allocation to the Republic of Korea until they are required at the USN Pacific Missile Range Facility (PMRF) to support the KDX-III Batch-II AEGIS Class Destroyers' (DDG 995, DDG 996, and DDG 997) Combat System Ship Qualification Trials (CSSQT).
2. The GQM-163A Coyote is a non-recoverable supersonic sea-skimming aerial target capable of speeds in excess of Mach 2.7, cruising altitudes from 13 to 66 feet, high diving speeds at Mach 3.9, and cruising altitudes up to 52,000 feet. This aerial target replicates a family of supersonic sea-skimming anti-ship cruise missile threats to meet critical Test and Evaluation requirements of Ship Self-Defense Systems (SSDS) and fleet training. The GQM-163A aerial target supports live-fire Test and Evaluation events for AEGIS, SM-6, SM-2, RAM, ESSM, and fleet training events. The GQM-163A assets for this potential sale will not be physically delivered to the Republic of Korea. They will remain in USN custody and reserved as an allocation to the Republic of Korea until they are required at the USN PMRF to support the KDX-III Batch-II AEGIS Class Destroyers' (DDG 995, DDG 996 and DDG 997) CSSQT.
3. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
4. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
5. A determination has been made that the Republic of Korea can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
6. All defense articles and services listed in this transmittal have been authorized for release and export to the Republic of Korea.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-32 and Policy Justification.
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* as defined in Section 47(6) of the Arms Export Control Act.
The Government of Canada has requested to buy telecommunications services providing Tactical Narrowband Satellite Communications (SATCOM) access to Canadian armed forces users over the Mobile User Objective System (MUOS) service; communication technical assistance to provide operational support, lifecycle management support, and engineering technical assistance and services; personnel training and training equipment; U.S. Government and contractor engineering; technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $138 million.
This proposed sale will support the foreign policy and national security objectives of the U.S. by helping to improve the military capability of Canada, a NATO Ally that is an important force for ensuring political stability and economic progress and a contributor to military, peacekeeping, and humanitarian operations around the world.
The proposed sale will improve Canada's ability to meet current and future threats by providing ultra-high frequency SATCOM access. MUOS access will increase Canada's capacity to conduct operations in concert with U.S. forces for the defense of North America. Enhanced functionality in northern latitudes is integral to meeting Canada's North American Aerospace Defense Command missions and makes MUOS particularly beneficial to continental air defense collaboration. Canada will have no difficulty absorbing these services into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be General Dynamics, Reston, VA. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Canada.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-17, Policy Justification, and Sensitivity of Technology.
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Funding Source: National Funds and Foreign Military Financing
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The Government of North Macedonia has requested to buy an additional eighteen (18) M1278A1/A2 Joint Light Tactical Vehicle (JLTV) Heavy Gun Carriers (HGC); and seven (7) M1280A1/A2 Joint Light Tactical Vehicle (JLTV) General Purpose (GP) that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $78.54 million ($23.16 million in MDE), included a total of seventy-one (71) JLTVs, consisting of forty-eight (48) M1278A1/A2 JLTVs HGC; seventeen (17) M1280A1/A2 JLTVs GP; and six (6) M1281A1/A2 JLTVs Close Combat Weapons Carrier (CCWC). This notification is for a combined total of sixty-six (66) M1278A1/A2 JLTV HGC; twenty-four (24) M1280A1/A2 JLTV GP; and six (6) M1281A1/A2 JLTV CCWC. Also included are Common Remotely Operated Weapon Stations (CROWS); CROWS spare parts; CROWS Basic Issue Items (BII)—Boresight Kit Components; CROWS packaging and handling; CROWS installation and training; M2A1 machine guns with support equipment; MK19 Mod III with support equipment; M240B machine guns with support equipment; MK93 weapon mount; Driver's Visor Enhancer (DVE); Maintenance Tool Set Toughbook Laptops; high frequency radios; communications equipment; Defense Advanced Global Positioning System Receivers (DAGR) with Selective Availability Anti-Spoofing Modules (SAASM) and support equipment; JLTV kits; Vehicle Integration kits; LCD 4.0; spare and repair parts; Supplemental Common Tool Kit (SCTK); Special Tools and Test Equipment (STTE); Objective Gunner Protection Kit (OGPK); Javelin Integration Bracket Kit; turret rings and hatches; technical manuals and publications; New Equipment Training (NET); U.S. Government and contractor technical engineering, logistics, and personnel services; JLTV Field Service Representative support; JLTV integration support, and other related elements of logistics and program support. The estimated total cost is $111 million.
This proposed sale will support the foreign policy and national security of the U.S. by improving the security of a NATO Ally that is an important force for political and economic stability in Europe.
The proposed sale will enhance North Macedonia's capability to meet current and future threats by providing a credible force that is capable of deterring adversaries and participating in NATO operations. The proposed sale will support its goal of improving national and territorial defense as well as interoperability with U.S. and NATO forces. North Macedonia will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be Oshkosh Defense, Oshkosh, WI; AM General, Auburn Hills, MI; Leonardo DRS, West Plains, MO, and L3Harris, Melbourne, FL. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will require temporary duty travel of three to five U.S. Government representatives to North Macedonia for a duration of up to five years. Implementation of this proposed sale will require contractor representatives for support equipment fielding and training.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
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1. The Joint Light Tactical Vehicle (JLTV) program is a light tactical vehicle designed to replace the U.S. military's aging High Mobility Multipurpose Wheeled Vehicle fleet. It was designed to close the existing gap in payload, performance, and protection with our adversaries during multi-domain operations. It is an optimal choice for a spectrum of light tactical vehicle missions anywhere in the world. All JLTV mission variants include a strong balance of protection, maneuverability, speed, reliability, and combat service support capability that far surpasses any similar vehicle in its weight class today.
2. The JLTV is designed to be a system of systems. The JLTV uses a modular design that allows it to integrate with various material and equipment used by U.S. forces in tactical operations.
3. The JLTV has inherent armor built into the base vehicle. It is what the U.S. Government calls A-Kit armor. This A-Kit inherent armor provides both opaque and transparent armor solutions to provide a 360-degree azimuthal (
4. The AN/VAS-5 Driver's Vision Enhancer is compact thermal camera providing armored vehicle drivers with day or nighttime visual awareness in clear or reduced vision (fog, smoke, dust) situations. The system provides the driver a 180-degree viewing angle using a high-resolution infrared sensor and image stabilization to reduce the effect of shock and vibration. The viewer and monitor are ruggedized for operation in tactical environments.
5. The Common Remote Operated Weapon Station (CROWS) is an externally mounted weapon mounting and control system that allows the gunner to remain inside the vehicle's protected armor while firing a variety of crew-served weapons. The CROWS provides remote day and night sighting and ballistic control capacity, enabling first-burst engagement of targets at maximum effective weapon range while on the move.
6. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
7. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
8. A determination has been made that North Macedonia can provide the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
9. All defense articles and services listed in this transmittal are authorized for release and export to the Government of North Macedonia.
National Advisory Committee on Institutional Quality and Integrity (NACIQI or Committee), Office of Postsecondary Education, U.S. Department of Education.
Announcement of an open meeting.
This notice sets forth the agenda, time, and instructions to access or participate in the February 19-20, 2025 meeting of NACIQI, and provides information to members of the public regarding the meeting, including requesting to make written or oral comments. Committee members will meet in-person while accrediting agency representatives and public attendees will participate virtually.
The NACIQI meeting will be held on February 19-20, 2025 from 9 a.m. to 5 p.m. eastern standard time.
U.S. Department of Education, 400 Maryland Avenue SW, Barnard Auditorium, Washington, DC 20202 [Only NACIQI members and Department of Education staff will participate in the meeting at this address]. There is a possibility that the meeting could shift to a virtual meeting for all participants. If that happens, the published registration link and supporting information described in this notice for public attendees will remain the same.
George Alan Smith, Executive Director/Designated Federal Official (DFO), NACIQI, U.S. Department of Education, 400 Maryland Avenue SW, Washington, DC 20202, telephone: (202) 453-7757, or email:
• The establishment and enforcement of the standards of accrediting agencies or associations under subpart 2, part H, title IV of the HEA, as amended;
• The recognition of specific accrediting agencies or associations;
• The preparation and publication of the list of nationally recognized accrediting agencies and associations;
• The eligibility and certification process for institutions of higher education under Title IV of the HEA, together with recommendations for improvement in such process;
• The relationship between (1) accreditation of institutions of higher education and the certification and eligibility of such institutions, and (2) State licensing responsibilities with respect to such institutions; and
• Any other advisory function relating to accreditation and institutional eligibility that the Secretary of Education may prescribe by regulation.
The notice of this meeting is required under 5 U.S.C. chapter 10 (commonly known as the Federal Advisory Committee Act) and section 114(d)(1)(B) of the HEA of 1965, as amended.
The purpose of the meeting is to conduct a review of compliance reports submitted by the following agencies.
1. American Occupational Therapy Association, Accreditation Council for Occupational Therapy Education. Scope of Recognition: The accreditation and preaccreditation of occupational therapy educational programs offering the professional master's degree and occupational therapy doctorate (OTD) degree; the accreditation of occupational therapy assistant programs offering a baccalaureate degree and associate degree; and the accreditation of these programs offered via distance education. Geographic Area of Accrediting Activities: The United States. The compliance report includes findings of noncompliance with certain criteria in 34 Code of Federal Regulations (CFR) part 602 identified in the October 19, 2022, letter from the senior Department official (SDO) following the July 19, 2022, NACIQI meeting. The SDO letter is available under NACIQI meeting date 7/19/2022, at
2. Accrediting Council for Pharmacy Education. Scope of Recognition: The accreditation and pre-accreditation of professional degree programs in pharmacy leading to the degree of Doctor of Pharmacy, including those programs offered via distance education. Geographic Area of Accrediting Activities: The United States. The compliance report includes findings of noncompliance with certain criteria in 34 CFR part 602 identified in the November 7, 2022, letter from the SDO following the July 19, 2022, NACIQI meeting. The SDO letter is available under NACIQI meeting date 7/19/2022, at
3. Middle States Commission on Secondary Schools. Scope of Recognition: The accreditation of institutions with postsecondary, non-degree granting career and technology programs, to include the accreditation of postsecondary, non-degree granting institutions that offer all or part of their educational programs via distance education modalities. Geographic Area of Accrediting Activities: The United
4. Southern Association of Colleges and Schools, Commission on Colleges. Scope of Recognition: The accreditation and pre-accreditation (“Candidate for Accreditation”) of degree-granting institutions of higher education in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia, including the accreditation of educational programs offered via distance and correspondence education, and direct assessment within these institutions. The accreditation status of these institutions and their recognition extends to the SACSCOC Board of Trustees, Executive Council, and the Appeals Committee of the Collegiate College Delegate Assembly on cases of initial candidacy or initial accreditation and for continued accreditation or candidacy. The compliance report includes findings of noncompliance with certain criteria in 34 CFR part 602 identified in the November 7, 2022, letter from the SDO following the July 19, 2022, NACIQI meeting. The SDO letter is available under NACIQI meeting date 7/19/2022, at
To ensure sufficient time for all agency reviews, including NACIQI questions and discussion, the Department requests that the agencies limit their opening statements to 10 minutes (total for one or more statements), and that the agencies avoid extended discussions about agency representatives and their backgrounds. Following the brief opening statement, the agency's presentation should focus on the regulatory criteria, and in particular, responses to areas where the staff has recommended a finding of noncompliance or substantial compliance, or where other concerns have been raised that the agency would like to address. However, the agency should expect that questions from NACIQI members may focus on other areas.
In addition to its review of accrediting agencies and State approval agencies for Secretarial recognition, there will be time for Committee discussions regarding any of the categories within NACIQI's statutory authority in its capacity as an advisory committee.
Committee members will meet in-person while agency representatives and public attendees will participate virtually.
You may register for the meeting on your computer using the link below. After you register, you will receive a confirmation email containing personalized participation links for each day of the two-day meeting no later than 8 a.m. eastern standard time on February 19, 2025.
Opportunity to submit a written statement regarding a specific accrediting agency under review was solicited by a previous
Members of the public may make oral comments regarding a specific accrediting agency under review and/or other issues within the scope of NACIQI's authority. Oral comments may not exceed three minutes. Oral comments about an agency's recognition when a compliance report has been required by the SDO or the Secretary must relate to the criteria for recognition cited in the SDO's letter that requested the report, or in the Secretary's appeal decision, if any. Oral comments about an agency seeking expansion of scope must be directed to the agency's ability to serve as a recognized accrediting agency with respect to the kinds of institutions or programs requested to be added. Oral comments about the renewal of an agency's recognition must relate to its compliance with the criteria for the Recognition of Accrediting Agencies, which are available at
To request to make oral comments of three minutes or less during the February 19-20, 2025 meeting, please follow either Method One or Method Two below. To submit a written statement to NACIQI concerning its work outside a specific accrediting agency under review, please follow Method One.
Election Assistance Commission.
Notice; correction.
The U.S. Election Assistance Commission published a document in the
Raymond Williams at 202-924-0794, or email
In the
Office of Environmental Management, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Paducah. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Thursday, February 20, 2025; 5:30-7p.m. CST.
West Kentucky Community and Technical College, Emerging Technology Center, Room 215, 5100 Alben Barkley Drive, Paducah, Kentucky 42001.
Robert “Buz” Smith, Federal Coordinator, by Phone: (270) 441-6821 or Email:
Department of Energy (DOE).
Notice of availability (NOA); extension of public comment period.
On December 20, 2024, the Department of Energy (DOE) published a notice entitled “Notice of Availability: Draft Energy Storage Strategy and Roadmap.” DOE is extending the public comment period announced in that notice, which currently closes on February 3, 2025, by 45 days. The comment period will now remain open until March 20, 2025, to allow additional time for the public to review and comment on the Draft DOE Energy Storage Strategy and Roadmap.
The comment period for the NOA published on December 20, 2024 (89 FR 104129) is extended. DOE will accept comments responding to this NOA submitted on or before March 20, 2025, 11:59 p.m. eastern time (ET).
Interested parties may submit comments electronically to
Requests for additional information may be submitted electronically to Caitlin Callaghan at
DOE is seeking general feedback on the Draft DOE Energy Storage Strategy and Roadmap (Energy Storage SRM) as part of its process to update the Energy Storage Grand Challenge 2020 Roadmap. The Draft Energy Storage SRM can be found here:
Based on consideration of the current timeline for public comment, including recognition of several Federal holidays, DOE is extending the public comment period announced in 89 FR 104129 by 45 days. Therefore, the public comment period is extended until March 20, 2025.
This document of the Department of Energy was signed on January 15, 2025, by Gene Rodrigues, Assistant Secretary for the Office of Electricity, 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
On March 31, 2021, and supplemented on April 8, 2021, Kennebunk Light and Power District (licensee) filed an application for surrender of its license for the Lower Mousam Hydroelectric Project No. 5362. The project is located on the Mousam River in York County, Maine. The project does not occupy any Federal lands.
The licensee proposes to surrender its license because more cost-effective sources of electricity are available and the project is no longer cost-effective to operate. The licensee proposes to decommission the project by removing all flashboards, disconnecting the leads from the generators, removing all generation and electrical equipment, as well as securing each project development with fencing. The dams would remain in place and no ground disturbing activities are proposed other than fencing.
Commission staff issued a public notice of the application on April 21, 2021, setting May 21, 2021 as the deadline for filing comments, motions to intervene, and protests. The U.S. Department of Commerce, Maine Department of Inland Fisheries and Wildlife, and the U.S. Department of Interior filed timely notices of intervention and comments. Maine Rivers, Mousam and Kennebunk Rivers Alliance, Mousam Rivers Coalition, Maine Department of Marine Resources, and Trout Unlimited filed timely motions to intervene and comments. Additionally, non-profits and numerous private citizens filed comments or protests, including: Maine Audubon Society, National Marine Fisheries Service, the U.S. Fish and Wildlife Service, Maine Audubon Society, and the Wells National Estuarine Research Reserve. Numerous commenters recommend removal of the dams and
This notice identifies Commission staff's intention to prepare an environmental assessment (EA) for the project.
With this notice, the Commission is inviting federal, state, local, and Tribal agencies with jurisdiction and/or special expertise with respect to environmental issues affected by the proposal to cooperate in the preparation of the EA planned to be issued April 2025. Agencies wishing to cooperate, or further discuss the benefits, responsibilities, and obligations of the cooperating agency role, should contact staff listed at the bottom of this notice by February 5, 2025. Cooperating agencies should note the Commission's policy that agencies that cooperate in the preparation of any environmental document cannot also intervene.
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 to 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 questions regarding this notice may be directed to Diana Shannon at (202) 502-6136 or
Take notice that on January 7, 2025, Columbia Gas Transmission, LLC (Columbia), 700 Louisiana Street Suite 1300, Houston, Texas 77002-2700, filed in the above referenced docket, a prior notice request pursuant to sections 18 CFR 157.205 and 157.216 of the Commission's regulations under the Natural Gas Act (NGA), and Columbia's blanket certificate issued in Docket No. CP83-76-000, for authorization to plug and abandon one injection/withdrawal well and to abandon connecting pipeline and appurtenant facilities (Victory A Well 4289 Abandonment Project), all located in at the Victory A Storage Field in Wetzel County, West Virginia. The Victory A Well 4289 Abandonment Project is necessary to comply with the Pipeline and Hazardous Materials Safety Administration's (PHMSA) Storage Final Rule, which requires operators to assess and minimize well integrity risks. Well 4289, and the associated facilities are no longer necessary due to their low performance and inability to contribute significantly to the total deliverability of the Victory A Storage Field. Abandoning these facilities will eliminate routine maintenance requirements and the associated costs. The estimated cost of the project is approximately $862,500, all as more fully set forth in the request which is on file with the Commission and open to public inspection.
In addition to publishing the full text of this document in the
User assistance is available for eLibrary and the Commission's website during normal business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
Any questions concerning this request should be directed David A. Alonzo, Manager of Project Authorizations, 700 Louisiana Street Suite 1300, Houston, Texas 77002-2700, (832) 320-5477, or
There are three ways to become involved in the Commission's review of this project: you can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on March 17, 2025. How to file protests, motions to intervene, and comments is explained below.
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
Pursuant to section 157.205 of the Commission's regulations under the NGA,
Protests must comply with the requirements specified in section 157.205(e) of the Commission's
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before March 17, 2025. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP25-45-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission by mailing it to the address below. Your submission must reference the Project docket number CP25-45-000.
The Commission encourages electronic filing of submissions (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail at: David A. Alonzo, Manager of Project Authorizations, Columbia Gas Transmission, LLC, 700 Louisiana Street, Suite 1300, Houston, Texas, or by email (with a link to the document) at
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental document, that will discuss the environmental impacts for the Entriken Amendment Project (Amendment Project) involving abandonment of facilities by Texas Eastern Transmission, LP (Texas Eastern) in Huntingdon County, Pennsylvania. This is a proposed amendment to Certificate of Public Convenience and Necessity for the Armagh and Entriken Replacement Project (2023 Order) under docket CP22-486-000, issued on October 23, 2023. The Commission will use this environmental document in its decision-making process.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies regarding the project. As part of the National Environmental Policy Act (NEPA) review process, the Commission takes
By this notice, the Commission requests public comments on the scope of issues to address in the environmental document. To ensure that your comments are timely and properly recorded, please submit your comments so that the Commission receives them in Washington, DC on or before 5:00pm Eastern Time on February 13, 2025. Comments may be submitted in written form. Further details on how to submit comments are provided in the Public Participation section of this notice.
Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the environmental document. Commission staff will consider all written comments during the preparation of the environmental document.
If you submitted comments on this project to the Commission before the opening of this docket on December 9, 2024, you would need to file those comments in Docket No. CP25-24-000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this proposed project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The company would seek to negotiate a mutually acceptable easement agreement. You are not required to enter into an agreement. However, if the Commission approves the project, the Natural Gas Act conveys the right of eminent domain to the company. Therefore, if you and the company do not reach an easement agreement, the pipeline company could initiate condemnation proceedings in court. In such instances, compensation would be determined by a judge in accordance with state law. The Commission does not subsequently grant, exercise, or oversee the exercise of that eminent domain authority. The courts have exclusive authority to handle eminent domain cases; the Commission has no jurisdiction over these matters.
Texas Eastern provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” which addresses typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. This fact sheet along with other landowner topics of interest are available for viewing on the FERC website (
There are three methods you can use to submit your comments to the Commission. Please carefully follow these instructions so that your comments are properly recorded. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the eComment feature, which is located on the Commission's website (
(2) You can file your comments electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the Commission. Be sure to reference the project docket number (CP25-24-000) on your letter. Submissions sent via the U.S. Postal Service must be addressed to: Debbie-Anne A. Reese, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426. Submissions sent via any other carrier must be addressed to: Debbie-Anne A. Reese, Secretary, Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, Maryland 20852.
Additionally, the Commission offers a free service called eSubscription which makes it easy to stay informed of all issuances and submittals regarding the dockets/projects to which you subscribe. These instant email notifications are the fastest way to receive notification and provide a link to the document files which can reduce the amount of time you spend researching proceedings. Go to
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
Under the 2023 Order, the Armagh and Entriken Replacement Project consisted of the abandonment of pipeline facilities, construction of pipeline facilities, and the abandonment of gas-driven compression facilities to be replaced with electric-motor driven (EMD) facilities. With the Amendment Project, Texas Eastern proposes to modify the certificated facilities at the Entriken Compressor Station from a 24,000 horsepower (hp) electric-motor driven compressor unit to a 24,306 hp gas-driven compressor unit. The Amendment Project is proposed due to uncertainties regarding obtaining the electrical transmission power needed at the Entriken Station to support the EMD compressor unit approved in the 2023 Order.
Specifically, the Amendment Project would consist of the following:
• installation of one 24,306-hp Solar Titan 250 Gas Turbine compressor unit;
• abandonment of one 22,000-hp GE Frame 5 gas-driven compressor unit and the associated auxiliary piping and equipment;
• re-use of air-cooled heat exchangers to service the existing Titan 250 Compressor unit (2T);
• installation of 4 bays of new air-cooled heat exchangers to service new Titan 250 gas-driven compressor unit (3T);
• installation of new domestic gas meter and odorizer;
• installation of a new compressor building, office building, and electrical and control building;
• installation of a new recompression building and new battery building;
• minor station piping modifications; and
• installation of other appurtenant facilities.
The Amendment Project would be within the workspaces approved in the 2023 Order, on an approximately 55-acre property owned by Texas Eastern and lies within a fenced area encompassing approximately 18 acres. Approximately 28.70 acres of land would be disturbed during construction, including 18.10 acres of land within the existing fence line of the station and 10.60 acres of workspace which would expand the station fence line to encompass the new compressor building and office building.
Any environmental document issued by the Commission will discuss impacts that could occur as a result of the construction and operation of the proposed project under the relevant general resource areas:
• geology and soils;
• water resources and wetlands;
• vegetation and wildlife;
• threatened and endangered species;
• cultural resources;
• land use;
• environmental justice;
• air quality and noise; and
• reliability and safety.
Commission staff will also evaluate reasonable alternatives to the proposed project or portions of the project and make recommendations on how to lessen or avoid impacts on the various resource areas. Your comments will help Commission staff identify and focus on the issues that might have an effect on the human environment and potentially eliminate others from further study and discussion in the environmental document.
Following this scoping period, Commission staff will determine whether to prepare an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The EA or the EIS will present Commission staff's independent analysis of the issues. If Commission staff prepares an EA, a “Notice of Schedule for the Preparation of an Environmental Assessment” will be issued. The EA may be issued for an allotted public comment period. The Commission would consider timely comments on the EA before making its decision regarding the proposed project. If Commission staff prepares an EIS, a “Notice of Intent to Prepare an EIS/Notice of Schedule” will be issued, which will open up an additional comment period. Staff will then prepare a draft EIS which will be issued for public comment. Commission staff will consider all timely comments received during the comment period on the draft EIS and revise the document, as necessary, before issuing a final EIS. Any EA or draft and final EIS will be available in electronic format in the public record through eLibrary
With this notice, the Commission is asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues of this project to formally cooperate in the preparation of the environmental document.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, the Commission is using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list includes Federal, State, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project and includes a mailing address with their comments. Commission staff will update the environmental mailing list as the analysis proceeds to ensure that Commission notices related to this environmental review are sent to all individuals, organizations, and government entities interested in and/or potentially affected by the proposed project.
If you need to make changes to your name/address, or if you would like to remove your name from the mailing list, please complete one of the following steps:
(1) Send an email to
(2) Return the attached “Mailing List Update Form” (appendix 2).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
Public sessions or site visits will be posted on the Commission's calendar located at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
l.
m.
n. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
o.
p.
q. 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
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
l.
m.
n. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
o.
p.
q. 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
On October 27, 2023, Dominion Energy South Carolina, Inc. (Dominion Energy), filed a final license application to relicense its Stevens Creek Hydroelectric Project No. 2535. On November 8, 2023, Commission staff issued a notice of application and solicited additional study requests. On December 11, 2023, Augusta-Richmond County, Georgia, filed additional study requests with the Commission. On November 25, 2024, Commission staff issued a letter responding to the additional study requests and explained that no further studies were needed. On December 26, 2024, Augusta-Richmond County filed a request for rehearing of Commission staff's November 25, 2024 letter.
Rule 713(b) of the Commission's Rules of Practice and Procedure permits requests for rehearing “of any final decision or other final order in a proceeding.”
When the Commission, or its delegate, issues a final order regarding Dominion Energy's license application, Augusta-Richmond County may, at that time, file a request for rehearing. Thus, Commission staff's November 25, 2024 letter is interlocutory and does not fall within the scope of Rule 713. Accordingly, the request for rehearing is dismissed.
This notice constitutes final agency action. Requests for rehearing by the Commission of this notice must be filed within 30 days of the date of issuance of this notice, as provided in section 313(a) of the Federal Power Act, 16 U.S.C. 825
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate 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 contact OPP at (202) 502-6595 or
Take notice that on January 6, 2025, Gulf South Pipeline Company, LLC (Gulf South), 9 Greenway Plaza, Suite 2800, Houston, Texas, 77046, filed an application under section 7(c)(1)(B) of the Natural Gas Act (NGA), and Rule 207(a)(5) requesting an exemption from certificate requirements to drill a stratigraphic test well to determine the feasibility of developing a natural gas storage project in Wharton County, Texas (Project). The Project consists of drilling a single stratigraphic test well to test the salt characteristics of the underlying salt dome formation. The test well is necessary to determine the technical, environmental, and economic feasibility of developing an underground natural gas storage facility, all as more fully set forth in the application which is on file with the Commission and open for public inspection.
In addition to publishing the full text of this document in the
User assistance is available for eLibrary and the Commission's website during normal business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
Any questions regarding the proposed project should be directed to J. Kyle Stephens, Vice President, Regulatory Affairs, 9 Greenway Plaza, Suite 2800, Houston, Texas, 77046, by phone at (713) 479-8033, or by email at
Pursuant to section 157.9 of the Commission's Rules of Practice and Procedure,
There are three ways to become involved in the Commission's review of this project: you can file comments on the project, you can protest the filing, and you can file a motion to intervene in the proceeding. There is no fee or cost for filing comments or intervening. The deadline for filing a motion to intervene is 5:00 p.m. Eastern Time on
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 person wishing to comment on the project may do so. Comments may include statements of support or objections, to the project as a whole or specific aspects of the project. The more specific your comments, the more useful they will be.
Pursuant to sections 157.10(a)(4)
To ensure that your comments or protests are timely and properly recorded, please submit your comments on or before February 5, 2025.
There are three methods you can use to submit your comments or protests to the Commission. In all instances, please reference the Project docket number CP25-44-000 in your submission.
(1) You may file your comments electronically by using the eComment feature, which is located on the Commission's website at
(2) You may file your comments or protests electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments or protests by mailing them to the following address below. Your written comments must reference the Project docket number (CP25-44-000).
The Commission encourages electronic filing of comments (options 1 and 2 above) and has eFiling staff available to assist you at (202) 502-8258 or
Persons who comment on the environmental review of this project will be placed on the Commission's environmental mailing list, and will receive notification when the environmental documents (EA or EIS) are issued for this project and will be notified of meetings associated with the Commission's environmental review process.
The Commission considers all comments received about the project in determining the appropriate action to be taken. However, the filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding. For instructions on how to intervene, see below.
Any person, which includes individuals, organizations, businesses, municipalities, and other entities,
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
There are two ways to submit your motion to intervene. In both instances, please reference the Project docket number CP25-44-000 in your submission.
(1) You may file your motion to intervene by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your motion to intervene, along with three copies, by mailing the documents to the address below. Your motion to intervene must reference the Project docket number CP25-44-000.
The Commission encourages electronic filing of motions to intervene (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail at: J. Kyle Stephens, Vice President, Regulatory Affairs, 9 Greenway Plaza, Suite 2800, Houston, Texas 77046 or by email (with a link to the document) at
All timely, unopposed
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Take notice that on October 31, 2024, pursuant to Rule 207(a)(5) of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure,
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
In addition to publishing the full text of this document in the
User assistance is available for eLibrary and the Commission's website during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link 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
Take notice that the Commission has received the following Natural Gas 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.
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:
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
On December 11, 2024, Office of Energy Projects staff issued a “Notice of Scoping Period Requesting Comments on Environmental Issues for the Rover—Bulger Compressor Station and Harmon Creek Meter Station Expansion Project”. It has come to our attention that some individuals were inadvertently omitted from the mailing list and did not receive the notice. As such, we are issuing a Supplemental Notice of Scoping Period.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental document, that will discuss the environmental impacts of the Rover—Bulger Compressor Station and Harmon Creek Meter Station Expansion Project (Project) involving construction and operation of facilities by Rover Pipeline LLC (Rover) in Smith Township, Washington County, Pennsylvania. The Commission will use this environmental document in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the extension of the scoping process the Commission will use to gather input from the public and interested agencies regarding the project. As part of the National Environmental Policy Act (NEPA) review process, the Commission takes into account concerns the public may have about proposals and the environmental impacts that could result from its action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. This gathering of public input is referred to as “scoping.” The main goal of the scoping process is to focus the analysis in the environmental document on the important environmental issues. Additional information about the Commission's NEPA process is described below in the NEPA Process and Environmental Document section of this notice.
By this notice, the Commission requests public comments on the scope of issues to address in the environmental document. To ensure that your comments are timely and properly recorded, please submit your comments so that the Commission receives them in Washington, DC on or before 5:00pm Eastern Time on February 13, 2025. Comments may be submitted in written form. Further details on how to submit comments are provided in the Public Participation section of this notice.
Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the environmental document. Commission staff will consider all written comments during the preparation of the environmental document.
If you submitted comments on this project to the Commission before the opening of this docket on October 31, 2024, you will need to file those comments in Docket No. CP25-12-000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this proposed project and encourage them to comment on their areas of concern.
Rover provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” which addresses typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. This fact sheet along with other landowner topics of interest are available for viewing on the FERC website (
There are three methods you can use to submit your comments to the Commission. Please carefully follow these instructions so that your comments are properly recorded. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the eComment feature, which is located on the Commission's website (
(2) You can file your comments electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the Commission. Be sure to reference the project docket number (CP25-12-000) on your letter. Submissions sent via the U.S. Postal Service must be addressed
Additionally, the Commission offers a free service called eSubscription which makes it easy to stay informed of all issuances and submittals regarding the dockets/projects to which you subscribe. These instant email notifications are the fastest way to receive notification and provide a link to the document files which can reduce the amount of time you spend researching proceedings. Go to
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
Rover proposes to construct, own, and operate certain facilities at its existing Bulger Compressor Station, located at milepost 0 of Rover's Burgettstown Lateral in Washington County, Pennsylvania. The proposed expansion of the Bulger Compressor Station would consist of the following facilities:
• one new 2,750-horsepower compressor unit package and cooling;
• one discharge filter separator;
• one unit blowdown silencer;
• extension of the existing compressor building and station fencing; and
• associated interconnect piping systems.
The Project also includes expansion of Rover's existing Harmon Creek Receipt Meter Station located within the Bulger Compressor Station. The proposed meter station expansion consist of one ultrasonic meter skid, one flow control skid, one filter separator, and associated interconnect piping. The Project would allow Rover to ensure delivery of Range Resources—Appalachia LLC's (Range) requested transportation quantities at the required pressures. According to Rover, the Project is designed to provide to an additional 400,000 dekatherms of natural gas per day.
The general location of the project facilities is shown in appendix 1.
The Project would impact about 8.38 acres of land within and immediately adjacent to Rover's existing Bulger Compressor Station. About 8.05 acres of land would be used for temporary workspace, including 6.62 acres of existing aboveground facilities, 1.09 acres of an existing permanent access road, 0.24 acre of an existing parking area, and 0.10 acre of a temporary access road. Of the 8.38 acres, about 0.33 acre of open space land cover would be permanently impacted due to the extension of the compressor station fence line by 50 feet. Rover would convert the 0.33 acre of open space land cover to gravel to accommodate the addition of the new compressor unit and building.
Any environmental document issued by the Commission will discuss impacts that could occur as a result of the construction and operation of the proposed project under the relevant general resource areas:
• geology and soils;
• water resources and wetlands;
• vegetation and wildlife;
• threatened and endangered species;
• cultural resources;
• land use;
• environmental justice;
• air quality and noise; and
• reliability and safety.
Commission staff will also evaluate reasonable alternatives to the proposed project or portions of the project and make recommendations on how to lessen or avoid impacts on the various resource areas. Your comments will help Commission staff identify and focus on the issues that might have an effect on the human environment and potentially eliminate others from further study and discussion in the environmental document.
Following this scoping period, Commission staff will determine whether to prepare an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The EA or the EIS will present Commission staff's independent analysis of the issues. If Commission staff prepares an EA, a
With this notice, the Commission is asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues of this project to formally cooperate in the preparation of the environmental document.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, the Commission is using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list Federal, State, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project and includes a mailing address with their comments. Commission staff will update the environmental mailing list as the analysis proceeds to ensure that Commission notices related to this environmental review are sent to all individuals, organizations, and government entities interested in and/or potentially affected by the proposed project.
If you need to make changes to your name/address, or if you would like to remove your name from the mailing list, please complete one of the following steps:
(1) Send an email to
(2) Return the attached “Mailing List Update Form” (appendix 2).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
Public sessions or site visits will be posted on the Commission's calendar located at
Federal Deposit Insurance Corporation (FDIC).
Notice and request for comment.
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995, invites the general public and other Federal agencies to take this opportunity to comment on the request to renew the existing information collections described below (OMB Control No. 3064-0025; -0200 and -0214). The notices of proposed renewal for these information collections were previously published in the
Comments must be submitted on or before February 21, 2025.
Interested parties are invited to submit written comments to the FDIC by any of the following methods:
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Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Manny Cabeza, Regulatory Counsel, 202-898-3767,
Proposal to renew the following currently approved collection of information:
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3.
Comments are invited on (a) whether the collection of information is necessary for the proper performance of the FDIC's functions, including whether the information has practical utility; (b) the accuracy of the estimates of the burden of the information collection, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. All comments will become a matter of public record.
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 received are subject to public disclosure. In general, comments
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 February 21, 2025.
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Board of Governors of the Federal Reserve System.
Federal Trade Commission.
Annual notice of revision.
The Federal Trade Commission announces the revised thresholds for interlocking directorates required by the 1990 amendment of section 8 of the Clayton Act.
January 22, 2025.
Christopher M. Grengs (202-326-2612), Bureau of Competition, Office of Policy and Coordination.
Section 8 prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if two thresholds are met. Competitor corporations are covered by section 8 if each one has capital, surplus, and undivided profits aggregating more than $10,000,000, with the exception that no corporation is covered if the competitive sales of either corporation are less than $1,000,000. Section 8(a)(5) requires the Federal Trade Commission to revise those thresholds annually, based on the change in gross national product. The new thresholds, which take effect immediately, are $51,380,000 for section 8(a)(1), and $5,138,000 for section 8(a)(2)(A).
Federal Trade Commission.
Annual notice of revision.
The Federal Trade Commission announces the revised thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 required by the 2000 amendment of section 7A of the Clayton Act; and the revised filing fee schedule for the same Act required by division GG of the 2023 Consolidated Appropriations Act.
February 21, 2025.
Nora Whitehead (
This document announces updates to (1) the thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as required by the 2000 amendment of section 7A of the Clayton Act; and (2) the filing fee schedule for the same Act, as required by division GG of the 2023 Consolidated Appropriations Act. Both updates are discussed in more detail below.
Section 7A of the Clayton Act, 15 U.S.C. 18a, as added by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Public Law 94-435, 90 Stat. 1390 (“the Act”), requires all persons contemplating certain mergers or acquisitions, which meet or exceed the jurisdictional thresholds in the Act, to file notification with the Commission and the Assistant Attorney General and to wait a designated period of time before consummating such transactions. Section 7A(a)(2) requires the Federal Trade Commission to revise those thresholds annually, based on the change in gross national product, in accordance with section 8(a)(5).
The new jurisdictional thresholds, which take effect 30 days after publication in the
Any reference to the jurisdictional thresholds and related thresholds and limitation values in the HSR rules (16 CFR parts 801 through 803) and the Antitrust Improvements Act Notification and Report Form (“the HSR Form”) and its Instructions will also be adjusted, where indicated by the term “(as adjusted)”, as follows:
Section 605 of Public Law 101-162 (15 U.S.C. 18a note) requires the Federal Trade Commission to assess and collect filing fees from persons acquiring voting securities or assets under the Act. The original filing fee thresholds are set forth in section 605. Division GG of the 2023 Consolidated Appropriations Act, Public Law 117-328, 136 Stat. 4459, requires the Federal Trade Commission to revise these filing fee thresholds and amounts based on the percentage change in the GNP for such fiscal year compared to the GNP for the year ending September 30, 2022 (for the filing fee thresholds) and the percentage increase, if any, in the Consumer Price Index, as determined by the Department of Labor or its successor, for the year then ended over the level so established for the year ending September 30, 2022 (for the fee amounts).
Any reference to the fee thresholds and related values in the HSR rules (16 CFR parts 801 through 803) and the HSR Form and its Instructions will also be adjusted, where indicated by the term “(as adjusted)”, as follows:
By direction of the Commission.
Centers for Disease Control and Prevention, Health and Human Services (HHS).
Denial of petitions for addition of a health condition.
The Administrator of the World Trade Center (WTC) Health Program received four petitions (Petitions 031, 036, 039, and 053) to add amyotrophic lateral sclerosis (ALS) to the List of WTC-Related Health Conditions (List). Upon reviewing the scientific and medical literature, including information provided by petitioners, the Administrator determined that there is insufficient evidence to support taking further action at this time regarding ALS. The Administrator also finds that insufficient evidence exists to request a recommendation of the WTC Health Program Scientific/Technical Advisory Committee (STAC), to publish a proposed rule, or to publish a determination not to publish a proposed rule.
The Administrator of the WTC Health Program is denying these petitions for the addition of a health condition as of January 22, 2025.
Visit the WTC Health Program website at
Rachel Weiss, Program Analyst, 1090 Tusculum Avenue, MS: C-48, Cincinnati, OH 45226; telephone (404) 498-2500 (this is not a toll-free number); email
Title I of the James Zadroga 9/11 Health and Compensation Act of 2010 (Pub. L. 111-347, as amended by Pub. L. 114-113, Pub. L. 116-59, Pub. L. 117-328, and Pub. L. 118-31), added Title XXXIII to the Public Health Service (PHS) Act,
All references to the Administrator of the WTC Health Program (Administrator) in this document mean the Director of the National Institute for Occupational Safety and Health (NIOSH) or his designee.
Pursuant to section 3312(a)(6)(B) of the PHS Act, interested parties may petition the Administrator to add a health condition to the List in 42 CFR 88.15. Within 90 days after receipt of a valid petition to add a condition to the List, the Administrator must take one of the following four actions described in section 3312(a)(6)(B) of the PHS Act and § 88.16(a)(2) of the WTC Health Program regulations: (1) Request a recommendation of the STAC; (2) publish a proposed rule in the
More information about the WTC Health Program, including the List and the petition process, is available at
In addition to the regulatory provisions, the WTC Health Program has developed policies to guide the review of submissions and petitions,
A valid petition must include sufficient medical basis for the association between the September 11, 2001, terrorist attacks and the health condition to be added. In accordance with WTC Health Program
After the Program has determined that a petition is valid, and in accordance with the
Using validity indicators detailed in the
(1) substantial likelihood of causal association,
(2) high likelihood of causal association,
(3) limited likelihood of causal association,
(4) no likelihood of causal association, or
(5) inadequate evidence to determine the likelihood of causal association.
The Science Team provides the outcome of its evaluation to the Administrator. A health condition may be added to the List if peer-reviewed, published, epidemiologic studies provide support that there is a substantial likelihood of a causal association between the health condition and 9/11 exposures (Category 1).
More information about the WTC Health Program, including the List and the petition process, is available at
The Administrator of the WTC Health Program received four petitions requesting the addition of amyotrophic lateral sclerosis to the List of WTC-Related Health Conditions between 2021 and 2024. Of the scientific references provided in each petition, six were found to meet the validity requirement of being peer-reviewed, published, epidemiologic studies about the health condition among 9/11-exposed populations or to clinical case reports of health conditions in WTC responders or survivors. Each petition and its medical basis is described below.
On July 12, 2021, the Administrator received a petition (Petition 031) from a WTC responder requesting the addition of “Amyotrophic Lateral Sclerosis (ALS)” to the List.
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On April 7, 2022, the Administrator received a petition (Petition 039), requesting the addition of “Amyotrophic Lateral Sclerosis (ALS), Lou Gehrig's disease,” to the List.
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This study suggests a potential association between exposure to formaldehyde, a 9/11 agent, and ALS, and thus provided a sufficient medical basis to consider the submission a valid petition.
On January 30, 2024, the Administrator received a petition (Petition 053), requesting the addition of “Amyotrophic Lateral Sclerosis (ALS)” to the List.
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These studies suggest a potential association between cadmium, lead, and zinc and ALS, and thus provided a sufficient medical basis to consider the submission a valid petition.
In response to Petitions 031, 036, 039, and 053, and pursuant to the
The literature search conducted by the WTC Health Program found no studies that directedly examined ALS or MND risk in the 9/11-exposed population. However, the search identified six peer-reviewed, published, epidemiologic studies of mortality from nervous systems disorders, including ALS
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Pursuant to the WTC Health Program's
The six studies identified as high-quality and summarized in the Scientific Evaluation were evaluated individually and together to determine whether they provide a basis to support the addition of ALS to the List based on a causal relationship between 9/11 exposures to WTC dust, injury, or experiences and ALS. As described in the
The Science Team discussed its evaluation in full in the Scientific Evaluation, and summarized its findings in table 5, which is reproduced here:
Upon review of the evidence available in peer-reviewed, published, epidemiological studies regarding ALS among 9/11-exposed populations, the Science Team has assessed the degree to which the evidence supports a causal association between 9/11 exposures and ALS and has determined that the available evidence is inadequate to determine the likelihood of a causal association
Based on the Scientific Evaluation and the Science Team's finding that there is inadequate evidence to determine whether a causal association exists between 9/11 exposures and ALS, the Administrator has determined that there is insufficient evidence of causal association between 9/11 exposures and ALS to propose adding the condition to the List.
For the reasons discussed above, the request of Petitions 031, 036, 039, and 053 to add ALS to the List of WTC-Related Health Conditions is denied.
The Secretary, HHS, or his designee, the Director, Centers for Disease Control and Prevention (CDC) and Administrator, Agency for Toxic Substances and Disease Registry (ATSDR), authorized the undersigned, the Administrator of the WTC Health Program, to sign and submit the document to the Office of the Federal Register for publication as an official document of the WTC Health Program. Mandy Cohen M.D., M.P.H., Director, CDC, and Administrator, ATSDR, approved this document for publication on January 6, 2025.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation Nos. 701-TA-754 and 731-TA-1732 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of temporary steel fencing from China, provided for in subheading 7308.90.95 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Government of China. Unless the Department of Commerce (“Commerce”) extends the time for initiation, the Commission must reach a preliminary determination in antidumping and countervailing duty investigations in 45 days, or in this case by March 3, 2025. The Commission's views must be transmitted to Commerce within five business days thereafter, or by March 10, 2025.
January 15, 2025.
Kristina Lara ((202) 205-3386), 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 these investigations and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on November 19, 2024, under section 337 of the Tariff Act of 1930, as amended, on behalf of Modumetal, Inc. of Snohomish, Washington. A letter supplementing the complaint was filed on December 4, 2024. The complaint, as supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain nanolaminate alloy coated metal parts, components thereof, and products containing the same by reason of the infringement of certain claims of U.S. Patent No. 10,253,419 (“the '419 patent”) and U.S. Patent No. 11,242,613 (“the '613 patent”). The complaint further alleges that an industry in the United States exists as required by the applicable Federal Statute. The complainant requests that the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, may be viewed on the Commission's electronic docket (EDIS) at
Susan Orndoff, The Office of Docket Services, U.S. International Trade Commission, telephone (202) 205-1802.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain products identified in paragraph (2) by reason of infringement of one or more of claims 1-3, 5, and 7 of the '419 patent and claims 1-3 and 5 of the '613 patent, and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) Pursuant to section 210.10(b)(1) of the Commission's Rules of Practice and Procedure, 19 CFR 210.10(b)(1), the plain language description of the accused products or category of accused products, which defines the scope of the investigation, is “metal parts coated with Parker Hannifin's ToughShield® Plus coating as well as bundles containing one or more parts with ToughShield® Plus coating”;
(3) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainant is:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(4) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge. The Office of Unfair Import Investigations will not participate as a party in this investigation.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), as amended in 85 FR 15798 (March 19, 2020), such responses will be considered by the Commission if received not later than 20 days after the date of service by the complainant of the complaint, as supplemented, and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint, as supplemented, and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint, as supplemented, and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
Office of Community Oriented Policing Services, Department of Justice.
30-Day notice.
The office of Community Oriented Policing Services, 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.
Comments are encouraged and will be accepted for 30 days until February 21, 2025.
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: Dave Neely, Department of Justice, Office of Community Policing Services, 145 N St. NE, Washington, DC 20530, (202) 514-8553.
The proposed information collection was previously published in the
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.
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On January 15, 2025, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Eastern District of Michigan in
The United States, on behalf of the Environmental Protection Agency (“EPA”), filed a Complaint in this lawsuit seeking civil penalties and injunctive relief from Defendants for alleged violations of title II of the Clean Air Act, as amended, 42 U.S.C. 7521-7590, and the regulations promulgated thereunder, which aim to protect human health and the environment by reducing emissions of nitrogen oxides (“NO
When the United States' Complaint was filed, the United States also lodged a proposed Consent Decree among the United States on behalf of EPA, the People of the State of California on behalf of the the California Air Resources Board, and Defendants (the “Joint Consent Decree”). If approved by the Court, the Joint Consent Decree would resolve the claims against Defendants in the United States' Complaint on behalf of EPA, as well as related claims by U.S. Customs and Border Patrol and the National Highway Transportation and Safety Administration. The Joint Consent Decree would also partially resolve the claims against Defendants in the California Complaint. On January 15, 2025, California filed a separate proposed Consent Decree between Defendants and California (the “California Partial Consent Decree”). The California Partial Consent Decree would resolve the remaining claims in the California Complaint.
The Joint Consent Decree would require Defendants to: (i) pay a civil penalty of $525,000,000; (ii) take steps to remedy the alleged violations, including conducting a vehicle recall program to modify model year 2017-2019 J05E and J08E truck engines; (iii) implement a corporate compliance program; and (iv) perform mitigation projects to offset 100% of the excess NO
The California Partial Consent Decree would resolve California state claims for a proportional amount of the civil penalty recovered under the Joint Consent Decree and for an additional payment for a mitigation program in California administered by the California Air Resources Board.
The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
Any comments submitted in writing may be filed in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the proposed Consent Decree may be examined and downloaded at this Justice Department website:
On January 14, 2025, the Department of Justice lodged a proposed Modification to a Consent Decree with the United States District Court for the Northern District of Ohio, in the lawsuit entitled
In 2004, EPA and DOJ entered into a Consent Decree (“CD”) with the inter-related predecessors of Ohio Fresh Eggs, LLC (“OFE”) to resolve Clean Air Act (“CAA”) violations at several of defendants' barns in Ohio that house egg-laying chickens. The CD required OFE, which had purchased the facilities, to install particulate matter (“PM”) control equipment and implement best management practices to reduce ammonia emissions. In 2017, the lessee of OFE's facilities requested termination of the CD. EPA conducted an inspection of the facilities and found numerous violations of the CD. The proposed Modification amends the CD to resolve these violations by providing alternative injunctive relief approved by EPA that will achieve the emission reduction goals of the CD and requiring payment of $5,816,250 in penalties for violations of CD requirements to install and operate emissions controls and to submit quarterly reports.
The publication of this notice opens a period for public comment on the proposed Modification of the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
Any comments submitted in writing may be filed by the United States in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the Modification of the Consent Decree may be examined and downloaded at this Justice Department website:
Cyber Division, Federal Bureau of Investigation, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Cyber Division (CyD) 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.
Comments are encouraged and will be accepted for 30 days until February 21, 2025.
The proposed information collection was previously published in the
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.
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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 Tribal Justice, Department of Justice.
60-Day notice.
The Office of Tribal Justice, 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.
Comments are encouraged and will be accepted for 60 days until March 24, 2025.
If you have additional 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
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:
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The time per response is 80 hours.
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If additional information is required contact: Darwin Arceo, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC.
On January 16, 2025, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the District of Columbia in the lawsuit entitled
The United States filed a Complaint, on behalf of the United States Environmental Protection Agency, against Fayat S.A.S. and its subsidiaries BOMAG GmbH, BOMAG Americas, Inc., BOMAG (China) Construction Machinery Co., Ltd., MARINI S.p.A., RAVO B.V., Charlatte of America, Inc., PTC S.A.S., Secmair S.A.S., and MATHIEU S.A. alleging violations of sections 203(a) and 213(d) of the Clean Air Act, 42 U.S.C. 7522(a) and 7547(d), and implementing regulations, by their importation, introduction into commerce, and sale of nonroad equipment containing diesel engines that were not certified to model year engine emission standards. The Complaint also alleges related violations of labeling and reporting requirements and seeks civil penalties and appropriate injunctive relief.
Under the proposed Consent Decree, the Defendants will pay a civil penalty of $11,000,000 and will complete a project to mitigate harm caused by excess nitrogen oxide and particulate matter emissions from the noncompliant engines.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
Any comments submitted in writing may be filed by the United States in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the proposed Consent Decree may be examined and downloaded at this Justice Department website:
On January 15, 2025, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the District of Idaho in the lawsuit entitled
The United States filed a complaint under the Clean Water Act (“CWA”) against the City of Driggs, Idaho (“the City”) and State of Idaho seeking injunctive relief and civil penalties for violations of the requirements of the City's National Pollutant Discharge Elimination System (“NPDES”) permit and violations of an administrative order with the Environmental Protection Agency (“EPA”). The proposed Consent Decree would resolve the claims in the complaint, require the City to perform injunctive relief measures to ensure future compliance, and require the City to pay a penalty of $400,0000.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
Any comments submitted in writing may be filed by the United States in whole or in part on the public court docket without notice to the commenter.
During the public comment period, the consent decree may be examined and downloaded at this Justice Department website:
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
In this notice, OSHA announces the final decision to expand the scope of recognition for SGS North America, Inc., as a Nationally Recognized Testing Laboratory (NRTL).
The expansion of the scope of recognition becomes effective on January 22, 2025.
Information regarding this notice is available from the following sources:
OSHA hereby gives notice of the expansion of the scope of recognition of SGS North America, Inc. (SGS) as a NRTL. SGS's expansion covers the addition of six test sites and one test standard 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 and for an expansion or renewal of this recognition, following requirements in Appendix A to 29 CFR 1910.7. This appendix requires that the agency publish two notices in the
SGS submitted five applications to OSHA to expand recognition as a NRTL. The first application was received on March 20, 2022 (OSHA-2006-0040-0084), requesting the addition of one test site in Brussels, Belgium. This application was revised on January 9, 2024 (OSHA-2006-0040-0089) to update the address on the original application. The second expansion application was received on March 29, 2022 (OSHA-2006-0040-0085), requesting the addition of one test site in Yokohama, Japan. This application was revised on May 9, 2024 (OSHA-2006-0040-0091) requesting an additional test standard in addition to the Yokohama site. The third expansion application was received on March 30, 2022 (OSHA-2006-0040-0086), requesting the addition of one test site in Munich, Germany. This application was revised on January 9, 2024 (OSHA-2006-0040-0090) to update the address on the application to Puchheim, Germany. The fourth (OSHA-2006-0040-0087) and fifth (OSHA-2006-0040-0088) applications were received on April 1, 2022, requesting the addition of two test sites in New Taipei
OSHA staff performed a detailed analysis of the application packets and reviewed other pertinent information. OTPCA staff also performed on-site reviews of SGS's Korea site on April 25 and May 7, 2024; SGS's two Taiwan sites on February 29-March 1, 2024; SGS's Germany site on June 15-16, 2023; SGS's Belgium site on June 15-16, 2023; and SGS's Japan on May 9-10, 2024, in which the assessors found some nonconformances with the requirements of 29 CFR 1910.7. SGS addressed these issues sufficiently and OTPCA has preliminarily determined that OSHA should grant the application requests to add these six test sites and one test standard to SGS's NRTL scope of recognition.
OSHA published the preliminary notice announcing SGS's expansion applications in the
To obtain or review copies of all public documents pertaining to the SGS expansion applications, go to
OSHA staff examined SGS's expansion applications, conducted detailed on-site assessments, and examined other pertinent information. Based on review of this evidence, OSHA finds that SGS 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 SGS's scope of recognition. OSHA limits the expansion of SGS's recognition to include the sites listed below:
Table 2 lists the one test standard included in SGS's applications for expansion for testing and certification of products under the NRTL Program.
OSHA's recognition of the sites listed in table 1 above, limits SGS 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 SGS's scope of recognition. This limitation is consistent with the recognition that OSHA grants to other NRTLs that operate multiple sites. OSHA's recognition of any NRTL for a particular test standard is limited to equipment or materials for which OSHA standards require third-party testing and certification before using them in the workplace. Consequently, if a test standard also covers any products for which OSHA does not require such testing and certification, a NRTL's scope of recognition does not include these products.
In addition to those conditions already required by 29 CFR 1910.7, SGS must abide by the following conditions of the recognition:
1. SGS 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. SGS must meet all the terms of its recognition and comply with all OSHA policies pertaining to this recognition; and
3. SGS must continue to meet the requirements for recognition, including all previously published conditions on SGS's scope of recognition, in all areas for which it has recognition.
Pursuant to the authority in 29 CFR 1910.7, OSHA hereby expands the scope of recognition of SGS as a NRTL, to include six recognized testing sites and one recognized test standard, subject to the limitations and conditions specified above.
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.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Occupational Safety & Health Administration (OSHA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for
The OMB will consider all written comments that the agency receives on or before February 21, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Nicole Bouchet by telephone at 202-693-0213, or by email at
The collection of information requirements specified in this request apply to general working conditions in shipyard employment (29 CFR part 1915, subpart F). The specific collection of information requirements include employers obtaining information, utilities (§ 1915.83); employers providing information, sanitation (§ 1915.88); marking requirements, medical services and first aid, (§ 1915.87); developing written procedures, information exchange, tagging, and training, control of hazardous energy, (§ 1915.89). For additional substantive information about this ICR, see the related notice published in the
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL 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 DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Mine Safety and Health Administration (MSHA), Labor.
Notice.
The Federal Mine Safety and Health Act of 1977 governs the application, processing, and disposition of petitions for modification of mandatory safety standards. Any mine operator or representative of miners may petition for an alternative method of complying with an existing safety standard. MSHA reviews the content of each submitted petition, assesses the mine in question, and ultimately issues a decision on the petition. This notice includes a list of petitions for modification that were granted after MSHA's review and investigation, between July 1, 2024, and December 31, 2024.
Copies of the final decisions are posted on MSHA's website at
S. Aromie Noe, Director, Office of Standards, Regulations, and Variances at 202-693-9440 (voice),
Under section 101(c) of the Federal Mine Safety and Health Act of 1977, any mine operator or representative of miners may petition to use an alternative approach to comply with a mandatory safety standard. In response, the Secretary of Labor (Secretary) or his or her designee may modify the application of a mandatory safety standard to that mine if the Secretary determines that: (1) An alternative method exists that will guarantee no less protection for the miners affected than that provided by the standard; or (2) the application of the standard will result in a diminution of safety to the affected miners.
MSHA bases the final decision on the petitioner's statements, any comments and information submitted by interested persons, and a field investigation of the conditions at the mine. In some instances, MSHA may approve a petition for modification on the condition that the mine operator complies with other requirements noted in the decision. In other instances, MSHA may deny, dismiss, or revoke a petition for modification. In accordance with 30 CFR 44.5, MSHA publishes every final action granting a petition for modification.
On the basis of the findings of MSHA's investigation, and as designee of the Secretary, MSHA granted or partially granted the petitions for modification below. Since the previous
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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.
Pursuant to 39 CFR 3041.405, the Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to Competitive negotiated service agreement(s). The request(s) may propose the addition of a negotiated service agreement from the Competitive product list or the modification of an existing product currently appearing on the Competitive product list.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
Section II identifies the docket number(s) associated with each Postal Service request, if any, that will be reviewed in a public proceeding as defined by 39 CFR 3010.101(p), the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each such 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 and 39 CFR 3000.114 (Public Representative). Section II also establishes comment deadline(s) pertaining to each such request.
The Commission invites comments on whether the Postal Service's request(s) identified in Section II, if any, are consistent with the policies of title 39. 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 3041. Comment deadline(s) for each such request, if any, appear in Section II.
Section III identifies the docket number(s) associated with each Postal Service request, if any, to add a standardized distinct product to the Competitive product list or to amend a standardized distinct product, the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. Standardized distinct products are negotiated service agreements that are variations of one or more Competitive products, and for which financial models, minimum rates, and classification criteria have undergone advance Commission review.
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This Notice will be published in the
On December 13, 2024, CME Securities Clearing, Inc. (“CMESC”) filed with the Securities and Exchange Commission (“Commission”) an application on Form CA-1 (“Application”) under section 17A of the Securities Exchange Act of 1934 (“Exchange Act”) seeking to register as a clearing agency.
The Commission is publishing this notice to solicit comments on the Application. To grant CMESC's request to register as a clearing agency, the Commission must find that it satisfies the requirements of the Exchange Act and the rules and regulations thereunder, including the determinations required under Exchange Act section 17A(b)(3)(A) through (I).
The Application states that CMESC would be wholly owned by its parent company, CME Group, Inc.
CMESC's proposed Rules describe two types of participants: first, Members, which would be able to clear proprietary Eligible Securities Transactions through CMESC and to authorize Users with respect to clearing Eligible Securities Transactions through CMESC; and second, Users, which
A Member that authorizes a User is responsible for guaranteeing the financial performance of that User beyond the margin posted to the User's Account at the Applicant, and in this respect Members, but not Users, are required to make contributions to the Applicant's Guaranty Fund. A person will be admitted as a User only with the authorization of a Member and may utilize the Clearing Services as a User only for so long as it has a Member's authorization in place. In contrast to Members, CMESC does not impose direct financial responsibility requirements on User applicants and instead relies upon Members that authorize Users to determine the appropriate financial responsibility standards to impose, based on their assessment of a User's financial circumstances and their obligations to conduct due diligence of their authorized Users.
In Exhibit J, the Application provides information regarding CMESC's risk management framework, which CMESC describes as being intended to: (i) reduce the potential impact of a participant default via credit risk management standards and ongoing monitoring, and (ii) ensure that CMESC has sufficient financial and liquidity resources to manage the default of a certain number of participants. CMESC states that it would use onboarding requirements for each of its Members to mitigate counterparty risk and would apply financial responsibility requirements to its Members. CMESC may take action against a Member for its failure to remain in compliance with such requirements. Additionally, CMESC states that it would seek to mitigate counterparty and liquidity risk through various mechanisms, including its credit rating process for Members, credit limits, daily risk monitoring, margin collection, settlement variation exchange, backtesting, and stress testing.
With respect to risk management, the Application states that CMESC would maintain and structure a Guaranty Fund using its stress test methodology that is designed to ensure that the size of the Guaranty Fund is at least equal to the largest theoretical loss to the Registrant resulting from the Default of two Member Families, covering, if applicable, a predefined number of User accounts, in extreme but plausible market conditions.
With respect to systems, the Application states that CMESC's systems will be hosted in a virtual private cloud environment and in physical datacenters.
With respect to fees, the Application states that CMESC continues to engage the marketplace on its ultimate fee structure, which it plans to finalize as it approaches the launch date for operating its clearing agency. The Application also states that cleared repo and cleared U.S. Treasuries services that it offers will operate in a competitive environment, which in turn is expected to impact fees, and that fees for Members and Users will be published on CMESC's website when its clearing services are launched after filing a proposed rule change with the Commission pursuant to section 19(b)(3)(A) of the Exchange Act.
CMESC's application on Form CA-1, including each exhibit thereto referenced above, is available online at
Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number 600-44.
To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all comments on the Commission's internet website (
Copies of the Form CA-1, all subsequent amendments, all written statements with respect to the Form CA-1 that are filed with the Commission, and all written communications relating to the Form CA-1 between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Section, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m.
Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to File Number 600-44 and should be submitted on or before March 10, 2025.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 13, 2024, Cboe BZX Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., and Cboe C2 Exchange, Inc. (“Exchanges”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 30, 2024, New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On November 25, 2024, pursuant to Section 19(b)(2) of the Act,
The Exchange is proposing to amend Section 802.01C of the Manual to provide that (i) a listed company that falls below the price criteria set forth therein and effects a reverse stock split to regain compliance will not be eligible for a compliance period in certain circumstances, and (ii) a listed company may not effectuate a reverse stock split if it would result in the company falling below continued listing requirements.
Section 802.01C of the Manual (“Section 802.01C”) provides that a listed company will be considered to be below compliance standards if the average closing price of a security as reported on the consolidated tape is less than $1.00 over a consecutive 30 trading-day period (“Price Criteria”).
Notwithstanding the foregoing, Section 802.01C provides that if a listed company determines that, if necessary, it will cure the price condition by taking an action that will require approval of its shareholders, it must so inform the Exchange in the above referenced notification, must obtain the shareholder approval by no later than its next annual meeting, and must implement the action promptly thereafter. The company will be deemed to have regained compliance with the Price Criteria if the price promptly exceeds $1.00 per share, and the price remains above the level for at least the following 30 trading days.
The Exchange now proposes to amend Section 802.01C to limit the circumstances under which a listed company that fails to meet the Price Criteria may be provided a compliance period under Section 802.01C. Specifically, the Exchange proposes that, notwithstanding the general ability of a listed company to utilize a reverse stock split as a mechanism for regaining compliance with the Price Criteria, if a listed company's security fails to meet the Price Criteria and the company (i) has effected a reverse stock split over the prior one-year period
The Exchange also proposes to amend Section 802.01C to prohibit a listed company from effectuating a reverse stock split, for purposes of regaining compliance with the Price Criteria or otherwise, if the effectuation of such reverse stock split results in the company's security falling below the continued listing requirements of Section 802.01A of the Manual (Distribution Criteria for Capital or Common Stock (including Equity Investment Tracking Stock)). If a listed company effectuates a reverse stock split notwithstanding this limitation, the company would not be eligible to follow the procedures outlined in Sections 802.02 and 802.03 of the Manual
In support of its proposal, the Exchange states that it has observed that some companies, typically those in financial distress or experiencing a prolonged operational downturn, engage in a pattern of repeated reverse stock splits.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The development and enforcement of meaningful listing standards
The Exchange's proposal would eliminate the compliance periods available to listed companies to cure a Price Criteria deficiency in certain circumstances, which could lead to earlier delisting of companies that fail to comply with the Price Criteria. In particular, a listed company that fails to meet the Price Criteria and that has effected a reverse stock split during the prior one-year period or has effected reverse stock splits with a cumulative ratio of 200 shares or more to one over the prior two-year period would not be eligible for any compliance periods under Section 802.01C
The Exchange's proposal is reasonably designed to enhance its continued listing standards, thereby protecting investors and the public interest. In particular, the proposal is reasonably designed to curtail the use of reverse stock splits to inappropriately delay delisting and thereby allow a company's security to remain listed on the Exchange for an extended period despite not being able to maintain compliance with the Price Criteria or Distribution Criteria. As discussed above, the Exchange states that engaging in a pattern of repeated reverse stock splits is often indicative of deep financial or operational distress that renders a company inappropriate for trading on the Exchange for investor protection reasons.
The Exchange's proposal is reasonably designed to further investor protection by limiting the ability of listed companies with a history of having a low stock price to use reverse stock splits to remain qualified for listing.
While the Commission recognizes that the Exchange delisting process is in part designed to allow listed companies experiencing temporary financial and/or business issues to regain compliance with continued listing standards, the proposal reasonably balances the intent of the delisting process with the need to prevent companies from taking advantage of the delisting process for an extended period of time despite not being able to comply with Exchange standards for continued listing, which is contrary to the goal of protecting investors and the public interest.
The proposed rule change, as modified by Amendment No. 2, is also consistent with Section 6(b)(7) of the Act
Finally, the comment letters received on the proposal were generally supportive.
In sum, the Exchange's proposal appropriately identifies securities listed on its market that are more likely to have serious recurrent issues in regaining and maintaining compliance with the Exchange's continued listing standards, including the Price Criteria, and proposes reasonable changes to shorten the time that such non-compliant securities can remain trading on the Exchange, thereby protecting investors and the public interest in accordance with Section 6(b)(5) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning whether the proposed rule change, as modified by Amendment No. 2, 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.
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 2, prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 2 in the
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Like most issuers of securities, when an investment company (“fund”)
Rule 482 contains certain requirements regarding the disclosure that funds are required to provide in qualifying advertisements. These requirements are intended to encourage the provision to investors of information that is balanced and informative, particularly in the area of investment performance. For example, a fund is required to include disclosure advising investors to consider the fund's investment objectives, risks, charges and expenses, and other information described in the fund's prospectus, and highlighting the availability of the fund's prospectus and, if applicable, its summary prospectus. In addition, rule 482 advertisements that include performance data of open-end funds or insurance company separate accounts offering variable annuity contracts are required to include certain standardized performance information, information about any sales loads or other nonrecurring fees, and a legend warning that past performance does not guarantee future results. Such funds including performance information in rule 482 advertisements are also required to make available to investors month-end performance figures via website disclosure or by a toll-free telephone number, and to disclose the availability of the month-end performance data in the advertisement. The rule also sets forth requirements regarding the prominence of certain disclosures, requirements regarding advertisements that make tax representations, requirements regarding advertisements used prior to the effectiveness of the fund's registration statement, requirements regarding the timeliness of performance data, and certain required disclosures by money market funds.
Rule 482 advertisements must be filed with the Commission or, in the alternative, with the Financial Industry Regulatory Authority (“FINRA”).
Rule 482 contains requirements that are intended to encourage the provision to investors of information that is balanced and informative, particularly in the area of investment performance. The Commission is concerned that in the absence of such provisions fund investors may be misled by deceptive rule 482 advertisements and may rely on less-than-adequate information when determining in which funds they should invest money. As a result, the Commission believes it is beneficial for funds to provide investors with balanced information in fund advertisements in order to allow investors to make better-informed decisions.
On November 7, 2024, the Commission adopted amendments to rule 482 to correct outdated cross-references and conform the risk statements that money market funds must include in their advertisements and sales literature to the risk statements that money market funds must include in their prospectuses.
We estimate the total annual burden to comply with amended rule 482 to be 577,896 hours, at an average time cost of $213,154,498. The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act and is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules and forms. The provision of information under rule 482 is necessary to obtain the benefits of the safe harbor offered by the rule. The information provided under rule 482 will not be kept confidential. 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.
Written comments are invited on: (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 estimate of the burden of the collection of information; (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 respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street NE Washington, DC 20549 or send an email to:
Publishing in the
Thursday, January 23, 2025, at 2 p.m.
The Closed Meeting scheduled for Thursday, January 23, 2025, at 2 p.m., has been changed to Thursday, January 23, 2025, at 1 p.m.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
On November 22, 2024, the Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR-OCC-2024-016, pursuant to Section 19(b) of the Securities Exchange Act of 1934 (“Exchange Act”)
OCC is a central counterparty (“CCP”), which means that as part of its function as a clearing agency, it interposes itself as the buyer to every seller and the seller to every buyer for financial transactions. As the CCP for the listed options markets and for certain futures in the United States, OCC is exposed to the risk that one or more of its Clearing Members may fail to make a payment or to deliver securities. OCC addresses such risk exposure, in part, by requiring its members to provide collateral, including both margin collateral and Clearing Fund collateral. Margin is the collateral that CCPs collect to cover potential changes in a member's positions over a set period of time during normal market conditions. OCC's Clearing Fund is a mutualized pool of financial resources to which each Clearing Member is required to contribute to ensure that OCC maintains sufficient qualifying liquid resources to manage its liquidity risk, and to address the tail risk that the margin collateral OCC collects from each Clearing Member might be insufficient to cover OCC's credit exposure to a defaulting member in extreme but plausible market conditions.
OCC's methodology for calculating margin collateral requirements is called the System for Theoretical Analysis and Numerical Simulations (“STANS”).
OCC proposes to address the misalignment of day count conventions used in the models underlying both STANS and the CST methodology by processing data through a series of conversions to ensure that the data presented to the price smoothing and volatility simulation models is consistent with the assumptions of those models. Specifically, OCC would convert implied volatility data into a trading day convention before feeding that data into OCC's implied volatility simulation models. OCC would then convert the output of its implied volatility simulation models back into a calendar day convention before feeding those results into OCC's price smoothing process.
OCC proposes to estimate implied volatility shocks specific to options with a shorter tenor than 1M options rather than imposing the same shock on all options with one month or less to maturity. Within STANS, OCC proposes to derive the shocks for SDOs from the shock applied to 1M options. Specifically, OCC would derive the shocks for such options through the application of a square-root decay to the 1M option volality.
OCC summarized the potential impacts of the proposed changes to both margin and Clearing Fund requirements based on data from July 2023 to September 2024.
Section 19(b)(2)(C) of the Exchange Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to such organization.
The description of a proposed rule change, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding,
After carefully considering the Proposed Rule Change, the Commission finds that the Proposed Rule Change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to OCC. More specifically, the Commission finds that the Proposed Rule Change is consistent with Exchange Act Rules 17Ad-22(e)(4)
Rule 17Ad-22(e)(4) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit risk exposures to participants and those arising from payment clearing, and settlement processes by, in part, testing the sufficiency of its financial resources available to meet the minimum standards under Rules 17Ad-22(e)(4)(i) through (iii), as applicable.
As described above, OCC proposes changes to both its margin methodology (STANS) and stress testing (CST) methodology. The proposed changes
Accordingly, the Proposed Rule Change is consistent with Rules 17Ad-22(e)(4) and (6) under the Exchange Act.
Section 17A(b)(3)(F) of the Exchange Act requires, among other things, that the rules of a clearing agency be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
On the basis of the foregoing, the Commission finds that the Proposed Rule Change is consistent with the requirements of the Exchange Act, and in particular, the requirements of Section 17A of the Exchange Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act” or “Act”),
On July 25, 2024, OCC filed the proposed rule change File No. SR-OCC-2024-010 (“Initial Filing”).
Proposed changes to OCC's Rules are contained in Exhibit 5A to Amendment No. 3 to File No. SR-OCC-2024-010. Proposed changes to OCC's Margin Policy are contained in confidential Exhibit 5B to Amendment No. 3 to File No. SR-OCC-2024-010. Material proposed to be added is marked by italicizing and material proposed to be deleted is marked with strikethrough text. All terms with initial capitalization that are not otherwise defined herein have the same meaning as set forth in the OCC By-Laws and Rules.
In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections (A), (B),
On July 25, 2024, OCC filed with the Commission a proposed rule change, SR-OCC-2024-010 to establish a margin add-on charge (the “Intraday Risk Charge”) that would be applied to all Clearing Member accounts to assist with mitigating the risks arising from intraday and overnight trading activity. On September 4, 2024, OCC amended the filing to include as Exhibit 2 an information memorandum OCC published on its website informing OCC's membership of the details of the margin add-on charge. The Commission received comments regarding the proposed rule change
Based on the comments the Commission received and a recent release of the Commission's October 25, 2024, final rule amending the CCA Standards,
OCC is the sole clearing agency for standardized equity options listed on national securities exchanges registered with the Commission. OCC also clears stock loan and futures transactions. In its role as a clearing agency, OCC guarantees the performance of its Clearing Members for all transactions cleared by OCC by becoming the buyer to every seller and the seller to every buyer (or the lender to every borrower and the borrower to every lender, in the case of stock loan transactions). These clearing activities could expose OCC to financial risks if a Clearing Member fails to fulfil its obligations to OCC. In its role as guarantor for all transactions cleared through OCC, one of the more material risks related to a Clearing Member's failure to perform is credit risk arising from the activity of the Clearing Members whose performance OCC guarantees. OCC manages these financial risks through financial safeguards, including the collection of margin collateral from Clearing Members designed to, among other things, address the market risk associated with a Clearing Member's positions during the period of time OCC has determined it would take to liquidate those positions.
At the start of each business day, OCC collects margin requirements for each marginable account calculated by OCC's proprietary System for Theoretical Analysis and Numerical Simulation (“STANS”) based on the account's end-of-day positions from the previous business day.
Since the time these existing margin collection processes were established, OCC has observed a significant increase in contract volume and, in particular, volume in option contracts traded on the day of their expiration—so-called “zero-days-to-expiration” or “0DTE” options.
The increase in 0DTE options trading combined with increased intraday trading activity across other products poses challenges to OCC's risk management, particularly with respect to the management of OCC's overnight and intraday risk exposure to its Clearing Members in between the collections of margin at the start of each business day. Because OCC's STANS margin calculation is based on end-of-day positions, the margin requirement may not account for 0DTE options trading activity, since the Clearing Member would have either traded out of or exercised the options position, or the option would have expired by the end of the day. Similarly, in the current system the risk increase from intraday trading activity across other products would only be captured once end-of-day positions are established, which when margin calculations are applied would not account for the intraday risk increase from any positions that were traded out of. In addition, OCC's portfolio revaluation process for purposes of determining intraday margin calls to address the change in value of margin collateral is based on a Clearing Member's start-of-day collateral deposits, which would not include margin for 0DTE options or intraday positions. For these reasons OCC proposes to establish the Intraday Risk Charge add-on to capture such risk increases, and the associated Intraday Monitoring Thresholds regime to observe and measure risk increasing activity.
Based on industry and participant feedback and to conform to the recent release of the Commission's final rule amending the CCA Standards concerning intraday margin calls, and in order to mitigate OCC's intraday risk exposures, OCC proposes to: (i) narrow the window over which the Intraday Risk Charge would be calculated to between 11:00 a.m. to 12:30 p.m. Central Time, (ii) to remove any
In the Initial Filing,
OCC's current intraday margin system recalculates the STANS margin risk using portfolio position sets updated every 20 minutes between 8:30 a.m. and 6:30 p.m. Central Time, and at-least every hour during ETH sessions. OCC considers that 20 minutes is sufficient time under OCC's current system capabilities to provide consistent and reliable snapshot results at a steady cadence during regular trading hours with heavy trading activity. Outside of regular trading hours and during overnight trading, hourly intervals between snapshots were deemed more appropriate because of the significantly lower trading activity. OCC currently employs and will continue to use the intraday margin system for ETH monitoring, including to determine when to issue an ETH margin call.
OCC proposes to amend the proposed Intraday Risk Charge so that it is determined based on a narrower monitoring interval. Specifically, OCC would calculate the Intraday Risk Charge based on the average daily increased risk identified through OCC's current intraday margin system between the hours of 11:00 a.m. and 12:30 p.m. Central Time; provided however, that OCC may adjust the Intraday Risk Charge as described further below. This change would address comments that the 20-minute snapshots during overnight and intraday trading hours were too frequent and suggested that OCC use fewer snapshots at predictable intervals. In particular, by narrowing the window, Execution-Only Clearing Members
As under the Initial Filing,
As under the Initial Filing,
To effect the proposed changes, OCC proposes to amend Rule 601 by adding
Proposed Rule 601(i)(2) would be modified to provide the method of calculation for the Intraday Risk Charge add-on, which would generally be set as the average of the peak intraday risk increases from portfolio position changes between 11:00 a.m. and 12:30 p.m. Central Time over the preceding month.
OCC would also amend its Margin Policy to describe material aspects of the Intraday Risk Charge as discussed herein. As under the Initial Filing,
As under the Initial Filing,
As under the Initial Filing,
OCC has reviewed the potential impact of the proposed add-on charge on all Clearing Members over a thirteen-month period.
As compared to the Initial Filing, that aggregate amount of the additional margin would be distributed across market-maker, firm and customer accounts as follows:
With respect to firms classified as Execution-Only Clearing Members, the add-on charge would generate approximately $23.4 million of additional margin in the aggregate, down from $39.4 million under the Initial Filing, assuming that Execution-Only Clearing Members made no changes to allocate trades prior to the Intraday Risk Charge Measurement Time.
Under the Initial Filing,
OCC proposes to establish the Intraday Monitoring Thresholds as statistical measures (
As under the Initial Filing,
In the Initial Filing,
As under the Initial Filing,
The Margin Policy would further provide that any margin calls issued outside of the standard processing time window must be approved by the Chief Financial Risk Officer, Chief Executive Officer, Chief Operating Officer, or Chief Risk Officer. This change aligns with OCC's current Portfolio Revaluation margin call process in allowing margin calls to be issued outside the single intraday collection time in exceptional circumstances with escalated approval. OCC believes that margin calls issued outside the single intraday collection time would be the exception, rather than the rule. This change also aligns with Commission guidance from its October 25, 2024, final rule amending the CCA Standards, suggesting that scheduled intraday margin calls may not be sufficient and that CCAs would need to have the ability to make unscheduled intraday margin calls.
The Margin Policy would be further revised to state that any margin call would be calculated as the difference between the reviewed intraday risk increase at the single intraday collection time at or around 12:00 p.m. Central Time and the Intraday Risk Charge. Intraday margin calls would only be increasing financial resources to OCC. Generally, an intraday margin call would be released the next business day.
Data from September 2023 to September 2024 indicates there would have been approximately 1024 potential margin calls issued under the proposed changes, as amended. The number of potential margin calls would not change as a result of the amendments to the Initial Filing. As amended, the average daily margin call amount would have been $27 million, as opposed to $25.1 million under the Initial Filing. This increase is attributable to the decrease in the pre-funded Intraday Risk Charge resulting from the proposed amendments to the Initial Filing.
OCC also proposes to modify the Margin Policy to add a provision whereby an FRM Officer will have the discretion to decide whether to issue or not issue a margin call, if in their judgement the call is not necessary to effectively manage the risk posed to OCC based on the specific facts and circumstances. As under the Initial Filing, such circumstances would include instances where OCC's intraday risk system may produce results that may not indicate actual risk increasing activity,
In all such cases, the FRM Officer would be required to document the basis for their decision not to issue a margin call at the single intraday collection time for an account breaching the Intraday Risk Monitoring Threshold
In the Initial Filing,
OCC believes that the proposed changes are consistent with Section 17A(b)(3)(F) of the Exchange Act
Rule 17Ad-22(e)(6)(ii), as recently amended, requires OCC to establish, implement, maintain and enforce written policies and procedures reasonably designed to cover its credit exposures to its participants by establishing a risk-based margin system that, at a minimum:
(A) Marks participant positions to market and collects margin (including variation margin or equivalent charges if relevant) at least daily;
(B) Monitors intraday exposures on an ongoing basis;
(C) Includes the authority and operational capacity to make intraday margin calls, as frequently as circumstances warrant, including (1) when risk thresholds specified by OCC are breached, or (2) when the products cleared or markets served display elevated volatility; and
(D) Documents when OCC determines not to make an intraday call pursuant to its written policies and procedures required under Rule 17Ad-22(e)(6)(ii)(C).
OCC's existing margin processes are already designed to mark positions to market and collect margin at least daily, consistent with Rule 17Ad-22(e)(6)(ii)(A).
In general, OCC would issue a Clearing Member a margin call during the scheduled intraday collection time in the event that Clearing Member's intraday risk increase, as measured at or around 12:00 p.m. Central Time breached the proposed Intraday Monitoring Threshold. The scheduled intraday margin call aligns with the timing of OCC's existing intraday margin calls when unrealized losses exceeding 50% of an account's total risk charges are observed for that account based on start-of-day positions, which were previously approved by the Commission.
In addition, consistent with Commission guidance from its October 25, 2024, final rule,
For the above reasons, OCC believes that the proposed rule change is consistent with Section 17A of the Exchange Act
Section 17A(b)(3)(I) requires that the rules of a clearing agency do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
While the proposed rule change may impact different accounts to a greater or lesser degree depending on each Clearing Member's trading activity, including portfolios containing a greater volume of 0DTE option positions, OCC does not believe that the proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. As discussed above, OCC is obligated under the Exchange Act and the regulations thereunder to establish, implement, maintain and enforce written policies and procedures reasonably designed to cover its credit exposures to its participants by establishing a risk-based margin system that, among other things, (i) considers, and produces margin levels commensurate with the risks and particular attributes of each relevant product, portfolio, and market, (ii) monitor intraday exposures on an ongoing basis, and (iii) maintain the authority and operational capacity to make intraday margin calls, as frequently as circumstances warrant, including when thresholds specified by the CCA are breached or when the products cleared or markets served display elevated volatility.
Moreover, the proposed rule change relates to risk management changes designed to mitigate OCC's credit exposure from the increased risk generated from Clearing Member trading activities that includes 0DTE option contracts. As noted above, the risk exposure from the significant increase in intraday trading activity of 0DTE options may not be adequately captured under OCC's current margin system. OCC believes the Intraday Risk Charge would be a risk-based approach suitable to mitigate the increased intraday risk exposure presented to OCC from such trading activities.
Furthermore, the proposed rule change would be applied uniformly across all Clearing Members and affect all cleared products. In response to feedback from industry participants, the amendments to the proposal would provide additional clarity to participants by shortening the time horizon for assessing the Intraday Risk Charge, while also designating a singular intraday margin issue collection time for potential margin calls in the ordinary course. These changes are designed to address feedback from industry participants to provide them with the necessary predictability they need to allocate trades within their portfolio more often throughout the day while also allowing Clearing Members to actively manage their exposure to the Intraday Risk Charge. Accordingly, OCC believes that the proposed rule change would not impose any burden or impact on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.
Written comments were not and are not intended to be solicited with respect to the proposed change and none have been received.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
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 Vanessa Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-OCC-2024-010 and should be submitted on or before February 12, 2025.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Dustin Hanks, DS/SI/PSS, SA-20 10th Fl., 2201 C St. NW, Washington, DC 20522-2210, who may be reached on (202)949-6965 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• 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.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
The information solicited on this form will be used to conduct background investigations, reinvestigations, and continuous vetting of persons for eligibility for logical access, physical access, credentialing, and fitness to perform work overseas for or on behalf of the U.S. Government as Locally Employed (LE) Staff and locally-hired third party contractors employed overseas at a U.S. Mission. For applicants, this form is to be used only after a conditional offer of employment has been made. This form is not to be used for national security positions.
The collection of information will be presented to respondents as an electronically fillable form as well as through a static web page that will produce an electronic form.
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “The Book of Esther in the Age of Rembrandt” at The Jewish Museum, New York, New York; the North Carolina Museum of Art, Raleigh, North Carolina; the Isabella Stewart Gardner Museum, Boston, Massachusetts; and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Notice of public meeting.
The Department of State will conduct a public meeting at 1 p.m. on Thursday, February 13, 2025, both in-person at Coast Guard Headquarters in Washington, DC, and via teleconference. The primary purpose of the meeting is to prepare for the 11th session of the International Maritime Organization's (IMO) Sub-committee on Ship Systems and Equipment (SSE) to be held at IMO Headquarters in London, United Kingdom from Monday, February 24 to Friday, February 28, 2025.
Members of the public may participate up to the capacity of the teleconference via Microsoft Teams, which can handle 500 participants or up to the seating capacity of the room if attending in person. The meeting location will be the United States Coast Guard Headquarters, and the teleconference line will be provided to those who RSVP. To RSVP, participants should contact the meeting coordinator, LT Jeff Bors, by email at
The agenda items to be considered at SSE 11 include:
Those who plan to participate should contact the meeting coordinator, LT Jeff Bors, by email at
Additional information regarding this and other IMO public meetings may be found at:
Notice is hereby given of the following determinations: I hereby determine that a certain object being imported from abroad pursuant to an agreement with its foreign owner or custodian for temporary exhibition within the Collection Galleries: 1880s-1940s of The Museum of Modern Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, is of cultural significance, and, further, that its temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “Sargent and Paris” at The Metropolitan Museum of Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “Monstrous Beauty: A Feminist Revision of Chinoiserie” at The Metropolitan Museum of Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion nor omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before February 11, 2025.
Send comments identified by docket number FAA-2024-2450 using any of the following methods:
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Sean O'Tormey at 202-267-4044, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Issued in Washington, DC.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The
Written comments should be submitted by February 21, 2025.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/FAA, and sent via electronic mail to
Raymond Plessinger by email at:
The information collected includes: type of application, operator's name/DBA, telephone number, mailing address, physical address of the principal base of operations, chief pilot/designee name, airman certificate grade and number, and aircraft make/model and registration numbers to be used.
This information collection also includes safety mitigation plans and public interest statements in petitions for exemption; plans for operations over congested areas; and recordkeeping requirements.
All operators certificated under part 137 are required to maintain certain records for a minimum of 12 months. The FAA estimates this recordkeeping burden at 4.5 hours per operator. Assuming a universe of 1,763 operators, the annual recordkeeping burden is 7,934 hours.
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 one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on January 15, 2025. See Supplementary Information section for relevant date(s).
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Sanctions Compliance, 202-622-2490 or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On January 15, 2025, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
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 one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on January 15, 2025. See
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Sanctions Compliance, 202-622-2490; or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On January 15, 2025, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
1. PRIKHODKO, Andrei Valeryevich (a.k.a. PRIKHODKO, Andrey Valeryevich), Moscow, Russia; DOB 26 Aug 1977; POB Moscow, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; National ID No. 772335626982 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of Executive Order 13662 of March 20, 2014, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” 79 FR 16169, 3 CFR, 2014 Comp., p. 233 (E.O. 13662) for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of Executive Order 14024 of April 15, 2021, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation,” 86 FR 20249, 3 CFR, 2021 Comp., p. 542 (Apr. 15, 2021) (E.O. 14024) as amended by Executive Order 14114 of December 22, 2023, “Taking Additional Steps With Respect to the Russian Federation's Harmful Activities,” 88 FR 89271, 3 CFR, 2023 Comp., p. 721 (Dec. 22, 2023) (E.O. 14114) for operating or having operated in the financial services sector of the Russian Federation economy.
1. AKTSIONERNOE OBSHCHESTVO ATLANT TORG, Ul. 1-Ya Tekstilshchikov D. 12/9, Pomeshch. 5P, Moscow 109390, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 31 Jan 2024; Tax ID No. 9723222604 (Russia); Registration Number 1247700093211 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
2. AKTSIONERNOE OBSHCHESTVO TRANZAKTSII I RASCHETY, Proezd Lugovoi D. 9, K. 1, Pomeshch. 2/1, Moscow 109652, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 31 May 2024; Tax ID No. 9723231824 (Russia); Registration Number 1247700404907 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
3. ANHUI HONGSHENG INTERNATIONAL TRADE CO LTD (a.k.a. ANHUI HONGSHENG INTERNATIONAL BUSINESS CO LTD), 200 Huaining Road, Heyedi, Shushan District, Hefei, Anhui 230000, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 27 Aug 2024; Unified Social Credit Code (USCC) 91340000MADXTPQR3H (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
4. FUJIAN XINFUWANG INTERNATIONAL TRADE CO LTD (a.k.a. FUJIAN XINFUWANG INTERNATIONAL TRADING COMPANY LTD), Unit 2601, Hengli City, 128 Wusi Road, Gulou District, Fuzhou, Fujian 350000, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 11 Oct 2024; Unified Social Credit Code (USCC) 91350000MAE1HJFW50 (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
5. HANGZHOU XIANGHE TRADING CO LTD, Office 143, Floor 1, Building 1, 63 Jiuhuan Road, Shangcheng District, Hangzhou, Zhejiang Province, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Unified Social Credit Code (USCC) 91330102MAE1C08D6W (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
6. HEILONGJIANG SHUNSHENG ECONOMIC AND TRADE DEVELOPMENT CO LTD, Room 301, Building S21, No. 5566 Maple Leaf Blue Peninsula, Zhigu Third Street, Songbei District, Harbin, Heilongjiang 150000, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 09 Sep 2024; Unified Social Credit Code (USCC) 91230109MADXG1GK67 (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
7. HERBARIUM OFFICE MANAGEMENT LLC (a.k.a. GERBARIUM OFFICE MANAGEMENT LLC), Ul. Novyi Arbat D. 29, Kabinet 324, Moscow 121099, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7704877746 (Russia); Registration Number 5147746250890 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
8. JILIN PROVINCE SHUNDA TRADING COMPANY LTD, Office 1901, China Trade International Unit 1, Renmin Street No. 146, Nanguan District, Changchun City, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Unified Social Credit Code (USCC) 91220000MAE2BG024F (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
9. JOINT STOCK COMPANY ARCTUR (a.k.a. JSC ARKTUR), Ul Chaginskaya D. 4, Str. 13, Pomeshch. 6/2, Moscow 109380, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 24 Aug 2022; Tax ID No. 9725093383 (Russia); Registration Number 1227700519804 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
10. LIMITED LIABILITY COMPANY SIGMA PARTNERS, Ul. Lenina D. 10, Office 201A, Kostroma 156000, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 05 Jul 2023; Tax ID No. 4400015270 (Russia); Registration Number 1234400003463 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
11. PAYLINK LIMITED, Ul. 2-Ya Entuziastov D. 5, K. 40, Pomeshch. 3/2, Vn. Ter. G. Munitsipalnyy Okrug Perovo, Moscow 111024, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 10 Oct 2024; Tax ID No. 7720938259 (Russia); Registration Number 1247700672427 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
12. QINGDAO HEZHI BUSINESS SERVICE CO LTD, Room 303, Unit 1, Building 1, No.112 Ningxia Road, Shinan District, Qingdao, Shandong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 21 Aug 2024; Unified Social Credit Code (USCC) 91370200MADY0FLQ9J (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
13. QINGYUAN FO FENG LEDA SUPPLY CHAIN SERVICE CO LTD, Room 701, Lixin Shengfeikangcheng Commercial Office Building, 59 Zhenxing South Road, Shijiao Town, Fogang County, Guangdong Province, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Unified Social Credit Code (USCC) 91441821MADYPAQ94B (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
14. SHAANXI HONGRUN JINHUA TRADING CO LTD (a.k.a. SHAANXI HONGRUN JINHUA TRADE AND COMMERCE COMPANY LTD), Room 1511, Unit 2, Building 28, Shouchuang Fubei Gaoyin, Fengcheng 12th Road, Economic and Technological Development Zone, Xi'an, Shaanxi 710000, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
15. XINJIANG FINANCIAL IMPORT AND EXPORT CO LTD, Office 720, 7th Floor, Yizhan Tiandi Building A, 336 Rongsheng Fifth Street, Economic and Technological Development Zone, Urumqi, Xinjiang, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Unified Social Credit Code (USCC) 91650106MADXMUBG3Q (China) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
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 one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on January 16, 2025. See
OFAC: Associate Director for Global Targeting, 202-622-2420; the Assistant Director for Sanctions Compliance, 202-622-2490 or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On January 16, 2025, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
1. ABDALLA, Ahmed (a.k.a. ABDALLA, Akhmed Abdalla Khalafalla; a.k.a. AHMED, Abdalla Khalafalla Abdalla; a.k.a. KHALAFALLAH, Abdallah Ahmed Abdallah), Pishonevskaya 20-1, Flat 76, Odessa, Odessa 65026, Ukraine; Apt. 5405, Amna Tower, Al Habtoor City, Dubai, United Arab Emirates; DOB 14 Mar 1978; POB Omdurman, Sudan; nationality Ukraine; Gender Male; Passport PU669310 (Ukraine) expires 20 Sep 2032; alt. Passport PU683987 (Ukraine) expires 28 Oct 2032; alt. Passport FM684476 (Ukraine) expires 05 Apr 2028; alt. Passport FB793884 (Ukraine) expires 09 Sep 2025 (individual) [SUDAN-EO14098] (Linked To: DEFENSE INDUSTRIES SYSTEM).
Designated pursuant to section 1(a)(v) of Executive Order 14098 of May 4, 2023, “Imposing Sanctions Certain Persons Destabilizing Sudan and Undermining the Goal of a Democratic Transition,” (E.O. 14098) for being a foreign person who is owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, the Defense Industries System, a person whose property and interests in property are blocked pursuant to E.O. 14098.
2. AL-BURHAN, Abdel Fattah (a.k.a. ALBURHAN, Abdalftah Alburhan A Alrahman; a.k.a. “BURHAN”), Port Sudan, Sudan; DOB 04 Jul 1960; POB Shandi, Sudan; nationality Sudan; Gender Male; Passport P11000434 (Sudan) expires 30 Aug 2033 (individual) [SUDAN-EO14098].
Designated pursuant to section 1(a)(ii)(A) of E.O. 14098 for being a foreign person who is or has been a leader, official, senior executive officer, or member of the board of directors of the Sudanese Armed Forces, an entity that has, or whose members have been responsible for, or complicit in, or have directly or indirectly engaged or attempted to engage in actions or policies that threaten the peace, security, or stability of Sudan, relating to the tenure of such leader, official, senior executive officer, or member of the board of directors.
1. PORTEX TRADE LIMITED (a.k.a. CLOUD COMPUTING INTERNATIONAL HONG KONG LIMITED; a.k.a. PORTEX TRADE FZE), Room 1502 Easey Coml Bldg, Wan Chai, Hong Kong, China; Organization Established Date 17 May 2011; Company Number 1602116 (Hong Kong); Business Registration Number 58369682 (Hong Kong) [SUDAN-EO14098] (Linked To: ABDALLA, Ahmed).
Designated pursuant to section 1(a)(v) of E.O. 14098 for being a foreign person who is owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, Ahmed Abdalla, a person whose property and interests in property are blocked pursuant to E.O. 14098.
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 one or more persons and vessels that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons, including the identified vessels, are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on January 10, 2025. See
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Sanctions Compliance, 202-622-2490 or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On January 10, 2025, OFAC determined that the property and
1. ALEKPEROV, Yusuf Vagitovich (a.k.a. ALEKPEROV, Iussuf), Russia; DOB 20 Jun 1990; POB Moscow, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 770300105897 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of Executive Order 13662 of March 20, 2014, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” 79 FR 16169, 3 CFR, 2014 Comp., p. 233 (E.O. 13662) for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of Executive Order 14024 of April 15, 2021, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation,” 86 FR 20249, 3 CFR, 2021 Comp., p. 542 (Apr. 15, 2021) (E.O. 14024) as amended by Executive Order 14114 of December 22, 2023, “Taking Additional Steps With Respect to the Russian Federation's Harmful Activities,” 88 FR 89271, 3 CFR, 2023 Comp., p. 721 (Dec. 22, 2023) (E.O. 14114). Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
2. BOGDANOV, Vladimir Leonidovich, Russia; DOB 28 May 1951; POB Suyerka, Uporovsky District, Tyumen Region, Russian Federation; nationality Russia; Gender Male; Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 860205272069 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
3. CHERNOV, Vladimir Nikolaevich, Russia; DOB 1970; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 720601297051 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
4. DYUKOV, Aleksandr Valeryevich (a.k.a. DYUKOV, Alexander), Russia; DOB 13 Dec 1967; POB Saint Petersburg, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 782570676482 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
5. KUDRYASHOV, Sergei Ivanovich (a.k.a. KUDRYASHOV, Sergey Ivanovich), Russia; DOB 25 Jul 1967; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 702203156990 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
6. MAGANOV, Nail Ulfatovich, Russia; DOB 28 Jul 1958; POB Almetyevsk, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 164401094935 (Russia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
7. VOROBYEV, Vadim Nikolaevich (a.k.a. VOROBEV, Vadim Nikolaevich; a.k.a. VOROBYOV, Vadim Nikolaevich), Russia; DOB 16 Apr 1961; POB Pavlovo, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
8. BOBYLEV, Peter Mikhailovich, Russia; DOB 21 Jul 1980; POB Chelyabinsk, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
9. MARSHAVIN, Roman Anatolyevich, Russia; DOB 16 Sep 1977; POB Moscow, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
10. PAVLOV, Vadim Alekseevich, Russia; DOB 05 Dec 1977; POB Kalinkovichi, Gomel Oblast, Belarus; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
11. SEMENOV, Dmitry Borisovich, Russia; DOB 06 Aug 1981; POB Moscow, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
12. SHEREMETTSEV, Eduard Mikhailovich, Russia; DOB 08 Feb 1979; POB Village of Karl Liebknecht, Kurchatovsky District, Kursk Region, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
13. VERHOV, Artem Aleksandrovich (a.k.a. VERKHOV, Artem; a.k.a. VERKHOV, Artyom), Russia; DOB 03 Aug 1986; POB
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
14. DERYUSHKIN, Denis Olegovich, Moscow, Russia; DOB 20 Oct 1988; POB Gorkiy, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Passport 758516894 (Russia) expires 17 Jul 2028 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
15. HALAVINS, Aleksejs, Riga, Latvia; DOB 19 Nov 1981; POB Riga, Latvia; nationality Latvia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Passport LV6197952 (Latvia) expires 28 Jul 2030; National ID No. 19118110919 (Latvia) (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
16. NEMIROVSKIY, Alexander Valeryevich, Moscow, Russia; DOB 02 Jun 1989; POB Moscow, Russia; nationality Russia; Gender Male; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 (individual) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
1. AKTSIONERNOE OBSHCHESTVO ACHIMGAZ (a.k.a. AO ACHIMGAZ), Mkr Slavyanskii D. 10, Novyy Urengoy 629309, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8904047896 (Russia); Registration Number 1068904007578 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
2. AKTSIONERNOE OBSHCHESTVO GAZPROM SHELFPROEKT (a.k.a. JSC GAZPROM SHELFPROJECT), Pr-Kt Leninskii D. 15A, Floor 9, Moscow 119071, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Target Type State-Owned Enterprise; Tax ID No. 7730250045 (Russia); Registration Number 1197746185691 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
3. AKTSIONERNOE OBSHCHESTVO SAMOTLORNEFTEPROMKHIM (Cyrillic: АКЦИОНЕРНОЕ ОБЩЕСТВО САМОТЛОРНЕФТЕПРОМХИМ) (a.k.a. “AO SNPKH” (Cyrillic: “АО СНПХ”)), Ul. Industrialnaya D. 95, Str. 1, Nizhnevartovsk 628600, Russia; Ul. Industrialnaya ZD. 95, Str. 1, Nizhnevartovsk 628616, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8603118208 (Russia); Registration Number 1048600521408 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
4. AKTSIONERNOE OBSHCHESTVO TSENTR EKSPLUATATSIONNYKH USLUG (a.k.a. “OPERATIONAL SERVICES CENTRE”), Bulv Chistoprudnyi D 12, Korp 2, Moscow 101000, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 9722010773 (Russia); Registration Number 1217700541850 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
5. AKTSIONERNOE OBSHCHESTVO UPRAVLENIE PO POVYSHENIYU NEFTEOTDACHI PLASTOV I KAPITALNOMU REMONTU SKVAZHIN (a.k.a. “AO UPNP I KRS”), Ul. Alma Atinskaya 125, Samara 443106, Russia; Zona Promyshlennaya D. 9 A, Svetloye 446368, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 6376000010 (Russia); Registration Number 1026303801809 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
6. ALFASTRAKHOVANIE GROUP (a.k.a. ALFASTRAKHOVANIE JSC; a.k.a. ALFASTRAKHOVANIE PLC), Likhacheva Prospekt, 15, Office 2/15, Moscow 115820, Russia; Ul. Shabolovka D. 31, Str. 5, Moscow 115162, Russia; website
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy. Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
7. AMBRA LIMITED, Rm. 18, 27/F, Ho King Comm Ctr, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Company Number 3308446 (Hong Kong); Business Registration Number 75612414 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
8. AMSHA MARITIME, Room 101, Ground Floor, Rifle Range Road, Ghatkopar West, Mumbai, India; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2024; Identification Number IMO 6474020 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
9. AQUAQUASAR HOLDING LIMITED, Antigua, Antigua and Barbuda; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209;
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
10. ARCTOS SHIPPING AND TRADE DMCC, 3O-01-5033 Jewellery & Gemplex 3, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 20 Nov 2023; Registration Number DMCC-908401 (United Arab Emirates); alt. Registration Number DMCC198423 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
11. ARGO TANKER GROUP LLC, Office 139, Building 2, Naberezhnaya Presnenskaya 10, Moscow 123112, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 9703142189 (Russia); Identification Number IMO 6426832 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 operating or having operated in the energy sector of the Russian Federation economy.
12. ARGOS (Cyrillic: АРГОС), Ul. Morisa Toreza D. 1 B, Samara 443093, Russia; Ul. Tsentralnaya D. 15/10, Kogalym 628483, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Type: Support activities for petroleum and natural gas extraction; Tax ID No. 6311079117 (Russia); Registration Number 1056311044998 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
13. ARISTOS MARITIME INCORPORATED, Trust Company Complex, Ajeltake Road, Majuro, Ajeltake Island 96960, Marshall Islands; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6252035 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
14. ATLAS NNB (Cyrillic: АТЛАС ННБ) (a.k.a. ATLAS DIRECTIONAL DRILLING SERVICES; a.k.a. “ATLAS DDS”), Ul. Grimau D. 10, pomeshch. 7, Moscow 117036, Russia; Ul. Mozhaysky Val, Dom 8, Str. S, 10 etazh, Moscow, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 5836673287 (Russia); Registration Number 1155836003212 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
15. BLACK PEARL ENERGY TRADING LLC (a.k.a. BLACK PEARL ENERGY TRADING LLC FZ; a.k.a. OGC SHIPPING LLC FZ; a.k.a. STARLINE MANAGEMENT FZ LLC), Business Center 1, M Floor, The Meydan Hotel, Nad Al Sheba, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 30 Mar 2022; Registration Number 2201205 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
16. BLUEJOURNEY SHIPPING LIMITED, 60, Nevis Street, St. John's, Antigua and Barbuda; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6474033 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
17. CELESTIAL STAR CORPORATION, Suite 10, 3rd Floor, La Ciotat, Mont Fleuri, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6437253 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
18. CHAMAIYATI DOROI MASAULIYATI MAKHDUDI GAZPROM NEFT TADZHIKISTAN (a.k.a. GAZPROM NEFT TAJIKISTAN LLC), Shokhmansur, Ayni, Dushanbe, Tajikistan; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 010023372 (Tajikistan); Business Registration Number 0110000477 (Tajikistan) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PUBLIC JOINT STOCK COMPANY GAZPROM NEFT).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 14024.
19. CHENG SHIPPING AND TRADER LIMITED, Suite 212, 2nd Floor, Block A, La Ciotat, Mont Fleuri, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6419328 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
20. COLUMBA LIMITED, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2022; Identification Number IMO 6341429 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
21. CONMAR MARITIME DMCC, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 23 Jan 2023; Commercial Registry Number 195872 (United Arab Emirates); Registration Number DMCC-874218 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: BLACK PEARL ENERGY TRADING LLC).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, BLACK PEARL ENERGY TRADING LLC, a person whose property and interests in property are blocked pursuant to E.O. 14024.
22. CONRAD MANAGEMENT COMPANY LLC FZ, Business Center 1, M Floor, The Meydan Hotel, Nad Al, Sheba, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 27 Jan 2022; Business Registration Number 2200438.1 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HALAVINS, Aleksejs).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 14024.
23. CRIUS LIMITED, Block 3, Un Shing House Phase 3, Un Chau Street, Kowloon, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2022; Identification Number IMO 6355621 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
24. CUBE VENTURES SHIPPING SA, Trust Company Complex, Ajeltake Road, Majuro, Ajeltake Island MH96960, Marshall Islands; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6389478 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
25. DANIKA ROBERT LIMITED, 6/F, Block 30, City One Shatin, Flat B, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2022; Organization Type: Transportation and storage; Identification Number IMO 6371374 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
26. DEMEX TRADING LIMITED DMCC, Unit No: 2904, Plot No: JLT-PH2-Y1A, JBC3, Jumeirah Lake Towers, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Registration Number DMCC-772021 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
27. DENKARS (Cyrillic: ДЕНКАРС), Ter. Severnyi Promyshlennyi Uzel Goroda d. 4ps, Nizhnevartovsk 628600, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 30 Jul 2001; Tax ID No. 8603100120 (Russia); Registration Number 1028600947650 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
28. JOINT STOCK COMPANY SOVCOMFLOT (a.k.a. JSC SOVCOMFLOT; a.k.a. PAO SOVCOMFLOT; a.k.a. PUBLIC JOINT STOCK COMPANY MODERN COMMERCIAL FLEET; a.k.a. PUBLICHNOE AKTSIONERNOE OBSCHESTVO SOVREMENNYY KOMMERCHESKIY FLOT; a.k.a. “SCF”; a.k.a. “SCF GROUP”), Ul. Gasheka D. 6, Moscow 125047, Russia; Nab. Reki Moiki d.3, Lit. A, Saint Petersburg 191186, Russia; Building 3, Letter A, Moyka River Embankment, Saint Petersburg 191186, Russia; website sovcomflot.ru; alt. Website
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
29. PUBLIC JOINT STOCK COMPANY GAZPROM NEFT (a.k.a. GAZPROM NEFT JOINT STOCK COMPANY; a.k.a. GAZPROM NEFT PAO; a.k.a. GAZPROM NEFT PJSC; a.k.a. PUBLICHNOE AKTSIONERNOE OBSHCHESTVO GAZPROM NEFT), 5, Let. A, Galernaya, Saint Petersburg 190000, Russia; d. 3-5 litera A Ch. Pom. 1N kab. 2401, ul. Pochtamtskaya, St. Petersburg 190000, Russia; Executive Order 13662 Directive Determination—Subject to Directive 2; alt. Executive Order 13662 Directive Determination—Subject to Directive 4; Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: See Section 11 of Executive Order 14024.; Executive Order 14024 Directive Information—For more information on directives, please visit the following link:
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
30. DOUBLE HARMONY MARINE CORPORATION, Suite 10, 3rd Floor, La Ciotat Mont Fleuri, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
31. DOXA SHIPPING LINE INC, LLC Plot 341-0, Al Zarooni Building, Al Murar, Dubai, United Arab Emirates; Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: See Section 11 of Executive Order 14024.; Identification Number IMO 6386734 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
32. ELGON MARITIME CORPORATION, 1st Floor, Dekk House, Zippora, Street, Providence Industrial Estate, Victoria, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6466047 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
33. ENERGY OF OIL AND GAS SERVICE LLC (a.k.a. “ENGS LLC”), Yakimanskaya Naberezhnaya D. 4, Str.1, Moscow 119180, Russia; Ul. Grimau D. 10A, Str. 1, Moscow 117292, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7727650928 (Russia); Registration Number 1087746582714 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
34. ETERRA CRUDE OIL ABROAD TRADING LLC, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 25 Nov 2022; Chamber of Commerce Number 431348 (United Arab Emirates); Registration Number 1849492 (United Arab Emirates) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
35. FORNAX SHIP MANAGEMENT FZCO, Unit 40260-001, Building A1, IFZA Business Park, Dubai Silicon Oasis, Dubai, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6466241 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
36. FRAKDZHET VOLGA, Pr-Kt Fridrikha Engelsa D. 207, Engels 413111, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 6432005462 (Russia); Registration Number 1076432002680 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
37. FRINA EXPRESS CORPORATION, Suite 10, 3rd Floor, La Ciotat, Mont Fleuri, Mahe Island, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6507506 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
38. FULDA SHIPPING CO, 80 Broad Street, Monrovia, Liberia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2024; Identification Number IMO 6491531; Registration Number C-126622 (Liberia) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HALAVINS, Aleksejs).
Designated pursuant to section 1(a)(iii) of E.O. for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 14024.
39. GAZPROM NEFT INTERNATIONAL SA, Rue Matthias Hardt 8-10, Luxembourg 1717, Luxembourg; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Business Registration Number B 154.621 (Luxembourg) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PUBLIC JOINT STOCK COMPANY GAZPROM NEFT).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 14024.
40. GAZPROM NEFT KAZAKHSTAN LLC, Prospekt Abaya 26 A, 2 Floor, Almaty 050013, Kazakhstan; Furmanova 187B, Almaty 050000, Kazakhstan; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Business Registration Number 070540009192 (Kazakhstan) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PUBLIC JOINT STOCK COMPANY GAZPROM NEFT).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PUBLIC JOINT STOCK COMPANY GAZPROM NEFT, a person whose property and interests in property are blocked pursuant to E.O. 14024.
41. GAZPROM NEFT SHELF LIMITED LIABILITY COMPANY, Pr-kt Nevskii D. 38/4, Saint Petersburg 191186, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7725610285 (Russia); Registration Number 5077746978315 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
42. GAZPROMNEFT AERO JOINT STOCK COMPANY (a.k.a. GAZPROMNEFT AERO AO), Zoologicheskii Per Dom 2-4, Lit. B, Saint Petersburg 197198, Russia; Ul.
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
43. GAZPROMNEFT BITUMEN MATERIALS LIMITED LIABILITY COMPANY, 3-ya Liniya V.O. D. 62, Lit. A, Saint Petersburg 199178, Russia; Pr-kt Bolshoi V.O. D. 80, Lit. R, Floor 5, 6, Saint Petersburg 199106, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 6234000600 (Russia); Registration Number 1036238001645 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
44. GAZPROMNEFT KHANTOS LIMITED LIABILITY COMPANY, Ul. Lenina D. 56, Khanty-Mansiysk 628011, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8618006063 (Russia); Registration Number 1058600001118 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
45. GAZPROMNEFT LUBRICANTS LTD (a.k.a. GAZPROMNEFT LUBRICANTS LLC; a.k.a. GAZPROMNEFT SM LLC), Ul. Krzhizhanovskogo D. 14/3, Blok B, Moscow 117218, Russia; Leningradsky Avenue 37A, Building 4, BC Arcus III, Moscow 125167, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7728640182 (Russia); Registration Number 1077762940331 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
46. GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, 3-ya Liniya V.O d. 62, 5, lit. A, Saint Petersburg 199178, Russia; Block R, 80 Bolshoi prospect, Vasilyevski Island, Saint Petersburg 199106, Russia; Ul. Galernaya 5 Lit A., Saint Petersburg 190000, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7838392447 (Russia); Identification Number IMO 5402692; Registration Number 1077847626042 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
47. GAZPROMNEFT MOSCOW REFINERY JOINT STOCK COMPANY (a.k.a. AO GAZPROMNEFT MORP; a.k.a. AO GAZPROMNEFT MOSCOW REFINERY PLANT; a.k.a. GAZPROM NEFT MOSCOW REFINERY JSC; a.k.a. GAZPROMNEFT MNPZ AO; a.k.a. GAZPROMNEFT MOSKOVSKIY NPZ AO), Kv-l Kapotnya 2-I D. 1, K. 3, Russia 109429, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7723006328 (Russia); Registration Number 1027700500190 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
48. GAZPROMNEFT NOYABRSK OIL AND GAS JOINT STOCK COMPANY (a.k.a. GAZPROMNEFT NOYABRSKNEFTEGAZ), Ul. Lenina D. 59/87, Noyabrsk 629807, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8905000428 (Russia); Registration Number 1028900703963 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
49. GAZPROMNEFT OMSK REFINERY JOINT STOCK COMPANY (a.k.a. GAZPROM NEFT OMSK REFINERY JSC; a.k.a. GAZPROMNEFT ONPZ OMSKIY REFINERY), PR-KT Gubkina, D. 1, Omsk 644040, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 5501041254 (Russia); Registration Number 1025500508956 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
50. GAZPROMNEFT ORENBURG LIMITED LIABILITY COMPANY (a.k.a. GAZPROM NEFT ORENBURG LLC; a.k.a. GAZPROM NEFT ORENBURG ZAO), Ul. Krasnoznamennaya D. 56/1, Orenburg 460024, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 5610218014 (Russia); Registration Number 1165658052450 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
51. GAZPROMNEFT TECHNOLOGICAL PARTNERSHIPS LIMITED LIABILITY COMPANY (a.k.a. “INDUSTRIX”), Ul. Yakubovicha d. 24, lit. A, Saint Petersburg 190000, Russia; ul. Promyshlennaya zd. 19, pomeshch. 403, Khanty-Mansiysk 628011, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Target Type State-Owned Enterprise; Tax ID No. 8601066868 (Russia); Registration Number 1188617010064 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
52. GAZPROMNEFT VOSTOK LLC, Ul. Nakhimova D. 13A, Str. 1, Tomsk 634045, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7017126251 (Russia); Registration Number 1057002610378 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
53. GAZPROMNEFT YAMAL LIMITED LIABILITY COMPANY (a.k.a. GAZPROM NEFTEKHIM YAMAL), Ul. 50 Let Oktyabrya D. 8B, Tyumen 625000, Russia; Ul. Mira D. 43A, Salekhard 629002, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8901001822 (Russia); Registration Number 1118903004989 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
54. GAZPROMNEFT ZAPOLYARYE LIMITED LIABILITY COMPANY (a.k.a. GAZPROMNEFT ZAPOLYARYE LLC), Ul. Taezhnaya D. 30A, Pomeshch. 10, Kabinet 207, Novyy Urengoy 629305, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Target Type State-Owned Enterprise; Tax ID No. 7728720448 (Russia); Registration Number 1097746829740 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
55. GESSI MARITIME CORPORATION, 1st Floor, Dekk House, Zippora Street, Providence Industrial Estate, Victoria, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6466149 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
56. GIFTED PEAK LIMITED, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 31 Jan 2022; Company Number 3125459; Business Registration Number 73768871 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
57. GURON TRADING LIMITED, Unit 1411, 14/Floor, Cosco Tower, 183 Queen's Road, Sheung Wan, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 20 Dec 2021; Company Number 3114250 (Hong Kong); Business Registration Number 73655404 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
58. HAIMA SHIPPING LIMITED, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6413519 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
59. HARMONY GROVE CORPORATION, Suite 10, 3rd Floor, La Ciotat, Mont Fleuri, Mahe, Seychelles; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6457171 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
60. HENGTAI SHIPPING LIMITED, Trust Company Complex, Ajeltake Road, Majuro, Ajeltake Island, Marshall Islands; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6498321 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
61. HERA GAM LIMITED, Unit 18, 9th Floor, Tower A, New Mandarin Plaza, 14, Science Museum Road, Tsim Sha Tsui East, Kowloon, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6473636 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
62. HONG KONG HANYUAN SHIPPING CO LIMITED, Rm. 4, 16/F, Ho King Comm Ctr, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 13 Jun 2022; Company Number 3161890 (Hong Kong); Business Registration Number 74136104 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
63. HONG KONG YONGYE SHIPPING LIMITED, Room 1003, 10th Floor, Tower 1, Lippo Centre, 89, Queensway, Central Admiralty, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6361055 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
64. HUIHAI HONG KONG SHIPPING CO LIMITED, Rm. 4, 16/F, Ho King Comm Ctr, 2—16 Fayuen St, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 30 May 2022; Company Number 3157252 (Hong Kong); Business Registration Number 74089456 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
65. INGOSSTRAKH INSURANCE COMPANY, Ul. Pyatnitskaya D. 12, Str. 2, Moscow 117997, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7705042179 (Russia); Legal Entity Number 253400GMWZ0DBU6G0E87; Registration Number 1027739362474 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
66. INTERNATIONAL MARINE MANAGEMENT FZE, P.O. Box 4422, Fujairah, United Arab Emirates; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209 [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HALAVINS, Aleksejs).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 14024.
67. JOINT STOCK COMPANY INVESTGEOSERVIS (a.k.a. AO INVESTGEOSERVIS), Pr-Kt 60 Letiya Oktyabrya D. 10A, Pom XXII, Moscow 117036, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7704627560 (Russia); Registration Number 1067760718871 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
68. JOINT STOCK COMPANY OFS TECHNOLOGIES (a.k.a. OFS TECHNOLOGIES JSC), Proezd 1-I Krasnogvardeiskii D. 22, Str. 1, Floor/Pomeshch. 8/8.23, Mesto 174, Moscow 123112, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 7714024384 (Russia); Registration Number 1027739299961 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
69. JOINT STOCK COMPANY ROSNEFTEFLOT, Nab. Presnenskaya D. 6, Str. 2, Delovoi Kompleks Imperiya, Moscow 109004, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 6501096047 (Russia); Registration Number 1026500526590 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
70. JOINT STOCK COMPANY SURGUTNEFTEGASBANK (a.k.a. CLOSED JOINT STOCK COMPANY SURGUTNEFTEGASBANK; a.k.a. JSC BANK SNGB; a.k.a. SNGB AO; a.k.a. ZAO SNGB), 19 Kukuyevitskogo Street, Surgut 628400, Russia; website
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the financial services sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
71. KALININGRADNEFTEPRODUKT OOO (a.k.a. KALININGRADNEFTEPRODUKT LLC; a.k.a. LIMITED LIABILITY COMPANY KALININGRADNEFTEPRODUCT; a.k.a. LLC KALININGRADNEFTEPRODUCT), 22-b Komsomolskaya Ulitsa, Central District, Kaliningrad, Russia; Email Address
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
72. KANGEN MARITIME CORPORATION, 1st Floor, Dekk House, Zippora Street, Providence Industrial Estate, Port Victoria, Mahe, Seychelles; Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: See Section 11 of Executive Order 14024.; Identification Number IMO 6466051 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
73. KAT DENNINGS LIMITED, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 27 May 2022; Company Number 3157024 (Hong Kong); Business Registration Number 74087153 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
74. KINEF OOO (a.k.a. KINEF; a.k.a. LIMITED LIABILITY COMPANY PRODUCTION ASSOCIATION KIRISHINEFTEORGSINTEZ; a.k.a. LLC KINEF), d. 1 Shosse Entuziastov, Kirishi, Leningradskaya Oblast 187110, Russia; website
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
75. KIRISHIAVTOSERVIS OOO (a.k.a. LIMITED LIABILITY COMPANY KIRISHIAVTOSERVIS; a.k.a. LLC KIRISHIAVTOSERVIS), Lit A, 12 Smolenskaya Ulitsa, St. Petersburg 196084, Russia; website
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
76. KUPA LINES INCORPORATED, Trust Company Complex, Ajeltake Road, Majuro, Ajeltake Island MH96960, Marshall Islands; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Identification Number IMO 6315113 [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
77. LAGOSMARINE LIMITED, Andrea Araoyzou 2, Limassol 4150, Cyprus; Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: See Section 11 of Executive Order 14024.; Organization Established Date 09 Oct 2019; Registration Number C402876 (Cyprus) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
78. LATHYRUS SHIPPING COMPANY, 80 Broad Street, Monrovia, Liberia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Organization Established Date 2024; Identification Number IMO 6498685; Registration Number C-126303 (Liberia) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HALAVINS, Aleksejs).
Designated pursuant to section 1(a)(iii) of E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 13662.
Also designated pursuant to section 1(a)(vii) of E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, ALEKSEJS HALAVINS, a person whose property and interests in property are blocked pursuant to E.O. 14024.
79. LENGIPRONEFTEKHIM OOO (a.k.a. INSTITUT PO PROEKTIROVANIYU PREDPRIYATY NEFTEPERERABATYVAYUSCHEY I NEFTEKHIMICHESKOY PROMYSHLENNOSTI, LIMITED LIABILITY COMPANY; a.k.a. LIMITED LIABILITY COMPANY DESIGN AND ENGINEERING INSTITUTE FOR OIL REFINING AND PETROCHEMICAL ENTERPRISES; a.k.a. LIMITED LIABILITY COMPANY OIL REFINING AND PETROCHEMICAL FACILITIES DESIGN INSTITUTE; a.k.a. LLC LENGIPRONEFTEKHIM), D. 94, Obvodnogo Kanala, nab, St. Petersburg 196084, Russia; Email Address
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
80. LENINOGORSKREMSERVICE LIMITED LIABILITY COMPANY (a.k.a. “LRS LLC”), Ul. Chaikovskogo D. 9A, K. 9/1, Leninogorsk 423250, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 1649015690 (Russia); Registration Number 1071689002923 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
81. LEPUS SAI LIMITED, Unit 13, 12/F, One Vita Supreme, Tuen Mun, Hong Kong, China; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Company Number 3237451 (Hong Kong); Business Registration Number 74898491 (Hong Kong) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
82. LIMITED LIABILITY COMPANY CATKONEFT (a.k.a. KATKONEFT), Ul. Yantarnaya D. 8, Kogalym 628481, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8608180009 (Russia); Registration Number 1028601441582 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
83. LIMITED LIABILITY COMPANY GAZPROMNEFT REGIONAL SALES, Per. Vilenskii D. 14, Lit. A, Office 203, Saint Petersburg 191014, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 4703105075 (Russia); Registration Number 1084703003384 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
84. LIMITED LIABILITY COMPANY NAFTAGAZ DRILLING (a.k.a. “LLC NG DRILLING”), Promuzel Pelei Panel 13, Noyabrsk 629800, Russia; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Tax ID No. 8905053564 (Russia); Registration Number 1138905000090 (Russia) [UKRAINE-EO13662] [RUSSIA-EO14024].
Designated pursuant to section 1(a)(i) of E.O. 13662 for operating in the energy sector of the Russian Federation economy.
Also designated pursuant to section 1(a)(i) of E.O. 14024 for operating or having operated in the energy sector of the Russian Federation economy.
On December 27, 2024, OFAC also identified the following vessels as property in which a blocked person has an interest under the relevant sanctions authority listed below:
1. AKADEMIK GUBKIN (a.k.a. ACADEMIC GUBKIN) (UBZX4) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9842190; MMSI 273616040 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
2. ALEKSEY CHIRIKOV (UBXJ4) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9613551; MMSI 273369290 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
3. ALEXANDER BEGGROV Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9876373 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
4. ALEXEY BOGOLYUBOV Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9876361 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
5. ALISSA (TRAP2) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9273052; MMSI 626248000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: DOXA SHIPPING LINE INC).
Identified as property in which DOXA SHIPPING LINE INC, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which DOXA SHIPPING LINE INC, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
6. AMBER 6 (3E2141) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
7. APUS (3E2712) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9280885; MMSI 352001692 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
8. AQUATICA (3E6678) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9299769; MMSI 352004367 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: CELESTIAL STAR CORPORATION).
Identified as property in which CELESTIAL STAR CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which CELESTIAL STAR CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
9. AQUILA II (3E2714) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9281152; MMSI 352001694 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
10. ARIA (8P2495) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2009; Vessel Registration Identification IMO 9397559; MMSI 314987000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
11. ARIADNE (8P2446) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2008; Vessel Registration Identification IMO 9397547; MMSI 314948000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
12. ARJUN (3E5088) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9297357; MMSI 352002801 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: KANGEN MARITIME CORPORATION).
Identified as property in which KANGEN MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which KANGEN MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
13. ASTRA (XVJT7) Chemical/Oil Tanker Vietnam flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9273387; MMSI 574005470 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SAO VIET PETROL TRANSPORTATION COMPANY LIMITED).
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
14. ATLAS (8P2259) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9413573; MMSI 314895000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
15. ATTICA (TRAT2) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9436941; MMSI 626278000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: ELGON MARITIME CORPORATION).
Identified as property in which ELGON MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which ELGON MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
16. AULIS (3E5853) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9233765; MMSI 352003752 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: NOBLEFU COMPANY LIMITED).
Identified as property in which NOBLEFU COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which NOBLEFU COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
17. BOLERO (8P2492) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9412335; MMSI 314984000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person
18. BORAY (UBGX6) Chemical/Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9198783; MMSI 273610900 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNOR ILLC).
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
19. BOREY G (3E2481) Products Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9199127; MMSI 352001461 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: LUSEIA MARINE SERVICES CO LTD).
Identified as property in which LUSEIA MARINE SERVICES CO LTD, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which LUSEIA MARINE SERVICES CO LTD, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
20. BUK (UBOE3) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9201994; MMSI 273318480 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: RPK NORD LIMITED LIABILITY COMPANY).
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
21. CALLISTO (8P2438) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9299692; MMSI 314942000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
22. CANGJIE (E5U5064) Crude Oil Tanker Cook Islands flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9299680; MMSI 518999083 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: KUPA LINES INCORPORATED).
Identified as property in which KUPA LINES INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which KUPA LINES INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
23. CANKIRI (3E4108) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9411331; MMSI 352002456 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
24. CAPELLA (8P2447) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9341079; MMSI 314949000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
25. CAPTAIN KOSTICHEV (3E4142) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9301392; MMSI 352002205 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest..
26. CARL (8P2479) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9288851; MMSI 314975000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: CUBE VENTURES SHIPPING SA).
Identified as property in which CUBE VENTURES SHIPPING SA, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which CUBE VENTURES SHIPPING SA, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
27. CASSIOPEIA (8P2466) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9341081; MMSI 314964000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
28. CEPHEUS (3E3724) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9299721; MMSI 352001911 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: COLUMBA LIMITED).
Identified as property in which COLUMBA LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which COLUMBA LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
29. CHRISTOPHE DE MARGERIE (8E4097) LNG Carrier Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
30. CLIO (3E2767) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9238052; MMSI 352001855 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HONG KONG YONGYE SHIPPING LIMITED).
Identified as property in which HONG KONG YONGYE SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HONG KONG YONGYE SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
31. CORUM (3E2362) Products Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9544281; MMSI 352002588 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
32. CRIUS (3E3759) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9251274; MMSI 352002070 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: CRIUS LIMITED).
Identified as property in which CRIUS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which CRIUS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
33. CUP (V2Y16) Crude Oil Tanker Antigua & Barbuda flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9271327; MMSI 304768000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: BLUEJOURNEY SHIPPING LIMITED).
Identified as property in which BLUEJOURNEY SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which BLUEJOURNEY SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
34. DEYNA (3E5822) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9299903; MMSI 352003718 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SINO SHIP MANAGEMENT COMPANY LIMITED).
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
35. DIAMOND (8P2444) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2009; Vessel Registration Identification IMO 9385142; MMSI 314946000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
36. DIGNITY (UBIZ6) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9283241; MMSI 273253500 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: ARGO TANKER GROUP LLC).
Identified as property in which ARGO TANKER GROUP LLC, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which ARGO TANKER GROUP LLC, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
37. DMITRY MENDELEEV (UBJV8) Bunkering Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9888182; MMSI 273296810 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
38. DOBRYNYA (UBOO) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 8730077; MMSI 273449240 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
39. ELEGANCE (3E5080) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9383950; MMSI 352002791 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
40. EMILY S (3E2473) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9321847; MMSI 352001452 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
41. FEDOR USHAKOV (UBAQ3) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9753739; MMSI 273396260 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
42. FJORD SEAL (3E3737) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9513139; MMSI 352001925 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
43. FREDA (3E5145) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9402469; MMSI 352003485 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HERA GAM LIMITED).
Identified as property in which HERA GAM LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HERA GAM LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
44. GALAXY (8P2373) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9826902; MMSI 314905000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
45. GAZPROMNEFT NORDWEST (UBAI2) Chemical/Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9590137; MMSI 273355640 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
46. GAZPROMNEFT ZUID EAST (UCSK) Chemical/Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9537109; MMSI 273353580 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
47. GENNADIY NEVELSKOY (UDFS) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9742120; MMSI 273396990 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
48. HEIDI A (3E2523) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9321976; MMSI 352001510 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
49. HENG TAI (3E5359) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9419448; MMSI 352003963 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HENGTAI SHIPPING LIMITED).
Identified as property in which HENGTAI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HENGTAI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
50. HIMALAYAN (3E4651) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9392822; MMSI 352002872 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GIFTED PEAK LIMITED).
Identified as property in which GIFTED PEAK LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GIFTED PEAK LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
51. HUI HAI ATLANTIC (3E3814) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9312872; MMSI 352002139 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HUIHAI HONG KONG SHIPPING CO LIMITED).
Identified as property in which HUIHAI HONG KONG SHIPPING CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HUIHAI HONG KONG SHIPPING CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
52. HUIHAI PACIFIC (3E3800) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9346732; MMSI 352002122 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HONG KONG HANYUAN SHIPPING CO LIMITED).
Identified as property in which HONG KONG HANYUAN SHIPPING CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HONG KONG HANYUAN SHIPPING CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
53. HYPERION (8P2458) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9322968; MMSI 314958000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: FORNAX SHIP MANAGEMENT FZCO).
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
54. IVAN AIVAZOVSKY Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9876359 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
55. IVY (XVJI7) Crude Oil Tanker Vietnam flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9337133; MMSI 574005380 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SAO VIET PETROL TRANSPORTATION COMPANY LIMITED).
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
56. JUPITER (8P2425) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2009; Vessel Registration Identification IMO 9397535; MMSI 314931000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
57. KAPAL CANTIK (E5U4767) Crude Oil Tanker Cook Islands flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9224283; MMSI 518998787 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: WORTHALIANCE LIMITED).
Identified as property in which WORTHALIANCE LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which WORTHALIANCE LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
58. KAPITAN GOTSKY (UBCF2) Shuttle Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9372559; MMSI 273335010 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
59. KIRILL LAVROV (UBOL9) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9333682; MMSI 273345750 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
60. KOLA (UBDQ5) Floating Storage Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9217979; MMSI 273414140 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: LK VOLGA LIMITED LIABILITY COMPANY).
Identified as property in which LK VOLGA LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which LK VOLGA LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
61. KRISHNA 1 (TRAT4) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9271585; MMSI 352004581 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: AMSHA MARITIME).
Identified as property in which AMSHA MARITIME, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which AMSHA MARITIME, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
62. LAUREN II (3FCU5) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9258521; MMSI 355070000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
63. LEGACY (8P2256) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9339337; MMSI 314892000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
64. LEO (8P2467) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9412347; MMSI 314965000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
65. LEOPARD (XVKF7) Crude Oil Tanker Vietnam flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9284594; MMSI 574005550 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SAO VIET PETROL TRANSPORTATION COMPANY LIMITED).
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
66. LI BAI (3E4641) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9589750; MMSI 352002861 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HAIMA SHIPPING LIMITED).
Identified as property in which HAIMA SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HAIMA SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
67. LIBERTY (8P2253) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9339325; MMSI 314889000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
68. LYRA (3E2571) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9314088; MMSI 352001732 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: KAT DENNINGS LIMITED).
Identified as property in which KAT DENNINGS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which KAT DENNINGS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
69. M SOPHIA (3FTT) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9289477; MMSI 374933000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
70. MAKALU (8P2533) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9314105; MMSI 314001002 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: DOUBLE HARMONY MARINE CORPORATION).
Identified as property in which DOUBLE HARMONY MARINE CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which DOUBLE HARMONY MARINE CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
71. MERCURY (TRAX8) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9321706; MMSI 626315000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GESSI MARITIME CORPORATION).
Identified as property in which GESSI MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GESSI MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
72. MERMAR (3E3356) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9231212; MMSI 352978243 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: MERLUZA GROUP LIMITED).
Identified as property in which MERLUZA GROUP LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which MERLUZA GROUP LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
73. MEROPE (3E2648) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9281891; MMSI 352002495 (vessel) [UKRAINE-EO13662] [IRAN-EO13902] [RUSSIA-EO14024] (Linked To: SHANGHAI FUTURE SHIP MANAGEMENT CO LTD; Linked To: LEPUS SAI LIMITED)
Identified as property in which LEPUS SAI LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which LEPUS SAI LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
74. MERU (9LS2036) Crude Oil Tanker Sierra Leone flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9187227; MMSI 667002333 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: HARMONY GROVE CORPORATION).
Identified as property in which HARMONY GROVE CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which HARMONY GROVE CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
75. MIKHAIL LAZAREV (UBZS8) Shuttle Tanker Russia flag; Secondary sanctions risk:
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
76. MIKHAIL ULYANOV (UBAL3) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9333670; MMSI 273328440 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
77. MIN HANG (E5U5075) Crude Oil Tanker Cook Islands flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9257137; MMSI 518999094 (vessel) [UKRAINE-EO13662] [IRAN-EO13902] [RUSSIA-EO14024] (Linked To: SHANGHAI LEGENDARY SHIP MANAGEMENT COMPANY LIMITED; Linked To: AMBRA LIMITED).
Identified as property in which AMBRA LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which AMBRA LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
78. MINERVA M (3E2537) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9282479; MMSI 352001530 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
79. MISTRAL 1 (T7AV4) Crude Oil Tanker San Marino flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9257993; MMSI 268249200 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: ODINE MARINE INCORPORATED).
Identified as property in which ODINE MARINE INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which ODINE MARINE INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
80. MOSKOVSKY PROSPECT (TRBE7) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9511521; MMSI 626368000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
81. MOTI (J2JZ) Crude Oil Tanker Djibouti flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9281011; MMSI 621819067 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: WAVECREST MARITIME LIMITED).
Identified as property in which WAVECREST MARITIME LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which WAVECREST MARITIME LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
82. MUM (V2YP5) Crude Oil Tanker Antigua and Barbuda flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9315446; MMSI 305026000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: AQUAQUASAR HOLDING LIMITED).
Identified as property in which AQUAQUASAR HOLDING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which AQUAQUASAR HOLDING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
83. MURMANSK (UBRR2) Chemical/Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9167930; MMSI 273430430 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
84. NANDA DEVI (TRAT3) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9274434; MMSI 626279000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: TAGABO MARITIME CORPORATION).
Identified as property in which TAGABO MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which TAGABO MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
85. NEREUS SOPHIA (3E5862) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9266853; MMSI 352003763 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: MEGHAN GROUP LIMITED).
Identified as property in which MEGHAN GROUP LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which MEGHAN GROUP LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
86. NEVE (3E6083) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9224465; MMSI
Identified as property in which TRIDENT INFINITY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which TRIDENT INFINITY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
87. NIKOLAY ZADORNOV (3E3485) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9901037; MMSI 352002208 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
88. NS PRIDE (TRBI6) Chemical/Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2006; Vessel Registration Identification IMO 9322956; MMSI 626399000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
89. NS SILVER (3E7521) Chemical/Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2005; Vessel Registration Identification IMO 9309576; MMSI 352003367 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
90. NURKEZ (3E2311) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9253325; MMSI 352002470 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SERPENS LIMITED).
Identified as property in which SERPENS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SERPENS LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
91. NURSULTAN NAZARBAYEV Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9842217 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
92. OKEANSKY PROSPECT (UBFV) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9866380; MMSI 273618730 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
93. OKEANSKY PROSPECT Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9898254 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
94. OLANGA (UBVH4) Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9286463; MMSI 273355340 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
95. OLIA (TRBO9) Crude Oil Tanker Gabon flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9268112; MMSI 626450000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: ARISTOS MARITIME INCORPORATED).
Identified as property in which ARISTOS MARITIME INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which ARISTOS MARITIME INCORPORATED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
96. OLIVIA (9LS2020) Crude Oil Tanker Sierra Leone flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9233741; MMSI 667002317 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: FRINA EXPRESS CORPORATION).
Identified as property in which FRINA EXPRESS CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which FRINA EXPRESS CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
97. OMSK (UBZU) Chemical/Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9418509; MMSI 273371330 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
98. ORIENT HARMONY (3E5021) Bulk Carrier Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9620633; MMSI 352002708 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
99. ORIENT VISION (3E5020) Bulk Carrier Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9673202; MMSI 352002707 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
100. OWENS (H3XW) LPG Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9223540; MMSI 373482000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SAO VIET PETROL TRANSPORTATION COMPANY LIMITED).
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
101. PANDA (XVJG7) Crude Oil Tanker Vietnam flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9284582; MMSI 574005540 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SAO VIET PETROL TRANSPORTATION COMPANY LIMITED).
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SAO VIET PETROL TRANSPORTATION COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
102. PATHFINDER (8P2482) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9577094; MMSI 314976000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
103. PAVEL CHERNYSH (3E4132) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9301380; MMSI 352002195 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
104. PEGASUS (8P2449) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9276028; MMSI 314951000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: FORNAX SHIP MANAGEMENT FZCO).
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
105. PING AN (3E4672) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9378632; MMSI 352002898 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: CHENG SHIPPING AND TRADER LIMITED).
Identified as property in which CHENG SHIPPING AND TRADER LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which CHENG SHIPPING AND TRADER LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
106. PREMIER (8P2443) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2011; Vessel Registration Identification IMO 9577082; MMSI 314945000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
107. PROXIMA (8P2475) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9329655; MMSI 314971000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: FORNAX SHIP MANAGEMENT FZCO).
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
108. PSKOV (8P2424) LNG Carrier Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9630028; MMSI 314930000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
109. PYTHON (8P2523) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9250531; MMSI 314993000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: OCEAN WATERS MARITIME CORPORATION).
Identified as property in which OCEAN WATERS MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which OCEAN WATERS MARITIME CORPORATION, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
110. RIGEL (8P2389) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9511533; MMSI 314919000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
111. RN AMUR (UIZU) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9653068; MMSI 273333470 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
112. RN SAKHALIN (UBCP8) Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9650016; MMSI 273399390 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
113. RN USSURI (UBTK3) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9653070; MMSI 273320710 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
114. SABLE (3E4117) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9524451; MMSI 352002179 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
115. SAGA (8P2258) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9318553; MMSI 314894000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
116. SAGITTA (3E3674) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9296822; MMSI 352001616 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
117. SAKARYA (3E3835) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9524463; MMSI 352002168 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
118. SALTY WOLF (3E3497) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9530917; MMSI 352002280 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
119. SAMSUN (3E2327) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9436006; MMSI 352002486 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
120. SANAR 7 (UBFX5) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9211999; MMSI 273615700 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNOR ILLC).
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
121. SANAR 8 (UBFX8) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9212008; MMSI 273619700 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNOR ILLC).
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNOR ILLC, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
122. SCF ENDEAVOUR (UIHP) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9335678; MMSI 273312540 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
123. SCF ENDURANCE (UIPN) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9335680; MMSI 273314650 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
124. SCF ENTERPRISE (UFHH2) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9335692; MMSI 273312060 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
125. SCF SAKHALIN (UHME) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9307724; MMSI 273318120 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
126. SERENADE (8P2363) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9318541; MMSI 314897000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
127. SHTURMAN ALBANOV (UBXO2) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9752084; MMSI 273397870 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
128. SHTURMAN KOSHELEV (UCMR) Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9759939; MMSI 273391160 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
129. SHTURMAN MALYGIN (UHBP) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9752096; MMSI 273398780 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
130. SHTURMAN OVTSYN (UBEP3) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9752101; MMSI 273391790 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
131. SHTURMAN SHCHERBININ (UEXZ) Products Tanker Russia flag; Secondary
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
132. SHTURMAN SKURATOV (UBFP4) Products Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9759915; MMSI 273392990 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY).
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
133. SHUN TAI (5LIC9) Crude Oil Tanker Liberia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9242223; MMSI 636022303 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SYMI SHIPPING LIMITED).
Identified as property in which SYMI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SYMI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
134. SI HE (3E4703) Products Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9378618; MMSI 352002948 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: LOENGO SHIPPING AND TRADER LIMITED).
Identified as property in which LOENGO SHIPPING AND TRADER LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which LOENGO SHIPPING AND TRADER LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
135. SIRIUS (8P2496) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9422445; MMSI 314988000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
136. SIRIUS 1 (3E5824) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9285847; MMSI 352003720 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SINO SHIP MANAGEMENT COMPANY LIMITED).
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
137. SIVAS (3E2642) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9419137; MMSI 352002488 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
138. STEPAN MAKAROV (UAOZ) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9753727; MMSI 273392530 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
139. SUCCESS (8P2257) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9333436; MMSI 314893000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
140. SURREY QUAYS (3E2363) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9350654; MMSI 352002589 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SURREY QUAYS COMPANY LIMITED).
Identified as property in which SURREY QUAYS COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SURREY QUAYS COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
141. SVYATOY KNYAZ VLADIMIR (UBUP4) Passenger Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9678238; MMSI 273393630 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
142. SYMPHONY (8P2445) Chemical/Oil Tanker Barbados flag; Secondary sanctions
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which FORNAX SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
143. TALISMAN (8P2456) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2006; Vessel Registration Identification IMO 9292060; MMSI 314956000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
144. TANGO (8P2442) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2006; Vessel Registration Identification IMO 9292058; MMSI 314944000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
145. TASCA (3E2647) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9313149; MMSI 352002494 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SUNNE CO LIMITED).
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SUNNE CO LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
146. THALIA III (3E3812) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9259197; MMSI 352002137 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SELENA LIVELY LIMITED).
Identified as property in which SELENA LIVELY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SELENA LIVELY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
147. TIMOFEY GUZHENKO (UBQF5) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9372561; MMSI 273330620 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
148. TIS (UBXP4) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9817779; MMSI 273396740 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: RPK NORD LIMITED LIABILITY COMPANY).
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
149. TOPAZ (8P2459) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2004; Vessel Registration Identification IMO 9292034; MMSI 314959000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
150. TRIUMPH (8P2439) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2007; Vessel Registration Identification IMO 9344033; MMSI 314943000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
151. TRUST (8P2453) Products Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2008; Vessel Registration Identification IMO 9382798; MMSI 314953000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
152. TURACO (3E4698) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9247780; MMSI 352002942 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: SINO SHIP MANAGEMENT COMPANY LIMITED).
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which SINO SHIP MANAGEMENT COMPANY LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
153. TYMEN (UBIK8) Chemical/Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9422653; MMSI 273334570 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To:
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which GAZPROMNEFT MARINE BUNKER LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
154. UMBA (UEIW) Floating Storage Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9196620; MMSI 273387920 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: RPK NORD LIMITED LIABILITY COMPANY).
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
155. UNIVERSAL (8P2454) Chemical/Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Year of Build 2009; Vessel Registration Identification IMO 9384306; MMSI 314954000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
156. VALENTIN PIKUL (UAAA2) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9885879; MMSI 273259920 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
157. VALOUR (3E6071) Products Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9832559; MMSI 352003207 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
158. VANGUARD (8P2469) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9311622; MMSI 314967000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
159. VASILY DINKOV (UEVN) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9372547; MMSI 273345020 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
160. VELIKIY NOVGOROD (8P2422) LNG Carrier Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9630004; MMSI 314928000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
161. VENTURE (3E7423) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9832547; MMSI 352003251 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: PROMINENT SHIPMANAGEMENT LIMITED).
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which PROMINENT SHIPMANAGEMENT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
162. VESNA (V3MD7) Crude Oil Tanker Belize flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9233349; MMSI 312242000 (vessel) [UKRAINE-EO13662] [IRAN-EO13902] [RUSSIA-EO14024] (Linked To: SHANGHAI LEGENDARY SHIP MANAGEMENT COMPANY LIMITED; Linked To: DANIKA ROBERT LIMITED).
Identified as property in which DANIKA ROBERT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which DANIKA ROBERT LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
163. VICTOR KONETSKY (3E4134) Shuttle Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9301421; MMSI 352002197 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
164. VIKTOR TITOV (3E4141) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
165. VITUS BERING (UBGJ9) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9613549; MMSI 273358680 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
166. VLADIMIR ARSENYEV (3E4140) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9901025; MMSI 352002203 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
167. VLADIMIR MONOMAKH (UBUT6) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9842176; MMSI 273211040 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
168. VLADIMIR VINOGRADOV (UBTV8) Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9842188; MMSI 273295230 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
169. VOSTOCHNY PROSPECT (UBEZ2) LNG Carrier Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9866392; MMSI 273611590 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
170. VOYAGER (8P2374) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9843560; MMSI 314906000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
171. VYACHESLAV TIKHONOV (UBSH6) Research Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9538115; MMSI 273350140 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
172. VYAZ (UBXQ5) Tug Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9804057; MMSI 273418480 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: RPK NORD LIMITED LIABILITY COMPANY).
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which RPK NORD LIMITED LIABILITY COMPANY, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
173. WEI FENG (3E4609) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9388754; MMSI 352002820 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: XINGFU HAI SHIPPING LIMITED).
Identified as property in which XINGFU HAI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which XINGFU HAI SHIPPING LIMITED, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
174. YARD NO.131040 ZVEZDA-DSME Crew/Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9842205 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
175. YARD NO.131080 ZVEZDA-DSME Crude Oil Tanker Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9908994 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY ROSNEFTEFLOT).
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY ROSNEFTEFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
176. YEVGENY PRIMAKOV (UAUH) Supply Vessel Russia flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9753741; MMSI 273412440 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
177. YURI SENKEVICH (3E4135) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9301419; MMSI 352002198 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: STREAM SHIP MANAGEMENT FZCO).
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which STREAM SHIP MANAGEMENT FZCO, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
178. ZALIV AMERIKA (3E7520) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9354301; MMSI 352003366 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
179. ZALIV AMURSKIY (3E7519) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9354313; MMSI 352003364 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
180. ZALIV ANIVA (3E3486) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9418494; MMSI 352002209 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
181. ZALIV BAIKAL (3E4131) Shuttle Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9360128; MMSI 352002194 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
182. ZALIV VOSTOK (3E4133) Crude Oil Tanker Panama flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9360130; MMSI 352002196 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
183. ZENITH (8P2448) Crude Oil Tanker Barbados flag; Secondary sanctions risk: See Section 11 of Executive Order 14024.; alt. Secondary sanctions risk: Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209; Vessel Registration Identification IMO 9610781; MMSI 314950000 (vessel) [UKRAINE-EO13662] [RUSSIA-EO14024] (Linked To: JOINT STOCK COMPANY SOVCOMFLOT).
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 13662, has an interest.
Identified as property in which JOINT STOCK COMPANY SOVCOMFLOT, a person whose property and interests in property are blocked pursuant to E.O. 14024, has an interest.
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 general public and other federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning a combined information reporting by a successor business entity.
Written comments should be received on or before March 24, 2025 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of this collection should be directed to Jason Schoonmaker, (801)
The IRS is currently seeking comments concerning the following information collection tools, reporting, and record-keeping requirements:
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning Electronic Federal Tax Payment System (EFTPS).
Written comments should be received on or before March 24, 2025 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of this collection should be directed to Jason Schoonmaker, (801) 620-2128, at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The IRS is currently seeking comments concerning the following information collection tools, reporting, and record-keeping requirements:
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Veterans Health Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Health Administration (VHA), Department of Veterans Affairs (VA), will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden, and it includes the actual data collection instrument.
Comments and recommendations for the proposed information collection should be sent by February 21, 2025.
To submit comments and recommendations for the proposed information collection, please type the following link into your browser:
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
Commodity Futures Trading Commission.
Final rule.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is amending its regulations governing the types of investments that futures commission merchants and derivatives clearing organizations may make with funds held for the benefit of customers engaging in futures, foreign futures, and cleared swaps transactions. The Commission is also revising asset-based and issuer-based concentration limits for the investment of customer funds. The Commission is also specifying market risk capital charges that a futures commission merchant must take on new investments added to the list of permitted investments in computing the firm's adjusted net capital. The amendments also revise regulations that require each futures commission merchant to report to the Commission, and to the firm's designated self-regulatory organization, the name, location, and amount of customer funds held by each depository, including any investments of customer funds held by the depository. Lastly, the Commission is eliminating the requirement that each depository holding customer funds must provide the Commission with read-only electronic access to such accounts for the futures commission merchant to treat the funds as customer segregated funds.
Amanda L. Olear, Director, (202) 418-5213,
The Commodity Exchange Act (“Act” or “CEA”)
Segregated customer funds are classified as either: (i) “futures customer funds;” (ii) “Cleared Swaps Customer Collateral;” or (iii) “30.7 customer funds.”
Section 4d(b) of the Act establishes obligations for DCOs and other depositories receiving futures customer funds from FCMs pursuant to section 4d(a)(2) of the Act.
With respect to cleared swap transactions, Commission regulations 1.3 and 22.1
Part 30 of the Commission's regulations govern the requirements imposed on FCMs that carry futures positions for customers trading on foreign markets.
In order to simplify the discussion in this preamble, the terms “futures customer funds,” “Cleared Swaps Customer Collateral,” and “30.7 customer funds,” are used when referring to regulations applicable specifically to futures customers, Cleared Swaps Customers, and 30.7 customers, respectively. In addition, the term “Customer Funds” is used when referring collectively to “futures customer funds,” “Cleared Swaps Customer Collateral,” and “30.7 customer funds.”
The Act establishes the authority for FCMs and DCOs to invest Customer Funds. Section 4d(a)(2) of the Act authorizes FCMs to invest futures customer funds in: (i) obligations of the U.S.; (ii) obligations fully guaranteed as to principal and interest by the U.S.; and (iii) general obligations of any State or of any political subdivision of a State.
The Commission subsequently expanded the Permitted Investments in 2000 to include certificates of deposit, commercial paper, corporate notes, foreign sovereign debt, and interests in money market funds.
The list of investments that qualify as Permitted Investments has undergone several revisions following the 2000 Permitted Investments Amendment.
Section 4(b)(2)(A) of the Act grants the Commission authority to adopt rules and regulations regarding an FCM's safeguarding of 30.7 customer funds.
The Commission also extended the requirements of Commission regulation 1.25 to FCMs and DCOs investing Cleared Swaps Customer Collateral.
In addition to enumerating the Permitted Investments that FCMs and DCOs may enter into with Customer Funds, Commission regulation 1.25 also imposes several conditions on the investment of Customer Funds. Commission regulation 1.25(b)(3) contains both asset-based and issuer-based concentration limits applicable to Permitted Investments. The asset-based concentration limits restrict the total amount of Customer Funds that an FCM or DCO may invest in any particular Permitted Investment instrument or asset class to a defined percentage of the total funds held in segregation by the FCM or DCO.
To limit risk to customers from the investment of Customer Funds, Commission regulations provide that FCMs and DCOs are financially responsible for any losses resulting from Permitted Investments and explicitly prohibit the allocation of investment losses to customers or clearing FCMs, respectively.
Commission regulation 22.2(e)(1) provides that an FCM shall bear sole responsibility for any losses resulting from the investment of Cleared Swaps Customer Collateral and may not allocate investment losses to Cleared Swaps Customers of the FCM. 17 CFR 22(e)(1).
Commission regulation 30.7(i) provides that an FCM shall bear sole financial responsibility for any losses resulting from the investment of 30.7 customer funds, and further provides that no investment losses may be allocated to the 30.7 customers of the FCM. 17 CFR 30.7(i).
In addition, Commission regulation 22.3(d) provides that DCOs may invest Cleared Swaps Customer Collateral in Permitted Investments set forth in Commission regulation 1.25. The regulation, however, does not provide that a DCO is responsible for investment losses. The Commission proposed to amend Commission regulation 22.3(d) to explicitly provide that a DCO shall bear sole responsibility for any losses resulting
The Commission has previously noted the importance of conducting periodic assessments of Commission regulation 1.25 and, as necessary, revising regulatory policies to strengthen safeguards designed to minimize risk while retaining an appropriate degree of investment flexibility and opportunities for capital efficiency for DCOs and FCMs investing customer segregated funds.
The Futures Industry Association (“FIA”) and CME Group Inc. (“CME”) (collectively, the “Petitioners”) submitted a joint petition requesting that the Commission issue an order under section 4(c) of the Act, or take such other action as the Commission deems appropriate, to expand the list of Permitted Investments that FCMs and DCOs may enter into with Customer Funds.
Commission regulation 1.25(d)(2) provides that an FCM or DCO may enter into Repurchase Transactions only with the following counterparties: (i) a bank as defined in section 3(a)(6) of the Securities Exchange Act of 1934; (ii) a domestic branch of a foreign bank insured by the FDIC; (iii) an SEC-registered securities broker or dealer; or (iv) an SEC-registered government securities broker or dealer. Section 3(a)(6) of the Securities Exchange Act of 1934 defines the term “bank” to mean: (i) a banking institution organized under the laws of the U.S. or a Federal savings association; (ii) a member bank of the Federal Reserve System; (iii) any other banking institution or savings association doing business under the laws of any State or the U.S., a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency, and which is supervised and examined by a State or Federal authority having supervision over banks or savings associations; and (iv) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (i), (ii), or (iii) above (“Section 3(a)(6) bank”). 15 U.S.C. 78c(a)(6). Foreign-domiciled banks and foreign securities brokers or dealers are not authorized counterparties for Repurchase Transactions under Commission regulation 1.25(d)(2).
In addition, Commission regulation 1.25(d)(7) provides that securities transferred to an FCM or DCO under Repurchase Transactions must be held in safekeeping accounts with certain U.S.-domiciled banks, a Federal Reserve Bank, a DCO, or the Depository Trust Company in an account that complies with the requirements of Commission regulation 1.26.
In support of the request, the Petitioners stated that the Commission issued an order in 2018 pursuant to section 4(c) of the Act providing a limited exemption to section 4d of the Act and Commission regulation 1.25 to permit DCOs to invest futures customer funds and Cleared Swaps Customer Collateral in the foreign sovereign debt of France and Germany.
The 2018 Order's section 4(c) exemption for DCOs is subject to conditions, including that: (i) investment in French or German sovereign debt is limited to investments made with euro-denominated balances owed to the futures customers and Cleared Swaps Customers of FCM clearing members; (ii) the dollar-weighted average of the remaining time-to-maturity of a DCO's portfolio of investments in each of French and German sovereign debt may not exceed 60 days; and (iii) a DCO may not make a direct investment in any sovereign debt instrument of France or Germany that has a remaining time-to-maturity in excess of 180 calendar days.
The 2018 Order also grants an exemption from Commission regulation 1.25(d)(2) to permit DCOs to enter into Repurchase Transactions involving French or German sovereign debt with foreign banks and foreign securities brokers or dealers as counterparties.
The Petitioners further requested that FCMs and DCOs be permitted to invest Customer Funds in certain exchange-traded funds (“ETFs”) that invest primarily in short-term U.S. Treasury securities (“U.S. Treasury ETFs”).
The Commission also received a petition from Invesco Capital Management LLC (“Invesco”), which serves as a sponsor of various ETFs, advocating for the addition of U.S. Treasury ETF securities to the list of Permitted Investments.
Lastly, the Petitioners also requested that the Commission amend its regulations consistent with CFTC Staff Letter 21-02 and CFTC Staff Letter 22-21
In order to revise Commission regulation 1.25 to address outdated provisions, and in consideration of the Joint Petition and the Invesco Petition, the Commission proposed to amend the list of Permitted Investments to: (i) add two new asset classes (
The comment period for the Proposal closed on January 17, 2024. The Commission received 17 comment letters from various interested parties, including investor advocacy groups, trade associations, and financial services companies.
In consideration of the broad public input expressed in the public comments and the Commission's experience administering the rules that govern investments of Customer Funds by FCMs and DCOs, the Commission is adopting the proposed amendments, subject to the changes discussed below.
Commission regulation 1.25(a)(1)(vii) currently provides that FCMs and DCOs may invest Customer Funds in interests in MMFs, subject to specified terms and conditions.
As further described below, the Commission proposed to amend Commission regulation 1.25(a)(1)(vii) to limit the scope of MMFs whose interests qualify as Permitted Investments in response to two sets of rule amendments adopted by the SEC regarding MMFs, which rendered, in the Commission's view, certain MMFs incompatible with the liquidity requirements of Commission regulation 1.25.
As noted above, the Commission proposed to amend Commission regulation 1.25 to limit the scope of MMFs that qualify as Permitted Investments in response to SEC revisions to its MMF rules. Specifically, in 2014, the SEC amended SEC Rule 2a-7 to authorize an MMF to impose liquidity fees on participant redemptions, or to temporarily suspend participant redemptions, if the MMF's investment portfolio triggered certain liquidity thresholds.
Commission staff subsequently received inquiries from market participants concerning the permissibility of investing Customer Funds in MMF interests under Commission regulation 1.25 in light of the 2014 SEC Redemption Provisions. In response, Commission staff issued CFTC Staff Letter 16-68
Staff Letter 16-68 was issued by the Commission's Division of Swap Dealer and Intermediary Oversight (“DSIO”) (subsequently renamed the Market Participants Division (“MPD”)).
Staff Letter 16-69 set forth DCR's interpretation that Commission regulations 39.15(c) and (e)
In August 2023, the SEC adopted additional amendments to its MMF rules, including amendments revising the 2014 SEC Redemption Provisions discussed above.
Accordingly, in an effort to improve the resilience of MMFs and address the issue of preemptive investor redemption behavior, particularly in times of stress, the SEC adopted changes to the fee and gate provisions in SEC Rule 2a-7. The 2023 SEC MMF Reforms, among other things, amended the 2014 SEC Redemption Provisions by removing a Prime MMF's ability to temporarily suspend participant redemptions and by removing an Electing Government MMF's ability to voluntarily retain authority to suspend participant redemptions.
The SEC's liquidity fee mechanism is designed to address shareholder dilution and the potential for first-mover advantage by allocating liquidity costs to redeeming investors. Although the mechanism may contribute to decreasing outflows from certain MMFs, the Commission preliminarily considered that the potential imposition of a fee would nonetheless potentially reduce the principal of an FCM's or DCO's investment in MMF shares, particularly during periods of market stress and high shareholder redemptions. Such potential loss of principal could have an adverse impact on the ability of an FCM or DCO to fully repay customers, who may need liquidity in their accounts to meet trading losses and/or margin calls. Therefore, consistent with the positions taken in Staff Letter 16-68 and Staff Letter 16-69, the Commission proposed to limit the scope of MMFs whose interests qualify as Permitted Investments to funds that are not subject to a liquidity fee (
To eliminate MMFs whose redemptions may be subject to a liquidity fee from the scope of Permitted Investments under Commission regulation 1.25, the Commission proposed revising Commission regulation 1.25(a)(1)(vii), which would be redesignated as Commission regulation 1.25(a)(1)(iv) to accommodate other amendments to Commission regulation 1.25(a) discussed in the Proposal, by replacing the term “money market mutual fund” with the term “government money market funds as defined in § 270.2a-7 of this title, provided that the funds do not elect to be subject to liquidity fees in accordance with § 270.2a-7 of this title (government money market fund).”
The Commission also noted that the proposed amendments removing interests in MMFs whose redemptions may be subject to a liquidity fee from the scope of Permitted Investments would prohibit an FCM from depositing proprietary interests in such MMFs into Customer Funds accounts.
The Commission received six comments on the proposed limit of the scope of MMFs whose interests qualify as Permitted Investments to Permitted Government MMFs.
In addition to supporting the proposed revisions to the scope of the MMFs, FIA and CME recommended an amendment to the template acknowledgement letters for Government MMFs set forth in appendices A and B to Commission regulation 1.26 for direct investments by FCMs and DCOs of futures customer funds and Cleared Swaps Customer Collateral in MMFs, and appendix F to part 30 for direct investments by FCMs of 30.7 customer funds in MMFs.
Finally, in response to the Commission's request for comment on whether the Commission should revise Commission regulation 1.25(b)(5)(ii) to prohibit FCMs and DCOs from investing Customer Funds in a fund affiliated with the FCM or DCO, commenters asserted that no changes were
The Commission has considered the comments received, and is adopting as proposed the amendments to Commission regulation 1.25 to limit the scope of MMFs that qualify as Permitted Investments for Customer Funds to Permitted Government MMFs. As stated in the Proposal, the Commission's intent in eliminating Prime MMFs and Electing Government MMFs from the list of Permitted Investments is to ensure that Customer Funds are managed with the objectives of preserving principal of the investments, consistent with the general requirements of Commission regulation 1.25(b).
The Commission is also maintaining current Commission regulation 1.25(b)(5)(ii), which provides that an FCM or DCO may invest Customer Funds in a fund affiliated with that FCM or DCO. Consistent with its views expressed in connection with the risk management program mandated by Commission regulation 1.11,
Lastly, in response to the comment asserting that the Commission failed to acknowledge the broader “dash for cash” that occurred across assets classes in March 2020,
To eliminate MMFs whose redemptions may be subject to a liquidity fee from the scope of Permitted Investments under Commission regulation 1.25, the Commission is revising Commission regulation 1.25(a)(1)(vii), which is redesignated Commission regulation 1.25(a)(1)(iv) to accommodate other amendments to Commission regulation 1.25(a) discussed in this Final Rule, by replacing the term “money market mutual fund” with the term “government money market funds as defined in § 270.2a-7 of this title, provided that the funds do not elect to be subject to liquidity fees in accordance with § 270.2a-7 of this title (government money market fund).” The Commission is also adopting further conforming changes throughout Commission regulation 1.25 and the appendix to Commission regulation 1.25 by replacing all references to “money market mutual fund” with “government money market fund.” In addition, the appendix to Commission regulation 1.25 is redesignated as appendix E to part 1 to address a change in the rules of the Office of the Federal Register regarding the structure of regulatory text to be codified in the Code of Federal Regulations.
To reflect the Final Rule's amendments to the scope of MMFs that qualify as Permitted Investments, the Commission is also adopting conforming amendments to Commission regulation 1.26, appendices A and B to Commission regulation 1.26, Commission regulation 30.7(d), and appendix F to part 30 of the Commission's regulations, as proposed. Specifically, the Commission is adopting conforming amendments to paragraphs (a) and (b) of Commission regulation 1.26 to replace the term “money market mutual fund” with the term “government money market fund.” Paragraph (b) of Commission regulation 1.26 is further revised to reflect the redesignation of appendices A and B to Commission regulation 1.26 as
In addition, the Commission is making conforming changes to Commission regulation 30.7(d)(2) and 30.7(l)(5)(iii)(G) (redesignated Commission regulation 30.7(l)(5)(iii)(F)) to replace the term “money market mutual fund” with “government money market fund.” The Commission is also implementing changes to appendix F to part 30, to replace the term “money market mutual fund” with “government money market fund.”
In response to FIA/CME Joint Letter, the Commission is also adopting additional conforming changes to the template acknowledgement letters set forth in appendices A and B to Commission regulation 1.26 (redesignated as appendices F and G to part 1) and in appendix F to part 30 to reflect the changes to the scope of MMFs that qualify as Permitted Investments.
As discussed in section IV.E. of this preamble regarding the removal of read-only electronic access, FCMs do not need to obtain new acknowledgment letters for existing accounts at depositories holding Customer Funds reflecting this new language regarding government money market funds. Instead, revised acknowledgment letters must be obtained only for accounts opened after the effective date of this Final Rule or if the FCM is required to obtain a new acknowledgment letter for reasons unrelated to the addition of the government money market fund language after the effective date of this Final Rule.
The Commission authorized FCMs and DCOs to invest futures customer funds in foreign sovereign debt as part of the 2000 Permitted Investments Amendment.
The Commission subsequently proposed to eliminate foreign sovereign debt as a Permitted Investment in 2010 citing an interest in simplifying the regulation and safeguarding futures customer funds in light of economic crises experienced by a number of foreign sovereigns.
The Commission subsequently eliminated foreign sovereign debt as a Permitted Investment in 2011.
As discussed in section II. of this preamble, the Commission issued an order in 2018 pursuant to section 4(c) granting DCOs a limited exemption from the prohibition on the investment of customer funds in foreign sovereign debt consistent with its views and the criteria expressed in the 2011 Permitted Investments Amendment.
As stated in section II. of this preamble, the FIA and CME submitted a joint petition requesting that the Commission expand the scope of the 2018 Order by permitting both DCOs and FCMs to invest Customer Funds (
After considering the Joint Petition and assessing changes to the holding of non-U.S. dollar currencies by FCMs and DCOs since the 2007 Review, the Commission proposed to permit both FCMs and DCOs to invest Customer Funds in Specified Foreign Sovereign Debt securities.
The Commission also proposed to limit the time-to-maturity of investments in Specified Foreign Sovereign Debt.
The Commission also proposed to expand the permissible Repurchase Transaction counterparties and depositories under Commission regulations 1.25(d)(2) and (7) to include certain foreign entities to effectively permit FCMs and DCOs to engage in Repurchase Transactions with Specified Foreign Sovereign Debt securities pursuant to Commission regulation 1.25(a)(2).
The Commission noted in the Proposal that, absent amendment to the counterparty and depository provisions of Commission regulations 1.25(d)(2) and (7), an FCM's and DCO's ability to buy and sell Specified Foreign Sovereign Debt pursuant to Repurchase Transactions would be restricted given that participants in such markets are predominantly non-U.S. entities.
The Commission also proposed to permit Specified Foreign Sovereign Debt securities transferred to an FCM or DCO under a reverse repurchase agreement to be held with a foreign bank that qualifies as a permitted depository under Commission regulation 1.49 by maintaining in excess of $1 billion in regulatory capital.
Lastly, the Commission proposed to amend Commission regulation 1.25(b)(4)(i), which provides that except for investments in MMFs, the dollar-weighted average time-to-maturity of an FCM's or DCO's portfolio of Permitted Investments, as computed under SEC Rule 2a-7, may not exceed 24 months.
The Commission received 12 comments in response to the proposed addition of Specified Foreign Sovereign Debt to the list of Permitted Investments for Customer Funds. Ten commenters supported the Proposal.
Several commenters expressing support for the Proposal stated that permitting investment in the Specified Foreign Sovereign Debt provides FCMs
Several commenters also observed that the ability to invest foreign currency balances owed to customers in Specified Foreign Sovereign Debt securities reduces potential credit risk that FCMs and DCOs would otherwise be exposed to by depositing the foreign currencies in unsecured commercial bank accounts.
FIA and CME further commented that the significant growth in the holding of foreign currencies, particularly CAD, EUR, JPY, and GBP, which comprise the currencies of the Specified Foreign Sovereign Debt securities, provides compelling evidence demonstrating the risk management rationale for expanding the list of Permitted Investments to include Specified Foreign Sovereign Debt securities.
FIA and CME also observed that as non-U.S. dollar customer funds balances have increased, so has the customer demand for FCM flexibility in servicing multi-currency accounts.
Commenters also supported the Proposal by noting that the credit, liquidity, and volatility characteristics of Specified Foreign Sovereign Debt securities are comparable to those of U.S. Treasury securities.
Better Markets and the Investor Advocacy Group opposed the proposed addition of Specified Foreign Sovereign Debt to the list of Permitted Investments, stating that such investments could compromise the protection of Customer Funds and put customers at undue financial risk.
Better Markets also asserted that allowing investments of Customer Funds in foreign sovereign debt would constitute a relaxation of regulatory enhancements introduced following the failures of MF Global Inc. (“MF Global”) and Peregrine Financial Group (“Peregrine”).
More generally, Better Markets and the Investor Advocacy Group contended that the Commission lacks a compelling, public interest-focused rationale for expanding the list of Permitted Investments to include Specified Foreign Sovereign Debt.
Separately, four commenters responded to the Commission's request for comment on whether the Commission should impose a “cooling-off ” period, following an exceedance of the 45 BPS limit on the two-year credit default swap spread of the issuing foreign sovereign, during which investments in Specified Foreign Sovereign Debt would remain prohibited.
FIA and CME also observed that the Commission did not indicate whether the calculation of the 45 BPS credit default spread condition should be based on the bid, offer or mid-level.
In addition, FIA and CME reiterated their request, originally expressed in the Joint Petition, that the Commission set a six-month dollar-weighted average time-to-maturity limit for the portfolio of Specified Foreign Sovereign Debt, and a maximum two-year remaining time-to-maturity condition for individual instruments.
Commenters also supported the Commission's proposal to revise Commission regulations 1.25(d)(2) and (7) by expanding the eligible counterparties for Repurchase Transactions for Specified Foreign Sovereign Debt securities to include foreign banks, foreign securities brokers and dealers, and the central banks of Canada, France, Germany, Japan, and the United Kingdom, and by including foreign banks as eligible custodians for securities received by FCMs and DCOs under agreements to resell the securities.
Separately, three commenters asserted that the Proposal's goals of increasing investment vehicles for DCOs, while minimizing credit risk, market risk, and liquidity risk could be effectively met if DCOs were allowed to deposit Customer Funds at the Federal Reserve Banks.
BlackRock also requested that the Commission amend Commission regulation 1.25(d)(2) to allow FCMs and DCOs to invest Customer Funds pursuant to Repurchase Transactions cleared by a covered clearing agency registered with the SEC under section 17A of the Securities Exchange Act.
The Commission is amending Commission regulation 1.25 to add Specified Foreign Sovereign Debt to the list of Permitted Investments as proposed, subject to certain clarifications and revisions to address comments. The amendments incorporate and expand upon the exemptive relief provided by the Commission in the 2018 Order by authorizing DCOs to invest Customer Funds in the sovereign debt of Canada, Japan, and the United Kingdom in addition to the sovereign debt of France and Germany. The amendments also expand upon the 2018 Order by authorizing FCMs to invest Customer Funds in the Specified Foreign Sovereign Debt.
After considering the public comments, the Commission continues to believe that adding Specified Foreign Sovereign Debt securities as a Permitted Investment provides FCMs and DCOs with an option to manage the potential foreign exchange risk that may arise in their administration and investment of Customer Funds. Specifically, absent the ability to invest Customer Funds in identically-denominated sovereign debt securities, an FCM or DCO seeking to invest customer foreign currency deposits would need to convert the currencies to a U.S. dollar-denominated asset, which would introduce potential foreign currency fluctuation risk to the FCMs and DCOs.
First, an FCM or DCO will be permitted to invest in the foreign sovereign debt of only Canada, France, Germany, Japan, and the United Kingdom. The Commission's determination to include the foreign sovereign debt to these five countries is based on various factors. As a preliminary matter, each of these countries, including the U.S., is a member of the Group of 7 (“G7”), which represents the world's largest industrial democracies, and qualifies as a “money center country” as the term is defined in Commission regulation 1.49(a)(1).
In addition, prior to proposing to allow FCMs and DCOs to invest in the sovereign debt of the enumerated countries, the Commission analyzed the credit, liquidity, and volatility characteristics of Specified Foreign Sovereign Debt. In particular, the Commission considered data provided by the Petitioners in support of the Joint Petition's statement that the credit default swaps of Canada, France, Germany, Japan, and the United Kingdom have relatively narrow spreads similar to the credit default spread of the U.S.
With regard to the volatility characteristics of Specified Foreign Sovereign Debt, the Commission concluded that expanding the list of Permitted Investments to include the sovereign debt of these five G7 countries is warranted based on available data that the price risk of the relevant foreign sovereign debt is comparable to that of U.S. Treasury securities that are already included in the list of Permitted Investments. Specifically, using one-year sovereign debt instruments yield data for the period September 21, 2018 to September 20, 2023, the Commission observed that the standard deviation of daily yield change for one-year U.S. Treasury bills was 9 BPS, whereas the same measure for Canadian, French, German, Japanese, and United Kingdom one-year debt instruments ranged from 1 to 7 BPS.
Second, an FCM or DCO is permitted to invest in the Specified Foreign Sovereign Debt of a country only to the extent that the FCM or DCO has balances in accounts owed to customers denominated in the country's currency.
Third, the Commission proposed to permit FCMs and DCOs to invest in Specified Foreign Sovereign Debt provided that the two-year credit default spread of the issuing sovereign is 45 BPS or less.
During the more recent period of September 21, 2018 to September 20, 2023 preceding the issuance of the Proposal, the U.S. Spread had a mean of approximately 16.4 BPS,
Consistent with the Proposal, if the credit default spread of the issuing sovereign exceeds the 45 BPS cap, FCMs and DCOs will not be permitted to make further investments, but neither will they be required to immediately divest their current investments in Specified Foreign Sovereign Debt. The prohibition on new investments will reduce the exposure to Customer Funds by avoiding the risk of default on the Specified Foreign Sovereign Debt. In situations where the 45 BPS cap is exceeded, FCMs and DCOs will hold Customer Funds denominated in foreign currency in cash or invest the foreign currency in U.S. dollar-denominated Permitted Investments rather than Specified Foreign Sovereign Debt. In addition, the requirement that the dollar-weighted average time-to-maturity of the portfolio of Specified Foreign Sovereign Debt not exceed 60 calendar days helps mitigate price risks to the Customer Funds that might arise from a country's two-year credit default spread exceeding the 45 BPS limit.
In addition, in response to a comment stating that the Commission did not specify how the 45 BPS limit should be calculated, the Commission is clarifying that the 45 BPS credit default spread must be determined using mid-level pricing, rather than the bid or ask price.
The Commission also requested comments as to whether it was appropriate to impose a “cooling-off” period before an FCM or DCO could invest Customer Funds in the Specified Foreign Sovereign Debt of a particular country once the two-year credit default spread of the country exceeded 45 BPS.
However, the Commission has determined to immediately halt the purchase of additional Specified Foreign Sovereign Debt once the 45 BPS cap is exceeded. Specifically, the Commission does not agree with commenters who suggested that there should be “flexibility” with respect to the number of breaches of the 45 BPS cap before investments are limited,
The Commission is also adopting the 60-calendar-day dollar-weighted average time-to-maturity of investments in Specified Foreign Sovereign Debt, as proposed.
In addition, data regarding the new issuances of short-term Specified Foreign Sovereign Debt supports the lower 60-day dollar-weighted average time-to-maturity requirement and the 180-day maximum remaining time-to-maturity requirement proposed.
In addition, as discussed in the Proposal, with the adoption of the 60-day dollar-weighted portfolio average time-to-maturity requirement, the Commission is also amending Commission regulation 1.25(b)(4)(i) to exclude Specified Foreign Sovereign Debt from the calculation of the dollar-weighted average time-to-maturity of the FCM's or DCO's full portfolio of investment of Customer Funds.
The Commission acknowledges the request of Eurex, CCP Global, and Nodal in their public comments
Consistent with the Proposal, the Commission is also amending Commission regulations 1.25(d)(2) and (7) to expand permissible counterparties and depositories that can be used in connection with Repurchase Transactions to include certain foreign entities. Without amendment to these counterparty and depository provisions, an FCM's and DCO's ability to buy and sell Specified Foreign Sovereign Debt securities pursuant to Repurchase Transactions would be restricted because participants in the foreign market are predominantly non-U.S. entities. The Commission is therefore adding foreign banks and foreign brokers or dealers meeting certain requirements, as well as the European Central Bank and the central banks of Canada, France, Germany, Japan, and the United Kingdom, to the list of permitted counterparties.
In response to Better Markets' assertion that allowing investments in Specified Foreign Sovereign Debt is relaxing some of the stringent requirements put in place after the collapse of MF Global,
The Commission continues to recognize that the safety of sovereign debt issuances of one country may vary greatly from the sovereign debt issuances of another country. Because of this, the Commission finds that investment in Specified Foreign Sovereign Debt that meets the tightly circumscribed risk characteristics set forth in the 2018 Order and restated in the Final Rule is consistent with the objectives of preserving principal and maintaining liquidity of investments specified in Commission regulation 1.25.
In addition, MF Global's trading losses, which Better Markets references in asserting that FCMs' and DCOs' investments in Specified Foreign Sovereign Debt might compromise the protection of Customer Funds,
Peregrine's failure was also the result of the misappropriation of Customer Funds and violations of the Commission segregation requirements for Customer Funds.
Moreover, the Commission adopted major revisions to its rules to enhance the protection of Customer Funds in response to the MF Global and Peregrine bankruptcies. Specifically, the Commission adopted Commission regulation 1.11,
The Commission also revised Commission regulation 1.10 to require, among other things, an FCM to report and maintain a targeted amount of residual interest (
The Commission further revised Commission regulation 1.12 to enhance reporting by FCMs to the Commission. Specifically, Commission regulation 1.12 was amended to define several additional reportable events that require an FCM to file a notice with the Commission and with the FCM's designated self-regulatory organization.
The additional Customer Funds safeguards adopted in 2013 are not affected by the amendments adopted in this Final Rule.
The Commission is not addressing BlackRock's request for amendments to Commission regulation 1.25(d)(2) to allow FCMs and DCOs to invest Customer Funds pursuant to Repurchase Transactions cleared by a covered clearing agency registered with the SEC because this requested change was not proposed and discussed as part of the Proposal.
Finally, as discussed previously, some commenters raised concerns about the profits of FCMs and DCOs and whether increased profits were in line with the public interest language in the Act to justify these changes to the list of Permitted Investments.
Furthermore, permitting investments in Specified Foreign Sovereign Debt facilitates FCMs' and DCOs' overall risk management in recognition of how the market has evolved since the 2007 Review.
The Commission has also determined that it is in the public interest to allow FCMs and DCOs to invest in foreign sovereign debt because there will be increased resources for financial stability and responsible innovation. Any increase in profits by FCMs and DCOs as a result of these expanded investment options would generate income and potentially increase their presence in the futures market and other relevant markets to support greater competition. This is particularly important because the futures industry has experienced considerable consolidation, with the number of FCMs
There is no guarantee that the potential for additional profits will benefit customers directly at all times; however, as described above, the increased investment options may potentially reduce concentration in the FCM industry, mitigate foreign currency risk, and facilitate FCMs' ability to answer margin calls in foreign currency, all of which directly benefit FCM customers.
In consideration of comments received, the Commission is amending Commission regulation 1.25(a)(1) to add Specified Foreign Sovereign Debt to the list of Permitted Investments, subject to the conditions as described above. The Commission is adding Commission regulation 1.25(a)(vi), as redesignated to accommodate other amendments to the list of Permitted Investments pursuant to this Final Rule. Paragraph (vi) reflects the addition of general obligations of Canada, France, Germany, Japan, and the United Kingdom as a Permitted Investment.
As part of its periodic reassessment of the list of Permitted Investments of Customer Funds, and as a result of its consideration of industry input provided in the Joint Petition and the Invesco Petition, the Commission proposed to include shares in certain U.S. Treasury ETFs to the list of Permitted Investments under Commission regulation 1.25. ETFs are collective investment vehicles that issue redeemable securities that are also traded at the market price on national securities exchanges.
As an open-end investment company,
An authorized participant may act as a principal for its own account or as an agent for others when purchasing or redeeming creation units.
In assessing the potential expansion of the list of Permitted Investments, the Commission considered statements emphasizing the liquidity of U.S. Treasury ETF shares and the diversification opportunity that such ETFs provide for Customer Funds.
The Commission also conducted an independent preliminary analysis of the risk profile and volatility of ETFs investing primarily in short-term U.S. Treasury securities and observed that during the period covered by the analysis, the relevant ETFs presented characteristics that were comparable to that of the underlying U.S. Treasury security investments.
Further, the Commission considered the limited types of investments that meet the requirements of Commission regulation 1.25. As a result of various regulatory reforms discussed in the Proposal, several asset classes included in Commission regulation 1.25 no longer qualify as Permitted Investments.
The Commission also noted the increased demand for high quality collateral, including for assets that currently qualify as Permitted Investments under Commission regulation 1.25, resulting from certain regulatory reforms.
In the Proposal, the Commission expressed its preliminary belief that expanding the range of available Permitted Investments to include interests in ETFs that meet specified conditions would provide FCMs and DCOs with greater flexibility and opportunities for capital efficiency in the investment of Customer Funds, without unacceptably increasing risk to customers.
Given the similarities between ETFs investing primarily in short-term U.S. Treasury securities and MMFs whose interests already qualify as Permitted Investments,
In addition, the Commission proposed to limit Qualified ETFs to funds that are passively managed and that seek to replicate the performance of a published short-term U.S. Treasury security index composed of bonds, notes, and bills with a remaining time-to-maturity of 12 months or less, issued by, or unconditionally guaranteed as to timely payment of principal and interest by, the U.S. Department of the Treasury.
The Commission further proposed, consistent with the current requirements applicable to interests in MMFs, to prohibit the agreement governing an FCM's or DCO's acquisition and holding of interests in Qualified ETFs from containing provisions that would prevent the pledging of the Qualified ETF's shares.
Also, under the terms of the Proposal, a Qualified ETF would be required to compute the NAV by 9 a.m. of the business day following each business day and make it available to FCMs or DCOs, as applicable, by that time.
The Commission also proposed several conditions specific to Qualified ETFs. Specifically, articulating concerns related to compliance with the Customer Funds segregation requirements and Commission regulation 1.25(b)(1) liquidity standards, the Commission proposed to require an FCM or DCO that invests Customer Funds in the shares of a Qualified ETF to be an authorized participant of the ETF.
Given the time limits for the redemption and liquidation of Permitted Investments in Commission regulation 1.25, the Commission also proposed that Qualified ETFs be required to redeem their shares in cash because in-cash redemptions could allow for a more expeditious liquidation of the shares as compared to in-kind redemptions.
The Commission received ten comments in support of the addition of Qualified ETFs to the list of Permitted Investments.
Some commenters expressed their belief that investments in Qualified ETFs are generally safe, short-term investments consistent with the objectives of Commission regulation 1.25 regarding preserving principal and maintaining liquidity of Customer Funds.
On the other hand, commenters expressed concerns regarding some of the proposed conditions for investing in ETFs and urged the Commission to reconsider them. Several commenters expressed reservations or opposed the proposed requirement that FCMs and DCOs be authorized participants.
Commenters further asserted that the Commission's concerns regarding compliance with the Customer Funds segregation requirements and the prompt liquidation of the Qualified ETF shares could be effectively addressed through existing market practices.
With regard to the proposed requirement that Qualified ETFs be required to redeem their shares in cash, commenters largely advocated that the Commission allow Qualified ETFs to redeem in kind as well as in cash.
Asserting that in-kind redemptions are a key feature of a U.S. Treasury ETF's pricing mechanism, SIFMA AMG raised concerns that an in-cash redemption mandate could potentially distort the price of a Qualified ETF.
Several commenters also criticized the condition that DCOs accept the interest in the Qualified ETF as
Commenters also generally opposed the proposed condition that Qualified ETFs invest at least 95 percent of their portfolio in securities comprising the short-term U.S. Treasury index that the fund is designed to track, suggesting instead that the Commission adopt an 80 percent threshold requirement, which is consistent with current market conventions.
In addition, five commenters requested that the Commission revise the portfolio composition requirements to allow for additional investments.
In connection with the proposed requirement that FCMs and DCOs obtain the acknowledgement letter required by Commission regulation 1.26 from an “entity with substantial control over the
Finally, in response to the Commission's question whether there are any extraordinary circumstances, similar to the events listed in Commission regulation 1.25(c)(5)(ii) with respect to MMFs, that may justify an exception to the proposed next-day redemption requirement with regard to Qualified ETFs, three commenters recommended that the redemption exceptions for MMFs be made available for Treasury ETFs.
After considering the comments received, the Commission is adopting the proposed addition of interests in Qualified ETFs to the list of Permitted Investments, subject to certain modifications discussed below. The Commission reiterates that the inclusion of Qualified ETFs as a Permitted Investment should foster innovation and promote competition in the ETF market and the financial services industry more generally. Further, the addition of Qualified ETFs should also foster diversification in the investment of Customer Funds through a new type of financial instrument that allows FCMs and DCOs to purchase a type of collateral (
In response to the comments received, the Commission has determined to revise the requirement that an FCM or DCO be an authorized participant in order to invest Customer Funds in Qualified ETFs.
The Commission understands that generally the process of transacting on a DVP basis through an authorized participant acting on behalf of an FCM or DCO would function as follows. In the case of a creation transaction, the authorized participant would use its proprietary funds to acquire a creation basket of U.S. Treasury securities before placing an order with the Qualified ETFs for the purchase of creation units. Upon receipt of the Qualified ETF shares, the authorized participant would transfer such shares to the FCM's or DCO's customer segregated accounts and receive payment from the FCM or DCO customer segregated account on a DVP basis. Under no circumstances would the authorized participant receive payment of Customer Funds from the FCM or DCO until the authorized participant has transferred the Qualified ETF interests to the FCM's or DCO's customer segregated accounts.
In the case of a redemption transaction, the authorized participant would either pre-fund the redemption with the FCM or DCO (
Moreover, regardless of the exact process used by FCMs and DCOs to transact with an authorized participant, for the transaction to be compliant with Commission regulations, the FCM or DCO must ensure that: (i) all Commission segregation requirements are met throughout the process; (ii) the transaction occurs on a DVP basis; (iii) no fees and/or other costs associated with the transaction are charged to the customer segregated accounts; and (iv) no person, including, but not limited to, the ETF or the authorized participant has any claim over Customer Funds held by the FCM or DCO.
Eliminating the requirement that FCMs and DCOs be authorized participants from the Final Rule should expand the opportunity to invest Customer Funds in Qualified ETFs beyond those FCMs and DCOs that have the resources to become authorized participants. This change addresses concerns raised by commenters that requiring FCMs and DCOs to be authorized participants would unfairly favor the limited number of FCMs that are already authorized participants and disadvantage DCOs that may not meet the criteria of an authorized participant.
As noted above, several commenters requested that the Commission also allow FCMs and DCOs to invest Customer Funds in shares of Qualified ETFs via secondary market transactions on a DVP basis.
In adopting the Final Rule, the Commission has also determined to modify the proposed requirement that FCMs and DCOs redeem Qualified ETFs in cash. The Commission understands that ETFs typically redeem interests in kind, although they may also redeem in cash or both in kind and in cash. As discussed above, the Commission proposed to require that Qualified ETFs redeem their shares within one business day following the submission of the redemption request to help ensure a more expeditious liquidation of the Qualified ETF shares, consistent with the time limit for redemptions applicable to MMFs under Commission regulation 1.25(c)(5) and the general liquidity requirement in Commission regulation 1.25(b)(1).
Further, following consideration of comments received, the Commission has determined not to adopt, as a condition for qualification as a Permitted Investment, the proposed requirement that Qualified ETFs be acceptable by a DCO as performance bond from clearing members to margin customer trades. In making this determination, the Commission acknowledges the views of various commenters that the standards for DCO collateral acceptability and the standards for Permitted Investments should not be conflated.
The Commission is also adopting with some changes the requirement that the Qualified ETF invest at least 95 percent of its assets in eligible securities comprising the short-term U.S. Treasury index whose performance the fund seeks to replicate and cash. In the Final Rule, eligible short-term securities are defined as bonds, notes, and bills with a remaining maturity of 12 months or less, issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of the Treasury. In response to comments, the Commission did not intend to limit the amount of cash that Qualified ETFs hold and is therefore adjusting the requirement to clarify that cash is an eligible underlying asset for purposes of the 95 percent threshold.
The Commission acknowledges commenters' concerns regarding the potential burdens and costs associated with changing the fund's fundamental investment policy to reflect the adoption of a 95 percent portfolio
Further, the Commission confirms that, under the Final Rule, if the aggregate of the ETF's cash holdings and assets invested in eligible securities comprising the short-term U.S. Treasury index falls below 95 percent of the fund's total assets, the FCM or DCO is not permitted to make additional investments of Customer Funds in the Qualified ETF. Rather, as the Commission stated in the Proposal, the FCM or DCO should take reasonable actions to divest interests in the fund, while managing Customer Funds in a manner consistent with Commission regulation 1.25's general objectives of preserving principal and maintaining liquidity.
In addition, the Commission has determined to maintain the scope of eligible underlying instruments to be included in the 95 percent threshold to bonds, notes, and bills with a remaining maturity of 12 months or less, issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of the Treasury, and cash. In response to comments advocating that the scope of Qualified ETFs be expanded to funds that invest in certain short-term U.S. agency obligations,
In consideration of comments received,
The Commission has determined not to adopt the proposed requirement that FCMs and DCOs obtain the acknowledgment letter required by Commission regulation 1.26 from an entity that has substantial control over the ETF interests purchased with Customer Funds and that has knowledge and authority to facilitate redemption and payment or transfer of the Customer Funds. Under the terms of the Final Rule, FCMs and DCOs will instead be required to obtain the acknowledgement letter mandated by Commission regulation 1.20, as required for any investment of Customer Funds in Permitted Investments except Permitted Government MMFs. This change from the Proposal is based on the Commission's understanding that, unlike MMF shares that may be held directly with the fund or its affiliate, Qualified ETFs shares will be held with a depository.
The Commission is adopting the remaining conditions for Qualified ETF eligibility set forth in the Proposal as proposed without change. That is, under the terms of the Final Rule, an FCM or DCO that acquires and holds interests in Qualified ETFs may not enter into an agreement that would prevent it from pledging the Qualified ETF's shares. FCMs and DCOs must also maintain confirmations relating to their purchase of interests in a Qualified ETF in their records.
Additionally, the NAV for the Qualified ETF must be computed by 9 a.m. of the business day following each business day and made available to FCMs or DCOs, as applicable, by that time.
Further, the Qualified ETF must be legally obligated to redeem its interests and make payment in satisfaction of the interests by the business day following a redemption request.
The Commission is adding paragraph (v) to Commission regulation 1.25(a)(1), as redesignated to accommodate other amendments to the list of Permitted Investments pursuant to the Final Rule, to add the interests of Qualified ETFs (U.S. Treasury exchange-traded funds) to the list of Permitted Investments under Commission regulation 1.25. The Commission is adopting further conforming changes throughout Commission regulation 1.25. As discussed above, the Final Rule provides for the replacement of “money market mutual fund” or “money market mutual funds” with “government money market fund” or “government money market funds” throughout Commission regulation 1.25. The Commission is inserting next to the term “government money market fund” or “government money market funds,” the term “U.S. Treasury exchange-traded fund” or “U.S. Treasury exchange-traded funds,” as appropriate, preceded by an appropriate conjunction (
The Commission is revising Commission regulation 1.25(c)(1) to incorporate the condition as set forth in the Proposal that a Qualified ETF must be an investment company that is registered under the Investment Company Act of 1940 with the SEC and holds itself out to investors as an ETF under SEC Rule 6c-11.
Consistent with the Proposal, the Commission is also adding a new paragraph (8) to Commission regulation 1.25(c) to incorporate the requirement that investments of Customer Funds in Qualified ETFs occur on a DVP basis. In a modification from the Proposal, however, new Commission regulation 1.25(c)(8) does not specify that Qualified ETF interests must be redeemable by the FCM or DCO “in its capacity of an authorized participant.” The Commission is also not specifying the ETF's interests must be “redeemable in cash” but rather that the FCM or DCO must have the necessary contractual arrangements in place to liquidate the ETF shares in cash in compliance with Commission regulation 1.25's liquidity requirements. New Commission regulation 1.25(c)(8) provides that an FCM or DCO transacting with a Qualified ETF through an authorized participant must redeem interests in the Qualified ETF in cash, whereas an FCM that is an authorized participant of the Qualified ETF may redeem interests in the Qualified ETF in kind, provided the FCM is able to convert the U.S. Treasury securities received pursuant to the redemption in cash within one business day of the redemption request.
To account for the possibility that, as part of their investment strategy and within the limits of applicable SEC rules, Qualified ETFs may engage in derivatives transactions, the Commission is adopting the revision set forth in the Proposal to amend Commission regulation 1.25(b)(2)(i) to indicate that the prohibition of investments containing embedded derivatives does not apply to Qualified ETFs.
The Commission is also adopting the revision set forth in the Proposal to amend Commission regulation 1.25(b)(4)(i), which provides that, except for investments in MMFs, the dollar-weighted average time-to-maturity of an FCM's or DCO's portfolio of Permitted Investments, as computed under SEC Rule 2a-7, may not exceed 24 months. The amendment revises Commission regulation 1.25(b)(4)(i) to exclude Qualified ETFs from the
Commission regulation 1.25(b) currently provides that FCMs and DCOs may invest Customer Funds in commercial paper, corporate notes, and corporates bonds that are guaranteed under the TLGP administered by the FDIC. The TLGP program, however, expired in 2012.
The Commission received three comments supporting the removal of commercial paper, corporate notes, and corporate bonds as Permitted Investments.
The Commission has considered the comments received and has determined to amend the list of Permitted Investments by revising Commission regulation 1.25(a)(1) to eliminate commercial paper, corporate notes, and corporate bonds as proposed, because these instruments have not been Permitted Investments since the expiration of the TLGP in 2012.
Commission regulation 1.25(b)(2)(iv)(A) currently provides that Permitted Investments may contain variable or floating interest rates provided, among other things, that: (i) the interest payments on variable rate securities correlate closely, on an unleveraged basis, to a benchmark of either the Federal Funds target or effective rate, the prime rate, the three-month Treasury Bill rate, the one-month or three-month LIBOR, or the interest rate of any fixed rate instrument that is a listed Permitted Investment under Commission regulation 1.25(a);
LIBOR had commonly been used as a reference rate in various commercial and financial contracts, including corporate and municipal bonds, commercial loans, floating rate mortgages, asset-backed securities, consumer loans, and interest rate swaps and other derivatives.
Prior to the UK FCA announcement, the Federal Reserve Bank of New York had convened the Alternative Reference Rate Committee (“ARRC”) in 2014 to identify best practices for U.S. alternative reference rates as well as best practices for contract robustness, to develop an adoption plan, and to create an implementation plan with metrics of success and a timeline.
In response to the anticipated termination of the publication of LIBOR
The Commission received three comments regarding the proposed transition to SOFR, and all three comments supported the proposed amendment to replace LIBOR with SOFR as a permitted benchmark for adjustable rate securities under Commission regulation 1.25(b)(2)(iv)(A).
The Commission has considered the comments received and upon further consideration is adopting the proposed revision to Commission regulation 1.25(b)(2)(iv)(A)(
The Commission has decided not to adopt the additional alternative rates suggested by the commenters. At this time, the Commission has not observed any investment instruments that would qualify as Permitted Investments using these alternative reference rates. Furthermore, as discussed above and in the Proposal, the Commission has performed an extensive review of SOFR and has followed the work of the ARRC in developing SOFR. It has not, however, engaged in a similar review of the additional alternative reference rates at this time.
To give effect to the adoption of SOFR as a permitted benchmark for Permitted Investments with an adjustable rate of interest, paragraphs (b)(2)(iv)(A)(
Commission regulation 1.25(a)(1)(iv) currently permits, subject to certain conditions, FCMs and DCOs to invest Customer Funds in certificates of deposit (“CDs”) issued by a section 3(a)(6) bank or a domestic branch of a foreign bank that carries deposits insured by the FDIC (“bank CDs”). To qualify as a Permitted Investment under Commission regulation 1.25, a bank CD must be redeemable at the issuing bank within one business day, with any penalty for early withdrawal limited to accrued interest earned according to the terms of the bank CD agreement.
As stated in the Proposal, the Commission's experience has been that FCMs and DCOs have not elected bank CDs as an investment option for Customer Funds.
With respect to an FCM, a DSRO is the self-regulatory organization that has been delegated the responsibility under a formal plan approved by the Commission pursuant to Commission Regulation 1.52 to monitor and examine the FCM for compliance with Commission and self-regulatory organization minimum financial and related financial reporting requirements. 17 CFR 1.52.
In the Proposal, the Commission requested comment on whether Commission regulation 1.25 should be amended by removing bank CDs from the list of Permitted Investments given the historical lack of usage by FCMs and DCOs.
Three comments responded to the Commission's request for comment on this subject.
The Commission has considered the comments received and is removing bank CDs from the list of Permitted Investments in Commission regulation 1.25(a)(1) as proposed. The Commission adopted bank CDs as a Permitted Investment in 2000.
The Commission is therefore deleting paragraph (a)(1)(iv) of Commission regulation 1.25 and redesignating paragraphs (i) through (vii) of Commission regulation 1.25(a)(1) to reflect the removal of bank CDs from the revised list of Permitted Investments. In addition, the Commission is deleting paragraph (b)(2)(v) of Commission regulation 1.25, which sets forth restrictions on the features of permitted bank CDs, and is revising and/or deleting, as appropriate in light of other amendments, paragraphs (b)(3)(i)(C) and (b)(3)(ii)(B) of Commission regulation 1.25, which set forth asset-based and issuer-based concentration limits for certain instruments currently included in the list of Permitted Investments, to reflect the elimination of bank CDs from that list. The Commission is also making conforming amendments to Commission regulations 1.32(f)(3), 22.2(g)(5), and 30.7(l)(5), which define the content of the SIDR Reports described in section IV.D. of this preamble, to reflect the removal of bank CDs from the list of Permitted Investments in Commission regulation 1.25. Finally, the Commission has deleted the requirement for an FCM to report the balances invested in bank CDs in the SIDR Report.
Commission regulation 1.25(b)(3) establishes asset-based and issuer-based concentration limits for an FCM's or DCO's investment of Customer Funds in Permitted Investments.
As explained in the Proposal, an FCM or DCO is currently permitted to directly invest futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds in each of the Permitted Investments up to the following asset-based limits: (i) U.S. government securities—100 percent; (ii) U.S. agency obligations—50 percent; (iii) for each investment asset class of bank CDs, commercial paper, and corporate notes and bonds—25 percent; and (iv) municipal securities—10 percent.
With respect to MMFs, an FCM or DCO may currently invest up to 100 percent of the total futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds that it holds in MMFs that invest only in U.S. government securities, provided
With respect to issuer-based concentration limits, an FCM or DCO is permitted to invest up to 100 percent of the total futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds that it holds in U.S. government securities.
With respect to MMFs, an FCM or DCO may invest up to 100 percent of the total futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds in a single MMF that invests only in U.S. government securities.
The Commission proposed to amend the asset-based and issuer-based concentration limits in Commission regulation 1.25(b)(3) to reflect the proposed revisions to the list of Permitted Investments discussed in the Proposal and to adjust the limits based on the Commission's experience administering Commission regulation 1.25.
The Commission also proposed to maintain the current 10 percent asset-based concentration limit on investments in MMFs that hold less than $1 billion in assets or have a management company with less than $25 billion in assets under management.
In addition, to mitigate the potential risks arising from concentration in any particular fund or family of funds, the Commission proposed issuer-based concentration limits for investments in Permitted Government MMFs. Specifically, the Commission proposed to limit investments of Customer Funds in any single family of Permitted Government MMFs to 25 percent and investments of Customer Funds in any individual Permitted Government MMFs to 5 percent of the total assets held in each of the segregated account classes of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds.
Further, as part of the proposed amendments to the concentration limits in Commission regulation 1.25,
As discussed in section IV.A.3. of this preamble, the Commission is adding Qualified ETFs to the list of Permitted Investments.
Under the Proposal, an FCM's or DCO's investment of Customer Funds in Qualified ETFs with at least $1 billion in assets and whose management company manages at least $25 billion in assets would be limited to an asset-based concentration limit of 50 percent of total funds held in each of the segregated account classes of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds.
The Commission also proposed revisions to the asset-based and issuer-based concentration limits to remove limits on commercial paper, and corporate notes and bonds, given that the Commission proposed to eliminate these instruments from the list of Permitted Investments.
Finally, the Commission proposed to expand the types of investments that would qualify as Permitted Investments to include Specified Foreign Sovereign Debt. However, the Commission did not propose asset-based or issuer-based concentration limits on an FCM's or DCO's investments in Specified Foreign Sovereign Debt. Among other considerations, the Commission noted, in the Proposal, that proposed Commission regulation 1.25(a)(1)(vii), which permits an FCM or DCO to invest Customer Funds in Specified Foreign Sovereign Debt only to the extent that the FCM or DCO has balances owed to customers denominated in the currency of the applicable country, is expected to effectively limit the amount of Customer Funds that an FCM or DCO may invest in Specified Foreign Sovereign Debt.
The concentration limits in Commission regulation 1.25 are minimum requirements.
In addition, if as a result of market events or extraneous circumstances, such as a change in an MMF's size, the FCM or DCO inadvertently breaches the concentration thresholds, the FCM or DCO would be expected to undertake prompt actions to restore compliance with the concentration limits, while managing the investments of Customer Funds in a manner consistent with the general objectives of preserving principal and maintaining liquidity. Depending on the market conditions, such actions may include taking steps to progressively reduce the amount of Customer Funds invested in a particular asset class instead of immediately divesting the full portfolio of investments in a potentially volatile market.
The Commission requested comment on all aspects of its Proposal relating to concentration limits, including the proposed asset-based and issuer-based concentration limits for Permitted Government MMFs and Qualified ETFs. The Commission received nine comments addressing concentration limits.
Regarding the proposed change of imposing a 50 percent asset-based concentration limit for all Permitted Government MMFs with at least $1 billion in assets and whose management company manages at least $25 billion in assets, FIA and CME did not support the
Regarding the proposed changes to issuer-based concentration limits, AIMA, Federated Hermes, ICI, and Nodal recommended a 25 percent single fund concentration limit for both Permitted Government MMFs and Qualified ETFs, a limit that they asserted would be more consistent with market practices.
FIA, CME, BlackRock, and SIFMA AMG expressed support for keeping the current issuer-based concentration limit thresholds of 10 percent for individual funds, and 25 percent for fund families.
SIFMA AMG also criticized the proposed 5 percent issuer concentration limit and advocated for keeping the current 10 percent concentration limit.
SIFMA AMG further noted that “MMFs and U.S. Treasury ETFs are sponsored by SEC-registered investment advisers that are subject to their own cyber safeguards and regulatory obligations.”
SIFMA AMG also asserted that the Proposal had not adequately explained why the proposed 5 percent limit more appropriately addressed the Commission's concerns over redemption and liquidity risks.
After consideration of the comments received, coupled with the Commission's concerns regarding the safety of Customer Funds, the Commission has decided to adopt, with one exception described below, the proposed concentration limits as set forth in the Proposal. Specifically, the Commission is adopting a single asset-based concentration limit of 50 percent for all Permitted Government MMFs of at least $1 billion in assets and whose management company manages at least $25 billion in assets. For MMFs that hold less than $1 billion in assets or have a management company with less than $25 billion in assets under management, the Commission is maintaining the current 10 percent asset-based concentration limit.
Regarding issuer-based concentration limits for Permitted Government MMFs, the Commission is limiting investments of Customer Funds in any single family of Permitted Government MMFs to 25 percent, as set forth in the Proposal. With respect to investments of Customer Funds in any individual Permitted Government MMF, however, the Commission is increasing the permissible concentration to 10 percent of the total assets held in each of the segregated account classes of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds. This is a change from the 5 percent that was set forth in the Proposal.
For Qualified ETFs, the asset-based concentration limits will be the same as those set forth in this Final Rule for Permitted Government MMFs. For Qualified ETFs with at least $1 billion in assets and whose management company manages at least $25 billion in assets, the asset-based concentration limit will be 50 percent of total funds held in each of the three categories of Customer Funds. For Qualified ETFs that hold less than $1 billion in assets or whose management company manages less than $25 billion in assets under management, the asset-based concentration limit will be 10 percent. The issuer-based concentration limit for Qualified ETFs will be 25 percent for a single family of Qualified ETFs, which is unchanged from the Proposal. With respect to any individual Qualified ETF, however, consistent with the upward revision for Permitted Government MMFs, the concentration limit will be 10 percent, rather than 5 percent as set forth in the Proposal.
The new concentration limits are summarized below:
As in the Proposal, Specified Foreign Sovereign Debt will be excluded from the concentration limits.
Furthermore, the new condition that would permit an FCM or DCO to invest Customer Funds in Specified Foreign Sovereign Debt only to the extent that the FCM or DCO has balances owed to customers denominated in the currency of the applicable country should limit the amount of Customer Funds that an FCM or DCO may invest in the Specified Foreign Sovereign debt.
As discussed above, the Commission received a substantial number of comments with respect to the issue of asset-based and issuer-based concentration limits pertaining to the proposed limits for Permitted Government MMFs and Qualified ETFs.
The Commission has considered these comments but continues to believe that the asset-based concentration limits set forth in the Proposal are an effective tool in ensuring that Customer Funds are invested in a manner that limits risks arising from a high concentration in any particular Permitted Investment asset class. Based on its experience administering its customer protection rules, the Commission declines to allow FCMs and DCOs to invest up to 100 percent of segregated Customer Funds in any category of Permitted Government MMFs and Qualified ETFs.
That the new Permitted Government MMF category is broader in scope than MMFs investing solely in U.S. government securities is particularly relevant here. This new Permitted Government MMF category is defined by reference to SEC Rule 2a-7 as an MMF that invests at least 99.5 percent or more of its total assets in cash, government securities, and/or Repurchase Transactions that are collateralized fully.
The new Permitted Investment category of Qualified ETFs provides additional flexibility to FCMs and DCOs with respect to the investment of Customer Funds, as FCMs and DCOs could invest 50 percent in Permitted Government MMFs, and the other 50 percent in Qualified ETFs under the Final Rule, which lessens any practical impact of an overall asset-based concentration limit of 50 percent for each type of fund.
Moreover, Commission staff reviewed SIDR Reports filed by FCMs for the period between January 16, 2024 and June 28, 2024. The available data from the reports indicate that FCMs are investing a relatively low proportion of the Customer Funds they hold in MMFs in comparison to direct purchases of U.S. Government Securities, and that such firms' investments in MMFs are sufficiently small that they are unlikely to rise to levels that would breach the asset-based concentration limits that the Commission is adopting in this Final Rule.
With respect to issuer-based concentration limits for Permitted Government MMFs and Qualified ETFs, as discussed above, no commenter on this issue supported the proposed 5 percent limit on any individual Permitted Government MMF or Qualified ETF. The commenters differed, however, as to whether the applicable limit for any individual Permitted Government MMF or Qualified ETF should be the 10 percent limit that is the existing limit for certain MMFs, or a higher limit of 25 percent that is applicable to fund families.
In light of these comments, the Commission is adopting issuer-based concentration limits for MMFs and ETFs that differ from those in the Proposal. With respect to the issuer-based concentration limits on Permitted Government MMFs, the Commission proposed to limit investments of Customer Funds in any single family of Government MMFs to 25 percent, consistent with the existing requirements applicable to MMFs, but to reduce the existing 10 percent limit for investments of Customer Funds in any individual Government MMF, to just 5 percent. The Commission proposed the same limits for Qualified ETFs. In proposing stricter concentration limits, the Commission intended to facilitate the preservation of principal and maintenance of liquidity of Customer Funds through sound diversification standards and to mitigate the potential risk that a large portion of Customer Funds could become inaccessible due to cybersecurity or operational incidents, among other events.
In light of comments received, however, the Commission has determined to raise the proposed 5 percent individual fund concentration limit for both Permitted Government MMFs and Qualified ETFs to 10 percent. In proposing to reduce the individual fund threshold to just 5 percent, the Commission's concerns with respect to the risk to principal and potential lack of sufficient liquidity for both Permitted Government MMFs and Qualified ETFs were illustrated by the 2008 “breaking the buck” by the Reserve Primary Fund as described in the Proposal.
The concentration limits set forth in this Final Rule, including increasing the limit for any individual Permitted Government MMF or Qualified ETF from 5 percent to 10 percent (but not 25 percent, as some commenters recommended as discussed above), should promote both the preservation of principal and maintenance of liquidity of Customer Funds through sound diversification standards, while ensuring that the limit is not set so low that the application of the requirement might not be practical. Even with the higher threshold of 10 percent for individual Permitted Government MMFs and Qualified ETFs, this restriction should mitigate the potential risk that FCMs and DCOs may be unable to access a large portion of Customer Funds due to cybersecurity or operational incidents, among other events.
Although commenters generally criticized any issuer-based concentration limit for Permitted Government MMFs and Qualified ETFs as arbitrary,
Although the foregoing discussion is applicable to both Permitted Government MMFs and Qualified ETFs, a few issues are of particular relevance to Qualified ETFs. As discussed above, for Qualified ETFs, the asset-based and issuer-based concentration limits will be the same as those for Permitted Government MMFs. In addition to raising similar objections to the issuer-based concentration limits for Qualified ETFs as for Permitted Government MMFs, commenters specifically noted that few families of ETFs offer more than two eligible funds, making the proposed 5 percent per fund concentration limit overly restrictive.
The Commission discussed in the Proposal that Commission regulations 1.29, 22.2(e)(1), and 30.7(i) provide that FCMs and DCOs, as applicable, are financially responsible for any losses resulting from the investment of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds, respectively.
As discussed in section IV.A.2. of this preamble, the Commission is amending the Permitted Investments under Commission regulation 1.25 to include Specified Foreign Sovereign Debt instruments (
Pursuant to SEC Rule 15c3-1(c)(2)(vi), an FCM investing Customer Funds in qualifying sovereign debt of Canada would have no capital charge for debt instruments with a remaining time-to-maturity of less than 3 months, and a capital charge of 0.5 percent of the market value for debt instruments with a remaining time-to-maturity of 3 to 6 months.
As discussed in section IV.A.3. of this preamble, the Commission is also amending the Permitted Investments under Commission regulation 1.25 to include interests in Qualified ETFs.
The SEC staff's guidance is applicable to a U.S. Treasury ETF that: (i) is an open-end investment company registered with the SEC under the Investment Company Act of 1940 that issues securities redeemable at the fund's NAV; and (ii) invests solely in cash and government securities that are eligible securities under paragraph (a)(11) of SEC Rule 2a-7, which are limited to U.S. Treasury floating and fixed rate bills, notes, and bonds with a remaining term to final maturity of 12 months or less, government money market funds as defined in SEC Rule 2a-7, and/or Repurchase Transactions with a remaining term to final maturity of 12 months or less collateralized by U.S. Treasury securities or other government securities with a remaining term to final maturity of 12 months or less. The SEC staff position is subject to the following conditions: (i) the broker or dealer is not aware of any substantial operational problem that the U.S. Treasury ETF may be experiencing; (ii) the U.S. Treasury ETF shares can be redeemed by a broker or dealer through an authorized participant, the redemption of the U.S. Treasury ETF's shares can be settled in exchange for a basket of the ETF's underlying securities and/or cash by T + 1, and the U.S. Treasury ETF has committed in its registration statement to permit shareholders, except in extraordinary circumstances, to settle transactions within that timeframe; and (iii) the U.S. Treasury ETF's shares are listed for trading on a national securities exchange and trades of such shares are settled in accordance with the standard cycle prescribed by SEC Rule 15c6-1
The Commission received two comments on the capital charges for Specified Foreign Sovereign Debt and Qualified ETFs. BlackRock expressed support for the 2 percent FCM capital charge on the shares of Qualified ETFs held as Permitted Investments.
Commission regulations 1.32(f), 22.2(g)(5), and 30.7(l)(5) require each FCM to submit a SIDR Report twice each month to the Commission and the firm's DSRO listing the names of all banks, trust companies, FCMs, DCOs, and other depositories or custodians holding futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds, respectively.
The Commission proposed to amend the content of the SIDR Report to reflect the proposed amendments to the list of Permitted Investments detailed in the Proposal. Specifically, the Commission proposed to amend the content of the SIDR Report by: (i) limiting the reporting of MMFs to Permitted Government MMFs; (ii) deleting the reporting of balances invested in commercial paper, corporate notes and bonds, and bank CDs;
The Commission did not receive any comments on the proposed amendments to the SIDR Report. Therefore, the Commission is amending the content of the SIDR Report specified in Commission regulations 1.32(f), 22.2(g)(5), and 30.7(l)(5) as proposed, to reflect the amendments to the list of Permitted Investments adopted in this Final Rule and reflected in Final Commission regulation 1.25(a)(1).
Commission regulations currently provide that an FCM may deposit Customer Funds only with depositories and custodians that agree to provide the Commission with direct, read-only electronic access to the Customer Fund accounts (“Read-only Access Provisions”).
By adopting the Read-only Access Provisions, the Commission established a mechanism to enable Commission staff to review and identify discrepancies between an FCM's daily segregation reports
When adopting the Read-only Access Provisions, the Commission did not anticipate that staff would access FCM accounts on a regular basis to monitor account activity, but, rather, that staff would make use of the Read-only Access Provisions only to obtain account balances and other information that staff could not obtain via the CME and NFA automated daily segregation confirmation system, or otherwise directly from the depositories.
In practice, CME and NFA receive account information from all depositories holding Customer Funds on a daily basis pursuant to CME Rule 971.C. and NFA Financial Requirements section 4. CME and NFA have developed programs that compare the daily balances reported by each of the depositories with balances reported by the FCMs in their daily segregation reports that are filed with CME and/or NFA.
The Commission's experience with overseeing the administration of the CME and NFA daily segregation confirmation and verification processes for several years has demonstrated that the system provides adequate access to relevant information and is capable of detecting discrepancies in account balances in a timely manner. Moreover, the establishment of an efficient method for obtaining and verifying FCM balances of Customer Funds at each depository supports the Commission's initial expectation that the direct, read-only electronic access would not be the Commission's principal tool for obtaining account information at depositories.
The Commission has encountered various practical challenges in implementing the Read-only Access Provisions. Due to the number of depositories utilized by FCMs, as well
The Commission received two comments regarding the proposed elimination of the Read-only Access Provisions.
Eurex also supported the Commission's proposal to eliminate the Read-only Access Provisions, stating that it fully agrees with the Proposal's rationale regarding the effectiveness of the CME and NFA daily segregation confirmation and verification process.
The Commission has considered the comments and is eliminating the Read-only Access Provisions as proposed for the reasons stated in the Proposal. Therefore, the Commission is eliminating the Read-only Access Provisions in Commission regulations 1.20(d)(3) and 30.7(d)(3), and appendix A to Commission regulation 1.20 (redesignated as appendix C to part 1), appendix A to Commission regulation 1.26 (redesignated as appendix F to part 1), and appendices E and F to part 30 of the Commission's regulations.
Separately, the Commission is redesignating appendices A and B to Commission regulation 1.20 as appendices C and D to part 1, and appendices A and B to Commission regulation 1.26 as appendices F and G to part 1, to address a change in the rules of the Office of the Federal Register regarding the structure of regulatory text to be codified in the Code of Federal Regulations.
Consistent with the position stated in the Proposal, FCMs will not need to obtain new acknowledgment letters for existing accounts at depositories holding Customer Funds reflecting the elimination of the Read-only Access Provisions.
Commission regulation 1.55(a) currently requires an FCM, or an introducing broker (“IB”) in the case of an introduced account, to provide each customer that is not an “eligible contract participant” a written risk disclosure statement prior to opening the customer's account (“Risk Disclosure Statement”).
Although certain conforming amendments to Commission regulation 1.55 are necessary to reflect the changes to the list of Permitted Investments in Commission regulation 1.25, the Commission omitted to include a discussion of potential amendments to Commission regulation 1.55(b)(6) in the Proposal. The Commission is now adopting technical, conforming amendments to Commission regulation 1.55(b)(6) to: (i) delete the reference in the Risk Disclosure Statement to investments in corporate notes and bonds; (ii) clarify that only certain MMFs may be Permitted Investments, and (iii) add investments in Specified Foreign Sovereign Debt and Qualified ETFs, which reflect the revised list of Permitted Investments that are being adopted under this Final Rule. As amended, the disclosure will state: The funds you deposit with a futures commission merchant may be invested by the futures commission merchant in certain types of financial instruments that have been approved by the Commission for the purpose of such investments. Permitted investments are listed in Commission regulation 1.25 and include: U.S. government securities; municipal securities; certain money market funds; certain foreign sovereign debt, and U.S. Treasury exchange-traded funds. The futures commission merchant may retain the interest and other earnings realized from its investment of customer funds. You should be familiar with the types of financial instruments that a futures commission merchant may invest customer funds in.
The Commission is not requiring FCMs and IBs to obtain acknowledgment of revised Risk Disclosure Statements from existing customers due to the technical amendment. FCMs and IBs are required to use the amended Risk Disclosure Statement for any customers onboarded on or after the compliance date of March 31, 2025. The Commission is setting an extended compliance date to provide FCMs and IBs with sufficient time to make any necessary system changes to reflect the revised Risk Disclosure Statement, which is generally prepared as an electronic document. The extended compliance period also addresses the fact that the Proposal did not include a discussion of proposed conforming amendments to Commission regulation 1.55.
With respect to an FCM's or DCO's investment of futures customer funds, the amendments to Commission regulation 1.25 are being promulgated under section 4d(a)(2) of the Act.
Pursuant to its authority under section 4(c)
Section 4(c)(2) of the Act provides that the Commission may grant exemptions under section 4(c)(1) only when it determines that the requirements for which an exemption is being provided should not be applied to the agreements, contracts, or transactions at issue; that the exemption is consistent with the public interest and the purposes of the Act; that the agreements, contracts, or transactions will be entered into solely between appropriate persons; and that the exemption will not have a material adverse effect on the ability of the Commission or any contract market to discharge its regulatory or self®ulatory responsibilities under the Act.
In the Proposal, the Commission detailed its preliminary analysis on how the proposed expansion of the list of Permitted Investments meets the conditions in section 4(c)(2)(A) as they apply to an exemption with respect to an FCM or DCO. The discussion in the Proposal focused on how the proposed
The Commission solicited public comment on whether the Proposal satisfies the requirements for exemption under section 4(c) of the Act. Commenters criticizing the expansion of Permitted Investments to Specified Foreign Sovereign Debt asserted that this expansion could put customers at undue financial risk
The Commission acknowledges the concerns raised by commenters but after consideration it maintains that the expansion to the list of Permitted Investments adopted in the Final Rule is consistent with the conditions in section 4(c) of the Act as they apply to an exemption with respect to an FCM or DCO. The discussion below describes why the Commission has determined that the exemption granted and the expansion adopted in the Final Rule is consistent with the public interest and the purposes of the Act as required pursuant to section 4(c)(2)(A) of the Act.
The Final Rule permits FCMs and DCOs to invest futures customer funds only in the sovereign debt of Canada, France, Germany, Japan, and the United Kingdom and only to the extent that the FCMs' and DCOs' hold balances owed to customers denominated in the applicable currency. As noted in section IV.2.b. of this preamble, FCMs held collectively a U.S. dollar equivalent of $64 billion of Customer Funds denominated in CAD, EUR, JPY, and GBP in August 2024. The ability for FCMs and DCOs to invest such Customer Funds in the applicable Specified Foreign Sovereign Debt instruments reduces potential currency risk that DCOs, FCMs, and customers would otherwise be exposed to as a result of investing such foreign currencies in U.S.-dollar denominated assets.
The Final Rule further conditions an FCM's or DCO's investment in Specified Foreign Sovereign Debt to mitigate potential credit and liquidity risk. The Final Rule provides that an FCM's or DCO's portfolio of investments must have a dollar-weighted average time-to-maturity of 60 calendar days or less, which will mitigate price risk and liquidity risk of the debt securities by providing an FCM with an option of holding the securities to maturity and not liquidating the securities at a loss. The Final Rule also mitigates credit risk by prohibiting an FCM or DCO from purchasing new debt securities if the two-year credit default spread of the applicable foreign sovereign exceeds 45 BPS.
In addition, permitting investments in Qualified ETFs, subject to the adopted conditions, including that the ETF is passively managed with the investment objective of replicating the performance of a published short-term U.S. Treasury security index composed of U.S. Treasury bonds, notes, and bills with a remaining maturity of 12 months or less, provides an opportunity for greater diversification of the types of investment options that FCMs and DCOs may use to manage the risk of holding futures customer funds. Qualified ETFs also provide potential benefits to FCMs, particularly smaller FCMs, that may lack the internal operations and resources to effectively manage direct investments in other Permitted Investments, such as U.S. government securities, U.S. agency obligations, and municipal securities. Both Specified Foreign Sovereign Debt and Qualified ETFs have the potential to reduce costs to FCMs, DCOs, and customers, while remaining consistent with the requirement in Commission regulation 1.25 for the preservation of principal and liquidity of Permitted Investments.
Although higher profits for FCMs do not “guarantee” lower costs to customers,
An expanded list of Permitted Investments should thus increase the likelihood that FCMs and DCOs will continue as viable businesses and remain available for customers at a time when the overall number of FCMs continues to decrease. Without the ability to generate revenue and operate at a profit sufficient to remain a going concern, FCMs, which are central to a well-functioning commodity interest market, may continue to exit the business, which would disrupt the ability of farmers, financial service providers, and other commercial enterprises to effectively manage the commodity risk associated with their businesses. A smaller number of FCMs would also concentrate risk associated with Customer Funds in fewer firms, increasing the potential for systemic risk due to the potential for significant disruption should one of the remaining FCMs fail. This is particularly an issue
Moreover, additional investment options may also motivate FCMs or DCOs to increase their presence in the commodity interest markets, or encourage new entrants to the industry, thereby increasing competition, which could result in reduced costs to customers and an increase in trading activity and liquidity, which supports efficient price discovery.
Based on the considerations discussed above, the Commission finds that the amendments to the list of Permitted Investments promote responsible economic and financial innovation and fair competition. By providing opportunities for investment diversification and risk management, promoting the continued participation of FCMs and DCOs in the market, and encouraging new entrants to the industry, the expansion of the list of Permitted Investments is consistent with the “public interest” and the purposes of the Act. Thus, the Commission has determined that the Final Rule meets the conditions in section 4(c) of the Act.
The compliance date for the Final Rule is the effective date of this release, except for the amendments to the SIDR Report, which are specified in Commission regulations 1.32, 22.2(g)(5), and 30.7(l)(5), and the amendments to the customer Risk Disclosure Statement required under Commission regulation 1.55.
As discussed in section IV.D. of this preamble, the Commission is amending the SIDR Report required under Commission regulations 1.32, 22.2(g)(5), and 30.7(l)(5) to align with the revisions to the list of Permitted Investments adopted herein. Specifically, the Commission is amending the content of the SIDR Report by: (i) revising the reporting of MMFs to include balances invested only in Permitted Government MMFs; (ii) deleting the reporting of balances invested in commercial paper, corporate notes and bonds, and bank CDs; (iii) adding the reporting of balances invested in the Specified Foreign Sovereign Debt of each particular foreign jurisdiction (
In addition, as discussed in section IV.F. of this preamble, the Commission is revising the Risk Disclosure Statement that an FCM or IB is required to provide to a customer prior to the opening of an account. The Final Rule amends Commission regulation 1.55(b)(6) by removing corporate notes and bonds from, and by adding Specified Foreign Sovereign Debt and Qualified ETFs to, the list of Permitted Investments that an FCM is authorized to enter into with Customer Funds.
The Commission is setting a compliance date of March 31, 2025 for the amendments to the SIDR Report and Risk Disclosure Statement. The compliance period is intended to provide FCMs with an opportunity to make any necessary updates to their policies, procedures, systems, and practices resulting from the amendment to the SIDR Report. The compliance period will also allow the Commission, NFA, and CME to make necessary updates to the electronic filing systems that are currently used to receive and process the SIDR Reports submitted by FCMs. The compliance period also provides FCMs and IBs with time to update their Risk Disclosure Statements and to make necessary revisions to any electronic account opening documents and processes.
The Regulatory Flexibility Act (“RFA”) requires Federal agencies to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis respecting the impact.
The Paperwork Reduction Act of 1995 (“PRA”)
This final rulemaking amends regulations that contain collections of information for which the Commission has previously received control numbers from OMB. The titles for these collections of information are OMB Control No. 3038-0024, Regulations and Forms Pertaining to Financial Integrity of the Market Place; Margin Requirements for SDs/MSPs and OMB Control No. 3038-0091, Disclosure and Retention of Certain Information Relating to Cleared Swaps Customer Collateral.
The Commission requested public comment on all aspects of its burden analysis under the PRA in the Proposal. No comments were received addressing the PRA analysis. As further discussed below, however, based on public comments received and conversations with industry representatives, the Commission has concluded that it is not necessary to provide a new template acknowledgement letter for investments in Qualified ETFs. Accordingly, as described below, the Commission has concluded that the amendments introduced by this Final Rule do not contain any new collections of information and will not increase the burden associated with the information collections contained in the affected regulations.
As discussed in section IV.D. of this preamble, among other reporting items, FCMs are required to report in the SIDR Reports the amount of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds invested in each of the current categories of Permitted Investments. The Commission is amending Commission regulations 1.32(f), 22.2(g)(5), and 30.7(l)(5), which define the content of the SIDR Report, by: (i) deleting the requirement for an FCM to report the balances invested in commercial paper, corporate notes and bonds, and bank CDs as such investments would no longer be Permitted Investments under the Final Rule; (ii) requiring each FCM to report the total amount of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds invested in Specified Foreign Sovereign Debt of each country that is included within the Specified Foreign Sovereign Debt; and (iii) requiring an FCM to include in the SIDR Report the total amount of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds invested in Qualified ETFs as such investments are now Permitted Investments. As such, the changes to the content of the SIDR Reports would reflect the revisions to the list of Permitted Investments discussed in section IV.A. of this preamble. The Commission does not expect these changes to result in an increase in the number of burden hours required for the completion of the reports. Accordingly, the Commission is retaining its existing burden estimates associated with this collection of information.
In addition, the Commission is revising Commission regulation 1.26, which requires each FCM or DCO investing futures customer funds in MMFs that are Permitted Investments to obtain and retain in its files a written acknowledgment from the depository holding the funds stating that the depository was informed that the funds belong to customers and are being held in accordance with the provisions of the Act and Commission regulations. Commission regulation 1.26 also specifies the form of the written acknowledgment letter that each FCM or DCO must obtain from an MMF, in the event futures customer funds are held directly with the MMF. Commission regulations 22.5 and 30.7(d) set forth similar requirements with respect to Cleared Swaps Customer Collateral and 30.7 customer funds. The amendments to Commission regulation 1.26 require FCMs and DCOs investing Customer Funds in a Permitted Government MMF to obtain and maintain in their files an acknowledgment letter from the fund in which Customer Funds are held and to file such acknowledgment letter electronically with the Commission. The Commission is adopting an analogous amendment to Commission regulation 30.7(d)(2) with respect to investments of 30.7 customer funds by FCMs.
As discussed in section IV.F. of this preamble, FCMs and IBs are required to provide each customer that is not an “eligible contract participant” a Risk Disclosure Statement prior to opening the customer's account.
Also, in connection with the revisions related to the elimination of the Read-
Section 15(a) of the Act requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the Act.
As described in more detail in section IV.A. of this preamble, the Commission is revising the list of Permitted Investments in Commission regulation 1.25(a) to: (i) add Specified Foreign Sovereign Debt and interests in Qualified ETFs; (ii) limit the scope of MMFs whose interests qualify as Permitted Investments to Permitted Government MMFs; and (iii) eliminate commercial paper, corporate notes or bonds, and bank CDs. The Commission is amending the Risk Disclosure Statement specified in Commission regulation 1.55 that FCMs are required to provide to certain customers to reflect the revisions to the list of Permitted Investments. The Commission is further amending the asset-based and issuer-based concentration limits for Permitted Investments to reflect the revisions to the investments that FCMs and DCOs may make with Customer Funds. The Commission is further specifying the capital charges that FCMs, in computing their regulatory capital, are required to take on investments of Customer Funds in Specified Foreign Sovereign Debt and Qualified ETFs. The Commission is also amending Commission regulation 1.25(b)(2)(iv)(A)(
The Commission recognizes that the Final Rule may impose costs. The consideration of costs and benefits below is based on the understanding that the markets function internationally, with many transactions involving U.S. firms taking place across international boundaries; with some Commission registrants being organized outside of the United States; with leading industry members typically conducting operations both within and outside the United States; and with industry members commonly following substantially similar business practices wherever located. Where the Commission does not specifically refer to matters of location, the below discussion of costs and benefits refers to the effects of the amendments on all activity subject to the amended regulations, whether by virtue of the activity's physical location in the United States or by virtue of the activity's connection with activities in, or its effect on, U.S. commerce under section 2(i) of the Act.
The Commission has endeavored to assess the expected costs and benefits of the Final Rule in quantitative terms, including PRA-related costs, where possible. In situations where the Commission is unable to quantify the costs and benefits, the Commission identifies and considers the costs and benefits of the applicable rules in qualitative terms. The lack of data and information to estimate those costs is attributable in part to the nature of the Final Rule. Additionally, any initial and recurring compliance costs for any particular FCM or DCO will depend on its size, existing infrastructure, practices, and cost structure.
To further inform the Commission's consideration of the costs and benefits imposed by the Proposal, the Commission invited comments from the public on all aspects of its cost-benefit considerations, including the identification and assessment of any costs and benefits not discussed by the Commission; data and any other information to assist or otherwise inform the Commission's ability to quantify or qualitatively describe the costs and benefits of the proposed amendments; and any other information to support positions posited by commenters with respect to the Commission's discussion. The Commission did not receive comments specific to the benefits and costs of the Proposal. To the extent that the Commission received comments that indirectly address the costs and benefits of the Proposal, those comments are discussed below.
The baseline for the Commission's consideration of the costs and benefits associated with this Final Rule are the costs and benefits that FCMs, DCOs, and the public would realize if the Commission did not proceed with the proposed amendments, or in other words, the status quo.
The Commission requested comment on any such incremental costs, especially by DCOs and FCMs, who may be better able to provide quantitative costs data or estimates, based on their respective experiences relating to Commissions regulations governing the investment of Customer Funds and related requirements. Commenters generally supported the proposed amendments to Commission regulation 1.25, with two commenters opposed to the proposed addition of Specified Foreign Sovereign Debt to the list of Permitted Investments. The commenters
The Final Rule expands the list of Permitted Investments that an FCM and DCO may enter into with Customer Funds by adding Specified Foreign Sovereign Debt (
The Final Rule also permits FCMs and DCOs to engage in Repurchase Transactions involving Specified Foreign Sovereign Debt with a broader group of counterparties than otherwise permitted
The Final Rule also expands the type and number of custodians that FCMs and DCOs may use to hold securities received under Repurchase Transactions. In addition to current permitted custodians,
The Final Rule also expands the list of Permitted Investments by adding Qualified ETFs.
The Final Rule also imposes the same asset-based and issuer-based concentration limits to Qualified ETFs as it imposes on Permitted Government MMFs previously described in the preamble and further discussed below. A 50 percent concentration limit will apply to Qualified ETFs with at least $1 billion in assets and whose management companies have more than $25 billion in assets under management. The Final Rule further allows for a 10 percent concentration limit for Qualified ETFs with less than $1 billion in assets or which have a management company managing less than $25 billion in assets. The Commission is limiting investments of Customer Funds in any single family of Qualified ETFs to 25 percent and investments of Customer Funds in interests in an individual Qualified ETF to 10 percent of the total assets held in each of the segregated account classes of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds.
Expanding the list of Permitted Investments to include Specified Foreign Sovereign Debt should benefit FCMs, DCOs, and market participants (including customers) by facilitating the management of risk associated with the acceptance of certain foreign currency deposits from customers to margin their trades, and should enable FCMs and DCOs to avoid certain risks and practical challenges in the handling of foreign currencies. Specifically, permitting FCMs and DCOs to invest foreign currencies deposited or owed to customers in identically denominated sovereign debt securities mitigates the risk that FCMs and DCOs face when converting foreign currencies to U.S. dollars to invest in Permitted Investments. The foreign currency risk arises from the FCMs' and DCOs' obligation to convert the Customer Funds from U.S. dollars back to the applicable foreign currencies when the margin deposits are returned to the customers.
The investment of non-U.S. dollar-denominated Customer Funds in Specified Foreign Sovereign Debt further benefits FCMs, DCOs, and market participants by providing an option that may assist with the mitigation of potential risks associated with FCMs and DCOs holding Customer Funds in unsecured deposit accounts with domestic or foreign commercial banks. If the depository or custodian becomes insolvent, claims related to uninsured cash balances are at greater risk of being treated as unsecured claims against the depository estate as compared to claims to specific securities held in custody. As a result, FCMs and DCOs may face less counterparty exposure by maintaining Customer Funds in the form of securities as opposed to cash, which would benefit market participants (including customers) by providing greater security to the timely, full payment of Customer Funds held by an insolvent depository or custodian.
Also, for reasons such as capital requirements and balance sheet management, banks may not accept foreign currencies at all or may place limits on the accepted amount. Banks may also charge higher rates for holding foreign currencies. As such, FCM customers depositing foreign currencies might potentially absorb those costs.
Permitting investments in Specified Foreign Sovereign Debt also benefits FCMs that post customer margin collateral with non-U.S. clearing organizations that impose strict cut-off times for cash withdrawals and more lenient cut-off times for non-cash collateral withdrawals.
Further, expanding Permitted Investments to include Qualified ETFs should also benefit FCMs, DCOs, and market participants. As discussed in section IV.A.3. of this preamble, Qualified ETFs are passively managed funds that seek to replicate the performance of published short-term U.S. Treasury security indices. Qualified ETFs provide FCMs and DCOs with the ability to invest Customer Funds in funds that are primarily comprised of U.S. Treasury securities and avoid the costs associated with direct investments, which involves managing interest payments and the maturity of securities.
The ability to invest in Specified Foreign Sovereign Debt and interests in Qualified ETFs will provide FCMs and DCOs with a wider range of alternatives in which to invest Customer Funds. As a result, FCMs and DCOs will have more investment options, some of which may be more economical than the existing Permitted Investments, such that FCMs and DCOs may be able to generate higher returns. In addition to allowing FCMs and DCOs to continue as viable businesses, this may motivate FCMs and DCOs to increase their presence in the commodity interest markets, thereby increasing competition, which might lead to a reduction in charges to customers and an increase trading activity and liquidity.
Expanding the list of Permitted Investments to instruments that meet the overall regulatory goals of preserving principal and maintaining liquidity, while also providing the potential for greater diversification or higher returns for FCMs, DCOs and customers, will give FCMs and DCOs more flexibility in the management of Customer Funds. This might be particularly important given the more limited categories of assets that currently qualify as Permitted Investments under Commission regulation 1.25.
Revising the Risk Disclosure Statement required by Commission regulation 1.55 to be provided to non-institutional or non-eligible contract participants customers to accurately reflect the types of instruments approved as Permitted Investments should benefit customers and potential customers. The final amendments to the Risk Disclosure Statement alert potential customers that, among other things, an FCM is permitted to invest Customer Funds in Permitted Investments detailed in Commission regulation 1.25, an FCM may retain earnings on such investments, and customers may obtain further detail regarding the FCM's policies for the investment of Customer Funds from the firm if needed.
Also, requiring an FCM to apply capital charges on investments of Customer Funds in Specified Foreign Sovereign Debt and Qualified ETFs
The Commission is also adopting new concentration limits for Qualified ETFs. The new concentration limits adopted by this Final Rule promote investments of Customer Funds in Qualified ETFs of different sizes subject to different concentration limits, leading to diversification in FCMs' and DCOs' portfolios, while encouraging investments in larger, presumably safer Qualified ETFs. The Commission is adopting different concentration limits depending on the size of the fund because larger Qualified ETFs may be more resilient during times of significant financial stress and better equipped to manage high levels of redemptions. The Final Rule's concentration limits may also reduce the potential concentration in certain Qualified ETFs, in turn fostering competition across the funds, which may lead to better terms and reduced costs for FCMs and DCOs.
Finally, the amendment to Commission regulation 22.3(d), clarifying that DCOs are responsible for losses resulting from their investments of Customer Funds, provides legal certainty with respect to the Commission's customer protection regulations. Specifically, in situations where an investment made by either an FCM or DCO experiences a realized or unrealized loss in market value, the amended regulations make clear that the FCM or DCO, not the customer, is responsible for bearing the loss.
Although the Final Rule increases the range of permissible investments in which DCOs and FCMs may invest Customers Funds, facilitating their management of investments and capital, the Final Rule may result in Customer Funds being invested in instruments that may be less liquid and have increased exposure to credit and market risks than those currently permitted under Commission regulation 1.25. Such risks could result in an increased exposure for FCMs and DCOs, who, pursuant to Commission regulations 1.29(b), 22.2(e)(1), 22.3(d), and 30.7(i), as applicable, are responsible for losses resulting from investments of Customer Funds. A heightened risk exposure may also indirectly impact customers if the losses compromise the FCM's or DCO's ability to return Customer Funds.
To account for these potential risks and ensure that the new Permitted Investments are consistent with the general objectives of Commission regulation 1.25 of preserving principal and maintaining liquidity, the Commission is adopting several conditions for foreign sovereign debt and interests in U.S. Treasury ETFs to qualify as Permitted Investments. Specifically, for Specified Foreign Sovereign Debt, the conditions include: (i) investments may be made only in the sovereign debt of Canada, France, Germany, Japan, and the United Kingdom, which are members of the G7and represent the world's largest industrial democracies; (ii) investments may only be made in the sovereign debt of a particular country to the extent an FCM or DCO holds balances owed to customers denominated in the currency of the particular country; (iii) the credit default spread of the two-year debt instruments of the relevant foreign sovereign jurisdiction may not exceeds 45 BPS; (iv) the dollar-weighted average of the time-to-maturity of the FCM's or DCO's portfolio of investments in each type of Specified Foreign Sovereign Debt may not exceed 60 calendar days; and (v) the remaining time-to-maturity of any individual Specified Foreign Sovereign Debt instrument may not exceed 180 calendar days.
Requiring an FCM to apply capital charges in connection with the new categories of Permitted Investments will result in costs associated with reserving capital. The FCM may not be able to use funds reserved for capital to otherwise support its business operations, thus potentially making the operation of the FCM less economical. Capital requirements are nevertheless an essential risk-management feature of the FCM's regulatory regime, and the amounts reserved as capital are necessary and expected costs associated with operating an FCM.
In addition, the clarifying amendment to Commission regulation 22.3(d) should not result in increased costs for DCOs. The amendment expressly states a regulatory obligation that is consistent with the Commission's original intent to permit DCOs to invest Cleared Swaps Customer Collateral within the parameters applicable to investments of futures customer funds.
Finally, as discussed earlier in this preamble, the Commission has retained its existing burden estimates associated with the approved collection of information for the reasons explained in section VII.B. of this preamble. FCMs and DCOs should not incur material costs relating to the collection of information as a result of the Final Rule.
In addition to the discussion above, the Commission has evaluated the costs and benefits of the Final Rule pursuant to the five considerations identified in section 15(a) of the Act as follows: (1) protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Final Rule should have a beneficial effect on sound risk management practices and on the protection of market participants and the public.
The expansion of Permitted Investments to include Specified Foreign Sovereign Debt securities should enhance the protection of market participants and the public by providing FCMs and DCOs with the ability to manage risks associated with the receipt and holding of foreign currencies deposited as margin by customers. As discussed in section IV.2. of this preamble, FCMs hold approximately $64 billion of Customer Funds denominated in non-U.S. dollars, which represents approximately 12 percent of the total $511 billion of Customer Funds held by FCMs. Investing these foreign currencies in foreign sovereign debt instruments meeting specified conditions provides FCMs and DCOs with a risk management tool to mitigate foreign currency exchange rate fluctuation risk that they would otherwise be exposed to if the foreign currency deposits had to be converted to U.S. dollars and then invested in U.S. dollar-denominated Permitted Investments. This risk mitigation protects market participants and the public by reducing exposures that FCMs and DCOs would otherwise face from investing foreign currency in U.S. dollar-denominated assets, and by reducing risk to customers of FCMs that would share pro rata in any shortfall in Customer Funds in the event of an insolvency. Providing FCMs and DCOs with efficient risk management tools also protects market participants and the public by supporting FCMs' and DCOs' ongoing ability to continue to provide access to the commodity interest markets.
As discussed in section IV.2. of this preamble, to limit the potential risks associated with investing in foreign sovereign debt, the Commission is adding to the list of Permitted Investments only certain foreign sovereign debt instruments that meet strict conditions designed to ensure the instruments' liquidity. The Commission's analysis indicates that instruments meeting the specified conditions present credit and volatility characteristics that are comparable to those of instruments that already qualify as Permitted Investments.
As discussed in the Proposal and in section IV.A. of this preamble, expanding the list of Permitted Investments may provide FCMs and DCOs with the ability to generate additional income for themselves and their customers from their investment of Customer Funds. This may motivate FCMs or DCOs to increase their presence in the futures and cleared swaps markets increasing competition, which might lead to lower commission charges and fees for customers. The increase in revenue for FCMs and DCOs may also increase earnings to customers as DCOs and FCMs often pay a return on customer deposited funds, and FCMs may otherwise share some or all of the income with customers.
The increased range of Permitted Investments should provide investment flexibility to FCMs and DCOs and an opportunity to realize cost savings. More specifically, by being able to invest in Specified Foreign Sovereign Debt, FCMs and DCOs may be able to avoid practical challenges, such as having to meet clearing organizations' strict cut-off times for cash withdrawal, or the additional fees for holding foreign currencies, imposed by some institutions. In addition, investing in Specified Foreign Sovereign Debt could be a safer alternative than holding cash at a commercial bank. It may also help avoid the foreign currency risk to which FCMs and DCOs may be exposed absent the ability to invest customer foreign currencies in identically denominated assets.
In addition, Qualified ETFs may provide a simpler and cost-efficient way of investing in U.S. Treasury securities, saving the resources that would otherwise be required to roll over such securities at their maturity.
The Final Rule expands upon the types of investments that FCMs and DCOs may make with Customer Funds by including Specified Foreign Sovereign Debt securities and Qualified ETFs. The ability of FCMs and DCOs to invest Customer Funds in additional investments may generate additional income for FCMs and DCOs, which may lead to an increased participation in the commodity interest markets and thus enhance price discovery. Specifically, FCMs' main sources of revenue from engaging in the futures markets are commission income and income from the investment of Customer Funds. Therefore, an increase in income from the investment of Customer Funds may benefit market participants by indirectly offsetting or reducing commissions charged to customers. In addition, FCMs, pursuant to customer agreements, may provide customers with interest on their margin deposits, and therefore, an increase in revenue from the investment of Customer Funds may directly benefit customers via increased interest income on their deposits. DCOs also pay interest to FCMs on deposits held at the DCO, and greater interest income from such deposits may benefit an FCM and its customers. Increases in revenue may also encourage greater participation in the commodity interest markets by customers and by firms willing to take on the responsibilities of an FCM. Such greater participation in the commodity interest markets may increase liquidity in the market and enhance the process of price discovery.
Increasing the range of Permitted Investments provides FCMs and DCOs with a broader selection of investment options to invest Customer Funds, enabling FCMs and DCOs to have more diversified portfolios and reduce the potential concentration in a few instruments. Providing safe alternative investment options may be particularly beneficial for FCMs and DCOs considering the limited range of instruments that meet the eligibility criteria of current Commission regulation 1.25 and the competing demand for high quality forms of collateral driven by the regulatory reforms implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
By making available Specified Foreign Sovereign Debt as a Permitted Investment, the Commission is providing FCMs and DCOs with an opportunity to better manage risks associated with holding foreign currencies deposited by customers. As noted above, investing Customer Funds in Specified Foreign Sovereign Debt provides an alternative to taking on the exposure of holding cash at a commercial bank. Also, absent the ability to invest Customer Funds in identically denominated sovereign debt securities, an FCM or DCO seeking to invest customer foreign currency deposits would need to convert the currencies to a U.S. dollar-denominated asset, which would increase the potential foreign currency risk. In addition, by limiting the investment of foreign currency to foreign sovereign debt that meets certain requirements, the Final Rule should further promote sound risk management. Lastly, requiring an FCM to reserve capital to cover potential decreases in the value of the Specified Foreign Sovereign Debt and Qualified ETFs helps ensure that an FCM has the financial resources to meet its regulatory obligations of bearing 100 percent of the losses on the investment of Customer Funds.
Although the four factors mentioned above are the primary cost-benefit considerations, other public interest considerations may also be relevant. For instance, in addition to the potential benefits that may accrue to FCMs, DCOs, and customers, benefits associated with the addition of Qualified ETFs to the list of Permitted Investments may also accrue to the general public, in that allowing FCMs and DCOs to invest Customer Funds in such instruments may contribute to a more robust market for U.S. Treasury ETFs. In addition, the expansion of Permitted Investments to include Specified Foreign Sovereign Debt may ease access to futures and cleared swaps markets for entities domiciled in non-U.S. jurisdictions that can now more easily transact in foreign currency with potentially lower costs and risk. This may provide additional hedging opportunities for entities and enhance market liquidity.
The Final Rule limits the scope of MMFs whose interests qualify as Permitted Investments to certain Government MMFs as defined by SEC Rule 2a-7, revises the asset-based concentration limits applicable to Government MMFs, and adds issuer-based concentration limits for such funds.
The Final Rule removes interests in Prime MMFs and Electing Government MMFs from the list of Permitted Investments currently set forth in Commission regulation 1.25. Pursuant to the Final Rule, FCMs and DCOs are permitted to invest Customer Funds in interests of Permitted Government MMFs. As discussed in section IV.A.1. of this preamble, interests in Prime MMFs and Electing Government MMFs should not be Permitted Investments under Commission regulation 1.25 because such MMFs are subject to the SEC MMF Reforms, which include the ability of the fund to impose liquidity fees to stem redemptions, which could hinder the liquidity of the MMFs and adversely impact customers' access to their funds, which may be needed to meet margin calls on open positions or cash market transactions. The Final Rule, therefore, prevents investments of Customer Funds in MMFs that may pose unacceptable levels of liquidity risk.
The Final Rule imposes asset-based concentration limits corresponding to the size of the Permitted Government MMFs and their management companies. A 50 percent concentration limit will apply to Government MMFs with at least $1 billion in assets and whose management companies have more than $25 billion in assets under management. The Final Rule retains the current 10 percent concentration limit for MMFs with less than $1 billion in assets or which have a management company managing less than $25 billion in assets.
The new concentration limits adopted by this Final Rule promote investments of Customer Funds in Permitted Government MMFs of different sizes subject to different concentration limits, leading to diversification in FCMs' and DCOs' portfolios, while encouraging investments in larger, presumably safer Government MMFs. The Final Rule's concentration limits may also reduce the potential concentration in certain Permitted Government MMFs, in turn fostering competition across the funds, which may lead to better terms and reduced costs for FCMs and DCOs. In addition, the Commission is adopting issuer-based limits with the goal of mitigating potential risks associated with concentrating investments of Customer Funds in any single fund or family of Government MMFs such as the risk that access to Customer Funds may become restricted due to a cybersecurity or other operational incident affecting the fund. Specifically, the Commission is limiting investments of Customer Funds in any single family of Government MMFs to 25 percent and investments of Customer Funds in interests in an individual Government MMF to 10 percent of the total assets held in each of the segregated account classes of futures customer funds, Cleared Swaps Customer Collateral, and 30.7 customer funds. There are no precise concentration limits that can guarantee absolute protection against market volatility. The Commission's assessment is, however, that these limits represent a practical approach that takes the need to support the viability of FCMs' and DCOs' business model into account, while safeguarding the principal and liquidity of the Customer Funds.
The Final Rule also revises the list of Permitted Investments in Commission regulation 1.25 to remove commercial paper and corporate notes or bonds guaranteed under the TLGP, to reflect that the TLGP expired in 2012 and, therefore, FCMs and DCOs have not been permitted to invest in such instruments since 2012. This amendment streamlines the Commission's rules, facilitating their implementation and administration, and is consistent with the Commission's earlier determination that commercial paper and corporate notes or bonds are rarely used and pose unacceptable levels of credit, liquidity, and market risk.
The Final Rule also removes bank CDs from the list of Permitted Investments. The Commission's experience administering Commission regulation 1.25 indicates that FCMs and DCOs have not invested Customer Funds in bank CDs. The Commission requested comment on the proposed elimination of bank CDs from the list of Permitted Investments. One commenter generally opposed the removal of bank CDs from the list of Permitted Investments, stating that the removal “would not be beneficial,” but other commenters supported the removal, including the FIA which stated that its member FCMs did not foresee investing Customer Funds in bank CDs.
This Final Rule limits the scope of MMFs whose interests qualify as Permitted Investments to Permitted Government MMFs and could lead to less diversification in the investment of Customer Funds by FCMs and DCOs. FCMs' and DCOs' portfolios may be concentrated in the Permitted Government MMFs, increasing exposure to risks associated with the funds, which might heighten the risk of loss of Customer Funds. Also, because fewer MMFs would be available as Permitted Investments, FCMs and DCOs might have less flexibility in investing Customer Funds. FCMs and DCOs might thus generate lower returns and could pass on additional operational costs to customers by increasing their fees.
The potential risk of concentration of investments in Permitted Government MMFs is nonetheless mitigated by the asset-based and issuer-based concentration limits, which are designed to promote diversification among different categories of Permitted Investments and among different individual Permitted Government MMFs. Additionally, the potential risk of concentration of investments is mitigated by the addition of Qualified ETFs to the list of Permitted Investments, a viable alternative to Permitted Government MMFs allowing FCMs and DCOs to diversify their investment holdings.
To meet the concentration limits adopted herein, FCMs and DCOs may be required to liquidate Government MMFs held in their portfolios and might incur losses. The risk of loss is likely to be mitigated because the Government MMFs permitted under Staff Letter 16-68 and Staff Letter 16-69 are presumably highly liquid.
The elimination of commercial paper and corporate notes or bonds guaranteed under the TLGP does not result in any costs as the instruments have not been available as Permitted Investments since 2012 when the TLGP expired. Similarly, removing bank CDs does not result in an immediate potential cost because, in the Commission's experience, FCMs and DCOs do not currently invest Customer Funds in this type of instrument. Eliminating this investment option, however, may lead to potential long-term costs should this option become more economical for FCMs and DCOs.
In light of the foregoing, the Commission has evaluated the costs and benefits of this Final Rule pursuant to the five considerations identified in section 15(a) of the Act as follows:
The Final Rule removes interests in MMFs whose redemptions may be subject to liquidity fees, including Prime MMFs and Electing Government MMFs, from the list of Permitted Investments. The imposition of a liquidity fee conflicts with provisions in Commission regulation 1.25 that are designed to reduce Customer Funds' exposure to liquidity risk and to preserve the principal of investments purchased with Customer Funds. As a result, by preventing investments in instruments that pose unacceptable levels of liquidity risk, the Final Rule provides greater protection to Customer Funds and promotes the efficient and safe investment of Customer Funds by FCMs and DCOs.
The Final Rule also limits the scope of MMFs whose interests qualify as Permitted Investments to Government MMFs as defined by SEC Rule 2a-7. These types of funds are less susceptible to runs and have seen inflows during periods of market instability.
The asset-based concentration limits for Government MMFs and Qualified ETFs assign limits according to the size of the funds, with larger funds being subject to a 50 percent limit and smaller funds to a 10 percent limit. These limits reflect that larger funds have capital bases better capable of handling a high volume of redemptions in times of stress. Accordingly, the concentration limits promote investments in larger funds, which by virtue of their size tend to be more resilient, while providing for diversification by permitting investments in smaller Government MMFs and Qualified ETFs subject to concentration limits intended to ensure the safety of Customer Funds. In addition, the issuer-based concentration limits promote diversification among different individual Government MMFs and Qualified ETFs, thus mitigating the potential risks associated with concentrating investments of Customer Funds with a single fund or family of funds.
The implementation of these newly adopted concentration limits may
By removing commercial paper and corporate notes or bonds guaranteed under the TLGP from the list of Permitted Investments under Commission regulation 1.25, the Final Rule eliminates instruments that are no longer available as a result of the expiration of the TLGP in 2012. Deleting these investments from the list streamlines the Commission's rules and removes a potential source of confusion for the public and market participants. Because they are no longer Permitted Investments, maintaining these instruments in the list of Permitted Investments could cause misunderstanding among the public and market participants about the eligibility of these instruments as permissible investments of Customer Funds. By removing bank CDs, a type of instrument that is not used by FCMs and DCOs as an investment instrument, the Commission is also contributing to the ongoing effort to streamline the Commission's regulations and reduce the possibility of confusion.
By eliminating interests in Prime MMFs and Electing Government MMFs from the list of Permitted Investments, the Final Rule prevents investments of Customer Funds in instruments that may be less liquid due to the SEC MMF Reforms. The changes imposed by the SEC MMF Reforms may not allow FCMs and DCOs to redeem interests in Prime MMFs and Electing Government MMFs without a material discount in value. The exclusion of these types of investments will improve efficiency in the markets, especially at times of stress when liquidity fees may be imposed, and ensure that Permitted Investments are always consistent with Commission regulation 1.25's objectives of preserving principal and maintaining liquidity.
As discussed above, the deletion of commercial paper and corporate notes or bonds guaranteed under the TLGP and bank CDs from the list of Permitted Investments removes investment instruments that are either no longer available or not used as an investment of Customer Funds, streamlining the Commission's regulations and contributing to their efficient implementation by market participants.
The Final Rule, by reducing the range of products that qualify as Permitted Investments, results in fewer investment options available to FCMs and DCOs. This could cause FCMs and DCOs to generate less income from their investment of Customer Funds and pass the costs of operations onto customers by increasing commissions and other fees. Facing increased costs, customers may reduce trading, thereby reducing liquidity, which may hinder price discovery.
The elimination of commercial paper and corporate notes or bonds guaranteed under the TLGP and bank CDs as Permitted Investments will not have an impact of this factor, because FCMs and DCOs have not invested Customer Funds in these instruments for several years.
By deleting interests in Prime MMFs and Electing Government MMFs from the list of Permitted Investments, the Final Rule prohibits investment of Customers Funds in such MMFs, which should reduce liquidity risk in light of the SEC MMF Reforms, thus promoting sound risk management. Also, the concentration limits that will apply to the Permitted Government MMFs and Qualified ETFs should foster diversification in FCMs' and DCOs' portfolios by encouraging investments of Customer Funds in larger funds that the Commission anticipates would have the capacity to withstand significant market stress and increasing redemptions, while making available smaller funds subject to specified concentration limits.
The elimination of commercial paper and corporate notes or bonds guaranteed under the TLGP and bank CDs as Permitted Investments will not have an impact of this factor.
The relevant cost-benefit considerations are captured in the four factors above.
In March 2021, the U.K. FCA announced that LIBOR would be effectively discontinued.
Currently under Commission regulation 1.25(b)(2)(iv)(A), Permitted Investments may have a variable or floating rate of interest, provided that the interest rate correlates to specified benchmarks, including LIBOR.
Given the widespread use of LIBOR as a benchmark, FCMs and DCOs that invest Customer Funds in Permitted Investments with variable and fixed rate securities might incur costs associated with the transition to SOFR. To the extent that FCMs and DCOs already invest in Permitted Investments with variable and fixed rate securities benchmarked to LIBOR, they would need to amend the terms of their agreements to incorporate the new benchmark. If they have not done so already, FCMs and DCOs may also need to adjust their systems and processes to implement and recognize SOFR as a benchmark.
In light of the foregoing, the Commission has evaluated the costs and benefits of the Final Rule pursuant to the five considerations identified in section 15(a) of the Act as follows:
LIBOR is no longer a reliable and robust benchmark. By eliminating LIBOR as a permitted benchmark, the Final Rule prevents investments of Customer Funds in securities referencing an unreliable benchmark and promotes the use of a safer, more accurate benchmark alternative.
By codifying the use of SOFR as a permitted benchmark for Permitted Investments in which Customer Funds may be invested, the Final Rule conforms to current market developments, facilitates the transition to SOFR and reflects the phasing out of LIBOR, which is no longer published and deemed unreliable, removing a potential source of risk to the financial system.
In addition, SOFR is now an essential benchmark that helps to ensure the stability and integrity of financial markets. Thus, codifying SOFR as a permitted benchmark for permitted investments may enhance the financial integrity of markets.
The replacement of LIBOR with SOFR as a permitted benchmark may have a positive impact on price discovery. By replacing an obsolete benchmark, LIBOR, with the now widely accepted benchmark, SOFR, FCMs and DCOs should have a greater opportunity to invest in variable or floating rate instruments that reference SOFR. The opportunity to invest in instruments referencing SOFR may encourage greater participation in the commodity interest markets, thereby increasing liquidity in the markets and enhancing the process of price discovery.
By eliminating LIBOR as a permitted benchmark and replacing it with SOFR, the Final Rule ensures that to the extent FCMs and DCOs select variable and floating rate securities as Permitted Investments to invest Customer Funds, these instruments reference benchmarks that are, in the Commission's view, sound and reliable, thus fostering sound risk management.
The relevant cost-benefit considerations are captured in the four factors above.
The Final Rule eliminates the Read-only Access Provisions in parts 1 and 30 of the Commission's regulations,
Eliminating the Read-only Access Provisions streamlines the CFTC rules, facilitating their implementation and administration, and is consistent with the Commission's expectation that the existence of alternative methods for obtaining and verifying account balance information will diminish the need to rely on the direct read-only access to accounts. By relying on CME's and NFA's daily segregation confirmation and verification process, the Commission can allocate resources to more immediate regulatory concerns within its jurisdictional purview. As discussed in section IV.E. of this preamble, the Commission has encountered numerous practical challenges in the administration of direct access to depository accounts. These challenges unduly burden the Commission's resources, particularly when one considers that the Commission contemplated that the use of real-time access would be limited. That is, the practical challenges prevent Commission staff from using the Read-only Access Provisions as intended.
In addition, eliminating the requirement to provide the Commission with direct, read-only access to accounts maintained by FCMs, reduces costs for depositories, which may motivate these institutions to more readily take FCM Customer Funds on deposit, thereby lowering the bar to entry for new FCMs. The Final Rule may thus foster competition in the futures market and ultimately reduce costs for FCMs and their customers.
Furthermore, the deletion of the Read-only Access Provisions eliminates the need for the Commission to keep a log of access credentials and physical authentication devices, thereby reducing the potential cybersecurity risk associated with the maintenance of such credentials and devices.
Withdrawing the requirement that depositories provide the Commission with direct, read-only electronic access to depository accounts holding Customer Funds deprives the Commission from ongoing, instantaneous access to the accounts for purposes of identifying potential discrepancies between the account balance information reported by the FCMs and the account balance information available directly from the depositories.
More efficient means for identifying discrepancies in the account balance information exist: obtaining account balance and transaction information through CME's and NFA's automated daily segregation confirmation system or by requesting the information directly from the depositories.
In light of the foregoing, the Commission has evaluated the costs and benefits of the Final Rule pursuant to the five considerations identified in section 15(a) of the Act as follows:
The Final Rule removes the requirement to provide the Commission with direct, read-only access to depository accounts. This change eliminates the potential cybersecurity risk associated with the maintenance of access credentials and authentication devices, thus limiting risk for market participants and the public.
CME's and NFA's automated daily segregation confirmation system provides an efficient and effective method for verifying customer account balances, which, in conjunction with the Commission's right to request information from the depositories, protects market participants and the public.
By eliminating the Read-only Access Provisions, the Commission has dispensed with a method for verifying account balance information that imposes technological challenges in its implementation and administration, permitting Commission staff to direct its efforts to more effective alternative means for verifying the information.
In addition, depositories holding Customer Funds will no longer have to provide and continuously update the login information necessary for Commission staff's access to the accounts or to train Commission staff on how to access their systems. This will reduce the burden on depository service providers and make the Commission's surveillance of accounts more efficient. Streamlining these processes may motivate depositories to more readily hold FCM Customer Funds, potentially fostering competition with respect to depository services provided to FCMs and ultimately reducing costs for such FCMs.
The Final Rule, by eliminating the requirement for depositories to provide the Commission with read-only access to accounts maintained by FCMs, may reduce operational costs for depositories, which may ultimately lead to cost reductions that benefit both depositories and FCMs. The FCMs may, in turn, pass those benefits to customers via reduced charges.
As previously noted, CME and NFA have developed a sophisticated system—the automated daily segregation confirmation system—which provides DSROs and the Commission with an efficient tool for detection of potential discrepancies between FCMs' daily segregation statements and the balances reported by the various depositories holding Customer Funds. Although the Commission is eliminating the Read-only Access Provisions, the Commission will continue to rely on CME's and NFA's automated system for oversight purposes. Thus, the amendment should not be detrimental to sound risk management practices.
Furthermore, as noted above, the deletion of the Read-only Access Provisions eliminates a potential cybersecurity risk associated with the maintenance by the Commission of periodically updated access credentials and physical authentication devices, thus promoting sound risk management.
The relevant cost-benefit considerations are captured in the four factors above.
The Commission requested public comment on its cost-benefit considerations, including the section 15(a) factors described above. The Commission received no specific comments on this part of the Proposal in response to this request.
Section 15(b) of the Act requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the Act, in issuing any order or adopting any Commission rule or regulation (including any exemption under section 4(c) or 4c(b)), or in requiring or approving any bylaw, rule or regulation of a contract market or registered futures association established pursuant to section 17 of the Act.
The Commission believes that the public interest to be protected by the antitrust laws is generally to protect competition. In the Proposal, the Commission requested comment on whether: (i) the Proposal implicates any other specific public interest to be protected by the antitrust laws; (ii) the Proposal is anticompetitive and, if it is, what the anticompetitive effects are; (iii) whether there are less anticompetitive means of achieving the relevant purposes of the Act that would otherwise be served by adopting the Proposal.
The Commission has considered the Final Rule to determine whether it is anticompetitive and has identified no anticompetitive effects. Because the Commission has determined that the Final Rule is not anticompetitive and has no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the Act.
Brokers, Commodity futures, Consumer protection, Reporting and recordkeeping requirements.
Brokers, Clearing, Consumer protection, Reporting and recordkeeping, Swaps.
Consumer protection.
For the reasons stated in the preamble, the Commodity Futures Trading Commission amends 17 CFR chapter I as follows:
7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6l, 6m, 6n, 6o, 6p, 6r, 6s, 7, 7a-1, 7a-2, 7b, 7b-3, 8, 9, 10a, 12, 12a, 12c, 13a, 13a-1, 16, 16a, 19, 21, 23 and 24 (2012).
The republications, revisions, and additions read as follows:
(a)
(iv) Interests in government money market funds as defined in § 270.2a-7 of this title, provided that the government money market funds do not choose to rely on the ability to impose discretionary liquidity fees consistent with the requirements of 17 CFR 270.2a-7(c)(2)(i)(government money market fund);
(v) Interests in exchange-traded funds, as defined in 17 CFR 270.6c-11, which seek to replicate the performance of a published short-term U.S. Treasury security index composed of bonds, notes, and bills with a remaining maturity of 12 months or less, issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of the Treasury (U.S. Treasury exchange-traded fund); and
(vi) General obligations of Canada, France, Germany, Japan, and the United Kingdom (permitted foreign sovereign debt), subject to the following:
(A) A futures commission merchant may invest in the permitted foreign sovereign debt of a country to the extent the futures commission merchant has balances in segregated accounts owed to its customers denominated in that country's currency; and
(B) A derivatives clearing organization may invest in the permitted foreign sovereign debt of a country to the extent the derivatives clearing organization has balances in segregated accounts owed to its clearing members that are futures commission merchants denominated in that country's currency.
(b)
(2)
(iv)(A) Adjustable rate securities are permitted, subject to the following requirements:
(
(
(3)
(i) * * *
(D) Investments in government money market funds or U.S. Treasury exchange-traded funds with $1 billion or more in assets and whose management company manages $25 billion or more in assets may not exceed 50 percent of the total assets held in segregation by the futures commission merchant or derivatives clearing organization.
(E) Investments in government money market funds or U.S. Treasury exchange-traded funds with less than $1 billion in assets or which have a management company managing less than $25 billion in assets, may not exceed 10 percent of the total assets held in segregation by the futures commission merchant or derivatives clearing organization.
(ii) * * *
(B) Securities of any single issuer of municipal securities held by a futures commission merchant or derivatives clearing organization may not exceed 5 percent of the total assets held in segregation by the futures commission merchant or derivatives clearing organization.
(C) Interests in any single family of government money market funds or U.S. Treasury exchange-traded funds may not exceed 25 percent of the total assets held in segregation by the futures commission merchant or derivatives clearing organization.
(D) Interests in any individual government money market fund or U.S. Treasury exchange-traded fund may not exceed 10 percent of the total assets held in segregation by the futures commission merchant or derivatives clearing organization.
(E) For purposes of determining compliance with the issuer-based concentration limits set forth in this section, securities issued by entities that are affiliated, as defined in paragraph (b)(5) of this section, shall be aggregated and deemed the securities of a single issuer. An interest in a permitted government money market fund or U.S. Treasury exchange-traded fund is not deemed to be a security issued by its sponsoring entity.
(4)
(c)
(1) The fund must be an investment company that is registered under the Investment Company Act of 1940 with the Securities and Exchange Commission and that holds itself out to investors as a government money market fund, in accordance with 17 CFR
(8) A futures commission merchant or derivatives clearing organization may invest in interests in U.S. Treasury exchange-traded funds if:
(i) The U.S. Treasury exchange-traded fund invests at least 95 percent of its assets in securities comprising the short-term U.S. Treasury index whose performance the fund seeks to replicate and cash; and
(ii) The purchase and liquidation of interests in the fund conform to the following requirements:
(A)
(B)
(d)
(2) Permitted counterparties are limited to a bank as defined in section 3(a)(6) of the Securities Exchange Act of 1934, a domestic branch of a foreign bank insured by the Federal Deposit Insurance Corporation, a securities broker or dealer, or a government securities dealer registered with the Securities and Exchange Commission or which has filed notice pursuant to section 15C(a) of the Government Securities Act of 1986. In addition, with respect to agreements to repurchase or resell permitted foreign sovereign debt, the following entities are also permitted counterparties: a foreign bank that qualifies as a depository under § 1.49(d)(3) and that is located in a money center country as the term is defined in § 1.49(a)(1) or in another jurisdiction that has adopted the currency in which the permitted foreign sovereign debt is denominated as its currency; a securities broker or dealer located in a money center country as the term is defined in § 1.49(a)(1) and that is regulated by a national financial regulator or a provincial financial regulator with respect to a Canadian securities broker or dealer; and the Bank of Canada, the Bank of England, the Banque de France, the Bank of Japan, the Deutsche Bundesbank, or the European Central Bank.
(7) Securities transferred to the futures commission merchant or derivatives clearing organization under the agreement are held in a safekeeping account with a bank as referred to in paragraph (d)(2) of this section, a Federal Reserve Bank, a derivatives clearing organization, or the Depository Trust Company in an account that complies with the requirements of § 1.26. Securities transferred to the futures commission merchant or derivatives clearing organization under an agreement related to permitted foreign sovereign debt may also be held in a safekeeping account that complies with the requirements of § 1.26 at a foreign bank that meets the location and qualification requirements in § 1.49(c) and (d), or with the Bank of Canada, the Bank of England, the Banque de France, the Bank of Japan, the Deutsche Bundesbank, or the European Central Bank.
(f)
(1) The dollar-weighted average of the remaining time-to-maturity of the portfolio of investments in permitted foreign sovereign debt, as that average is computed pursuant to 17 CFR 270.2a-7 on a country-by-country basis, may not exceed 60 calendar days. Permitted foreign sovereign debt instruments acquired under an agreement to resell shall be deemed to have a maturity equal to the period remaining until the date on which the resale of the underlying instruments is scheduled to occur, or, where the agreement is subject to demand, the notice period applicable to a demand for the resale of the securities. Permitted foreign sovereign debt instruments sold under an agreement to repurchase shall be included in the calculation of the dollar-weighted average based on the remaining time-to-maturity of each instrument sold.
(2) A futures commission merchant or a derivatives clearing organization may not invest customer funds in any permitted foreign sovereign debt that has a remaining maturity greater than 180 calendar days.
(3) If the two-year credit default spread, computed as the average of the bid and ask prices between willing buyers and sellers, of an issuing sovereign of permitted foreign sovereign debt is greater than 45 basis points:
(i) The futures commission merchant or derivatives clearing organization shall not make any new investments in that sovereign's debt using customer funds.
(ii) The futures commission merchant or derivatives clearing organization must discontinue investing customer funds in that sovereign's debt through agreements to resell as soon as practicable under the circumstances.
The revisions read as follows:
(f) * * *
(3) * * *
(iv) Permitted foreign sovereign debt by country:
(A) Canada;
(B) France;
(C) Germany;
(D) Japan;
(E) United Kingdom;
(v) Interests in U.S. Treasury exchange-traded funds; and
(vi) Interests in government money market funds.
(b) * * *
(6) The funds you deposit with a futures commission merchant may be invested by the futures commission merchant in certain types of financial instruments that have been approved by the Commission for the purpose of such investments. Permitted investments are listed in Commission Regulation 1.25 (17 CFR 1.25) and include: U.S. government securities; municipal securities; certain money market funds; certain foreign sovereign debt; and U.S. Treasury exchange-traded funds. The futures commission merchant may retain the interest and other earnings realized from its investment of customer funds. You should be familiar with the types of financial instruments that a futures commission merchant may invest customer funds in.
We refer to the Segregated Account(s) which [Name of Futures Commission Merchant] (“we” or “our”) have opened or will open with [Name of Bank, Trust Company, Derivatives Clearing Organization or Futures Commission Merchant] (“you” or “your”) entitled:
[Name of Futures Commission Merchant] [if applicable, add “FCM Customer Omnibus Account”] CFTC Regulation 1.20 Customer Segregated Account under sections 4d(a) and 4d(b) of the Commodity Exchange Act [and, if applicable, “, Abbreviated as [short title reflected in the depository's electronic system]”]
You acknowledge that we have opened or will open the above-referenced Account(s) for the purpose of depositing, as applicable, money, securities and other property (collectively the “Funds”) of customers who trade commodities, options, swaps, and other products, as required by Commodity Futures Trading Commission (“CFTC”) Regulations, including Regulation 1.20, as amended; that the Funds held by you, hereafter deposited in the Account(s) or accruing to the credit of the Account(s), will be separately accounted for and segregated on your books from our own funds and from any other funds or accounts held by us in accordance with the provisions of the Commodity Exchange Act, as amended (the “Act”), and part 1 of the CFTC's regulations, as amended; and that the Funds must otherwise be treated in accordance with the provisions of section 4d of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree that such Funds may not be used by you or by us to secure or guarantee any obligations that we might owe to you, and they may not be used by us to secure or obtain credit from you. You further acknowledge and agree that the Funds in the Account(s) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities we may now or in the future have owing to you. This prohibition does not affect your right to recover funds advanced in the form of cash transfers, lines of credit, repurchase agreements or other similar liquidity arrangements you make in lieu of liquidating non-cash assets held in the Account(s) or in lieu of converting cash held in the Account(s) to cash in a different currency.
In addition, you agree that the Account(s) may be examined at any reasonable time by the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent or employee of our designated self-regulatory organization (“DSRO”), [Name of DSRO], and this letter constitutes the authorization and direction of the undersigned on our behalf to permit any such examination to take place without further notice to or consent from us.
You agree to reply promptly and directly to any request for confirmation of account balances or provision of any other information regarding or related to the Account(s) from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, and this letter constitutes the authorization and direction of the undersigned on our behalf to release the requested information without further notice to or consent from us.
The parties agree that all actions on your part to respond to the above information request will be made in accordance with, and subject to, such usual and customary authorization verification and authentication policies and procedures as may be employed by you to verify the authority of, and authenticate the identity of, the individual making any such information request, in order to provide for the secure transmission and delivery of the requested information to the appropriate recipient(s). We will not hold you responsible for acting pursuant to any information request from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, upon which you have relied after having taken measures in accordance with your applicable policies and procedures to assure that such request was provided to you by an individual authorized to make such a request.
In the event that we become subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, we acknowledge that you will have no obligation to release the Funds held in the Account(s), except upon instruction of the Trustee in Bankruptcy or pursuant to the Order of the respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary, nothing contained herein
You may conclusively presume that any withdrawal from the Account(s) and the balances maintained therein are in conformity with the Act and CFTC regulations without any further inquiry, provided that, in the ordinary course of your business as a depository, you have no notice of or actual knowledge of a potential violation by us of any provision of the Act or the CFTC regulations that relates to the segregation of customer funds; and you shall not in any manner not expressly agreed to herein be responsible to us for ensuring compliance by us with such provisions of the Act and CFTC regulations; however, the aforementioned presumption does not affect any obligation you may otherwise have under the Act or CFTC regulations.
You may, and are hereby authorized to, obey the order, judgment, decree or levy of any court of competent jurisdiction or any governmental agency with jurisdiction, which order, judgment, decree or levy relates in whole or in part to the Account(s). In any event, you shall not be liable by reason of any action or omission to act pursuant to any such order, judgment, decree or levy, to us or to any other person, firm, association or corporation even if thereafter any such order, decree, judgment or levy shall be reversed, modified, set aside or vacated.
The terms of this letter agreement shall remain binding upon the parties, their successors and assigns and, for the avoidance of doubt, regardless of a change in the name of either party. This letter agreement supersedes and replaces any prior agreement between the parties in connection with the Account(s), including but not limited to any prior acknowledgment letter agreement, to the extent that such prior agreement is inconsistent with the terms hereof. In the event of any conflict between this letter agreement and any other agreement between the parties in connection with the Account(s), this letter agreement shall govern with respect to matters specific to section 4d of the Act and the CFTC's regulations thereunder, as amended.
This letter agreement shall be governed by and construed in accordance with the laws of [Insert governing law] without regard to the principles of choice of law.
Please acknowledge that you agree to abide by the requirements and conditions set forth above by signing and returning to us the enclosed copy of this letter agreement, and that you further agree to provide a copy of this fully executed letter agreement directly to the CFTC (via electronic means in a format and manner determined by the CFTC) and to [Name of DSRO], acting in its capacity as our DSRO. We hereby authorize and direct you to provide such copies without further notice to or consent from us, no later than three business days after opening the Account(s) or revising this letter agreement, as applicable.
We propose to invest funds held by [Name of Futures Commission Merchant] (“we” or “our”) on behalf of our customers in shares of [Name of Government Money Market Fund] (“you” or “your”) under account(s) entitled (or shares issued to):
[Name of Futures Commission Merchant] [if applicable, add “FCM Customer Omnibus Account”] CFTC Regulation 1.26 Customer Segregated Government Money Market Fund Account under sections 4d(a) and 4d(b) of the Commodity Exchange Act [and, if applicable, “, Abbreviated as [short title reflected in the depository's electronic system]”]
You acknowledge that we are holding these funds, including any shares issued and amounts accruing in connection therewith (collectively, the “Shares”), for the benefit of customers who trade commodities, options, swaps and other products (“Commodity Customers”), as required by Commodity Futures Trading Commission (“CFTC”) Regulation 1.26, as amended; that the Shares held by you, hereafter deposited in the Account(s) or accruing to the credit of the Account(s), will be separately accounted for and segregated on your books from our own funds and from any other funds or accounts held by us in accordance with the provisions of the Commodity Exchange Act, as amended (the “Act”), and part 1 of the CFTC's regulations, as amended; and that the Shares must otherwise be treated in accordance with the provisions of section 4d of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree that the Shares are in a fund that holds itself out to investors as a government money market fund, in accordance with 17 CFR 270.2a-7. In addition, you acknowledge and agree that the Shares are in a fund that does not choose to rely on the ability to impose discretionary liquidity fees consistent with the requirements of 17 CFR 270.2a-7(c)(2)(i).
Furthermore, you acknowledge and agree that such Shares may not be used by you or by us to secure or guarantee any obligations that we might owe to you, and they may not be used by us to secure or obtain credit from you. You further acknowledge and agree that the Shares in the Account(s) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities we may now or in the future have owing to you.
In addition, you agree that the Account(s) may be examined at any reasonable time by the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent or employee of our designated self-regulatory organization (“DSRO”), [Name of DSRO], and this letter constitutes the authorization and direction of the undersigned on our behalf to permit any such examination to take place without further notice to or consent from us.
You agree to reply promptly and directly to any request for confirmation of account balances or provision of any other account information regarding or related to the Account(s) from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, and this letter constitutes the authorization and direction of the undersigned on our behalf to release the requested information without further notice to or consent from us.
The parties agree that all actions on your part to respond to the above information request will be made in accordance with, and subject to, such usual and customary authorization verification and authentication policies and procedures as may be employed by you to verify the authority of, and authenticate the identity of, the individual making any such information request, in order to provide for the secure transmission and delivery of the requested information to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any information request from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors'
In the event we become subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, we acknowledge that you will have no obligation to release the Shares held in the Account(s), except upon instruction of the Trustee in Bankruptcy or pursuant to the Order of the respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary, nothing contained herein shall be construed as limiting your right to assert any right of offset or lien on assets that are not Shares maintained in the Account(s), or to impose such charges against us or any proprietary account maintained by us with you. Further, it is understood that amounts represented by checks, drafts or other items shall not be considered to be part of the Account(s) until finally collected. Accordingly, checks, drafts and other items credited to the Account(s) and subsequently dishonored or otherwise returned to you or reversed, for any reason and any claims relating thereto, including but not limited to claims of alteration or forgery, may be charged back to the Account(s), and we shall be responsible to you as a general endorser of all such items whether or not actually so endorsed.
You may conclusively presume that any withdrawal from the Account(s) and the balances maintained therein are in conformity with the Act and CFTC regulations without any further inquiry, provided that, in the ordinary course of your business as a depository, you have no notice of or actual knowledge of a potential violation by us of any provision of the Act or the CFTC regulations that relates to the segregation of customer funds; and you shall not in any manner not expressly agreed to herein be responsible to us for ensuring compliance by us with such provisions of the Act and CFTC regulations; however, the aforementioned presumption does not affect any obligation you may otherwise have under the Act or CFTC regulations.
You may, and are hereby authorized to, obey the order, judgment, decree or levy of any court of competent jurisdiction or any governmental agency with jurisdiction, which order, judgment, decree or levy relates in whole or in part to the Account(s). In any event, you shall not be liable by reason of any action or omission to act pursuant to such order, judgment, decree or levy, to us or to any other person, firm, association or corporation even if thereafter any such order, decree, judgment or levy shall be reversed, modified, set aside or vacated.
We are permitted to invest customers' funds in government money market funds pursuant to CFTC Regulation 1.25. That rule sets forth the following conditions, among others, with respect to any investment in a government money market fund:
(1) The net asset value of the fund must be computed by 9 a.m. of the business day following each business day and be made available to us by that time;
(2) The fund must be legally obligated to redeem an interest in the fund and make payment in satisfaction thereof by the close of the business day following the day on which we make a redemption request except as otherwise specified in CFTC Regulation 1.25(c)(5)(ii); and,
(3) The agreement under which we invest customers' funds must not contain any provision that would prevent us from pledging or transferring fund shares.
The terms of this letter agreement shall remain binding upon the parties, their successors and assigns, and for the avoidance of doubt, regardless of a change in the name of either party. This letter agreement supersedes and replaces any prior agreement between the parties in connection with the Account(s), including but not limited to any prior acknowledgment letter agreement, to the extent that such prior agreement is inconsistent with the terms hereof. In the event of any conflict between this letter agreement and any other agreement between the parties in connection with the Account(s), this letter agreement shall govern with respect to matters specific to section 4d of the Act and the CFTC's regulations thereunder, as amended.
This letter agreement shall be governed by and construed in accordance with the laws of [Insert governing law] without regard to the principles of choice of law.
Please acknowledge that you agree to abide by the requirements and conditions set forth above by signing and returning to us the enclosed copy of this letter agreement, and that you further agree to provide a copy of this fully executed letter agreement directly to the CFTC (via electronic means in a format and manner determined by the CFTC) and to [Name of DSRO], acting in its capacity as our DSRO, in accordance with CFTC Regulation 1.20. We hereby authorize and direct you to provide such copies without further notice to or consent from us, no later than three business days after opening the Account(s) or revising this letter agreement, as applicable.
We propose to invest funds held by [Name of Derivatives Clearing Organization] (“we” or “our”) on behalf of customers in shares of [Name of Government Money Market Fund] (“you” or “your”) under account(s) entitled (or shares issued to):
[Name of Derivatives Clearing Organization] Futures Customer Omnibus Account, CFTC Regulation 1.26 Customer Segregated Government Money Market Fund Account under sections 4d(a) and 4d(b) of the Commodity Exchange Act [and, if applicable, “, Abbreviated as [short title reflected in the depository's electronic system]”]
You acknowledge that we are holding these funds, including any shares issued and amounts accruing in connection therewith (collectively, the “Shares”), for the benefit of customers who trade commodities, options, swaps and other products, as required by Commodity Futures Trading Commission (“CFTC”) Regulation 1.26, as amended; that the Shares held by you, hereafter deposited in the Account(s) or accruing to the credit of the Account(s), will be separately accounted for and segregated on your books from our own funds and from any other funds or accounts held by us in accordance with the provisions of the Commodity Exchange Act, as amended (the “Act”), and part 1 of the CFTC's regulations, as amended; and that the Shares must otherwise be treated in accordance with the provisions of section 4d of the Act and CFTC regulations thereunder.
Furthermore, you acknowledge and agree that the Shares are in a fund that holds itself out to investors as a government money market fund, in accordance with 17 CFR 270.2a-7. In addition, you acknowledge and agree that the Shares are in a fund that does not choose to rely on the ability to impose discretionary liquidity fees consistent with the requirements of 17 CFR 270.2a-7(c)(2)(i).
Furthermore, you acknowledge and agree that such Shares may not be used by you or by us to secure or guarantee any obligations that we might owe to you, and they may not be used by us to secure or obtain credit from you. You further acknowledge and agree that the Shares in the Account(s) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities we may now or in the future have owing to you.
You agree to reply promptly and directly to any request for confirmation of account balances or provision of any other information regarding or related to the Account(s) from the Director of the Division of Clearing and Risk of the CFTC or the Director of the Market Participants Division of the CFTC, or any successor divisions, or such Directors' designees, and this letter constitutes the authorization and direction of the undersigned on our behalf to release the requested information without further notice to or consent from us.
The parties agree that all actions on your part to respond to the above information requests will be made in accordance with, and subject to, such usual and customary authorization verification and authentication policies and procedures as may be employed
We will not hold you responsible for acting pursuant to any information request from the Director of the Division of Clearing and Risk of the CFTC or the Director of the Market Participants Division of the CFTC, or any successor divisions, or such Directors' designees, upon which you have relied after having taken measures in accordance with your applicable policies and procedures to assure that such request was provided to you by an individual authorized to make such a request.
In the event that we become subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, we acknowledge that you will have no obligation to release the Shares held in the Account(s), except upon instruction of the Trustee in Bankruptcy or pursuant to the Order of the respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary, nothing contained herein shall be construed as limiting your right to assert any right of offset or lien on assets that are not Shares maintained in the Account(s), or to impose such charges against us or any proprietary account maintained by us with you. Further, it is understood that amounts represented by checks, drafts or other items shall not be considered to be part of the Account(s) until finally collected. Accordingly, checks, drafts and other items credited to the Account(s) and subsequently dishonored or otherwise returned to you or reversed, for any reason, and any claims relating thereto, including but not limited to claims of alteration or forgery, may be charged back to the Account(s), and we shall be responsible to you as a general endorser of all such items whether or not actually so endorsed.
You may conclusively presume that any withdrawal from the Account(s) and the balances maintained therein are in conformity with the Act and CFTC regulations without any further inquiry, provided that, in the ordinary course of your business as a depository, you have no notice of or actual knowledge of a potential violation by us of any provision of the Act or the CFTC regulations that relates to the segregation of customer funds; and you shall not in any manner not expressly agreed to herein be responsible to us for ensuring compliance by us with such provisions of the Act and CFTC regulations; however, the aforementioned presumption does not affect any obligation you may otherwise have under the Act or CFTC regulations.
You may, and are hereby authorized to, obey the order, judgment, decree or levy of any court of competent jurisdiction or any governmental agency with jurisdiction, which order, judgment, decree or levy relates in whole or in part to the Account(s). In any event, you shall not be liable by reason of any action or omission to act pursuant to any such order, judgment, decree or levy, to us or to any other person, firm, association or corporation even if thereafter any such order, decree, judgment or levy shall be reversed, modified, set aside or vacated.
We are permitted to invest customers' funds in government money market funds pursuant to CFTC Regulation 1.25. That rule sets forth the following conditions, among others, with respect to any investment in a government money market fund:
(1) The net asset value of the fund must be computed by 9 a.m. of the business day following each business day and be made available to us by that time;
(2) The fund must be legally obligated to redeem an interest in the fund and make payment in satisfaction thereof by the close of the business day following the day on which we make a redemption request except as otherwise specified in CFTC Regulation 1.25(c)(5)(ii); and,
(3) The agreement under which we invest customers' funds must not contain any provision that would prevent us from pledging or transferring fund shares.
The terms of this letter agreement shall remain binding upon the parties, their successors and assigns and, for the avoidance of doubt, regardless of a change in the name of either party. This letter agreement supersedes and replaces any prior agreement between the parties in connection with the Account(s), including but not limited to any prior acknowledgment letter agreement, to the extent that such prior agreement is inconsistent with the terms hereof. In the event of any conflict between this letter agreement and any other agreement between the parties in connection with the Account(s), this letter agreement shall govern with respect to matters specific to section 4d of the Act and the CFTC's regulations thereunder, as amended.
This letter agreement shall be governed by and construed in accordance with the laws of [Insert governing law] without regard to the principles of choice of law.
Please acknowledge that you agree to abide by the requirements and conditions set forth above by signing and returning to us the enclosed copy of this letter agreement, and that you further agree to provide a copy of this fully executed letter agreement directly to the CFTC (via electronic means in a format and manner determined by the CFTC) in accordance with CFTC Regulation 1.20. We hereby authorize and direct you to provide such copy without further notice to or consent from us, no later than three business days after opening the Account(s) or revising this letter agreement, as applicable.
7 U.S.C. 1a, 6d, 7a-1 as amended by Pub. L. 111-203, 124 Stat. 1376.
(g) * * *
(5) * * *
(iii) * * *
(D) Permitted foreign sovereign debt by country:
(
(
(
(
(
(E) Interests in U.S. Treasury exchange-traded funds; and
(F) Interests in government money market funds.
(d)
7 U.S.C. 1a, 2, 6, 6c, and 12a, unless otherwise noted.
The revisions read as follows:
(d) * * *
(2) The written acknowledgment must be in the form as set out in appendix E to this part;
(3)(i) A futures commission merchant shall deposit 30.7 customer funds only with a depository that agrees to provide the Director of the Market Participants Division, or any successor division, or such Director's designees, with account balance information for 30.7 customer accounts.
(ii) The written acknowledgment must contain the futures commission merchant's authorization to the depository to provide account balance information to the Director of the Market Participants Division, or any successor division, or such Director's designees, without further notice to or consent from the futures commission merchant.
(l) * * *
(5) * * *
(iii) * * *
(D) Permitted foreign sovereign debt by country:
(
(
(
(
(
(E) Interests in U.S. Treasury exchange-traded funds; and
(F) Interests in government money market funds.
We refer to the Secured Amount Account(s) which [Name of Futures Commission Merchant] (“we” or “our”) have opened or will open with [Name of Depository] (“you” or “your”) entitled:
[Name of Futures Commission Merchant] [if applicable, add “FCM Customer Omnibus Account”] CFTC Regulation 30.7 Customer Secured Account under section 4(b) of the Commodity Exchange Act [and, if applicable, “, Abbreviated as [short title reflected in the depository's electronic system]”]
You acknowledge that we have opened or will open the above-referenced Account(s) for the purpose of depositing, as applicable, money, securities and other property (collectively “Funds”) of customers who trade foreign futures and/or foreign options (as such terms are defined in U.S. Commodity Futures Trading Commission (“CFTC”) Regulation 30.1, as amended; that the Funds held by you, hereafter deposited in the Account(s) or accruing to the credit of the Account(s), will be kept separate and apart and separately accounted for on your books from our own funds and from any other funds or accounts held by us, in accordance with the provisions of the Commodity Exchange Act, as amended (the “Act”), and part 30 of the CFTC's regulations, as amended; that the Funds may not be commingled with our own funds in any proprietary account we maintain with you; and that the Funds must otherwise be treated in accordance with the provisions of section 4(b) of the Act and CFTC Regulation 30.7.
Furthermore, you acknowledge and agree that such Funds may not be used by you or by us to secure or guarantee any obligations that we might owe to you, and they may not be used by us to secure or obtain credit from you. You further acknowledge and agree that the Funds in the Account(s) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities we may now or in the future have owing to you. This prohibition does not affect your right to recover funds advanced in the form of cash transfers, lines of credit, repurchase agreements or other similar liquidity arrangements you make in lieu of liquidating non-cash assets held in the Account(s) or in lieu of converting cash held in the Account(s) to cash in a different currency.
In addition, you agree that the Account(s) may be examined at any reasonable time by the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent or employee of our designated self-regulatory organization (“DSRO”), [Name of DSRO], and this letter constitutes the authorization and direction of the undersigned on our behalf to permit any such examination to take place without further notice or consent from us.
You agree to reply promptly and directly to any request for confirmation of account balances or provision of any other information regarding or related to the Account(s) from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, and this letter constitutes the authorization and direction of the undersigned on our behalf to release the requested information without further notice to or consent from us.
The parties agree that all actions on your part to respond to the above information request will be made in accordance with, and subject to, such usual and customary authorization verification and authentication policies and procedures as may be employed by you to verify the authority of, and authenticate the identity of, the individual making any such information request, in order to provide for the secure transmission and delivery of the requested information to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any information request from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, upon which you have relied after having taken measures in accordance with your applicable policies and procedures to assure that such request was provided to you by an individual authorized to make such a request.
In the event we become subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, we acknowledge that you will have no obligation to release the Funds held in the Account(s), except upon instruction of the Trustee in Bankruptcy or pursuant to the Order of the respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary, nothing contained herein shall be construed as limiting your right to assert any right of offset or lien on assets that are not 30.7 customer funds maintained in the Account(s), or to impose such charges against us or any proprietary account maintained by us with you. Further, it is understood that amounts represented by checks, drafts or other items shall not be considered to be part of the Account(s) until finally collected. Accordingly, checks, drafts and other items credited to the Account(s) and subsequently dishonored or otherwise returned to you or reversed, for any reason, and any claims relating thereto, including but not limited to claims of alteration or forgery, may be charged back to the Account(s), and we shall be responsible to you as a general endorser of all such items whether or not actually so endorsed.
You may conclusively presume that any withdrawal from the Account(s) and the balances maintained therein are in conformity with the Act and CFTC regulations without any further inquiry, provided that, in the ordinary course of your business as a depository, you have no notice of or actual knowledge of a potential violation by us of any provision of the Act or part 30 of the CFTC regulations that relates to the holding of customer funds; and you shall not in any manner not expressly agreed to herein be responsible to us for ensuring compliance by us with such provisions of the Act and CFTC regulations; however, the aforementioned presumption does not affect any obligation you may otherwise have under the Act or CFTC regulations.
You may, and are hereby authorized to, obey the order, judgment, decree or levy of any court of competent jurisdiction or any governmental agency with jurisdiction, which order, judgment, decree or levy relates in whole or in part to the Account(s). In any event, you shall not be liable by reason of any action or omission to act pursuant to any such order, judgment, decree or levy, to us or to any other person, firm, association or corporation even if thereafter any such order, decree, judgment or levy shall be reversed, modified, set aside or vacated.
The terms of this letter agreement shall remain binding upon the parties, their successors and assigns and, for the avoidance of doubt, regardless of a change in the name of either party. This letter agreement supersedes and replaces any prior agreement between the parties in connection with the Account(s), including but not limited to any prior acknowledgment letter agreement, to the extent that such prior agreement is inconsistent with the terms hereof. In the event of any conflict between this letter agreement and any other agreement between the parties in connection with the Account(s), this letter agreement shall govern with respect to matters specific to section 4(b) of the Act and the CFTC's regulations thereunder, as amended.
This letter agreement shall be governed by and construed in accordance with the laws of [Insert governing law] without regard to the principles of choice of law.
Please acknowledge that you agree to abide by the requirements and conditions set forth above by signing and returning to us the enclosed copy of this letter agreement, and that you further agree to provide a copy of this fully executed letter agreement directly to the CFTC (via electronic means in a format and manner determined by the CFTC) and to [Name of DSRO], acting in its capacity as our DSRO. We hereby authorize and direct you to provide such copies without further notice to or consent from us, no later than three business days after opening the Account(s) or revising this letter agreement, as applicable.
We propose to invest funds held by [Name of Futures Commission Merchant] (“we” or “our”) on behalf of our customers in shares of [Name of Government Money Market Fund] (“you” or “your”) under account(s) entitled (or shares issued to):
[Name of Futures Commission Merchant] [if applicable, add “FCM Customer Omnibus Account”] CFTC Regulation 30.7 Customer Secured Government Money Market Fund Account under section 4(b) of the Commodity Exchange Act [and, if applicable, “, Abbreviated as [short title reflected in the depository's electronic system]”]
You acknowledge that we are holding these funds, including any shares issued and amounts accruing in connection therewith (collectively, the “Shares”), for the benefit of customers who trade foreign futures and/or foreign options (as such terms are defined in U.S. Commodity Futures Trading Commission (“CFTC”) Regulation 30.1, as amended); that the Shares held by you, hereafter deposited in the Account(s) or accruing to the credit of the Account(s), will be kept separate and apart and separately accounted for on your books from our own funds and from any other funds or accounts held by us in accordance with the provisions of the Commodity Exchange Act, as amended (the “Act”), and this part, as amended; and that the Shares must otherwise be treated in accordance with the provisions of section 4(b) of the Act and CFTC Regulations 1.25 and 30.7.
Furthermore, you acknowledge and agree that the Shares are in a fund that holds itself out to investors as a government money market fund, in accordance with 17 CFR 270.2a-7. In addition, you acknowledge and agree that the Shares are in a fund that does not choose to rely on the ability to impose discretionary liquidity fees consistent with the requirements of 17 CFR 270.2a-7(c)(2)(i).
Furthermore, you acknowledge and agree that such Shares may not be used by you or by us to secure or guarantee any obligations that we might owe to you, and they may not be used by us to secure or obtain credit from you. You further acknowledge and agree that the Shares in the Account(s) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities we may now or in the future have owing to you.
In addition, you agree that the Account(s) may be examined at any reasonable time by the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent or employee of our designated self-regulatory organization (“DSRO”), [Name of DSRO], and this letter constitutes the authorization and direction of the undersigned on our behalf to permit any such examination to take place without further notice to or consent from us.
You agree to reply promptly and directly to any request for confirmation of account balances or provision of any other information regarding or related to the Account(s) from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, and this letter constitutes the authorization and direction of the undersigned on our behalf to release the requested information, without further notice to or consent from us.
The parties agree that all actions on your part to respond to the above information request will be made in accordance with, and subject to, such reasonable and customary authorization verification and authentication policies and procedures as may be employed by you to verify the authority of, and authenticate the identity of, the individual making any such information request, in order to provide for the secure transmission and delivery of the requested information to the appropriate recipient(s).
We will not hold you responsible for acting pursuant to any information request from the Director of the Market Participants Division of the CFTC or the Director of the Division of Clearing and Risk of the CFTC, or any successor divisions, or such Directors' designees, or an appropriate officer, agent, or employee of [Name of DSRO], acting in its capacity as our DSRO, upon which you have relied after having taken measures in accordance with your applicable policies and procedures to assure that such request was provided to you by an individual authorized to make such a request.
In the event we become subject to either a voluntary or involuntary petition for relief under the U.S. Bankruptcy Code, we acknowledge that you will have no obligation to release the Shares held in the Account(s), except upon instruction of the Trustee in Bankruptcy or pursuant to the Order of the respective U.S. Bankruptcy Court.
Notwithstanding anything in the foregoing to the contrary, nothing contained herein shall be construed as limiting your right to assert any right of offset or lien on assets that are not Shares maintained in the Account(s), or to impose such charges against us or any proprietary account maintained by us with you. Further, it is understood that amounts represented by checks, drafts or other items shall not be considered to be part of the Account(s) until finally collected. Accordingly, checks, drafts and other items credited to the Account(s) and subsequently dishonored or otherwise returned to you or reversed, for any reason and any claims relating thereto, including but not limited to claims of alteration or forgery, may be charged back to the Account(s), and we shall be responsible to you as a general endorser of all such items whether or not actually so endorsed.
You may conclusively presume that any withdrawal from the Account(s) and the balances maintained therein are in conformity with the Act and CFTC regulations without any further inquiry, provided that, in the ordinary course of your business as a depository, you have no notice of or actual knowledge of a potential violation by us of any provision of the Act or part 30 of the CFTC regulations that relates to the holding of customer funds; and you shall not in any manner not expressly agreed to herein be responsible to us for ensuring compliance by us with such provisions of the Act and CFTC regulations; however, the
You may, and are hereby authorized to, obey the order, judgment, decree or levy of any court of competent jurisdiction or any governmental agency with jurisdiction, which order, judgment, decree or levy relates in whole or in part to the Account(s). In any event, you shall not be liable by reason of any action or omission to act pursuant to any such order, judgment, decree or levy, to us or to any other person, firm, association or corporation even if thereafter any such order, decree, judgment or levy shall be reversed, modified, set aside or vacated.
We are permitted to invest customers' funds in government money market funds pursuant to CFTC Regulation 1.25. That rule sets forth the following conditions, among others, with respect to any investment in a government money market fund:
(1) The net asset value of the fund must be computed by 9 a.m. of the business day following each business day and be made available to us by that time;
(2) The fund must be legally obligated to redeem an interest in the fund and make payment in satisfaction thereof by the close of the business day following the day on which we make a redemption request except as otherwise specified in CFTC Regulation 1.25(c)(5)(ii); and,
(3) The agreement under which we invest customers' funds must not contain any provision that would prevent us from pledging or transferring fund shares.
The terms of this letter agreement shall remain binding upon the parties, their successors and assigns and, for the avoidance of doubt, regardless of a change in the name of either party. This letter agreement supersedes and replaces any prior agreement between the parties in connection with the Account(s), including but not limited to any prior acknowledgment letter agreement, to the extent that such prior agreement is inconsistent with the terms hereof. In the event of any conflict between this letter agreement and any other agreement between the parties in connection with the Account(s), this letter agreement shall govern with respect to matters specific to section 4(b) of the Act and the CFTC's regulations thereunder, as amended.
This letter agreement shall be governed by and construed in accordance with the laws of [Insert governing law] without regard to the principles of choice of law.
Please acknowledge that you agree to abide by the requirements and conditions set forth above by signing and returning to us the enclosed copy of this letter agreement, and that you further agree to provide a copy of this fully executed letter agreement directly to the CFTC (via electronic means in a format and manner determined by the CFTC) and to [Name of DSRO], acting in its capacity as our DSRO. We hereby authorize and direct you to provide such copies without further notice to or consent from us, no later than three business days after opening the Account(s) or revising this letter agreement, as applicable.
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Behnam and Commissioners Mersinger and Pham voted in the affirmative. Commissioner Goldsmith Romero voted in the negative. Commissioner Johnson abstained.
This final rule amending Commission regulations addressing the investment of Customer Funds (funds deposited by customers to margin futures, foreign futures, and cleared swap transactions) by futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) (the “Final Rule”) represents responsive and responsible government action. It preserves core regulatory objectives through practical application of time-tested standards developed over decades to promote market resiliency, risk mitigation, and customer protections.
Financial regulation, unlike legislation, is designed to transition with and incorporate evolving market realities to preserve essential flexibilities in response to emerging market conditions, geopolitics, and economic policy. As with any principles-based regime, there are always concerns that our hands will provide no more than a feathery touch in the sway of prevailing winds. The response is, and always should be, that with our discretion embedded in statute, any rules or regulations we put forth are calibrated appropriately to the risks, embody principles and analyses above the highest levels of scrutiny, and incorporate prescriptive requirements as appropriate. The Final Rule is no departure. It further strengthens the Commission's fundamental customer protection framework aimed at preserving principal and maintaining liquidity by addressing foreign currency, credit, insolvency, and operational risks and incentivizing growth and competition, particularly among FCMs, which may reduce concentration risk and provide greater and more diverse hedging opportunities for customers. On this latter point, the Final Rule addresses a longstanding public interest in encouraging FCM growth and innovation that can ultimately support competition and customer access with the added benefit of reducing concentration, and ultimately, systemic risk,
Given the Final Rule's detailed and responsive preamble, I see no need to further reiterate the way the Final Rule modernizes the list of permitted investments of Customer Funds and creates parity across CFTC registrants without undermining or weakening any of the safeguards the Commission has maintained for the protection of Customer Funds for over a decade. To the extent one could confuse and conflate the events and bad actors that—to any degree—colored the Commission's consideration of prior rulemaking and policymaking, I would again suggest that they engage in a more thorough review of the Final Rule's surgically directed limitations.
Here, a periodic reassessment of Commission Regulation 1.25 and consideration of information submitted in two industry petitions supported the Commission's proposal to amend its rules governing the safeguarding and investment of Customer Funds by, among other things, revising the list of permitted investments to add two new asset classes including certain foreign sovereign debt instruments issued by Canada, France, Germany, Japan, and the United Kingdom, and certain short-term Treasury exchange-traded funds (ETFs), subject to certain restrictions. By finalizing these amendments, our regulations will now permit FCMs and DCOs to invest Customer Funds in the same narrowly tailored set of foreign sovereign debt to the extent that FCMs and DCOs hold balances owed to customers in the currency of the issuing sovereign and subject to certain eligibility, credit, and time-to-maturity conditions.
These additions to the list of permitted investments provide an efficient and effective means to minimize exposure to foreign currency risk fluctuations by eliminating the multi-step process exercised by FCMs and DCOs of converting the foreign currencies they accept from customers to U.S. dollars before investing in permitted investments (and converting them again when returning the margin deposits to customers). Permitting Customer Funds to be directly invested in foreign sovereign debt also eliminates the potential credit risk associated with holding Customer Funds in unsecured deposit accounts with commercial banks and the risk that such funds would be treated as unsecured claims in the event of a foreign depository facing insolvency.
It would always be easier for a regulator to eschew its duties and leave in place policies
I appreciate that commenters reminded us that despite regulations and an effective enforcement program, there will always be bad actors whose conduct runs afoul of our expectations. As detailed in the Final Rule, the Commission has been thoughtful in evaluating such concerns related to historical events and the market and other conditions to which they have been ascribed, rightly or wrongly. The Final Rule reflects such consideration by, among other things, limiting newly added permitted investments through tightly circumscribed risk characteristics. To the extent that conclusions could be drawn in a manner that relies heavily on factors unrelated to the status of investments permitted under Commission regulations, it is critical that we focus on the correlations and causation supported by facts and analyses.
I want to thank Abigail Knauff, and staff in the Market Participants Division, Division of Clearing and Risk, Office of the General Counsel, and the Office of the Chief Economist for their work on the Final Rule.
Commodity Futures Trading Commission.
Final rule.
The Commodity Futures Trading Commission (Commission or CFTC) is amending its regulations, adopted under the Commodity Exchange Act (CEA), to require a futures commission merchant (FCM) to ensure a customer does not withdraw funds from its account with the FCM if the balance in the account after the withdrawal would be insufficient to meet the customer's initial margin requirements; and relatedly, to permit an FCM, subject to certain requirements, to treat the separate accounts of a single customer as accounts of separate entities for purposes of certain Commission regulations.
Robert B. Wasserman, Chief Counsel, 202-418-5092,
Protection of market participants from misuses of customer assets and avoidance of systemic risk are two of the fundamental purposes of the CEA.
Section 4d(a)(2) of the CEA and regulation § 1.20(a) require an FCM to separately account for, and segregate from its own funds, all money, securities, and property it has received to margin, guarantee, or secure the trades or contracts of its commodity customers.
Section 5b of the CEA,
One such regulation, § 39.13(g)(8)(iii), provides that a DCO shall require a clearing member to ensure that a customer does not withdraw funds from its account with the clearing member unless the net liquidating value plus the margin deposits remaining in the customer's account after the withdrawal would be sufficient to meet the customer initial margin requirements with respect to all products and swap portfolios held in the customer's account that are cleared by the DCO.
In adopting the Margin Adequacy Requirement of regulation § 39.13(g)(8)(iii), the Commission stated
Thus, although regulation § 39.13(g)(8)(iii) was also designed to apply these risk mitigation and customer protection standards to futures and swap positions carried in customer accounts by clearing FCMs, Commission regulations do not apply a Margin Adequacy Requirement to non-clearing FCMs. Furthermore, regulation § 39.13(g)(8)(iii) does not require DCOs to apply a Margin Adequacy Requirement to the positions carried by a clearing FCM that are not cleared at a registered DCO (
On July 10, 2019, the Division of Swap Dealer and Intermediary Oversight (DSIO) (now Market Participants Division (MPD)) and the Division of Clearing and Risk (DCR) (collectively, the Divisions) published CFTC Letter No. 19-17, which, among other things, provides staff guidance with respect to the processing of margin withdrawals under regulation § 39.13(g)(8)(iii) and announced a conditional and time-limited no-action position for certain such withdrawals.
CFTC Letter No. 19-17 used the term “beneficial owner” synonymously with the term “customer,” as “beneficial owner” was, in this context, commonly used to refer to the customer that is financially responsible for an account. Additionally, as discussed further below, in the customer relationship context, FCMs often deal directly with a commodity trading advisor acting as an agent of the customer rather than with the customer itself. For the avoidance of confusion (
The written representations preceding the issuance of CFTC Letter No. 19-17 included letters filed separately by SIFMA-AMG, CME, and FIA (collectively, the “Industry Letters”). Citing regulation § 39.13(g)(8)(iii)'s requirements related to the withdrawal of customer initial margin, and JAC Regulatory Alert #19-02 reminding FCMs of those requirements,
As FIA explained, there are a variety of reasons why a customer may want separate treatment for its accounts under such an agreement.
Additionally, as FIA explained, a commercial enterprise may establish separate agreements to leverage specific broker expertise on products or to diversify risk management strategies.
SIFMA-AMG and FIA asserted that, subject to appropriate FCM internal controls and procedures, separate accounts should be treated as separate legal entities for purposes of regulation § 39.13(g)(8)(iii);
In its letter, SIFMA-AMG suggested that it would be possible to allow for separate account treatment without undermining the risk mitigation and customer protection goals of regulation § 39.13(g)(8)(iii).
SIFMA-AMG and FIA requested that DCR confirm that it would not recommend that the Commission initiate an enforcement action against a DCO that permits its clearing FCMs to treat certain separate accounts of a customer as accounts of separate entities for purposes of regulation § 39.13(g)(8)(iii),
In CFTC Letter No. 19-17, DCR stated that, in the context of separate accounts, the risk management goals of regulation § 39.13(g)(8)(iii) may effectively be addressed if a clearing FCM carrying a customer with separate accounts meets certain conditions, which were derived from the Industry Letters and specified in CFTC Letter No. 19-17.
On April 14, 2023, the Commission published in the
The requirements for separate account treatment in the First Proposal were substantially similar to the conditions in CFTC Letter No. 19-17. However, certain such proposed requirements reflected modification of the no-action conditions on which they were based, including additional reporting requirements for clearing FCMs required to cease disbursements on a separate account basis, an explicit process for clearing FCMs to resume disbursements on a separate account basis, and
The Commission originally proposed to codify the no-action position in CFTC Letter No. 19-17 in part 39 to hew closely to the operation of the no-action position itself. Under the First Proposal, DCOs would be able to permit clearing FCMs to engage in separate account treatment, provided such clearing FCMs complied with certain requirements, which DCOs would be required to monitor and enforce through their rules.
The comment period for the First Proposal was extended once at the request of a commenter and closed on June 30, 2023.
On February 20, 2024, the Commission voted to approve withdrawal of the First Proposal and publish a notice of proposed rulemaking to codify a Margin Adequacy Requirement similar to that of regulation § 39.13(g)(8)(iii), along with the no-action position in CFTC Letter No. 19-17, in part 1 of its regulations, whereby it would be applicable to all FCMs (Second Proposal).
The notice of proposed rulemaking and withdrawal were published in the
Regulation § 1.44 is comprised of eight subsections. Regulation § 1.44(a) defines key terms solely for purposes of regulation § 1.44. Regulation § 1.44(b) incorporates, for all FCMs, and for all accounts,
Section 8a(5) of the CEA
Accordingly, the Commission believes that the amendments adopted herein relating to the Margin Adequacy
All FCMs are currently subject to a detailed set of requirements designed to provide effective protection for customer funds. These include, for futures accounts, regulations §§ 1.20 (requiring segregation of customer funds), 1.22 (requiring,
Regulation § 39.13(g)(8)(iii) provides, through the Margin Adequacy Requirement, an additional layer of protection for customer funds, but only with respect to FCMs that are clearing members of DCOs. Prior to this final rule, there was no analogous Margin Adequacy Requirement applicable to FCMs that are not clearing members of DCOs. As discussed above, regulation § 39.13(g)(8)(iii) is designed to mitigate the risk that a clearing member fails to hold, from a customer, funds sufficient to cover the required initial margin for the customer's cleared positions and, in light of the use of omnibus margin accounts, avoid the misuse of customer funds by reducing the likelihood that the clearing member will cover one customer's margin shortfall using another customer's funds.
By establishing requirements for separate account treatment for all FCMs through the addition of a similar Margin Adequacy Requirement to part 1, the Commission seeks to replicate the regulatory structure presented by the interaction of regulation § 39.13(g)(8)(iii) and the no-action position of CFTC Letter No. 19-17 for all FCMs, and further the customer fund protection and risk mitigation purposes of the CEA
The requirements for separate account treatment established herein are designed to (i) ensure that FCMs carry out separate account treatment in a consistent and documented manner; (ii) monitor customer accounts on a separate and combined basis; (iii) identify and act upon instances of financial or operational distress that necessitate a cessation of disbursements on a separate account basis; (iv) provide appropriate disclosures to customers
The amendments are designed to extend the customer protection and risk management benefits of regulation § 39.13(g)(8)(iii) to all FCMs and all of their customer accounts, and to provide an alternative means of achieving those risk management goals if the FCM elects to permit customers to maintain separate accounts.
The Commission received comment letters in response to the Second Proposal from the JAC, FIA, SIFMA-AMG, CME, Intercontinental Exchange, Inc. (ICE), the Options Clearing Corporation (OCC), and MFA (formerly Managed Funds Association). Commenters supported the Commission's proposal to codify the no-action position of CFTC Letter No. 19-17 and the Commission's proposed approach to base that codification in part 1. Certain commenters commented on the substantive requirements proposed, as well as how the proposed requirements may interact with one another and with other Commission regulations, and suggested modifications to the Second Proposal. The Commission addresses these comments in the discussion below. Additionally, the Commission posed specific questions for comment in the Second Proposal. Although in three instances commenters responded explicitly to these questions,
Questions 1 and 2 concerned the Second Proposal generally. In Question 1, the Commission requested comment regarding whether, in light of changes made in the Second Proposal relative to the First Proposal, the Commission should consider any requirements for separate account treatment additional to those contained in regulation § 1.44 as proposed or modify or remove any of the proposed requirements. In Question 2, the Commission requested comment regarding whether the interaction between regulation § 1.44(g)-(h) as proposed and other regulations under parts 1, 22, and 30 affected by the proposed requirements (
The definitions contained in regulation § 1.3 are key to understanding and interpreting the Commission's regulations, including part 1 FCM regulations. The Commission believes the provisions of regulation § 1.44 require an amendment to regulation § 1.3.
The Commission proposed to amend the definition of “business day” in regulation § 1.3. Prior to this final rule, regulation § 1.3 provided, in relevant part, that “business day” meant any day other than a Sunday or holiday. The term “business day” is intended to encompass days on which banks and custodians are open in the United States to facilitate payment of margin. For the avoidance of doubt, “holiday” in this context refers to holidays in the United States. The Commission proposed to modify the definition of “business day” in regulation § 1.3 to confirm that the term encompasses any day other than a
The Commission notes that, in actual practice, Saturdays are generally not treated as business days in the markets,
Regulation § 1.17 establishes minimum financial requirements for FCMs. Regulation § 1.17(a)(1)(i) provides that each person registered as an FCM must maintain adjusted net capital equal to, or in excess of, the greatest of: (1) $1 million (or $20 million if the FCM is also registered as a swap dealer); (2) eight percent of the total “risk margin” required on the positions in customer and noncustomer accounts
The Commission proposed several amendments to regulation § 1.17 to reflect the regulatory capital treatment of separate accounts that would result from the implementation of proposed regulation § 1.44, including the requirements contained in regulation § 1.44(g)(3), discussed below. As a general matter, the proposed amendments to regulation § 1.17 were designed to ensure that FCMs manage risk with respect to separate accounts consistently, and cannot revert to calculating minimum financial requirements on a combined account basis where such calculations would tend to reflect less risk and reduced financial requirements for a customer than if each of the customer's separate accounts were treated as an account of a distinct customer without regard to the same customer's other separate accounts.
Consistent with that intent, the Commission proposed to expand the list of modifiers to the definition of the term “risk margin” for an account by adding proposed paragraph (b)(8)(v) to regulation § 1.17, providing that if an FCM carries separate accounts for separate account customers pursuant to regulation § 1.44, then the FCM shall calculate the risk margin pursuant to regulation § 1.17(a)(1)(i)(B)(
The Commission notes that, under the amendments as proposed, risk margin would be calculated on an individual basis for each separate account. Calculating risk margin separately for each separate account would eliminate the potential for portfolio margining offsets based on positions between separate accounts of the same separate account customer,
In proposing to amend the definition of the term “risk margin” in regulation § 1.17(b)(8) to reflect separate accounts, the Commission noted that such amendment, and the resulting potential increase in an FCM's minimum adjusted net capital requirement under regulation § 1.17(a)(1)(i), would also affect other regulations that impose obligations on FCMs based on their level of adjusted net capital.
The Commission additionally proposed to amend regulation § 1.58 to provide that, where a clearing FCM carries an omnibus customer account for a non-clearing FCM, and the non-clearing FCM applies separate account treatment, then such non-clearing FCM must calculate initial and maintenance margin for purposes of regulation § 1.58(a) separately for each separate account. These proposed amendments to regulation § 1.58 are discussed further below.
Second, the Commission proposed to amend regulation § 1.17(c)(2), which defines “current assets” that an FCM may recognize and include in computing its net capital. Regulation § 1.17(c)(2) currently defines “current assets” to include cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold during the next 12 months. However, regulation § 1.17(c)(2)(i) provides that an FCM must exclude from current assets any unsecured receivables resulting from futures, Cleared Swaps, or 30.7 accounts that liquidate to a deficit or contain a debit ledger balance only, provided, however, that the FCM may include a deficit or debit ledger balance in current assets until the close of business on the business day following the date on which the deficit or debit ledger balance originated (provided, in turn, that the account had timely satisfied the previous day's deficits or debit ledger balances).
The Commission proposed to amend regulation § 1.17(c)(2)(i) to provide explicitly that if an FCM carries separate accounts for separate account customers pursuant to proposed regulation § 1.44, then the FCM must treat each separate account as an account of a separate entity for the calculation of net capital, with certain limitations if deficits or debit ledger balances were not satisfied across the separate accounts of one separate account customer in accordance with the one business day requirements. As proposed, amended regulation § 1.17(c)(2)(i) would provide that the FCM must exclude each unsecured separate account that liquidates to a deficit or contains a debit ledger balance only from current assets in its calculation of net capital, provided, however, that if the separate account is subject to a call for margin by the FCM, it may be included in current assets until the close of business on the business day following the date on which the deficit or debit ledger balance originated, provided that the separate account timely satisfied a previous day's deficit or debit ledger balance in its entirety. As proposed, amended regulation § 1.17(c)(2)(i) further provides that, if the separate account does not satisfy a previous day's deficit or debit ledger balance in its entirety, then the deficit or debit ledger balance for the separate account, and any other deficits or debit ledger balances of the separate account customer in other separate accounts carried by the FCM, shall not be included in current assets until all such calls are satisfied in their entirety. The Commission's proposed amendments were intended to provide the same capital treatment to separate accounts as is currently provided customer accounts that liquidate to deficits or contain debit ledger balances, and to be consistent with corresponding conditions to the no-action position in CFTC Letter No. 19-17.
Third, the Commission proposed to amend regulation § 1.17(c)(4), which defines the term “liabilities” for purposes of an FCM calculating its net capital. Regulation § 1.17(c)(4) generally defines the term “liabilities” to mean the total money liabilities of an FCM arising in connection with any transaction whatsoever, including economic obligations of an FCM that are recognized and measured in conformity with generally accepted accounting principles. Regulation § 1.17(c)(4) also provides that for purposes of computing net capital, an FCM may exclude from its liabilities funds held in segregation for futures customers, Cleared Swaps Customers, and 30.7 customers, provided that such segregated funds are also excluded from the FCM's current assets in computing the firm's net capital.
The Commission proposed to amend regulation § 1.17(c)(4)(ii) to explicitly provide that an FCM that carries the separate accounts of separate account customers pursuant to proposed regulation § 1.44 must compute the amount of money, securities, and property due to a separate account customer as if each separate account of the separate account customer is a distinct customer. The Commission further proposed to amend regulation § 1.17(c)(4)(ii) to provide that an FCM, in computing its net capital, may exclude funds held in segregation for separate account customers from the FCM's liabilities, provided that funds held in segregation for separate account customers are also excluded from the FCM's current assets. The purpose of the proposed amendment is to ensure that an FCM, in computing its net capital, reflects separate accounts in a consistent manner in determining its total current assets and liabilities.
Fourth, the Commission proposed to amend regulation § 1.17(c)(5), which defines the term “adjusted net capital.” Regulation § 1.17(c)(5)(viii) provides, in relevant part, that adjusted net capital means net capital minus, among other items detailed in regulation § 1.17(c)(5), the amount of funds required in each customer account to meet maintenance margin requirements of the applicable board of trade or, if there are no such maintenance margin requirements, clearing organization margin requirements applicable to the account's positions. FCMs are allowed to apply (that is, to reduce the amount of this deduction from capital by) “calls for margin or other required deposits which are outstanding no more than one business day.”
The Commission proposed to amend regulation § 1.17(c)(5)(viii) to provide that an FCM that carries separate accounts for a separate account customer pursuant to proposed regulation § 1.44 must compute the amount of funds required to meet maintenance margin requirements for each separate account as if the account was owned by a distinct customer. However, if a margin call for any separate account of a separate account customer is outstanding for more than one business day, then (consistent with the treatment of multiple margin calls for a single customer described in the previous paragraph), no margin call for that separate account customer will benefit from the one business day period until the point in time at which all margin calls for the separate accounts of that separate account customer have been met in full.
As discussed further below in the context of proposed regulation § 1.44(f), the concepts of margin calls that are outstanding no more than one business day (for purposes of § 1.17(c)(5)(viii)) and meeting a one business day margin call (for purposes of § 1.44(f)) are separate and distinct. It is possible that a separate account customer may meet the test for the first, but not the second, or may meet the test for the second, but not the first.
The proposed amendments to regulation § 1.17 also include certain technical changes designed to improve clarity and promote consistency with other Commission regulations.
Commenters did not object to the Commission's proposed addition of paragraph (b)(8)(v) to regulation § 1.17, the Commission's proposed amendments to regulation § 1.17(c)(4)(ii), or the technical amendments that the Commission proposed to regulation § 1.17. FIA welcomed the Commission's proposal to amend regulation § 1.17 to require FCMs that carry separate accounts to calculate the risk margin component of the FCM's regulatory capital requirement as if the separate accounts are owned by separate entities.
The JAC also recommended that the Commission clarify how an FCM should consider whether a separate account timely satisfied the previous day's debit or deficits in its entirety, noting that, if margin calls are only considered satisfied when receipts are settled for purposes of proposed regulation § 1.17(c)(2)(i), then margin calls met in non-USD in one separate account may affect the current or noncurrent classification of a debit or deficits in all separate accounts of a separate account customer.
With respect to the proposed amendments to regulation § 1.17(c)(5)(viii), the JAC agreed that proposed regulation § 1.17(c)(5)(viii)(A) (requiring that if one margin call is noncurrent, then all margin calls are noncurrent), is consistent with how, pursuant to the JAC's guidance, FCMs currently calculate noncurrent margin calls and account for noncurrent margin calls for purposes of determining capital charges. The JAC did not take a position with respect to the proposed amendments to regulation § 1.17(c)(5)(viii)(B), but urged the Commission (if adopting the amendments as proposed) to highlight in its final rulemaking that the amendments would require that, if a margin call for any separate account of a separate account customer is outstanding for more than one business day, then the calculation of current calls used in computing the separate account's undermargined capital charge must account for the age of
Additionally, as the JAC noted in its comments with respect to the proposed amendments to regulation § 1.17(c)(2)(i), JAC Regulatory Alert #14-06 provides that, when calculating the undermargined capital charge and consistent with the treatment for residual interest, an FCM may consider pending non-USD deposits, ACH payments, and checks as received, subject to certain conditions.
The JAC also noted that, as the Commission has not proposed to modify regulation § 1.17(c)(5)(ix), requiring undermargined capital charges for noncustomer and omnibus accounts, the JAC will assume that FCMs will still be able to apply treatment for pending deposits as set forth in JAC Regulatory Alert #14-06 to noncustomers and omnibus accounts, unless the Commission amends the provision or confirms otherwise.
Additionally, the JAC requested that the Commission confirm that for purposes of the undermargined capital charge for a customer account under regulation § 1.17(c)(5), maintenance margin requirements include the risk component only, and non-cash collateral should be valued at market value less applicable haircuts, including for separate account customers.
FIA contended that the proposed amendments to regulation § 1.17(c)(2)(i) and regulation § 1.17(c)(5)(viii) are inconsistent with the principle of separate account margining and how clearing FCMs have understood the conditions of CFTC Letter No. 19-17.
FIA asserted that these proposed revisions to regulation § 1.17 would be costly for FCMs, which would be required to rebuild operational and reporting systems, and to rewrite underlying programming code, to perform the necessary look-across of all of the separately margined accounts for the same separate account customer whenever the separate account customer fails to timely satisfy the previous day's deficit/debit ledger balance in its entirety for the current asset calculation, or fails to settle a margin call by the end of the day after the call for the undermargined capital charge calculation.
FIA also argued that these proposed revisions to regulation § 1.17 would be punitive for FCMs, because they would impose capital costs on FCMs without regard to any related financial or operational risk. FIA included in its comment letter an example illustrating how an FCM could be required to take a significant capital charge due to a failure to meet a margin call timely in one separate account, even if the separate account customer's other separate accounts, managed by other investment managers, have margin calls that have not yet aged to a point that the FCM would be required to take a capital charge under existing regulation § 1.17.
FIA recommended that the Commission modify its proposed amendments to regulation § 1.17 to require a look-across of all of a separate account customer's separate accounts only where the ordinary course of business has been suspended for the separate account customer.
Like the JAC, FIA discussed the application of margin equity credit to accounts for pending non-USD margin deposits under JAC guidance.
In proposing to codify the no-action position of CFTC Letter No. 19-17 in part 1 of its regulations, the Commission considered the way in which it would need to modify existing provisions of part 1 to facilitate separate account treatment for FCMs. With respect to the calculation of current assets as set forth in regulation § 1.17(c)(2)(i) and the undermargined capital charge as set forth in regulation § 1.17(c)(5)(viii), the Commission proposed a more conservative approach to risk management that would trigger inclusion of debits or deficits (with respect to proposed regulation § 1.17(c)(2)(i)) or outstanding margin calls (with respect to proposed regulation § 1.17(c)(5)(viii)) across a separate account customer's separate accounts when a margin call made of such separate account customer for purposes of either regulation is not satisfied timely. Although CFTC Letter No. 19-17, which applied directly to DCOs, did not speak explicitly to how FCMs should treat separate accounts for purposes of these regulations, its provisions call for DCOs to require FCMs to subject accounts receiving separate treatment to heightened scrutiny and enhanced risk management practices, particularly with respect to timely receipt of margin.
The Commission has considered the JAC's and FIA's assertions that the proposed amendments to regulation § 1.17(c)(2)(i) and regulation § 1.17(c)(5)(viii) would represent a deviation from how FCMs have generally understood and applied the conditions of CFTC Letter No. 19-17. The Commission further acknowledges that a separate account customer's untimely payment of margin with respect to a separate account for purposes of regulation § 1.17(c)(2)(i) or regulation § 1.17(c)(5)(viii) does not necessarily indicate that the separate account customer is out of the ordinary course of business, as set forth in proposed regulation § 1.44(a), with respect to that separate account or any other separate account of such customer. It follows that a separate account for which payment of margin is untimely for purposes of regulation § 1.17(c)(2)(i) or regulation § 1.17(c)(5)(viii) may not be indicative of financial or operational distress in the same manner as would untimely payment of margin for purposes of regulation § 1.44. Unlike regulations § 1.17(c)(2)(i) and § 1.17(c)(5)(iii), which require an FCM to reserve capital when the aggregate of a customer's accounts are, respectively, in debit/deficit or undermargined beyond a defined period of time to protect the FCM against potential losses or price exposure if the liquidation of the customer's positions is required, regulation § 1.44 is designed to build in allowances to account for delays resulting from differences in time zones as well as international banking conventions in establishing requirements for meeting a one business day margin call. The Commission accordingly appreciates, and finds persuasive, FIA's comments to the effect that the proposed look-across of separate accounts of a separate account customer who does not timely meet a margin call for purposes of regulation § 1.17(c)(2)(i) or § 1.17(c)(5)(viii) may prove costly to implement and operationally disruptive to deploy. The Commission also appreciates the JAC's comments regarding the potential implementation and compliance burden that the proposed requirements would pose for FCMs.
Accordingly, the Commission is adopting the amendments to regulation § 1.17 as proposed, but with two modifications. First, the Commission is removing language from the proposed amendments to regulation § 1.17(c)(2)(i) that would have provided that, if a separate account does not meet a previous day's margin call for a deficit or debit balance, the FCM shall exclude all separate accounts of that separate account customer carried by the FCM that have a deficit or debit ledger balance from current assets under regulation § 1.17(c)(2)(i). Second, the Commission is modifying the language of proposed regulation § 1.17(c)(5)(viii)(B) to provide that, if a call for margin or other required deposits for any separate account of a particular separate account customer is outstanding for more than one business day, then all outstanding margin calls for
As previously discussed, the Commission believes that separate account treatment results in a conservative capital treatment due to the impact of removing portfolio margining across separate accounts, including in the calculation of the required capital based on risk margin separately for each separate account. Even during a period outside the ordinary course of business when disbursements on a separate account basis are suspended, the Commission believes that net capital treatment may in most instances continue to be more conservative by maintaining separate treatment of separate accounts for net capital calculation purposes. In consideration of the comments received regarding the operational difficulties which FCMs may face from being required to consolidate the treatment of separate accounts for net capital calculations and the likely conservative effect of maintaining separate treatment, the Commission is adopting the final rules as modified, and further clarifies that even during a period of a suspension of disbursements on a separate account basis, an FCM must continue separate treatment for net capital calculations. However, should an FCM itself cease treating the separate accounts separately, such as by initiating any cross-default remedies across the separate accounts of a separate account customer (thus indicating the FCM is exercising legal remedies to collapse separate accounts for the purpose of collection against the separate account customer), then continued separate net capital treatment by the FCM of such accounts would no longer be appropriate, as an FCM's exercise of cross-default remedies that combine separate accounts would be inconsistent with an FCM's continued election of separate account treatment.
The Commission additionally considered the JAC's and FIA's comments with respect to the treatment of pending non-USD transfers. As the JAC and FIA noted, JAC Regulatory Alerts #14-03 and #14-06 permit FCMs to apply margin equity credit to an account for pending non-USD transfers for certain purposes and subject to certain conditions. As the JAC noted, the guidance provided by JAC Regulatory Alert #14-03 and #14-06 provides that, due to the inherent delays in the settlement of certain foreign currency transfers, in determining a customer's or noncustomer's margin status (under JAC Regulatory Alert #14-03) or residual interest requirement (under JAC Regulatory Alert #14-06), an FCM may, at its discretion, consider unsettled non-USD transactions as pending in a customer's or noncustomer's account and include in the account's margin equity if: (i) the FCM assesses that it is prudent to do so based on the account's past history of satisfying margin calls and the operational and credit risk profile of the account owner; (ii) the account is on a one-day wire transfer basis (
In the Second Proposal, the Commission noted that it sought to enact a narrow codification, with respect to all FCMs, of the no-action conditions of CFTC Letter No. 19-17.
As the third condition, the FCM must also have a sufficient basis to believe that the transfer was actually initiated for immediate settlement (including, as the Commission understands, that the transfer was actually initiated on the required one-day basis). The Commission notes that, as each condition for the treatment of pending non-USD transfers is a separate condition, the Commission expects that in order to meet this third condition, an FCM would rely on evidence beyond the factors identified in the first condition (
The Commission has considered the history of FCMs' treatment of pending non-USD transfers under the JAC guidance. Among other information, the Commission has considered, with respect to separate accounts under the terms of the no-action position, the criteria applied to such treatment under the JAC guidance, the potential risks and benefits of such treatment for FCMs and customers, and the Commission's objectives in codifying the no-action position of CFTC Letter No. 19-17. The Commission confirms that it does not intend for the final rule to preclude FCMs from considering pending non-USD transfers as received for purposes of computing the undermargined capital charge pursuant to regulation § 1.17(c)(5), consistent with the JAC guidance as described above.
Lastly, to respond to the JAC's request for clarification on the subject, the Commission confirms that, for purposes of the undermargined capital charge for a customer account under regulation § 1.17(c)(5), maintenance margin requirements include the risk component only. The Commission further confirms that in computing the value of the margin deposits of an account, including accounts of separate account customers, non-cash collateral should be valued at market value less applicable haircuts.
As previously stated, protecting market participants from misuses of customer assets is one of the fundamental purposes of the CEA.
The Commission proposed to amend regulations §§ 1.32, 22.2, and 30.7 to provide that an FCM that permits separate accounts pursuant to regulation § 1.44 must perform its daily segregation calculations, and prepare its daily segregation statements, by treating the accounts of separate account customers as accounts of separate entities. The amendments add new paragraph (l) to regulation § 1.32, new paragraph (g)(11) to regulation § 22.2, and new paragraph
In addition, the amendments provide that an FCM, in computing its segregation obligations, may offset a net deficit in a particular separate account customer's separate account against the current value, net of specified haircuts, of any readily marketable securities held by the FCM for the separate account customer, provided that the readily marketable securities are held as margin collateral for the specific separate account that is in deficit. Readily marketable securities held for other separate accounts of the separate account customer may not be used to offset the separate account that is in deficit.
The Commission also proposed to amend regulation § 22.2(f) to revise the regulatory description of the stated calculation of the total amount of funds that an FCM is required to hold in segregation for Cleared Swaps Customers. The amendment: (i) corrects an error included in the drafting of the description of the calculation when the regulation was originally adopted in 2012; and (ii) aligns the regulatory text describing the segregation calculation set forth in regulation § 22.2(f) with the calculation performed on the Cleared Swaps Segregation Statement that is submitted to the Commission each day by FCMs with Cleared Swaps Customers pursuant to regulation § 22.2(g). The amendment applies across FCMs with Cleared Swaps Customers, whether or not such FCMs maintain separate accounts.
The segregation calculation required by regulation § 22.2(f) is intended to ensure that an FCM holds, at all times, a sufficient amount of funds in segregation to cover its total financial obligation to all Cleared Swaps Customers. Compliance with the segregation requirements helps ensure that an FCM is not using the funds of one Cleared Swaps Customer to cover a deficit in the Cleared Swaps Customer Account of another Cleared Swaps Customer, and further helps ensure that an FCM holds sufficient funds in segregation to transfer the Cleared Swaps Customer Accounts, including the Cleared Swaps and the Cleared Swaps Customer Collateral, to a transferee FCM if the transferor FCM becomes insolvent.
To achieve the regulatory objective noted above, regulation § 22.2(f)(2) currently requires an FCM to calculate its minimum segregation requirement as the sum of the net liquidating equities of each Cleared Swaps Customer Account with a positive account balance carried by the FCM. The net liquidating equity of a Cleared Swaps Customer Account is explicitly calculated as the sum of the market value of any funds held in the Cleared Swaps Customer Account of a Cleared Swaps Customer (including readily marketable securities), as adjusted positively or negatively by, among other things, any unrealized gains or losses on open Cleared Swaps positions, the value of open long option positions and short option positions, fees charged to the account, and authorized withdrawals. To the extent that the calculation results in a net liquidating equity that is positive, the Cleared Swaps Customer Account has a credit balance.
With respect to Cleared Swaps Customer Accounts with debit balances, regulation § 22.2(f)(5) further requires the FCM to include in the total funds required to be held in segregation all debit balances to the extent secured by readily marketable securities held for the particular Cleared Swaps Customers that have debit balances. The required addition of debit balance accounts in regulation § 22.2(f)(5) was intended to be consistent with the long-standing Futures Segregation Statement contained in the Form 1-FR-FCM and the Form 1-FR-FCM Instructions Manual.
The segregation calculation required under regulation § 1.32 for futures accounts, and the Commission's Form 1-FR-FCM and related Form 1-FR-
As noted above, the amendments to regulation § 22.2(f)(4) and (5) are intended to correct the description of the segregation calculation and to make it consistent with: (i) how FCMs calculate their total Cleared Swaps segregation obligations under regulation § 22.2(g), (ii) how FCMs report their total segregation requirements on the Cleared Swaps Segregation Statement, and (iii) the segregation calculation requirements for futures accounts under regulation § 1.32. Thus, the amendments are not expected to have any effect on FCMs and their current practices.
In addition, the Commission proposed to amend regulations §§ 1.20(i) and 30.7(f), which require an FCM carrying futures accounts and 30.7 accounts, respectively, to calculate its total segregation requirements in a manner that is consistent with current regulation § 22.2(f). As with the amendment to regulation § 22.2(f), the amendments to regulations §§ 1.20(i) and 30.7(f) apply across FCMs that maintain futures customer accounts or 30.7 customer accounts, respectively, whether or not such FCMs maintain separate accounts. The Commission adopted current regulations §§ 1.20(i) and 30.7(f) in 2013. The final regulations, however, did not include the provision set forth in regulation § 22.2(f)(5) requiring an FCM to include any secured debit balances in its segregation requirement. This omission was unintentional, as the Commission expressed its intent to “mirror” the requirements of regulation § 22.2(f) in regulation § 1.20(i) (and effectively regulation § 30.7(f)).
To address the omission, the Commission proposed to amend regulations §§ 1.20(i) and 30.7(f) to reflect the requirement that an FCM include any unsecured customer debit balances, calculated consistent with the amendments to regulation § 22.2(f)(4) and (5) that are discussed above, in the calculation of its futures and foreign futures and foreign options segregation requirement. The amendments to regulations §§ 1.20(i) and 30.7(f) accurately describe and reflect the existing segregation calculations for futures, foreign futures, and Cleared Swaps as originally intended. The amendments to regulations §§ 1.20(i) and 30.7(f) are not expected to have any impact on FCMs as the firms currently calculate their segregation requirements by including customer unsecured debit balances.
The Commission did not receive any comments with respect to the proposed amendments to regulations §§ 1.20, 1.32, 22.2, and 30.7. Accordingly, the Commission is adopting the amendments to regulations §§ 1.20, 1.32, 22.2, and 30.7 as proposed.
The Commission structured proposed regulation § 1.44 so that FCMs would be required to avoid returning margin to customers when doing so would create or exacerbate a margin deficiency in the customer's account; however, the proposed regulation then would allow FCMs to provide for separate account treatment within the Commission's broader regulatory framework for FCMs. As such, regulation § 1.44, as proposed, contains certain terms that are designed to operate in a specific manner with respect to regulation § 1.44, but that do not apply, or do not apply in the same way, with respect to other of the Commission's FCM regulations. The Commission therefore proposed to add new regulation § 1.44(a) to define certain terms only for purposes of regulation § 1.44. The Commission believes that regulation § 1.44(a) is reasonably necessary to accomplishing the goals of protecting customer funds and mitigating systemic risk because it defines key terms in requirements that FCMs will need to apply to ensure margin adequacy, and in requirements that FCMs will need to apply when treating customer accounts separately for purposes of margin adequacy.
The Commission proposed to define “account” for purposes of proposed regulation § 1.44 as meaning a futures account, a Cleared Swaps Customer Account (both of which are defined in regulation § 1.3, which definitions apply broadly to all CFTC regulations), or a § 30.7 account (as defined in regulation § 30.1
ICE's comment letter indirectly addressed the definition of “account” in proposed regulation § 1.44(a). ICE voiced support for the Commission's proposal to permit FCMs to provide separate account treatment for customers with regulation 30.7 accounts for futures and options transactions traded on exchanges outside the United States, but stated it does not believe it is necessary for the Commission to distinguish regulation 30.7 accounts from futures and Cleared Swap Customer accounts in connection with separate account treatment.
The Commission proposed to codify the Second Proposal principally in part 1 (as opposed to in part 39) in light of comments received in response to the First Proposal. This is designed to ensure that the Margin Adequacy Requirement and requirements for separate account treatment will apply directly to all FCMs and all FCM customers, including futures customers, Cleared Swaps Customers, and 30.7 account customers. The Commission is distinguishing these accounts in regulation § 1.44 to ensure that the regulation encompasses each class of FCM customer.
The Commission agrees that certain references to DCMs that are included in regulation § 1.44 should be clarified to include explicitly foreign exchanges in connection with 30.7 accounts, as separate account customers may have foreign futures and foreign options positions traded on such exchanges. Accordingly, as noted further below in connection with regulation § 1.44(b)(2) and 1.44(f)(7), in adopting these provisions, the Commission is modifying them to refer to “any designated contract market
The Commission also proposed in proposed regulation § 1.44(a) to further define “business day” as having the same meaning as set forth in regulation § 1.3, but with the clarification that “holiday” refers to Federal holidays as established by 5 U.S.C. 6103. The Commission also proposed in proposed regulation § 1.44(a) to define “holiday” as meaning Federal holidays as established by 5 U.S.C. 6103.
In Question 4 of the Second Proposal, the Commission sought commenters' views on how the proposed definition of “business day” should address days when securities and other markets are closed. (
In its comment letter, FIA noted that neither the proposed definitions of “business day” nor “holiday” in proposed regulation § 1.44(a) address days on which banks are open but futures and securities markets are closed.
The Commission acknowledges that, on days on which banks are open but futures and securities markets are closed, customers, including separate account customers, may be unable to use non-cash collateral to aid in their meeting margin calls. However, FCMs and customers may arrange for a variety of methods to settle margin calls, including bank transfers. The Commission believes that, given the availability of such funding mechanisms on days when banks are open but securities and other markets are closed, introducing an exception that would allow for additional delays in the payment of margin on such days may introduce unnecessary additional risk of undermargining.
The Commission did not receive any other comments related to the definitions of “business day” or “holiday” in proposed regulation § 1.44(a) and is adopting those definitions as proposed.
Relatedly, the Commission proposed to define “one business day margin call” as a margin call that is issued and met in accordance with the requirements of proposed regulation § 1.44(f). The Commission did not receive any comments with respect to this proposed definition, but the Commission received comments related to the substantive requirements defining a one business day margin call in proposed regulation § 1.44(f). The Commission addresses those comments below in connection with that provision. The Commission is adopting the definition of “one business day margin call” in regulation § 1.44(a) as proposed.
Under regulation § 1.44, an FCM may provide disbursements on a separate account basis only when it, and its customer, are operating within the “ordinary course of business,” as that term is defined in the proposed regulation. The Commission proposed to define “ordinary course of business” as meaning the standard day-to-day operation of the FCM's business relationship with its separate account customer, a condition where there are no unusual circumstances that might indicate either a materially increased level of risk that the separate account customer may fail promptly to perform its financial obligations to the FCM, or a decrease in the FCM's financial resilience. The Commission proposed regulation § 1.44(e) to set forth the circumstances that would be inconsistent with the ordinary course of business, and the occurrence of which would require a cessation of disbursements on a separate account basis.
SIFMA-AMG contended that the definition of “ordinary course of business” in proposed regulation § 1.44(a) poses certain regulatory compliance challenges.
SIFMA-AMG further contended that the Commission's proposed definition of “ordinary course of business” fails to recognize that FCMs must, under Commission regulations, manage risk effectively, and that FCMs also have
In adopting regulation § 1.44(a), the Commission has determined to modify the definition of “ordinary course of business” in consideration of SIFMA-AMG's comment. As an initial matter, the Commission notes that under regulation § 1.44 as proposed, events inconsistent with the ordinary course of business are generally those that the Commission would expect an FCM to become aware of through its existing compliance function and procedures (
The Commission notes that the list of events inconsistent with the ordinary course of business proposed as part of regulation § 1.44(e) is substantially the same as the list of events discussed in CFTC Letter No. 19-17, which has been relied on by DCOs (and by extension their clearing FCMs) successfully since 2019. As SIFMA-AMG noted in its comment letter, FCMs have some discretion in managing risk with respect to their (and their customers') activities, and FCMs appear to have done so effectively under the conditions of CFTC Letter No.19-17 for over five years. The Commission expects FCMs will under regulation § 1.44 similarly exercise risk management discretion to identify when certain non-ordinary course of business events have occurred.
Additionally, the Commission notes that although failure to make a single margin payment may not in itself represent a departure from the ordinary course of business (hence the Commission's proposal, consistent with the no-action conditions of CFTC Letter No. 19-17, to include an exception to non-ordinary course of business conditions for failure to pay margin due to certain unusual administrative errors or operational constraints), as a general matter, ensuring timely payment of margin is critical to the Commission's goal of providing for separate account treatment in a manner that ensures the safety of customer funds and effective risk mitigation.
Although the Commission believes default or bankruptcy of an FCM or customer are not the only events that could represent a departure from the ordinary course of business with respect to separate account margining, the Commission agrees that the standard for what constitutes the ordinary course of business can be more clearly defined.
Under the proposal, although the occurrence of any of the events described in regulation § 1.44(e) would be inconsistent with the “ordinary course of business,” it was also possible that some other, unspecified, events might also be inconsistent with the “ordinary course of business.” Accordingly, the Commission has modified regulation § 1.44(a) to close the set of such events by providing that the “ordinary course of business” means the operation of the FCM's business relationship with its separate account customer
The Commission proposed to define “separate account” as meaning any one of multiple accounts of the same separate account customer that are carried by the same FCM. The Commission did not receive any comments with respect to this proposed definition and is adopting it as proposed.
The Commission proposed to define “separate account customer” as meaning a customer for which the FCM has elected to engage in separate account treatment. The Commission also did not receive any comments with respect to this proposed definition and is adopting it as proposed.
Lastly, the Commission proposed to define “undermargined amount” for an account as meaning the amount, if any, by which the customer margin requirements with respect to all products held in that account, exceed the net liquidating value plus the margin deposits currently remaining in that account.
The Commission used the term “undermargined amount” in connection with proposed regulation § 1.44(f) in defining the requirements for making and meeting a one business day margin call, as well as in proposed regulation § 1.44(g) in setting legally segregated, operationally commingled (LSOC) compliance calculations for separate accounts.
In its comment letter, the JAC contended that the Commission's proposed definition of “undermargined amount” in proposed regulation § 1.44(a) is inconsistent with industry practice and methodologies for calculating the undermargined amount provided in the JAC Margins Handbook.
As the JAC explained, its Margins Handbook recognizes two methods for determining the undermargined amount: the Net Liquidating Value Method
For purposes of the Net Liquidating Value Method, the JAC Margins Handbook defines the undermargined amount as: “The amount by which margin equity is less than the maintenance margin requirement.”
Under the alternative Total Equity Method, the undermargined amount is the amount by which total equity plus the collateral value of acceptable margin deposits is less than the risk maintenance margin requirement adjusted for the option value.
The JAC argued that, as proposed, the definition of “undermargined amount” in proposed regulation § 1.44(a) would require that, for all customer accounts (not just the separate accounts of separate account customers), an FCM include the equity component of long and short options in both the margin equity and the margin requirement.
The JAC noted that, depending on the composition of an account, the Second Proposal's definition of “undermargined amount” may result in different undermargined amounts than the Net Liquidating Value Method or Total Equity Method as those methods are applied today. The JAC requested the Commission provide the specific calculation for inclusion of the equity component of premium for long or short options positions and provide further clarification as to the rationale for the apparent proposed change in methodology.
FIA similarly commented that, although the proposed definition of “undermargined amount” in proposed regulation § 1.44(a) appeared to derive from the JAC Margins Handbook definition of the same term, the definition as proposed may give the impression that the Commission intends to codify a preference for the Net Liquidating Value Method to the exclusion of the Total Equity Method alternative in the JAC Margins Handbook. FIA recommended that the Commission amend the proposed definition of “undermargined amount” in proposed regulation § 1.44(a) to provide that “undermargined amount” for an account means the account's margin deficiency, if any, computed in accordance with applicable guidance of the JAC promulgated under regulation § 1.52(d).
The Commission's proposed definition of “undermargined amount” is based not on the Net Liquidating Value/Risk/Pure SPAN Method as set forth in the JAC Margins Handbook but rather on the Margin Adequacy Requirement in regulation § 39.13(g)(8)(iii), which provides that a DCO shall require its clearing members to ensure their customers do not withdraw funds from their accounts with such clearing members unless the net liquidating value plus the margin deposits remaining in a customer's account after such withdrawal are sufficient to meet the customer initial margin requirements with respect to all products and swap portfolios held in such customer's account which are cleared by the DCO. In that respect, it is not intended to evince a requirement to determine the undermargined amount of an account specifically using the Net Liquidating Value Method to the exclusion of the Total Equity Method as set forth in the JAC Margins Handbook. In proposing the definition of “undermargined amount,” the Commission sought to make clear that an FCM's determination of the undermargined amount for a separate account should account for the equity component or premium for long or short options positions in computing the required level of margin for an account. However, the Commission's intent was not to change FCMs' current practice with respect to the way in which they determine the undermargined amount for an account.
In its comment letter, the JAC noted that FCMs determine the undermargined amount using either the Net Liquidating Value method or the alternative Total Equity method set forth in the JAC Margins Handbook, both of which incorporate the equity component for long or short option positions (the former as part of margin equity and the latter as part of margin requirements), and that margin
Having considered the JAC's and FIA's comments, relevant provisions of the JAC Margins Handbook, and the Commission's objectives in defining “undermargined amount,” the Commission is persuaded that utilizing either the Net Liquidating Value method or the alternative Total Equity method to determine an account's undermargined amount generally will produce an identical result (with the exception, as the JAC notes, of certain instances involving long options positions, in which the Total Equity method will produce a greater margin deficiency, resulting in a greater margin requirement, which would further serve to mitigate risk).
Accordingly, in adopting the definition of “undermargined amount” in regulation § 1.44(a), the Commission is removing the proposed language stating that, for purposes of the definition of “undermargined amount,” the term “margin requirements” shall “include[ ], as appropriate, the equity component or premium for long or short option positions,” based on the Commission's understanding, in light of comments received, that under current practice, the equity component is included as a matter of course in margin equity or margin requirements, and the option premium is factored into margin equity.
In Question 5 of the Second Proposal, the Commission invited commenters to provide feedback with respect to whether the definition of “undermargined amount” should apply haircuts to the value of customer collateral held by an FCM and, if so, whether the amount of such haircuts should be based on SEC rule 240.15c3-1 and Commission regulation § 1.17(c)(5)(ii), or on some other basis. A haircut is a reduction in the allowable value of an asset to account for market risk. In its comment letter, the JAC stated that non-cash collateral on deposit in a customer's account should be valued at market value less applicable SEC and CFTC haircuts for determining the margin value of collateral. No other commenters responded specifically to this question. The Commission has determined, in adopting the definition of “undermargined amount” in regulation § 1.44(a), to include in that definition a requirement that collateral haircuts based on Rule 15c3-1 of the Securities and Exchange Commission (17 CFR 240.15c3-1) and regulation § 1.17(c)(5) be applied to the value of the margin deposits held by an FCM to reflect potential market risk associated with the value of the collateral if and when such collateral was liquidated.
Accordingly, the Commission is adopting regulation § 1.44(a) as proposed, subject to the modifications discussed above with respect to the definitions of “ordinary course of business” and “undermargined amount.”
The Commission proposed regulation § 1.44(b) to require all FCMs, whether clearing or non-clearing, to comply with the same Margin Adequacy Requirement that DCOs are required to apply to their clearing FCMs pursuant to regulation § 39.13(g)(8)(iii). As proposed, regulation § 1.44(b) provides that an FCM shall ensure that a customer does not withdraw funds from its accounts with such FCM unless the net liquidating value (calculated as of the close of business on the previous business day) plus the margin deposits remaining in the customer's account after such withdrawal are sufficient to meet the customer initial margin requirements with respect to all products held in such customer's account, except as provided in proposed regulation § 1.44(c), which allows an FCM to permit disbursements on a separate account basis under ordinary course of business conditions.
In proposing regulation § 1.44(b), the Commission sought to articulate a standard for the calculation of margin adequacy that is consistent with the Commission's requirements for calculation of undermargined amounts for purposes of an FCM's residual interest calculations.
In order to address circumstances in which the previous day (for purposes of regulation § 1.44(b)(1)'s margin adequacy calculation requirements), excluding Saturdays and Sundays, is a holiday (as defined in regulation § 1.44(a)) on which markets, but not banks, may be open, proposed regulation § 1.44(b)(2) further provides that, in such circumstances, the margin adequacy calculation shall instead be made using the net liquidating value of an account as of the close of business on such holiday where (i) any DCM on which the FCM trades is open for trading; and (ii) an account of any of the FCM's customers includes positions traded on such a market.
The Commission notes that proposed regulation § 1.44(b)'s requirements related to the timing of the margin adequacy calculation required by the same section are intended to represent a minimum standard. The proposed requirements are not intended to prevent an FCM from exercising its judgment in connection with good risk management practice to prevent the disbursement of customer funds based on intervening intraday market movements resulting in losses to a customer account between the calculation benchmark set forth in proposed regulation § 1.44(b) and the time at which a customer requests to withdraw funds. Ensuring that customers do not withdraw funds from their accounts at FCMs if such withdrawal would create or exacerbate an initial margin shortfall is reasonably necessary from a risk management perspective to reduce the likelihood and magnitude of the risk that the FCM must cover losses due to a default by the customer on obligations that exceed the margin held by the FCM. Similarly, because customer funds are held by an FCM in omnibus accounts, this
Because regulation § 39.13(g)(8)(iii) applies only to DCOs (which in turn can only apply regulation § 39.13(g)(8)(iii)'s Margin Adequacy Requirement to their clearing member FCMs), and given the strong trend of the comments in favor of addressing these issues in a manner that is uniform across all types of FCMs directly in part 1 rather than indirectly through part 39, the Commission continues to view it as reasonably necessary to extend the requirement to prevent such undermargining scenarios to all FCMs.
Accordingly, it is the Commission's judgment that regulation § 1.44(b), which will apply a Margin Adequacy Requirement similar to that of regulation § 39.13(g)(8)(iii) directly to FCMs, both clearing and non-clearing, is reasonably necessary to protect customer funds and mitigate systemic risk, thus effectuating CEA section 4d(a)(2), 4d(f)(2), and 4(b)(2)(A)
The JAC discussed proposed regulation § 1.44(b) in several respects in its comment letter. First, the JAC asserted that proposed regulation § 1.44(b)(1) is unclear; specifically, because it is unclear how the Commission is defining customer initial margin requirements in light of its definition of the term “margin requirements,” within the proposed definition of the term “undermargined amount” in proposed regulation § 1.44(a), as including “the equity component or premium for long or short option positions.”
As discussed above in connection with regulation § 1.44(a), the Commission is adopting its proposed definition of “undermargined amount” with modifications to remove language that the JAC identified as inconsistent with exchange rules and industry practice, and the Commission views an FCM's use of either of the Net Liquidating Value or alternative Total Equity method set forth in the JAC Margins Handbook as consistent with the Commission's objective in defining an account's undermargined amount for purposes of regulation § 1.44.
Second, the JAC contended that proposed regulation § 1.44(b) may impact the way some FCMs settle with customers on a daily basis.
Relatedly, the JAC sought clarification regarding whether the Second Proposal requires each separate account to settle a single undermargined amount pursuant to proposed regulation § 1.44(f) or disburse a single excess margin amount pursuant to proposed regulation § 1.44(b), taking into account the aggregate of all positions and currencies within the separate account.
In response to the JAC's comment, the Commission confirms that each separate account would not be required to settle a
The Commission notes that, for purposes of regulation § 1.44(b), the net liquidating value is calculated based on the market value of the positions in the customer's account. In proposing regulation § 1.44(b), the Commission noted that real-time calculation of margin adequacy with respect to a potential withdrawal may prove impracticable.
However, the Commission does not believe it would be impracticable for an FCM to account for payments received or disbursements made since the close of business on the previous business day. Indeed, regulation § 1.22(c)(3)(ii) provides that an FCM may reduce the amount of residual interest required to be maintained under regulation § 1.22(c)(3)(i) to account for payments received from or on behalf of undermargined futures customers (less the sum of any disbursements made to or on behalf of such customers) between the close of business on the previous business day and the Residual Interest Deadline.
Similarly, in calculating margin adequacy under regulation § 1.44(b), an FCM should consider payments received from or on behalf of customers, including the separate accounts of separate account customers, less the sum of any disbursements made to or on behalf of such customers, between the close of business on the previous business day and the time at which the FCM considers a disbursement to a customer. In calculating the current balance in a customer's account, an FCM may use either the currency exchange rates at the close of business on the previous day, or at some later time. The FCM should be consistent in both the sources of exchange rates that it uses and in choosing the time as of which it will reference such exchange rates in calculating the current balance in the customer's account. Moreover, in doing so, the FCM must act consistently with regulation § 1.49(e).
Third, the JAC noted that although the Margin Adequacy Requirement in proposed regulation § 1.44(b) discusses determination of funds available for withdrawal from customer accounts, the Commission in the Second Proposal proposed only to establish a requirement to collect margin from separate account customers (in proposed regulation § 1.44(f)(1)) and did not propose a broader requirement for FCMs to collect margin, analogous to the collection requirement in regulation § 39.13(g)(8)(ii), and applicable to all accounts carried by clearing and non-clearing FCMs.
As discussed above, commenters to the First Proposal, including the JAC, asked that the Commission codify requirements for the treatment of separate accounts in its regulations that would apply to all FCMs. In the Second Proposal, the Commission proposed to do just that. The Commission discussed in the Second Proposal its intent to promulgate a narrow codification, applied directly to FCMs, of the requirements for margin disbursement set forth in regulation § 39.13(g)(8)(iii), subject to requirements based on the conditional no-action position in CFTC Letter No. 19-17, including requirements for separate account treatment that closely mirror the conditions in the no-action position.
The JAC also recommended that the Commission revise the Margin Adequacy Requirement in proposed regulation § 1.44(b) (and/or the definition of “account” proposed in proposed regulation § 1.44(a)) to “include accounts of noncustomers who pose risk to the FCM if such noncustomers are permitted to withdraw margin funds that would create or exacerbate an undermargined situation, or not be required to deposit and maintain sufficient margin to cover the risk of their positions.”
The Commission appreciates the JAC's recommendation to consider revising the Margin Adequacy Requirement to apply to the accounts of noncustomers, which the Commission generally understands to encompass accounts of certain affiliates and affiliated individuals of an FCM. The Commission notes that the Margin Adequacy Requirement of regulation § 39.13(g)(8)(iii) does not apply with respect to withdrawals by noncustomers, and neither CFTC Letter No. 19-17 nor the Commission's proposals to codify the no-action position in that letter contemplated the application of a Margin Adequacy Requirement, or requirements for separate account treatment, with respect to noncustomers. The Commission considers application of the Margin Adequacy Requirement in proposed regulation § 1.44(b) to noncustomers to
Lastly, as the Commission discusses above in connection with amendments to regulation § 1.17, the Commission received a number of comments requesting that the Commission confirm whether FCMs may consider as received pending non-USD transfers for purposes of certain regulations, consistent with JAC guidance and current industry practice. Although the Commission did not receive any such comments specifically with respect to proposed regulation § 1.44(b), for the avoidance of doubt, the Commission confirms that the final rule is not intended to preclude FCMs from considering as received pending non-USD transfers, consistent with JAC guidance, when considering a disbursement under regulation § 1.44(b). However, in light of regulation § 1.44(f)(1)-(3), under which payment of margin in Canadian dollars (CAD) is required to be settled pursuant to the timing requirements for payment of margin in USD for purposes of meeting a one business day margin call standard, the Commission expects that, when considering pending non-USD transfers for purposes of regulation § 1.44(b)'s Margin Adequacy Requirement, FCMs will treat pending CAD transfers on the same basis as pending USD transfers (
Having considered comments received in response to proposed regulation § 1.44(b), the Commission is adopting regulation § 1.44(b) as proposed, subject to modifications to regulation § 1.44(b)(2), discussed above in connection with regulation § 1.44(a), to address foreign exchanges related to regulation § 30.7 accounts.
The Commission proposed regulation § 1.44(c) to establish the fundamental requirements for separate account treatment. As a general matter, these requirements are substantially the same as in CFTC Letter No. 19-17, and in the First Proposal, except that the FCM may choose to engage in separate account treatment without a requirement that a DCO specifically authorize such treatment. As proposed, regulation § 1.44(c) provides that an FCM may, only during the ordinary course of business, as that term is defined in regulation § 1.44, treat the separate accounts of a separate account customer as accounts of separate entities for purposes of regulation § 1.44(b),
The Commission believes that permitting FCMs to treat the separate accounts of separate account customers as accounts of separate entities for purposes of regulation § 1.44(b), subject to the risk-mitigating requirements set forth in regulation § 1.44, accomplishes the CEA's purposes of promoting responsible innovation as well as effective customer fund protection and risk mitigation.
In its comment letter, ICE stated that it does not object to the specific requirements that would be imposed under proposed regulation § 1.44(c) where an FCM elects separate account treatment with respect to a customer.
The Commission did not receive any other comments specific to proposed regulation § 1.44(c). Accordingly, the Commission is adopting regulation § 1.44(c) as proposed.
The Commission proposed regulation § 1.44(d) to provide that an FCM may elect to treat the separate accounts of a customer as accounts of separate entities for purposes of proposed regulation § 1.44(b). As proposed, regulation § 1.44(d)(1) provides that, to elect to treat the separate accounts of a customer as accounts of separate entities for purposes of regulation § 1.44(b), the FCM shall include the customer on a list of separate account customers maintained in its books and records, and that such list shall include both the identity of each separate account customer and the identity of each separate account of such customer. The FCM would also be required to keep this list current. Furthermore, as proposed, regulation § 1.44(d)(2) provides that, when an FCM first chooses to include a customer on a list of separate account customers, the FCM is required to provide, within one business day, notification of the election to allow separate account treatment for customers in accordance with the process specified in regulation § 1.12(n)(3).
In its comment letter, the JAC stated that a complete and accurate listing of separate accounts is critical to ensure that the Commission's risk mitigating requirements can be effectively carried out by an FCM, monitored by self-regulatory organizations (SROs) and the Commission for compliance with such requirements, and monitored by DCOs for customer gross margin reporting under proposed regulation § 39.13(g)(8)(i), and to assist DCOs and/or bankruptcy trustees in porting accounts in the event of an FCM's
The Commission notes that the recordkeeping requirement in regulation § 1.44(d)(1), described above, is substantially similar to the corresponding condition in CFTC Letter No. 19-17 that an FCM maintain a list of all separate accounts receiving separate account treatment, indicating the beneficial owner and account numbers of such accounts. For the avoidance of doubt, the Commission also believes that the recordkeeping requirement in regulation § 1.44(d)(1) as proposed is consistent with the JAC's comment. It requires an FCM that elects to treat separate accounts of a customer as accounts of separate entities for purposes of regulation § 1.44(b) to: (i) include the customer on a list of separate account customers maintained in its books and records; (ii) include on the list the identity of each separate account customer; (iii) include on the list the identity of each separate account of such customer; and (iv) keep the list current.
The definition of “separate account customer” in regulation § 1.44(a) is “a customer for which the [FCM] has made the election set forth in [regulation § 1.44(d)].” The FCM would thus be required to subject the customers on that list, as separate account customers, to the requirements of regulation § 1.44 for separate account treatment, including regulation § 1.44's one business day margin call standard.
In its comment letter, ICE opined that it would be appropriate for the Commission under proposed regulation § 1.44(d) to require an FCM to provide notice to DCOs of which it is a clearing member of accounts that are subject to separate account treatment, so that the DCO can comply with its obligations with respect to the margining of such accounts under regulation § 39.13(g).
The Commission designed the Second Proposal to codify the terms of the no-action position in CFTC Letter No. 19-17 in a manner directly applicable to FCMs and not through the instrumentation of DCO rules. The Commission notes that under the conditions of CFTC Letter No. 19-17, an FCM shall, on a one-time basis, provide notification to its
FIA requested that the Commission clarify that any clearing FCM that has already provided the notice required by proposed regulation § 1.44(d)(2) to its DSRO in compliance with the conditions of CFTC Letter No. 19-17 shall be deemed to have complied with the requirement of proposed regulation § 1.44(d)(2) that an FCM provide notification to its DSRO of the first time the FCM includes a customer on its list of separate account customers.
As discussed above, in addition to requiring an FCM to maintain a list of all separate accounts (indicating the beneficial owner and account numbers) receiving separate account treatment, CFTC Letter No. 19-17 requires as a condition to separate account treatment that an FCM shall, on a one-time basis, provide notification to its DSRO if it will apply separate account treatment to any separate accounts. As proposed, regulation § 1.44(d)(2) adds to this requirement that such notification shall be provided in accordance with the following conditions: (i) the first time that the FCM includes a customer on the list of separate account customers; (ii) within one business day; (iii) to the Commission (in addition to the DSRO); and (iv) in accordance with the process specified in regulation § 1.12(n)(3). With respect to the one-time notification that the FCM is required to provide to its DSRO, the Commission recognizes that the requirements of regulation § 1.44(d)(2) are, in the main, substantially the same as those in the corresponding condition of CFTC Letter No. 19-17. Notwithstanding the timing and manner requirements of regulation § 1.44(d)(2) as proposed, recognizing that FCMs have successfully applied separate account treatment under the conditions of CFTC Letter No. 19-17 for over five years, the Commission confirms that a clearing FCM that has already provided to its DSRO the one-time notification of commencement of separate account treatment pursuant to the no-action conditions of CFTC Letter No. 19-17 shall be deemed to have complied with the analogous requirement of regulation § 1.44(d)(2).
Having considered comments received with respect to proposed regulation § 1.44(d), the Commission is adopting regulation § 1.44(d) as proposed.
As proposed, regulation § 1.44(e) enumerates events that would be inconsistent with the ordinary course of business, as that term is defined in regulation § 1.44(a), and sets forth
These events are divided into two categories: (i) events that concern the separate accounts of a particular separate account customer, the occurrence of any one of which would require the FCM to cease permitting disbursements on a separate account basis with respect to all accounts of that customer; and (ii) events that concern the financial status of the FCM itself, and the occurrence of any one of which would require the FCM to cease permitting disbursements on a separate account basis with respect to all of its separate account customers.
Significantly, while a separate account customer is outside the ordinary course of business as defined in regulation § 1.44(a), only the privilege of permitting disbursements on a separate account basis, pursuant to regulation § 1.44(c), is terminated (or suspended). So long as a customer remains a separate account customer, whether or not within the ordinary course of business, then the FCM is required to comply with the requirements of regulation § 1.44, including with respect to the relevant provisions addressed in regulations §§ 1.17, 1.20, 1.22, 1.23, 1.32, 1.55, 1.58, 1.73, 22.2, 30.7, and 39.13(g)(8)(i) regarding that customer and all of that customer's separate accounts. Similarly, if it is the FCM that is outside the ordinary course of business, it is only the privilege of permitting disbursements on a separate account basis with respect to any of the FCM's separate account customers and their separate accounts that is terminated (or suspended). The FCM continues to be required to comply with the requirements in regulation § 1.44, including with respect to the relevant provisions described above, with respect to its separate account customers and their separate accounts. Thus, for the avoidance of doubt, a separate account customer that is outside the ordinary course of business is still a separate account customer.
The first category of events is as follows:
• (1)(i) The separate account customer, including any separate account of such customer, fails to deposit initial margin or maintain maintenance margin or make payment of variation margin or option premium as specified in proposed regulation § 1.44(f).
• (ii) The occurrence and declaration by the FCM of an event of default as defined in the account documentation executed between the FCM and the separate account customer.
• (iii) A good faith determination by the FCM's CCO, one of its senior risk managers, or other senior manager, following such FCM's own internal escalation procedures, that the separate account customer is in financial distress, or there is significant and bona fide risk that the separate account customer will be unable promptly to perform its financial obligations to the FCM, whether due to operational reasons or otherwise.
• (iv) The insolvency or bankruptcy of the separate account customer or a parent company of such customer.
• (v) The FCM receives notification that a board of trade, a DCO, an SRO as defined in regulation § 1.3 or section 3(a)(26) of the Securities Exchange Act of 1934, the Commission, or another regulator
• (vi) The FCM is directed to cease permitting disbursements on a separate account basis, with respect to the separate account customer, by a board of trade, a DCO, an SRO, the Commission, or another regulator with jurisdiction over the FCM, pursuant to, as applicable, board of trade, DCO, or SRO rules, government regulations, or law.
The second set of events is as follows:
• (2)(i) The FCM is notified by a board of trade, a DCO, an SRO, the Commission, or another regulator with jurisdiction over the FCM, that the board of trade, the DCO, the SRO, the Commission, or other regulator, as applicable, believes the FCM is in financial or other distress.
• (ii) The FCM is under financial or other distress as determined in good faith by its CCO, senior risk managers, or other senior management.
• (iii) The insolvency or bankruptcy of the FCM or a parent company of the FCM.
As proposed, regulation § 1.44(e)(3) provides that the FCM must provide notice to its DSRO and to the Commission of the occurrence of any of the events terminating (or suspending) disbursements on a separate account basis for one or more separate account customers. The notice must be provided to the DSRO and the Commission in accordance with the process specified in regulation § 1.12(n)(3). The notice also must identify the event and, if applicable, the customer. The FCM is required to provide such notice promptly in writing no later than the next business day following the date on which the FCM identifies or has been informed that the relevant event has occurred. The notification required upon exiting the ordinary course of business is intended to ensure that the Commission and DSROs will be apprised of the occurrence of non-ordinary course of business events, so that they may actively communicate with and monitor an FCM with respect to the resolution of such events (
Regulation § 1.44(e)(4), as proposed, provides an avenue for an FCM that has experienced a non-ordinary course of business event with respect to itself or a customer to return to the ordinary course of business and resume disbursements on a separate account basis for itself or its customers, as may be the case. Regulation § 1.44(e)(4) provides that an FCM that has ceased permitting disbursements on a separate account basis to a separate account customer due to the occurrence of a non-ordinary course of business event, with respect to that specific separate account customer, or with respect to all such customers, may resume permitting disbursements to such customer(s) on a separate account basis if such FCM reasonably believes, based on new information, that those circumstances triggering the event have been cured, and such FCM documents in writing the factual basis and rationale for its
That permitting disbursements on a separate account basis should be discontinued (or at least suspended) under certain circumstances is reflected in CME's recommendation, preceding issuance of CFTC Letter No. 19-17, that disbursements on a separate account basis be permitted only during the ordinary course of business. As CME explained, FCMs should maintain the flexibility to determine that either the customer or the FCM itself is in distress and “pause” disbursements until the customer's other account can demonstrably meet the call to deposit funds.
However, the Commission acknowledges that in some instances, an FCM or customer may exit a state of financial, operational, or other distress, such that resumption of separate account disbursements would be appropriate. By explicitly providing FCMs with an avenue to resume disbursements on a separate account basis consistent with the resumption of the ordinary course of business, the Commission seeks to ensure that a temporary departure from the ordinary course of business, once remedied, does not continue to preclude an FCM from applying (and a customer from having applied to its accounts) separate account treatment, and to incentivize transparency between FCMs and their DSROs and Commission staff with respect to conditions at the FCMs or customers that could indicate operational or financial distress and, more generally, the risk management program at the FCM.
Regulation § 1.44(e) is designed to ensure that disbursements are permitted on a separate account basis only during the routine operation of the FCM's business relationship with its customer. Certain events signaling financial or operational distress of the FCM or customer are inconsistent with the normal operation of the business relationship between the FCM and its customer. The Commission believes that, when such events occur, and throughout the duration of their occurrence, suspending FCMs' ability to provide disbursements on a separate account basis with respect to the Margin Adequacy Requirement is reasonably necessary to protect customer funds and mitigate systemic risk, and to effectuate section 4d of the CEA.
The JAC, noting the passage of time since the Divisions issued CFTC Letter No. 19-17, requested that the Commission provide examples of non-enumerated events that would constitute operating outside the ordinary course of business, so that FCMs and their customers can better understand the circumstances in which disbursements on a separate account basis are not permitted.
In the Second Proposal, the Commission proposed to define the “ordinary course of business” as the “standard day-to-day operation of the futures commission merchant's business relationship with its separate account customer,” based on the similar definition in CFTC Letter No. 19-17 (“standard day to day operation of the FCM's business relationship with its customer”). Although in both CFTC Letter No. 19-17 and proposed regulation § 1.44(e) the Commission set forth events that it would consider inconsistent with the ordinary course of business, the Commission acknowledges that the Second Proposal's proposed definition of “ordinary course of business” in conjunction with the list of events inconsistent with the ordinary course of business in proposed regulation § 1.44(e) may have resulted in confusion regarding the scope of events that the Commission will consider inconsistent with the ordinary course of business for purposes of regulation § 1.44(a).
As discussed above in connection with SIFMA-AMG's comment related to the definition of “ordinary course of business” in regulation § 1.44(a), the Commission is modifying the proposed definition of “ordinary course of business” in regulation § 1.44(a) to make clear that regulation § 1.44(e) contains the complete list of events that, for purposes of regulation § 1.44, would cause a separate account customer or an FCM providing separate account treatment to fall outside the ordinary course of business, such that the FCM would need to cease providing disbursements on a separate account basis for one or more customers. Therefore, only the events specifically enumerated in regulation § 1.44(e) would place a separate account customer or an FCM providing separate account treatment outside the ordinary course of business, as defined in regulation § 1.44(a).
ICE, in its comment letter, stated that it did not object to the list of events that would be inconsistent with the ordinary course of business in proposed regulation § 1.44(e).
The Commission did not receive any other comments directly related to proposed regulation § 1.44(e).
The Commission proposed regulation § 1.44(f) to require that each separate account must be on a one business day margin call, subject to certain requirements designed to further define what constitutes a one business day margin call. Providing for a one business day margin call, as defined in this regulation § 1.44(f), ensures that margin shortfalls are timely corrected, and that a customer's inability to meet a margin call is timely identified. However, in certain circumstances, it may be impracticable for payments to be received on a same-day basis due to the mechanics of international payment systems (
Specifically, the Commission understands that, although margin calls made in the morning in the U.S. Eastern Time Zone (ET) are typically capable of being met on a same-day basis when margin is paid in United States dollars (USD) and CAD, the operation of time zones and banking conventions in other jurisdictions may necessitate additional time when margin is paid in other currencies. For example, the Commission understands, based on discussions with market participants, that margin paid in Japanese yen (JPY) and certain other currencies is typically received two business days after a margin call is issued, and margin paid in British pounds (GBP), euros (EUR), and certain other non-USD/CAD/JPY currencies is typically received one business day after a margin call is issued.
In connection with proposed regulation § 1.44(f), the Commission requested comment (as Question 6) regarding whether, in light of changes made in the Second Proposal relative to the First Proposal, the regulatory framework set forth in proposed regulation § 1.44(f) appropriately balances practicability and burden with risk management, as well as: (i) if not, what alternative approach should be taken; and (ii) how such an alternative approach would better balance practicability and burden with risk management. As part of this request, the Commission requested comment on whether the standard of timeliness for a one business day margin call set forth in proposed regulation § 1.44(f) presented practicability challenges and, if so, what those challenges would be, and how the proposed standard of timeliness could be improved. The Commission considers the comments received in response to the margin payment timing requirements set forth in proposed regulation § 1.44(f)(1)-(3), and other provisions of proposed regulation § 1.44(f) that modify those requirements in certain circumstances, to be generally responsive to this question. The Commission discusses these comments below.
As proposed, regulation § 1.44(f)(1) provides that, except as explicitly provided in regulation § 1.44(f), if, as a result of market movements or position changes on the previous business day, a separate account is undermargined (
In light of challenges to same-day settlement posed by margining in certain currencies, as described above, and in recognition of the particular banking conventions around payments in other currencies, the Commission proposed regulation § 1.44(f)(2) to provide that payment of margin in certain currencies listed in proposed Appendix A to part 1 shall be considered in compliance with the requirements of regulation § 1.44(f) provided they are received by the applicable FCM no later than the end of the second business day after the day on which the margin call is issued.
The Commission also proposed regulation § 1.44(f)(3), which provides that payment of margin in fiat currencies other than USD, CAD, or the currencies listed in proposed Appendix A to part 1 shall be considered in compliance with the requirements of regulation § 1.44(f) if received by the applicable FCM no later than the end of the business day after the business day on which the margin call was issued.
In the Commission's view, a “one business day margin call” should be defined beyond the term itself, in light of the effect of time zones and international banking conventions that may cause a customer to be unable to meet a call for margin in certain currencies on the day the margin call is issued. Although FCMs may ensure that margin calls are generally met within one business day, for purposes of separate account treatment, the Commission wishes to ensure that such margin calls are (subject to specified exceptions) always met on a one business day basis. The Commission also notes that, with respect to the calculation of balances in customers' accounts and the undermargined amount which the FCM must include in its residual interest and LSOC compliance calculations, such figures would be calculated on a separate account basis, as discussed herein.
The Commission received several comments with respect to the margin payment timing framework for separate accounts set forth in proposed regulation § 1.44(f)(1)-(3).
As discussed above in connection with regulation § 1.44(a), the JAC contended that the Commission's proposed definition of the term “undermargined amount” would be inconsistent with existing industry practice and the guidance for calculating a margin call in the JAC Margins Handbook. As with respect to other provisions of proposed regulation § 1.44 that use or otherwise rely on the term “undermargined amount,” the JAC contended that the margin call required under proposed regulation § 1.44(f)(1) would be similarly inconsistent with industry practice and JAC guidance.
As discussed above in connection with regulation § 1.44(a), the Commission is modifying the definition of “undermargined amount” to remove the language that the Commission believes created the identified inconsistency and confirm that the Commission considers either of the Net Liquidating Value or Total Equity methods set forth in the JAC Margins Handbook to be consistent with the definition of “undermargined amount” that the Commission is adopting.
SIFMA-AMG urged the Commission to rescind the one business day margin call standard set forth in proposed regulation § 1.44(f)(1)-(3).
ICE, in its comment letter, noted it did not object to the proposed one business day margin call standard as it would apply to FCMs.
The Commission proposed regulation § 1.44(f), particularly the margin payment timing framework set forth in regulation § 1.44(f)(1)-(3), to more clearly define the concept of a “one business day margin call,” as that term is used in CFTC Letter No. 19-17. CFTC Letter No. 19-17 provided, among other conditions for separate account treatment, that: (i) each separate account must be on a one business day margin call; (ii) situations of administrative error or operational constraints which prevent the call from being met within a one-day period will not be considered a violation of such condition; and (iii) in no case can customers and FCMs contractually arrange for longer than a one business day period for a margin call to be met. The Commission notes that the no-action conditions of CFTC Letter No. 19-17 would thus appear to unambiguously provide that a margin call in a separate account must be met within one business day, but do not explicitly address certain practical challenges in applying such a standard, such as how an FCM shall make, and a customer shall meet, a call for margin paid in a currency that an FCM may be unable to practicably receive on the same (or in some cases next) business day. Although SIFMA-AMG appears to interpret this silence as promoting operational flexibility, the Commission believes it may confuse FCMs as to their obligations with respect to the margining of separate accounts, and may result in interpretations that are inconsistent with the Commission's customer funds protection and risk management goals in providing for the separate treatment of accounts.
Furthermore, although regulation § 1.44(f)(1)-(3) require a margin call to be met on a one business day basis, as set forth in regulation § 1.44(f)(1)-(3), regardless of the time the call is issued, the Commission did not prescribe a time by which a margin call must be issued, recognizing that there may be legitimate operational reasons as to why an FCM may need to issue margin calls to different separate account customers at different times. The margin call contemplated by regulation § 1.44(f)(1)-(3) is based on market movements or changes in positions on the previous business day, not as of the day of the call itself.
Accordingly, the Commission is adopting regulation § 1.44(f)(1)-(3) as proposed.
The occurrence of a foreign holiday during which banks are closed may also create difficulties in the payment of margin in a fiat currency other than USD. Therefore, the Commission proposed regulation § 1.44(f)(4), which, as proposed, states that the relevant deadline for payment of margin in fiat currencies other than USD may be extended by up to one additional business day and still be considered in compliance with the requirements of
The Commission designed regulation § 1.44(f)(4) to provide FCMs with a level of discretion in how they manage risk by allowing an FCM to
In the Second Proposal, with respect to proposed regulation § 1.44(f)(4), the Commission requested comment (as Question 7) regarding whether commenters believe it will be impracticable to comply with proposed regulation § 1.44(f)(4), as that section pertains to payment of margin in EUR, including examples of operational or other challenges that would result in such impracticability. To the extent commenters have such practicability concerns, the Commission requested comment regarding how, in the alternative, the Commission should seek to achieve its goal of preventing evasion of the one business day margin call standard, in light of differing banking holidays within the national jurisdictions that comprise the Eurozone. The Commission considers the comments received in response to proposed regulation § 1.44(f)(4) to be responsive to this question.
With respect to proposed regulation § 1.44(f)'s provisions regarding payment of margin in connection with Eurozone holidays, FIA stated it does not believe motives of leveraging banking holidays in a multiplicity of jurisdictions to circumvent margin payment timing requirements are practicable or can be fairly ascribed to the institutional asset owners and money managers whom, according to FIA, comprise the predominant part of the group of customers who rely on separate account margining.
FIA noted, for example, that where a European state pension fund contracts with two unaffiliated institutional money managers based in France (
Furthermore, FIA asserted, FCMs would incur operational risk in having to track the Eurozone holiday preferences of hundreds or thousands of separate accounts, and FCMs will need to deploy new margin day counting systems and protocols, including new coding for automated systems.
Additionally, with respect to proposed regulation § 1.44(f)(4)'s provision for one additional business day to meet a margin call in non-USD fiat currency to account for non-U.S. banking holidays, FIA noted that a growing number of FCM institutional clients, managers, and custodians are based in jurisdictions where there may be consecutive holidays.
SIFMA-AMG asserted it would be impractical for FCMs to comply with proposed regulation § 1.44(f), and further asserted that there does not appear to be data or analysis to support the Commission's position.
SIFMA-AMG argued that requiring clients posting cash margin in EUR to choose a country in the Eurozone and follow its holiday schedule would, in the event different managers for the same client choose different Eurozone countries, require the overhaul of agreements and burden FCMs with additional monitoring responsibilities.
SIFMA-AMG stated that the base currency, custodian, and overall global nature of investing complicate efforts to pre-fund ahead of known holidays.
SIFMA-AMG stated that, when a global holiday approaches, firms are asked by FCMs to prefund anticipated, expected initial and/or variation margin, resulting in overcollateralization.
Additionally, SIFMA-AMG stated the Commission's Second Proposal does not consider the product and foreign currency associated with a particular trade, noting that a client may always be behind on margin due to the client's or fund's location, the client custodian, the product traded, and the clearinghouse.
SIFMA-AMG requested that, to the extent the Commission is considering the deadline for payment of margin in non-USD fiat currencies may be extended by up to one additional business day and still be considered in compliance with proposed regulation § 1.44(f) if payment is delayed due to a banking holiday in the jurisdiction of issue of the currency, the Commission confirm that initiating a transfer on the same day would suffice to meet the requirement.
SIFMA-AMG contended FCMs should have discretion to consider a deposit as pending in a customer's account, consistent with JAC Regulatory Alert #14-03.
In MFA's comment letter, MFA opined that the manner in which the Second Proposal defined “business day” provided appropriate extensions of time for circumstances in which U.S. markets are open, but the day is a holiday in a non-U.S. jurisdiction.
The Commission is adopting regulation § 1.44(f)(4) with modifications in light of comments received.
Specifically, final regulation § 1.44(f)(4) provides, in its first sentence, “The relevant deadline for payment of margin in fiat currencies other than U.S. Dollars may be extended to the next business day following any banking holiday in the jurisdiction of issue of the currency, and still be considered in compliance with the requirements of this paragraph (f) if payment is delayed due to such banking holiday.” Accordingly, final regulation § 1.44(f)(4) provides an extension to meet margin calls in non-USD fiat currency during consecutive holidays.
Furthermore, in final regulation § 1.44(f)(4), the Commission eliminates the proposed provision regarding payments in EUR that a would have
The Commission views the one business day margin call standard set forth in regulation § 1.44(f) as a fundamental measure for mitigating the risk to an FCM and its omnibus customer accounts for futures, Cleared Swaps, or foreign futures and foreign options, as it limits the time in which a customer's separate account may be undermargined. However, noting that, in codifying the no-action position of CFTC Letter No. 19-17, the Commission does not seek to disrupt established margining practices, the Commission has considered, and finds persuasive, comments submitted by FIA and SIFMA-AMG with respect to the anticipated challenges associated with implementing regulation § 1.44(f)(4) as proposed, including the expected difficulties associated with implementing and administering new operational systems and renegotiating customer agreements. The Commission also finds persuasive information submitted by commenters regarding steps FCMs take currently to ensure customer accounts will not be undermargined during non-U.S. banking holidays, including instances in which there are consecutive non-U.S. banking holidays. Furthermore, both FIA and SIFMA-AMG disputed that firms leverage banking holidays (or that they practicably could) to gain a benefit with respect to required margin, and the Commission did not receive any comments indicating that such leveraging occurs, or that it is a substantial risk.
In CFTC Letter No. 19-17, staff stated that a failure to deposit, maintain, or pay margin or option premium due to administrative errors or operational constraints would not constitute a failure to timely deposit or maintain initial or variation margin that would place a customer out of the ordinary course of business. This provision was intended to prevent a clearing FCM from being excluded from relying on the no-action position as a result of one-off exceptions, such as mis-entered data, a flawed software update, or an unusual and unexpected information technology outage (
The Commission proposed regulation § 1.44(f)(5), which, as proposed, provides that a failure with respect to a specific separate account to deposit, maintain, or pay margin or option premium that was called pursuant to regulation § 1.44(f)(1), due to unusual administrative error or operational constraints that a separate account customer or investment manager acting diligently and in good faith could not have reasonably foreseen, does not constitute a failure to comply with the requirements of regulation § 1.44(f). As proposed, regulation § 1.44(f)(4) also provides that, for such purposes, an FCM's determination that the failure to deposit, maintain, or pay margin or option premium is due to such administrative error or operational constraints must be based on the FCM's reasonable belief in light of information known to the FCM at the time the FCM learns of the relevant administrative error or operational constraint.
FIA contended that proposed regulation § 1.44(f)(5) results in a proposal that is unnecessarily complex, disruptive of existing market practice, and an inappropriate and unjustified departure from the conditions of CFTC Letter No. 19-17.
Specifically, FIA contended that, by reformulating CFTC Letter No. 19-17's standard for situations of administrative error or operational constraints to require that such situations be “unusual,” and by requiring FCMs to, in effect, document each determination of failure to settle based on administrative error or operational constraints in light of whether the separate account customer or investment manager acting diligently and in good faith could have reasonably foreseen the error or constraints giving rise to the settlement failure, the Commission has made such standard unworkable.
Additionally, FIA noted, FCMs have invested significantly in renovating operational and compliance systems in order to implement the conditions of CFTC Letter No. 19-17.
SIFMA-AMG similarly contended that proposed regulation § 1.44(f)(5) would establish a standard that is subjective and ambiguous and does not appropriately balance practicability and burden with risk management.
MFA similarly argued that the Commission should effectively revert proposed regulation § 1.44(f)(5) to the original language of the corresponding condition in CFTC Letter No. 19-17 regarding instances when administrative error or operational constraints do not result in a non-ordinary course of business event.
MFA opined that the Second Proposal revises the conditions of CFTC Letter No. 19-17 to narrow them significantly and render them all but unusable. Specifically, MFA contended that the term “unusual” is subjective, and that, with the benefit of hindsight, any administrative error or operational constraint could be argued to have been reasonably foreseen.
MFA expressed concern that proposed regulation § 1.44(f)(5) would impede an FCM from exercising reasonable risk management practices and would require the FCM to undergo a complex and time-consuming analysis before determining whether to provide some form of grace period to the underlying customer.
The Commission proposed regulation § 1.44(f)(5) to provide that a single missed margin payment would not result in an FCM being required to suspend disbursements on a separate account basis for a customer, where the missed payment is the result of an unexpected, unusual administrative error or operational constraint. As proposed, regulation § 1.44(f)(5) reflects the Commission's belief that providing such an exception for
The Commission recognizes that there could be a wide variety of situations that may constitute administrative error or operational constraints for purposes of regulation § 1.44(f)(5), and, as discussed further below, that, at the time an FCM learns of such administrative error or operational constraint, a well-run FCM, may be required to act expeditiously based on limited information concerning such events, and in a manner consistent with its own risk management processes and procedures. The Commission accordingly is not prescribing the form or manner in which an FCM must document determinations of administrative error or operational constraints, much less that such determination be made following an exhaustive analysis. For the same reason, the Commission is not prescribing specific procedures or lines of escalation an FCM must implement in order to make a determination of administrative error or operational constraint in compliance with regulation § 1.44(f)(5).
Moreover, a client's or asset manager's arrangements for paying margin are not necessarily static. Where an administrative error or operational constraint prevents the prompt payment of margin, the FCM may be able to work with the client or asset manager so that steps are taken to mitigate the likelihood of, or prevent, the recurrence of, the circumstances that led to that result.
As discussed above, FIA, SIFMA-AMG, and MFA variously commented that proposed regulation § 1.44(f)(5) uses subjective and ambiguous terms; in particular, the requirement that an administrative error or operational constraint be “unusual.” The corresponding condition in CFTC Letter No. 19-17, provides an exception to the one business day margin call condition for margin payments that are untimely due to administrative error or operational constraint, but does not contain an express limiting principle with respect to the nature of the administrative errors or operational constraints that would be within its scope.
The Commission agrees with commenters that the “unusual” standard could be read to be subjective and ambiguous, and does not appropriately balance practicability and burden with risk management. As such, the Commission is declining to retain in final regulation § 1.44(f)(5) the proposed requirement that an administrative error or operational constraint be unusual. The Commission is also persuaded by commenters' assertions that the requirement that the relevant unusual administrative error or operational constraint be one that a “separate account customer or asset manager acting diligently and in good faith could not have reasonably foreseen” may prove unworkable and may ultimately introduce unnecessary delay and complexity to an FCM's determination of the occurrence of an unusual administrative error or operational constraint.
Accordingly, in adopting regulation § 1.44(f)(5), the Commission is eliminating the requirement that an administrative error or operational constraint be “unusual” or one “that a separate account customer or asset manager acting diligently and in good faith could not have reasonably foreseen.” The Commission is otherwise adopting regulation § 1.44(f)(5) as proposed, with a change for internal consistency.
Although not directly related to proposed regulation § 1.44(f)(5), ICE suggested that the Commission revise regulation § 1.56, which prohibits an FCM from representing that it will not call for or collect margin, to make conforming changes to facilitate separate account treatment.
The Commission appreciates ICE's comment. The Commission noted in the Second Proposal that it seeks in this rulemaking only to directly apply the Margin Adequacy Requirement encompassed by regulation § 39.13(g)(8)(iii) to all FCMs and to enact a narrow codification of the no-action position in CFTC Letter No. 19-17 as applicable to all FCMs, and that it considers amendments to regulation § 1.56 as outside the scope of this rulemaking. The Commission believes regulation § 1.56's prohibition of guarantees against loss with respect to “any commodity interest in
The Commission additionally notes that the requirement that an FCM provide separate account customers with a disclosure that under part 190 of the Commission's regulations that all separate accounts of a separate account customer will be combined in the event of an FCM bankruptcy, an original condition of the no-action position proposed as regulation § 1.44(h)(3), was included as a no-action condition due to the fact that it would not possible to limit the losses in one separate account from affecting another separate account of the separate account customer in a default scenario.
The Commission proposed regulation § 1.44(f)(6) to make clear that it is establishing a maximum period in which a margin call must be met for purposes of regulation § 1.44, rather than establishing a minimum time an FCM must allow. As proposed, regulation § 1.44(f)(6) provides that an FCM would not be in compliance with the requirements of proposed regulation § 1.44(f) if it contractually agrees to provide separate account customers with periods of time to meet margin calls that extend beyond the time periods specified in proposed regulation § 1.44(f)(1)-(5),
SIFMA-AMG urged the Commission to consider permitting FCMs to continue having discretion to agree on a limited grace period, based on their own credit assessment and consistent with their risk management programs.
SIFMA-AMG asserted that contractual grace periods can manifest in scenarios other than separate account treatment, depending on a fund's structure.
SIFMA-AMG contended that an FCM's inability to rely on the return of excess margin due to “foot faults” at other managers could cause further downstream failures and inadvertent consequences.
SIFMA-AMG also asserted that certain sub-advised funds or separate account clients are not able to hold cash as a buffer against this scenario due to cash limits, which, in light of the proposed regulation, would incentivize managers to move sub-advised funds or separate account clients to FCMs where there is no overlap across such sub-
The Commission views grace periods as inconsistent with the risk management goals of separate account treatment, although the Commission reiterates that regulation § 1.44, as proposed, does not prohibit the use of grace periods with respect to the accounts of non-separate account customers. The Margin Adequacy Requirement set forth in regulation § 1.44(b) provides that an FCM shall not allow a customer to withdraw funds from its accounts if such withdrawal would create or exacerbate an undermargining scenario in the customer's account. Regulation § 1.44(c)'s provision for an election for separate account treatment for purposes of the Margin Adequacy Requirement is premised on an FCM's ability to comply with risk management requirements designed to ensure, in part, that margin for separate accounts is paid timely, such that a separate account customer's individual separate accounts do not become undermargined. The Commission's one business day margin call standard is intended to limit the window in which a customer's separate account may be undermargined, thus limiting the risk to the FCM, and the FCM's omnibus customer account for futures, Cleared Swaps, or foreign futures or foreign options.
The Commission notes that while a single “foot fault” with respect to a single manager
As noted above, as proposed, regulation § 1.44(f)(6) provides that an FCM would not be in compliance with the requirements of proposed regulation § 1.44(f) if it contractually agrees to provide separate account customers with periods of time to meet margin calls that extend beyond the time periods specified in proposed regulation § 1.44(f)(1)-(5), or engages in practices that are designed to circumvent proposed regulation § 1.44(f). While the JAC did not directly discuss proposed regulation § 1.44(f)(6) in its comment letter, the JAC noted that if an FCM and customer contract to arrange for margins calls to be met in longer than one business day, then the FCM is not making a bona fide attempt to collect margin within one business day after the occurrence of the event giving rise to the margin deficiency.
The Commission reiterates that regulation § 1.44 is designed to operate without prejudice to the rules or guidance of a DSRO, and that a DSRO may promulgate and maintain rules and guidance with respect to the treatment of customer accounts, including separate accounts, that are more stringent than the regulations promulgated herein.
Although FIA in its comment letter did not directly discuss proposed regulation § 1.44(f)(6), FIA noted that, for the past three years, examiners from CME's Financial and Regulatory Surveillance Department have taken the position in financial and operational audits of FCM clearing members for which CME serves as DSRO that any contractual grace or cure period overlying a customer's failure to satisfy a margin call (which is not qualified by reference to administrative or operational reasons for failure) is a violation of CME Rule 930.K.1, requiring clearing members to maintain full discretion to determine when and under what circumstances positions in any account shall be liquidated.
With respect to FIA's comment, the Commission believes that DSROs, in overseeing FCMs, should make clear the manner in which they will apply their rules, and should not apply such rules in a disparate manner to the entities for which they serve as DSRO.
Accordingly, the Commission is adopting regulation § 1.44(f)(6) as proposed, with a change for internal consistency.
The Commission proposed regulation § 1.44(f)(7) to provide an exception to regulation § 1.44(f)(1) with respect to certain holidays (currently, Columbus Day and Veterans Day) on which some DCMs may be open for trading, but on which banks are closed (and, therefore, payment of margin may be difficult or impracticable). As proposed, regulation § 1.44(f)(7) only applies to an FCM if that FCM intermediates trades on such a DCM, and to a separate account if that
Paragraph (i) deals with margin calls based on undermargined amounts in a separate account resulting from market movements on the business day before the holiday. Such calls may be made on the holiday but would be due by the close of Fedwire on the next business day after the holiday.
Paragraph (ii) deals with margin calls based on undermargined amounts resulting from market movements on the holiday. If, as a result of such market movements, a separate account is undermargined by an amount greater than the amount it was undermargined due to market movements or position changes on the business day before the holiday, the FCM shall issue a margin call for the separate account for at least the incremental undermargined amount, which must be met by the applicable separate account customer no later than the close of the Fedwire Funds Service on the next business day after the holiday.
Although ICE, in its comment letter, stated that it did not object to the Commission's proposed standard for a one business day margin call as it applies to FCMs,
The Commission acknowledges that the same rationale for providing the exception in proposed regulation § 1.44(f)(7) with respect to an FCM trading uncleared swaps on a DCM applies equally in respect of an FCM with swaps cleared at a DCO: on days when DCOs are open, but banks are closed, and margin requirements are set by the DCO, it may be difficult or impracticable for FCMs to pay margin.
Accordingly, the Commission is adopting regulation § 1.44(f)(7) with the modification that its terms shall apply in the case of a holiday where any DCM or other board of trade on which the FCM trades is open for trading, or any DCO that clears the Cleared Swaps of such FCM's Cleared Swaps Customers is open for clearing such swaps, and where a separate account of any of the FCM's separate account customers includes positions traded on such market or cleared at such a DCO. Additionally, as discussed above in connection with regulation § 1.44(a), final regulation § 1.44(f)(7) will also refer to “any designated contract market
Lastly, the Commission proposed regulation § 1.44(f)(8) to set forth a procedure to adjust the scope of currencies in proposed Appendix A to part 1. In proposing regulation § 1.44(f)(8), the Commission sought to ensure a more flexible process whereby members of the public, or the Commission itself, may initiate a process to expand or narrow proposed Appendix A to part 1 as may be required from time to time, subject to public notice and comment. Regulation § 1.44(f)(8), as proposed, provides that any person may submit to the Commission any currency that such person proposes to add to or remove from proposed Appendix A to part 1.
The submission must include a statement that margin payments in the relevant currency cannot, in the case of a proposed addition, or can, in the case of a proposed removal, practicably be received by the FCM issuing a margin call no later than the end of the first business day after the day on which the margin call is issued. The submitter would be required to support such assertion with documentation or other relevant supporting information, as well as any additional information that the Commission requests.
The Commission did not receive any comments with respect to proposed regulation § 1.44(f)(8). Accordingly, the Commission is adopting regulation § 1.44(f)(8) as proposed.
As proposed, regulation § 1.44(g) contains requirements related to calculations for capital, risk management, and segregation of customer funds. These provisions are substantially similar to the corresponding no-action conditions in CFTC Letter No. 19-17, except that they have been reorganized and subjected to minor changes to account for their proposed inclusion in part 1 of the Commission's regulations as well as the proposed introduction of new defined terms. Regulation § 1.44(g) is intended to ensure that an FCM treats separate accounts in a consistent manner for purposes of risk management. Many of its provisions are intended to ensure that an FCM treats each separate account as a distinct account from all other accounts of a separate account customer for purposes of the FCM computing its regulatory capital and segregation of customer funds.
The Industry Letters preceding the issuance of CFTC Letter No. 19-17 provided examples of controls an FCM could apply to mitigate the risk of permitting disbursements on a separate account basis, and discussed restrictions used in customer agreements providing for the application of separate account treatment designed to ensure that a customer's separate accounts are in fact treated separately on a consistent basis in the FCM's management of risk. For instance, as FIA noted in its June 26, 2019 letter, customer agreements that provide for separate account treatment generally require that a separate account be margined separately from any other account maintained for the customer with the FCM, and assets held in one separate account should not ordinarily be used to offset, or (absent default) meet, any obligations of another separate account, including obligations
These controls, and conditions for the consistent treatment of separate accounts in an FCM's books and records for purposes of risk management, constitute a key part of the no-action conditions of CFTC Letter No. 19-17. The Commission considers such requirements as reasonably necessary with respect to this final rule to ensure that FCMs do not manage the risk posed by the separate accounts of certain separate account customers, or the risk posed by certain such separate accounts of such customers, in a disparate manner. Such disparate treatment could reduce the risk-mitigating effects of such requirements with respect to certain separate account customers and their separate accounts, and could impair the ability of an FCM's DSRO or the Commission to ascertain the extent to which certain customers' accounts are in fact being treated separately. Thus, these requirements are reasonably necessary to effectuate section 4d of the CEA.
Accordingly, as proposed, regulation § 1.44(g) would apply to all FCMs certain conditions in CFTC Letter No. 19-17 designed to provide for consistent treatment of separate accounts. As proposed, regulation § 1.44(g) requires a separate account of a customer to be treated separately from other separate accounts of the same customer for purposes of certain existing computational and recordkeeping requirements, which would otherwise be met by treating accounts of the same customer on a combined basis. Because accounts subject to regulation § 1.44 would be risk-managed on a separate basis, the Commission believes it is appropriate for the regulation to provide that FCMs apply these risk-mitigating computational and recordkeeping requirements on a separate account basis. The effect of the requirements in these paragraphs is to augment the FCM's existing obligations under various provisions of regulation § 1.17.
As proposed, regulation § 1.44(g)(1) provides that an FCM's internal risk management policies and procedures shall provide for stress testing as set forth in regulation § 1.73, and credit limits for separate account customers. Regulation § 1.44(g)(1) further provides that such stress testing must be performed, and the credit limits must be applied, both on an individual separate account and on a combined account basis. By conducting stress testing on both an individual separate account and on a combined account basis, an FCM can determine the potential for significant loss in the event of extreme market conditions, and the ability of traders and FCMs to absorb those losses, with respect to each individual separate account of a customer, as well as with respect to all of the customer's separate accounts. Additionally, by applying credit limits on both an individual separate account basis (to address issues that may be specific to the particular strategy governing the separate account) and on a combined account basis (to address issues that may be applicable to the customer's overall portfolio at the FCM), an FCM can better manage the financial risks they incur as a result of carrying positions both for a customer's separate account and for all of the customer's accounts. By better managing the financial risks posed by customers and understanding the extent of customers' risk exposures, FCMs can better mitigate the risk that customers do not maintain sufficient funds to meet applicable initial and maintenance margin requirements. Such FCMs can also anticipate and mitigate the risk of the occurrence of certain of the events detailed in regulation § 1.44(e).
Regulation § 1.44(g)(2), as proposed, provides that an FCM shall calculate the margin requirement for each separate account of a separate account customer independently from such margin requirement for all other separate accounts of the same customer with no offsets or spreads recognized across the separate accounts. An FCM would be required to treat each separate account of a customer independently from all other separate accounts of the same customer for purposes of computing capital charges for undermargined customer accounts in determining its adjusted net capital under regulation § 1.17.
Regulation § 1.44(g)(3), as proposed, provides that an FCM shall, in computing its adjusted net capital for purposes of regulation § 1.17, record each separate account of a separate account customer in the books and records of the FCM as a distinct account of a customer, including recording each separate account with a net debit balance or a deficit as a receivable from the separate account customer, with no offsets between the other separate accounts of the same separate account customer.
Regulations §§ 1.20, 22.2, and 30.7 currently require an FCM to maintain a sufficient amount of customer funds in segregated accounts to meet its total obligations to all futures customers, Cleared Swaps Customers, and 30.7 customers, respectively.
Regulation § 1.44(g)(4), as proposed, provides that an FCM shall, in calculating the amount of its own funds it is required to maintain in segregated accounts to cover deficits or debit ledger balances pursuant to regulations §§ 1.20(i), 22.2(f), or 30.7(f)(2) in any futures customer accounts, Cleared Swaps Customer Accounts, or 30.7 accounts, respectively, include any deficits or debit ledger balances of any separate account as if the accounts are accounts of separate entities. The purpose of regulation § 1.44(g)(4) is to ensure that an FCM that elects to permit separate account customers treats separate accounts as if the accounts are accounts of separate entities for purposes of computing the amount of funds the FCM is required to hold in segregation for futures customers, Cleared Swaps Customers, and 30.7 customers. Specifically, regulation § 1.44(g) would provide that an FCM may not offset a deficit or debit ledger balance in the separate account of a separate account customer by any credit balance in any other separate accounts of the same separate account customer carried by the FCM. Regulation § 1.44(g)
Regulations §§ 1.22, 22.2, and 30.7 currently prohibit an FCM from using, or permitting the use of, the funds of one futures customer, Cleared Swaps Customer, or 30.7 customer, respectively, to purchase, margin, or settle the positions of, or to secure or extend the credit of, any person other than such customer.
The Commission proposed regulation § 1.44(g)(5) to provide that, for purposes of its residual interest and LSOC compliance calculations, as applicable under regulations §§ 1.22(c), 22.2(f)(6), and 30.7(f)(1)(ii), the FCM shall treat the separate accounts of a separate account customer as if the accounts were accounts of separate entities and include the undermargined amount of each separate account, and cover such deficiency with its own funds. The amendments would result in an FCM treating each separate account in a manner comparable with the treatment currently provided to customer accounts that are not separate accounts and are consistent with CFTC Letter No. 19-17.
Regulation § 1.11 requires an FCM that accepts customer funds to margin futures, Cleared Swaps, or foreign futures and foreign options to implement a risk management program designed to monitor and manage the risks associated with the activities of the FCM.
The Commission proposed regulation § 1.44(g)(6) to provide that, in determining its residual interest target for purposes of regulations §§ 1.11(e)(3)(i)(D) and 1.23(c), the FCM must treat separate accounts of separate account customers as accounts of separate entities. In this regard, an FCM is required to consider the potential impact to segregated funds and to the FCM's targeted residual interest resulting from one or more separate accounts of a separate account customer that are undermargined, or that contain deficits or debit ledger balances, without taking into consideration the funds in excess of the margin requirements maintained in other separate accounts of the separate account customer.
Currently, Commission regulations require an FCM to maintain its own capital, or residual interest, in customer segregated accounts in an amount equal to or greater than its customers' aggregate undermargined accounts.
Citing proposed regulation § 1.44(g)(5)'s requirement that an FCM, for purposes of its residual interest and LSOC compliance calculations, must “treat the separate accounts of a separate account customer as if the accounts were accounts of separate entities and include the undermargined amount of each separate account, and cover such undermargined amount with its own funds,” the JAC reiterated its comment that the definition of “undermargined amount” in proposed regulation § 1.44(a) defines the undermargined amount differently than how the term is currently defined in the JAC Margins Handbook and has been applied for purposes of an FCM's compliance with regulations §§ 1.22(c), 22.2(f)(6), and 30.7(f)(1)(ii).
As discussed above in connection with regulation § 1.44(a), the Commission is adopting its proposed definition of “undermargined amount”
Additionally, recalling its comment with respect to pending receipts, the JAC noted it was unclear whether pending non-USD receipts could be considered as received under proposed regulation § 1.44(g)(5) based on the definition of “undermargined amount” in proposed regulation § 1.44(a).
Consistent with its discussion of the JAC's and FIA's comments with respect to treatment of pending non-USD transfers in connection with amendments to regulation § 1.17, the Commission confirms that the final rule would not preclude an FCM from treating as received pending non-USD transfers, consistent with the conditions in the JAC guidance discussed above, for purposes of complying with regulation § 1.44(g)(5).
ICE noted that it generally supports the risk management requirements for separate accounts set forth in proposed regulation § 1.44(g).
The Commission did not receive any other comments regarding proposed regulation § 1.44(g). Accordingly, the Commission is adopting regulation § 1.44(g) as proposed.
As proposed, regulation § 1.44(h) contains requirements related to information and disclosures. As with the provisions in regulation § 1.44(g), these provisions are substantially similar to their corresponding no-action conditions in CFTC Letter No. 19-17, except that they have been reorganized and subject to minor changes to account for their proposed inclusion in part 1 as well as the proposed introduction of new defined terms. The Commission believes that regulation § 1.44(h) is reasonably necessary to protect customer funds and mitigate systemic risk, and to effectuate section 4d of the CEA, because it establishes requirements designed to ensure that FCMs applying separate account treatment have the customer information necessary to apply such treatment consistent with the risk mitigating requirements of regulation § 1.44 and, with respect to FCMs that choose to apply separate account treatment, it establishes requirements designed to inform customers of certain potential risks associated with such treatment.
As proposed, regulation § 1.44(h)(1) provides that an FCM shall obtain from each separate account customer or, as applicable, the manager of a separate account, information sufficient for the FCM to: (i) assess the value of the assets dedicated to such separate account; and (ii) identify the direct or indirect parent company of the separate account customer, as applicable, if such customer has a direct or indirect parent company.
The Commission did not receive any comments with respect to proposed regulation § 1.44(h)(1), and accordingly is adopting that provision as proposed.
As proposed, regulation § 1.44(h)(2) provides that, where a separate account customer has appointed a third-party as the primary contact to the FCM, the FCM must obtain and maintain current contact information of an authorized representative at the customer and take reasonable steps to verify that such contact information is and remains accurate, and that the person is in fact an authorized representative of the customer. In many cases, an asset manager acts under a power of attorney on behalf of a customer, and the FCM has little direct contact with the customer. Regulation § 1.44(h)(2) is designed to ensure that FCMs have a reliable means of contacting separate account customers directly if the asset manager fails to ensure prompt payment on behalf of the customer.
The Commission did not receive any comments with respect to proposed regulation § 1.44(h)(2), and accordingly is adopting that provision as proposed.
Regulation § 1.44 will not affect the Commission's bankruptcy rules under part 190 of its regulations or any rights of a customer or FCM in bankruptcy thereunder. In the event that an FCM electing separate account treatment experiences a bankruptcy, the accounts of a customer in each account class will be consolidated, and accounts of the same customer treated separately for purposes of regulation § 1.44 will not be treated separately in bankruptcy. To make this limitation clear to customers and FCMs, the Commission proposed regulation § 1.44(h)(3), which provides that an FCM must provide each separate account customer with a disclosure that, pursuant to part 190 of the Commission's regulations, all separate accounts of the customer in each account class will be combined in the event of the FCM's bankruptcy. As proposed, regulation § 1.44(h)(3) provides that the disclosure statement must be delivered directly to the customer via electronic means, in writing or in such other manner as the FCM customarily delivers disclosures pursuant to applicable Commission regulations, and as permissible under the FCM's customer documentation. Furthermore, the FCM must maintain documentation demonstrating that the disclosure statement required by regulation § 1.44(h)(3) was delivered directly to the customer. The FCM must also include the disclosure statement required by regulation § 1.44(h)(3) on its website or within its Disclosure Document required by regulation § 1.55(i).
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In its comment letter, FIA requested that the Commission clarify that any FCM that has already provided the disclosure specified in proposed regulation § 1.44(h)(3) pursuant to the identical requirement of CFTC Letter No. 19-17 shall be deemed to have complied with regulation § 1.44(h)(3).
The Commission is adopting regulation § 1.44(h)(3) as proposed. However, the Commission recognizes that regulation § 1.44(h)(3) is virtually identical to a corresponding condition in CFTC Letter No. 19-17,
As proposed, regulation § 1.44(h)(4) provides that an FCM that has made an election pursuant to regulation § 1.44(d) shall disclose in the Disclosure Document required by regulation § 1.55(i) that it permits the separate treatment of accounts for the same customer under the requirements of proposed regulation § 1.44 and that, in the event that separate account treatment for some customers were to contribute to a loss that exceeds the FCM's ability to cover, that loss may affect the segregated funds of all of the FCM's customers in one or more account classes. Regulation § 1.55 was adopted to “advise new customers of the substantial risk of loss inherent in trading commodity futures.”
The Commission believes that the application of separate account treatment for some customers of an FCM, is “material to the . . . decision to entrust . . . funds to and otherwise do business with the [FCM]” with respect to the customers of such FCM generally because, in the event that separate account treatment for some customers were to contribute to a loss that exceeds the FCM's ability to cover, that loss might affect the segregated funds of all of the FCM's customers in one or more account classes.
In its comment letter, FIA contended that the Commission's proposed firm-specific disclosure for regulation § 1.55(i) under proposed regulation § 1.44(h)(4) is confusing and misleading.
The Commission notes that, although separate account margining may reduce risk in the sense that, generally, an FCM will hold more collateral with respect to the portfolio of a separate account customer, separate account margining is not risk-free. In adopting a Margin Adequacy Requirement applicable to all FCMs similar to that presently in regulation 39.13(g)(8)(iii), the Commission implements a regulation designed to guard against the possibility that an FCM will permit a withdrawal of customer funds that will lead to the customer's account becoming undermargined. Regulation § 1.44 operates to permit the customer's separate accounts to be treated as accounts of separate legal entities for purposes of the Margin Adequacy Requirement, provided the FCM complies with specified requirements for the treatment of separate accounts. Those requirements (including those that would result in the FCM holding a greater amount of margin than it would if it did not engage in separate account treatment) are designed to mitigate the potential risk posed by the treatment of one customer's separate account as the account of a separate legal entity without reference to other separate
Although the Commission believes FCMs have successfully complied with the no-action conditions of CFTC Letter No. 19-17, where ensuring margin adequacy is critical to protecting customer funds and mitigating risk to an FCM and the broader financial system, FCMs that engage in separate account treatment comply with margin adequacy in a materially different manner than FCMs that do not engage in separate account treatment, and are subject to additional requirements. The failure to comply with such requirements could contribute to a loss that the FCM is unable to cover. In light of considerations of protection of customer funds, and the purpose of regulation § 1.55(i) to provide to customers “all information . . . that would be material to the customer's decision to entrust such funds to and otherwise do business with” the FCM, the Commission believes it is appropriate for FCMs to apprise customers, whether separate account customers or otherwise, of such risk of loss resulting from the FCM's separate treatment of accounts.
Additionally, as proposed, regulation § 1.44(h)(4)(i) provides that an FCM that applies separate account treatment pursuant to proposed regulation § 1.44 must apply such treatment in a consistent manner over time, and that if the election pursuant to proposed regulation § 1.44(d) for a separate account customer is revoked, such election may not be reinstated during the 30 days following such revocation. The Commission proposed this 30-day period to prevent the possibility that, as discussed below, an FCM could toggle its separate account treatment election for purposes other than serving customers' bona fide commercial purposes.
Proposed regulation § 1.44(h)(4)(i) is intended to ensure that FCMs employ separate account treatment in a way that is consistent with the customer protection and FCM risk management provisions of the CEA and Commission regulations. The Commission recognizes that, although bona fide business or risk management purposes may at times warrant application or cessation of separate account treatment, FCMs should not apply or cease separate account treatment for reasons, or in a manner, that would contravene the customer protection and risk mitigation purposes of the CEA and Commission regulations. For instance, an FCM should not switch back and forth between separate and combined treatment for customer accounts to achieve preferable margining outcomes or offset margin shortfalls in particular accounts. The period of 30 days was chosen to balance this goal with a recognition that, after a sufficient period, the relevant circumstances for a particular customer may change for reasons other than strategic switching. The Commission recognizes that there are a wide variety of circumstances that may indicate inconsistent application of separate account treatment.
With respect to the 30-day toll on reinstatement of separate account disbursements in proposed regulation § 1.44(h)(4)(i), FIA asserted that it is not aware that any FCM has ever “toggled” separate account treatment for any customer, and further asserted the tolling period could have negative unintended consequences for customers and overall market liquidity.
SIFMA-AMG similarly commented that its members are not aware of instances in which an FCM might “toggle” separate account treatment, noting that, in addition to significant regulatory obligations intended to protect customers, including stringent risk management provisions, FCMs who try to “game” a system to maintain separate account status would lose the trust necessary to maintain these competitive, longstanding commercial relationships.
For the avoidance of doubt, the Commission confirms that the proposed 30-day toll on the reinstatement of separate account
An event that is outside the ordinary course of business would mean that the customer would, at least for a time, not be able to obtain disbursements on a separate account basis, pursuant to regulation § 1.44(c). During that time, the FCM would still be subject to the requirements attendant upon separate account treatment of a customer's account, including,
By contrast, if an FCM must cease providing disbursements to a customer on a separate account basis because the customer's account is no longer in the “ordinary course of business,” the FCM may permit a resumption of disbursements on a separate account basis for the separate account customer as soon as the requirements of regulation § 1.44(e)(4), regarding the
As discussed above, FIA and SIFMA-AMG stated in their comments that they are not aware that any FCM has ever attempted to selectively use separate account treatment to obtain an illegitimate economic advantage. The Commission does not assume that establishes that there is no possibility of separate account treatment being used in such manner, and further submits that, if such strategic use of separate account treatment is uncommon, then a toll on resumption of separate account treatment following a revocation of an election for separate account treatment should not represent a significant burden for FCMs or customers. At the same time, the Commission is not aware of any such instances of “strategic switching” occurring under the no-action position, nor has any commenter discussed such issue as a significant risk.
Accordingly, in adopting regulation § 1.44(h)(4), including regulation § 1.44(h)(4)(i), the Commission is eliminating the proposed 30-day tolling period for an FCM to reinstate an election for separate account treatment. The Commission is also adopting regulation § 1.44(h)(4) with a technical change.
The Commission proposed Appendix A to part 1 to set forth those currencies for which payment of margin shall be considered in compliance with the one business day margin call requirements of regulation § 1.44(f) if received no later than the end of the second business day after the day on which the margin call is issued.
The Commission understands that the list of currencies it included in proposed Appendix A to part 1 is consistent with current industry settlement conventions, based on the Commission staff's informational discussions with industry professionals knowledgeable regarding such conventions. The Commission proposed that the initial currencies under proposed Appendix A to part 1 should be Australian dollar (AUD), Chinese renminbi (CNY), Hong Kong dollar (HKD), Hungarian forint (HUF), Israeli new shekel (ILS), Japanese yen (JPY), New Zealand dollar (NZD), Singapore dollar (SGD), Turkish lira (TRY), and South African rand (ZAR).
The Commission did not receive any comments with respect to proposed Appendix A to part 1. Accordingly, the Commission is adopting Appendix A to part 1 as proposed.
Regulation § 1.58(a) currently provides that each FCM that carries a commodity futures or commodity option position for another FCM or a foreign broker on an omnibus basis must collect, and each FCM and foreign broker whose account is so carried, must deposit initial and maintenance margin on positions reportable under regulation § 17.04
In proposing regulation § 1.58(a) in 1981, the “Commission view[ed] with great concern the fact that [a significant] amount of customer funds [was] being held by firms [
By 2011, industry practice had developed such that “[u]nder current industry practice, omnibus accounts report gross positions to their clearing members and clearing members collect margins on a gross basis for positions held in omnibus accounts.”
The Commission also noted that, “under certain circumstances gross margining may also increase the portability of customer positions in an FCM insolvency. That is, a gross margining requirement would increase the likelihood that there will be sufficient collateral on deposit in support of a customer position to enable the DCO to transfer it to a solvent FCM.”
At the time, with its focus on implementing rules for DCOs, the Commission did not amend regulation § 1.58 explicitly to require gross margining for Cleared Swaps in omnibus accounts cleared by a non-clearing FCM through a clearing FCM. However, reviewing the matter presently, the Commission is of the view that the reasons for requiring clearing FCMs to post margin at a DCO on a gross basis apply,
Accordingly, in the Second Proposal, the Commission proposed to amend regulations § 1.58(a) and (b). The Commission proposed to amend regulation § 1.58(a), addressing gross collection of margin generally, to require that “[e]ach futures commission merchant which carries a futures, options, or Cleared Swaps position for another futures commission merchant or for a foreign broker on an omnibus basis must collect, and each futures commission merchant and foreign broker for which an omnibus account is being carried must deposit, initial and maintenance margin on each position so carried” at a level no less than that established for customer accounts by the rules of the applicable contract market or other board of trade” (or, if the board of trade does not specify any such margin level, the level specified by the relevant clearing organization),
Under regulation § 1.58 as proposed to be amended, clearing FCM initial and maintenance margin requirements for separate accounts of the same customer are to be calculated on a gross basis as the margin for accounts of distinct customers.
In its comment letter, the JAC discussed the Commission's proposal to amend regulation § 1.58(a) and (b) to extend the gross margin requirements of domestic futures and options accounts to Cleared Swaps accounts while specifically declining to require gross margining for omnibus accounts of secured 30.7 futures and options positions held by FCMs.
CME also suggested that the Commission require FCMs to collect margin on a gross basis for the foreign futures and foreign options contracts in an omnibus account held by the clearing FCM, noting that CME believes gross margining of customer positions is an important element of risk management in the event of default by an FCM and is essential to the Commission's stated goal in part 190 for porting customers regardless of whether the non-DCO foreign clearing organization collects margin on a gross or net basis.
The Commission has not proposed to require gross margining of secured 30.7 omnibus accounts and does not in this final rulemaking adopt such a requirement, although the Commission may consider proposing to do so in the future. The Commission notes that, with respect to the accounts of foreign futures and foreign options customers, unless an FCM is a direct clearing member of a non-U.S. DCO, porting the positions of the FCM's customers may prove impracticable because, to the extent the FCM clears through a foreign affiliate, the foreign affiliate will likely be subject to foreign insolvency laws.
The Commission proposed to amend regulation § 1.73 to add new paragraph (c) providing that an FCM that is not a clearing member of a DCO but that treats the separate accounts of a customer as accounts of separate entities for purposes of proposed regulation § 1.44 shall comply with regulation § 1.73(a) and (b) with respect to accounts and separate accounts of separate account customers, as if the FCM were a clearing member of a DCO. Regulation § 1.73 currently sets forth risk management requirements only for FCMs that are clearing members of DCOs. The Commission proposed this amendment to ensure that, where non-clearing FCMs are engaging in separate account
In proposing to codify the no-action position in part 1 of the Commission's regulations, the Commission believes it would be prudent from a customer funds protection perspective, and a systemic risk mitigation perspective, to ensure that any FCMs that provide for separate account treatment, whether clearing or non-clearing, do so subject to similarly heightened risk management requirements. The Commission expects that, by applying the heightened risk management requirements applicable to clearing FCMs to all of a non-clearing FCM's accounts for a customer receiving separate treatment, a non-clearing FCM will be better able to detect and prevent the emergence of risks that could lead to operational or financial distress at such customer, reducing the potential risk of a default (or a failure to maintain adequate customer funds) by the non-clearing FCM.
The Commission did not receive any comments with respect to the proposed amendments to regulation § 1.73.
Accordingly, the Commission is adopting the amendments to regulation § 1.73 as proposed.
Regulation § 30.2(b) currently excludes an FCM engaging in foreign futures and foreign option transactions for 30.7 customers from certain provision of the Commission's regulations, including regulation § 1.44, in recognition that such transactions are entered into on contract markets that are subject to regulation by non-U.S. authorities.
The amendment to regulation § 30.2(b) is consistent with the imposition of the Margin Adequacy Requirement on 30.7 accounts and the proposed definition of the term “account” in regulation § 1.44(a), which would include 30.7 accounts in addition to futures accounts and Cleared Swaps Customer Accounts.
The Commission also proposed to remove the exclusion of regulations §§ 1.41-1.43 from applicability to part 30. When regulation § 30.2 was promulgated in 1987 as part of the establishment of part 30,
When the Commission revised its part 190 bankruptcy rules in 2021, the Commission added, as regulations §§ 1.41-1.43, designation of hedging accounts, delivery accounts, and conditions on accepting letters of credit as collateral. Each of these regulations was intended to apply to foreign futures accounts. In this final rule, the Commission amends regulation § 30.2 to conform with that intention.
The Commission did not receive any comments with respect to the proposed amendments to regulation § 30.2.
Accordingly, the Commission is adopting the amendments to regulation § 30.2 as proposed.
Regulation § 39.13(g)(8)(i) requires DCOs to collect customer margin from their clearing members on a gross basis, that is, collect margin “equal to the sum of initial margin amounts that would be required by the [DCO] for each individual customer within that account if each individual customer were a clearing member.”
The Commission also proposed to amend regulation § 39.13(g)(8)(iii) to provide that such paragraph shall apply except as provided for in regulation § 1.44. The Commission proposed this amendment to ensure that the carve-out (represented by regulation § 1.44(c)-(h)) to the Margin Adequacy Requirement (represented by regulation § 1.44(b)) that would apply to all FCMs is also effectuated with respect to the Margin Adequacy Requirement applicable to clearing members through DCOs pursuant to regulation § 39.13(g)(8)(iii).
OCC commented that the Second Proposal makes clear, in defining the conditions under which an FCM can offer separate account treatment, that the Commission intended to make compliance with the requirements for such treatment the responsibility of FCMs, and the responsibility for monitoring such compliance that of the FCM's DSRO rather than any DCO of which it is a member.
With respect to the Margin Adequacy Requirement of regulation § 39.13(g)(8)(iii), which, as proposed, would apply except as provided for in § 1.44, OCC noted that the requirements for determining whether an FCM is operating in compliance with the requirements of regulation § 1.44 would require detailed knowledge of an FCM's operational and risk management practices on an ongoing basis, including, among other information, real-time knowledge of the timing of each such customer's margin posting to the FCM, and information as to the exact cause of any delay in posing margin.
Although both regulation § 1.44(b) and regulation § 39.13(g)(8)(iii) contain a Margin Adequacy Requirement, the former applies directly to FCMs whereas the latter applies to FCMs that are clearing members of DCOs through the operation of DCO rules. Accordingly, a DCO must have in place rules to effectuate the requirements of regulation § 39.13(g)(8)(iii) and must monitor and enforce compliance with those rules, consistent with DCO Core Principle H
In its comment letter, CME agreed with the Commission's proposal to add new regulation § 39.13(g)(8)(i)(E) to clarify that, for purposes of such provision, related to gross margining, each separate account of a separate account customer shall be treated as an account of a separate individual customer.
Additionally, in connection with proposed changes to regulation § 39.13(g)(8)(iii), the Commission requested comment with respect to whether the Commission should remove regulation § 39.13(g)(8)(iii), if the Commission includes the Margin Adequacy Requirement and requirements regarding separate account treatment in part 1 of its regulations as proposed (Question 8). In its comment letter, CME agreed that it would be logical to delete regulation § 39.13(g)(8)(iii) as regulation § 1.44 will address withdrawals from customer accounts at the clearing member.
The Commission appreciates CME's comment and acknowledges that the Margin Adequacy Requirement in regulation § 39.13(g)(8)(iii) is substantially the same as that in regulation § 1.44(b) (albeit applicable to FCMs through the instrumentation of DCO rules). The Commission, however, notes that in requiring DCOs to prevent clearing members from withdrawing margin such that it would lead to undermargining in the customer's account, regulation § 39.13(g)(8)(iii) provides for an additional layer of monitoring and enforcement (in addition to FCMs' DSROs and the Commission), to ensure that the Margin Adequacy Requirement is being met. Considering this substantial oversight benefit and noting the low volume of responses to this question, the Commission has determined to retain regulation § 39.13(g)(8)(iii).
Accordingly, the Commission is adopting the amendments to regulation § 39.13 as proposed.
Section 15(a) of the CEA requires the Commission to “consider the costs and benefits” of its actions before promulgating a regulation under the CEA or issuing certain orders.
By its terms, section 15(a) does not require the Commission to quantify the costs and benefits of a new rule or to determine whether the benefits of the adopted rule outweigh its costs. Nonetheless, the Commission has endeavored to assess the expected costs and benefits of the final rule in quantitative terms, including Paperwork Reduction Act-related costs, where practicable. In situations where the Commission is unable to quantify the costs and benefits, the Commission identifies and considers the costs and benefits of the applicable amendments in qualitative terms. However, the Commission lacks the data necessary to reasonably quantify all of the costs and benefits considered below. In some instances, it is not reasonably feasible to quantify the costs and benefits to FCMs with respect to certain factors, such as market integrity. Additionally, any initial and recurring compliance costs for any particular FCM will depend on its size, existing infrastructure, practices, and cost structures. Notwithstanding these types of limitations, the Commission otherwise identifies and considers the costs and benefits of these final rule amendments in qualitative terms.
In the following consideration of costs and benefits, the Commission first
The Commission notes that this consideration of costs and benefits is based on,
In the Second Proposal, the Commission generally requested comment on all aspects of its cost benefit considerations. The Commission also included a number of questions for the purpose of eliciting cost and benefit estimates from public commenters wherever possible.
The Commission is promulgating new regulations in part 1 of its regulations designed to (1) further ensure that FCMs hold customer funds sufficient to cover the required initial margin for the customer's positions, by prohibiting an FCM from permitting customers to withdraw funds from their accounts with such FCM unless the net liquidating value plus the margin deposits remaining in the customer's account after the withdrawal would be sufficient to meet the customer initial margin requirements with respect to the products or portfolios in the customer's account (
The Commission identifies the costs and benefits of the final amendments relative to the baseline of the regulatory status quo. In particular, the baseline that the Commission considers for the costs and benefits of these final rule amendments is the Commission regulations in effect immediately prior to the adoption of this final rule; specifically, part 1 of the Commission's regulations (where the operative part of the final rule would be codified) and regulation § 39.13(g)(8)(iii) (which contains the Commission's current Margin Adequacy Requirement). In considering the costs and benefits of the final rule against this baseline, the Commission considers the costs and benefits for both clearing FCMs and non-clearing FCMs—the two categories of market participants that will be directly affected by the final rule. To the extent that certain FCMs that are clearing members of DCOs have taken actions in reliance on CFTC Letter No. 19-17, the Commission recognizes the practical implications of those actions on the costs and benefits of the final rule.
Regulation § 39.13(g)(8)(iii) currently provides that DCOs shall establish a Margin Adequacy Requirement for their clearing FCMs with respect to the products that the DCOs clear. Thus, under the status quo baseline, clearing FCMs are, albeit indirectly (through the operation of DCO rules designed to implement regulation § 39.13(g)(8)(iii)), subject to the Margin Adequacy Requirement for futures and Cleared Swaps. They are not, however, subject to the Margin Adequacy Requirement for foreign futures that are not cleared by a DCO.
Immediately prior to the adoption of this final rule, Commission regulations did not, either directly or indirectly, impose a Margin Adequacy Requirement on non-clearing FCMs. Accordingly, non-clearing FCMs had no need to engage in separate account treatment with respect to such a requirement.
Additionally, immediately prior to the adoption of this final rule, the Commission's part 1 regulations did not contain any requirements specifically related to the separate treatment of accounts. As noted above, under the baseline, clearing FCMs are not permitted to engage in separate account treatment with respect to regulation § 39.13(g)(8)(iii)'s Margin Adequacy Requirement, and non-clearing FCMs previously had no need to engage in separate account treatment with respect to the Margin Adequacy Requirement of regulation § 39.13(g)(8)(iii) (because DCO rules addressing that regulation do not apply to non-clearing FCMs). Additionally, a non-clearing FCM was not permitted to treat the accounts of a single customer as accounts of separate entities for purposes of regulatory requirements imposed by the Commission (
As discussed above, the Commission is (a) promulgating new regulations in part 1 of its regulations designed to (1) further ensure that FCMs hold customer funds sufficient to cover the required initial margin for the customer's positions, and (2) permit FCMs to treat the separate accounts of a single customer as accounts of separate entities for purposes of such Margin Adequacy Requirement, subject to requirements designed to mitigate the risk that such separate account treatment could result in or worsen an undermargining scenario; and (b) adopting supporting amendments in parts 1, 22, 30, and 39 to facilitate the Margin Adequacy Requirement and requirements for separate account treatment, namely through changes to definitions, amendment of certain margin calculation requirements, application of certain risk management requirements to non-clearing FCMs engaged in separate account treatment, and amendment of regulation § 39.13(g)(8)(iii)'s Margin Adequacy Requirement to accommodate separate account treatment under the final rule.
Existing regulation § 39.13(g)(8)(iii) establishes a Margin Adequacy Requirement, designed to mitigate the risk that a clearing member fails to hold, from a customer, funds sufficient to cover the required initial margin for the customer's cleared positions, and thereby designed to avoid the risk that a clearing FCM will, whether deliberately or inadvertently, misuse customer funds by using one customer's funds to cover another customer's margin shortfall. DCO Core Principle D, which concerns DCO risk management, imposes a number of duties upon DCOs related to their ability to manage the risks associated with discharging their responsibilities as DCOs, such as measuring credit exposures, limiting exposures to potential default-related losses, setting margin requirements, and establishing risk management models and parameters.
With respect to clearing FCMs, because regulation § 39.13(g)(8)(iii) already results in the application of a Margin Adequacy Requirement to clearing FCMs through DCO rules in the context of futures and Cleared Swaps, the benefits of a Margin Adequacy Requirement in part 1 that applies directly to FCMs will be more limited than the benefits with respect to non-clearing FCMs. However, the Commission believes that, to the extent there are failures in compliance with respect to margin adequacy, final regulation § 1.44(b) will provide an additional avenue (
With respect to non-clearing FCMs, the Margin Adequacy Requirement of final regulation § 1.44(b) will result in similar benefits to those currently experienced with respect to clearing FCMs under regulation § 39.13(g)(8)(iii). Regulation § 39.13(g)(8)(iii) provides that DCOs shall require clearing FCMs to ensure that their customers do not withdraw funds from their accounts unless sufficient funds remain to meet customer initial margin requirements with respect to all products and swap portfolios held in the customers' accounts and cleared by the DCO. This requirement is designed to prevent the undermargining of customer accounts, and thus mitigate the risk of a clearing member default and the consequences that could accrue to the broader financial system.
Section 4d(a)(2) of the CEA and regulation § 1.20(a) require an FCM to separately account for and segregate all money, securities, and property which it has received to margin, guarantee, or secure the trades or contracts of its commodity customers, and section 4d(a)(2) of the CEA and regulation § 1.22(a) prohibit an FCM from using the money, securities, or property of one customer to margin or settle the trades or contracts of another customer.
The Commission believes that regulation § 1.44(b), which will apply a Margin Adequacy Requirement directly to FCMs, both clearing and non-clearing, would further achieve the benefits of serving to protect customer funds, and mitigating systemic risk that could arise from misuse of customer funds, by applying the undermargining avoidance requirements of regulation § 39.13(g)(8)(iii) directly to all FCMs. As noted above, this Margin Adequacy Requirement does not currently apply to non-clearing FCMs. The Commission further believes that the application of such a Margin Adequacy Requirement to all FCMs (and to all three types of customer transactions, including (additionally) foreign futures transactions), through more broadly preventing undermargining situations, is reasonably necessary to effectuate CEA sections 4d and 4(b)(2) and to accomplish the purposes of the CEA (from section 3(b)) of “avoidance of systemic risk” and “protecting all market participants from . . . misuses of customer assets.”
As discussed in section I.B above, there are a number of commercial reasons why an FCM or customer may wish to treat the separate accounts of a single customer as accounts of separate entities. Combination of all accounts of the same customer within the same regulatory account classification for purposes of margining and determining funds available for disbursement may make it challenging for certain customers and their asset managers to achieve certain commercial purposes.
Where FCMs are able to treat the separate accounts of a single customer as accounts of separate entities for purposes of the Margin Adequacy Requirement, customers benefit from being better able to leverage the skills and expertise of asset managers and realize the benefits of a balance of
The Commission believes that, where such separate account treatment is offered, it should be subject to safeguards that mitigate the risk that it will result in the undermargining of customer accounts. By applying regulatory safeguards designed to preserve the goals of the Margin Adequacy Requirement during such treatment, the final rule would achieve the benefit of permitting separate account treatment in a manner that would not contravene the customer funds protection and risk mitigation purposes of the CEA and Commission regulations.
The Commission also believes that several years of successful separate account activity based on the no-action conditions of CFTC Letter No. 19-17 and its superseding letters by DCOs, clearing FCMs, and customers demonstrate that separate account treatment can be successfully applied, subject to certain safeguards.
As discussed above, sections 4d(a)(2) of the CEA and regulations §§ 1.20(a) and 1.22(a) require an FCM to account separately for and segregate futures customer funds and prohibit FCMs from using one customer's funds to cover another customer's margin shortfall
Part 1 of the Commission's regulations contain the principal regulations applicable to the operation of FCMs that support the above-described statutory purposes and requirements. Such regulations include requirements related to financial and other reporting, risk management, treatment of customer funds, and recordkeeping, among others. As noted above, the Commission believes that a Margin Adequacy Requirement, directly applied to all FCMs and combined with separate account treatment, can further effectuate CEA section 4d(a)(2)'s customer fund protection and risk avoidance requirements
The final rule is designed to achieve the benefit of bridging this gap by
(i) inserting a Margin Adequacy Requirement (regulation § 1.44(b)) into part 1 to ensure further that an FCM (whether a clearing or non-clearing FCM) does not permit margin withdrawals that would create or exacerbate an undermargining situation,
(ii) allowing FCMs to treat the separate accounts of a single customer as accounts of separate entities for purposes of the Margin Adequacy Requirement, with the benefits discussed above (regulation § 1.44(c)),
(iii) establishing the manner in which FCMs may elect to engage in separate account treatment for a particular customer, with the benefit of identifying both for the FCM and its supervisory authorities (the Commission and SROs) whether it is engaging in separate account treatment, and, if so, for which customers, with the benefit of facilitating effective regulatory/self-regulatory supervision (regulation § 1.44(d)),
(iv) setting forth financial and operational conditions for customers and FCMs that would identify risk management issues that are sufficiently significant to disqualify a particular separate account customer from receiving (or an FCM with respect to all of its separate account customers from making) disbursements on a separate account basis (regulation § 1.44(e)),
(v) requiring that separate accounts be on a one business day margin call, while setting forth limited circumstances in which failure to actually receive margin on a same-day basis may be excused, with the benefit of limiting the extent of potential undermargining, (regulation § 1.44(f)), and
(vi) establishing requirements designed to ensure that separate account treatment is carried out in a consistent and documented manner, and carrying that treatment through to related FCM capital, customer funds protection, and risk management requirements in part 1 (regulation § 1.44(g)-(h)), with the benefit of further ensuring that the risk management objectives of the Margin Adequacy Requirement continue to be met during separate account treatment.
The revisions to regulations §§ 1.3, 1.17, 1.20, 1.32, 1.58, 1.73, 22.2, 30.2, 30.7, and 39.13(g)(8)(i) are designed to define terms used in regulation § 1.44 and facilitate implementation of provisions in regulation § 1.44 that would affect compliance with financial requirements for FCMs, collection of margin, and FCM risk management. Additionally, a revision to regulation § 39.13(g)(8)(iii) is intended to make clear that regulation § 39.13(g)(8)(iii)'s Margin Adequacy Requirement, applicable directly to DCOs and indirectly to clearing FCMs, and similar in substance to the Margin Adequacy Requirement of regulation § 1.44(b), does not require DCOs to preclude separate account treatment carried out subject to regulation § 1.44.
The Commission believes that final regulation § 1.44(c)-(h), and the final supporting amendments to regulations §§ 1.3, 1.17, 1.20, 1.32, 1.58, 1.73, 22.2, 30.2, 30.7, and 39.13 would benefit both clearing FCMs and non-clearing FCMs, in addition to customers and other market participants, by providing a comprehensive framework that affirms the availability of separate account treatment, and sets forth the manner in which such treatment can be carried out consistent with the customer fund protection and risk avoidance objectives of regulation § 39.13(g)(8)(iii) (as applied via DCO rules, with respect to clearing FCMs) and regulation § 1.44(b)'s Margin Adequacy Requirement (with respect to both clearing FCMs and non-clearing FCMs).
The Commission additionally notes that the allowance of, and requirements for separate account treatment in final regulation § 1.44(c)-(h) are substantially similar to the conditions to the staff no-action position in CFTC Letter No. 19-17. A number of clearing FCMs have adopted some practices based on this no-action position provided by Commission staff. As such, to the extent that some clearing FCMs have relied on the no-action position, the actual costs and benefits of the rule amendments as realized in the market may not be as significant as a comparison of the rule to the regulatory baseline would suggest.
Moreover, if the Commission were to allow the no-action position in CFTC Letter No. 19-17 to expire, and did not adopt the proposed regulation, then clearing FCMs that already engage in separate account treatment consistent with the terms of CFTC Letter No. 19-17 would be required to reverse those
In connection with its discussion of the benefits of the proposed requirements for separate account treatment, the Commission asked as Question 9 what evidence can be provided that customers have been able to achieve better performance by virtue of allowing separate account treatment; and whether there is evidence of under margining due to separate account treatment since CFTC Letter No. 19-17 was issued. Additionally, as Question 10, the Commission asked whether there is evidence of regulatory arbitrage between clearing FCMs and non-clearing FCMs on the grounds that the latter are not currently subject to the Margin Adequacy Requirement. No commenter responded to these questions.
The final rule (i) amends part 1 of the Commission regulations to add a new requirement (regulation § 1.44(b)) for FCMs to hold customer funds sufficient to cover the required initial margin for the customer's positions (the Margin Adequacy Requirement); (ii) amends part 1 to, in the same new section (regulation § 1.44(c)-(h)), permit FCMs, subject to certain requirements and for purposes of the Margin Adequacy Requirement, treat the accounts of a single customer as accounts of separate entities; and (iii) amends existing regulations in parts 1 and 39 to facilitate implementation of the new regulation. The Commission herein discusses the costs related to each such set of amendments with respect to clearing and non-clearing FCMs. There are currently approximately 60 registered FCMs, and of these, the Commission estimates that approximately 40 are clearing FCMs and approximately 20 are non-clearing FCMs.
The Margin Adequacy Requirement of regulation § 1.44(b) requires FCMs to hold customer funds sufficient to cover the required initial margin for customer positions. With respect to clearing FCMs, the Commission estimates that the cost of compliance would be
Prior to this final rule, non-clearing FCMs were not subject to a Margin Adequacy Requirement promulgated by the Commission, and the Commission expects that the costs for a non-clearing FCM to comply could be significant. The Commission expects that compliance with the Margin Adequacy Requirement for a non-clearing FCM may entail many of the same types of costs noted below in connection with compliance with separate account treatment requirements. Such costs could include personnel, operational, and other costs related to updating internal policies and procedures, updating or renegotiating customer documentation, and implementing or configuring internal systems to identify and prevent margin withdrawals that would be inconsistent with the Margin Adequacy Requirement. The Commission expects that the compliance costs for non-clearing FCMs could vary significantly depending on factors such as the FCM's size, customer base, and existing compliance infrastructure and resources. The extent to which non-clearing FCMs need to develop new tools, policies, and procedures may however be reduced, to the extent that such FCMs already voluntarily take steps to avoid distributing funds back to their customers in a manner that would create or exacerbate an undermargined condition for a customer, as a means of managing risks to the FCM.
Moreover, while promoting margin adequacy is a policy goal of many of the regulations promulgated under the CEA, there are potential costs to individual investors of the Margin Adequacy Requirement. In general, tightening the rules concerning margins can reduce the return to investors, and some effects of this type could result from requiring margin adequacy at non-clearing FCMs.
In addition to the Margin Adequacy Requirement of regulation § 1.44(b), the Commission is also adopting in regulation § 1.44(c)-(h) rules to allow FCMs to elect to apply separate account treatment for purposes of the Margin Adequacy Requirement, and requirements for the application of such treatment. The regulation would not require FCMs to apply separate account treatment, and FCMs that do not presently apply separate account treatment, and do not desire to do so in the future, would generally not incur any costs related to the application of such treatment. Furthermore, the Commission believes that an FCM electing separate account treatment will do so because such FCM believes the benefits of doing so will exceed the costs of doing so.
With respect to FCMs that choose to engage in separate account treatment under the final rule, the Commission expects that clearing FCMs and non-clearing FCMs will generally incur the same types of compliance costs, as there are no applicable requirements for separate account treatment under the baseline with respect to either clearing
The first would not create a difference in costs: Gross collection of margin without netting between separate accounts is required by regulation § 1.44(g)(2) and existing regulation § 39.13(g)(8)(i), as clarified by regulation § 39.13(g)(8)(i)(E) for clearing FCMs, and regulation § 1.58(c) creates this requirement for non-clearing FCMs.
The second would create some difference in additional costs: Under current regulation § 1.73, clearing FCMs are required to establish risk-based credit limits, screen orders for compliance with those limits, and monitor adherence to those limits, as well as conduct stress testing of positions that could pose material risk. Non-clearing FCMs are not currently required to do these things. Under regulations §§ 1.44(g)(1) and 1.73(c), they would be required to do so for separate account customers and separate accounts, both on an individual separate account and aggregate basis. As such, there are additional incremental costs faced by non-clearing FCMs that choose separate account treatment.
The costs of the final rule related to application of separate account treatment will likely vary across FCMs depending on the nature of their existing rule and compliance infrastructures, and as such would be difficult to quantify with precision. However, for those FCMs that choose to engage in separate account treatment in a manner consistent with the final rule, the costs of compliance could be significant, and may vary based on factors such as the size and existing compliance resources of a particular FCM, as well as the extent to which the FCM's existing risk management policies and procedures already incorporate risk management measures that overlap with those required under the final rule. FCMs that wish to allow for separate account treatment would likely incur costs in connection with updating their policies and procedures, internal systems, customer documentation and (re-)negotiation of customer agreements to allow for separate account treatment under the conditions codified in the final rule.
In a letter to the Commission staff dated April 1, 2022, FIA noted that, “For many [clearing] FCMs and their customers, the terms and conditions of the no-action position . . . presented significant operational and systems challenges,” as clearing FCMs were required to “(i) adopt new practices for stress testing accounts; (ii) review and possibly change margin-timing expectations for non-US accounts; (iii) undertake legal analysis to clarify interpretive questions; and (iv) revise their segregation calculation and recordkeeping practices,” as well as engage in “time-consuming documentation changes and customer outreach.”
FIA further described these challenges in a letter to the Commission staff dated May 11, 2022, noting that in order to meet the conditions of the no-action position, clearing FCMs were required to review and in some cases amend customer agreements, and identify and implement information technology systems changes.
The Commission anticipates that similar costs would arise for FCMs attempting to meet the requirements of the final rule.
Of the costs that FCMs would likely incur related to application of separate account treatment, some costs would be incurred on a one-time basis (
While the Commission, in connection with its Paperwork Reduction Act assessment below,
In terms of implementation costs relative to the baseline (that does not consider the effects of NAL 19-17), the Commission believes clearing FCMs and non-clearing FCMs will be subject to the same types of costs related to application of separate account treatment.
As discussed above, a number of clearing FCMs have adopted some current practices based not only upon regulation § 39.13(g)(8)(iii)'s existing Margin Adequacy Requirement applicable to clearing FCMs through the rules of such clearing FCMs' DCOs, but also on the no-action position provided by Commission staff in CFTC Letter No. 19-17, and decisions by DCOs to provide relief from their rules adopting a Margin Adequacy Requirement in line with (and subject to the conditions specified in) that staff no-action position. As such, to the extent that clearing FCMs have relied on the no-action position, the actual costs and benefits of the final rule amendments as realized in the market may not be as significant as a comparison of the rule to the regulatory baseline would suggest.
In addition to compliance costs, one other type of costs should be noted: The Commission is of the view that the risk mitigants in final regulation § 1.44(c)-(h) would achieve the benefits of the Margin Adequacy Requirement while permitting separate account treatment. However, there does exist a possibility that, despite these risk mitigants, an undermargin condition could exist, followed by a default by the customer to the FCM, and a consequent default by the FCM upstream (either to a DCO or to a clearing FCM), where the losses due to that default would be greater than they would have been absent separate account treatment.
As Question 11, the Commission asked whether the descriptions of the types of costs that would be incurred by FCMs to implement each of the Margin Adequacy Requirement and Separate Account Treatment under the proposed rules were appropriately comprehensive, and what data can be provided about the magnitude of such costs, either by type or in the aggregate. As Question 12, the Commission requested comment on the extent to which FCMs that are not presently clearing members that rely on the no-action position in CFTC Letter No. 19-17 would, following implementation of the proposed regulation, seek to engage in separate account treatment (requesting that commenters provide data where available). As Question 13, the Commission requested comment regarding whether there are FCMs that chose not to rely on the no-action position in CFTC Letter No. 19-17 due to the conditions required to rely on that position. The Commission further requested comment on how the implementation of those conditions in the Second Proposal could be modified to mitigate the burden of compliance while achieving the goals of mitigating systemic risk and protecting customer funds.
No commenters responded to these questions; however, several commenters submitted comments that dealt with potential costs, generally qualitatively. For example, in commenting on the Commission's definition of “undermargined amount” in proposed regulation § 1.44(a), the JAC asserted that the proposed rule appeared to require FCMs to perform margin calculations differently for compliance with different regulatory reporting requirements (including, potentially, bifurcated treatment for non-separate account customers and separate account customers), which the JAC contended may prove burdensome for FCMs that permit separate account treatment (
In discussing the permissibility under the proposed regulation of certain multi-settlement margining processes, the JAC also noted FCMs may be required to undertake significant work to update their regulatory records, risk programs, margin calculations, and reports for separate account customers and non-separate account customers.
The JAC discussed in its comment letter that FCMs could be subject to significant capital charges for separate accounts in light of the requirement in proposed regulation § 1.17(c)(5)(viii)(B) to require the calculation of current calls used in computing a separate account's undermargined capital charge based on the age of all margin calls in all separate accounts of the separate account customer.
As discussed above, in this final rule, the Commission has eliminated the requirement to look across separate accounts for purposes of regulation § 1.17(c)(2)(i) and regulation § 1.17(c)(5)(viii)(B), and further confirms that the final rule is not intended to preclude treatment of pending non-USD transfers as received (subject to conditions identical to those set forth in JAC guidance) for purposes of regulation § 1.17(c)(5)(viii), among others.
Additionally, FIA asserted that the standard for determining the occurrence of an unusual administrative error or operational constraint that would excuse a margin fail under the one business day margin call standard of regulation § 1.44, set forth in proposed regulation § 1.44(f)(5), introduces subjectivity and complexity into routine determinations that will require material levels of new investment in compliance, risk management, and operations time and resources, for no discernible risk management benefit.
FIA also asserted that proposed regulation § 1.44(h)(4)(i)'s 30-day stay on reinstating disbursements on a separate account basis could have certain negative unintended consequences for customers and market liquidity, if, due to an event outside the ordinary course of business, an FCM were forced to suspend disbursements to customers on a separate account basis (even after the underlying event was resolved).
The Commission considered as an alternative to this final rule codifying the no-action position absent the conditions. This alternative would preserve the benefits of separate account treatment for FCMs and customers. However, as discussed further below, the conditions of the no-action position—codified herein on an FCM-wide basis—are designed to permit separate account treatment only to the extent that such treatment would not contravene the risk mitigation goals of regulation § 39.13 (and the Margin Adequacy Requirement of regulation § 1.44(b)). The Commission believes that codifying the staff no-action position without the conditions would intensify risks for DCOs, FCMs, and customers. For instance, without a requirement to cease disbursements on a separate account basis in cases in which a customer is in financial distress, it is more likely that an undermargining scenario would be exacerbated, and a customer default to the clearing FCM—and potentially a default of the clearing FCM to the DCO—would be more likely. It would also forego applying the benefits of the Margin Adequacy Requirement and specific risk-mitigating requirements for separate account treatment to all FCMs.
Section 15(a) of the CEA requires the Commission to consider the effects of its actions in light of the following five factors:
Section 15(a)(2)(A) of the CEA requires the Commission, before promulgating a regulation or issuing an order, to consider the costs and benefits of the action in light of considerations of protection of market participants and the public. The Commission believes that the amendments adopted herein would strengthen the customer protection and risk mitigation provisions of part 1 applicable to FCMs generally, and, with respect to clearing FCMs, maintain the efficacy of protections for customers and the broader financial system contained in Core Principle D and regulation § 39.13.
The Commission believes that the final rule's Margin Adequacy Requirement will have a salutary effect on the protection of market participants and the public. Section 4d(a)(2) of the CEA and the Commission's implementing regulations under part 1 require FCMs to segregate customer funds to margin trades and prohibit FCMs from using one customer's funds to margin another customer's trades. The final rule is designed to effectuate and support these requirements by implementing requirements for FCMs to limit the potential for losses from defaults and maintain margin sufficient to cover potential exposures in normal market conditions
The Commission also believes the requirements in the final rule for carrying out separate account treatment will provide for separate account treatment in a manner that protects market participants and the public. While, with respect to clearing FCMs subject to the indirect effects of current § 39.13(g)(8)(iii), permitting separate account treatment unavoidably creates some additional risk of a margin deficiency, the conditions of the no-action position outlined in CFTC Letter No. 19-17, and codified herein, as modified and applicable on an FCM-wide basis, are designed to effectuate these customer protection and risk mitigation goals notwithstanding an FCM's application of separate account treatment (and the consequent additional risk). For example, disbursements on a separate account basis are not permitted in certain circumstances outside the ordinary course of business (
Section 15(a)(2)(B) of the CEA requires the Commission to evaluate the costs and benefits of its action in light of efficiency, competitiveness, and financial integrity of futures markets. The Commission believes that the final rule may carry potential implications for the financial integrity of markets, but not for the efficiency or competitiveness of markets, which the Commission believes remain unchanged.
As stated above, the purposes of the Commission's customer funds protection and risk management regulations include not just protection of customer assets, but also mitigation of systemic risk: a customer in default to an FCM may in turn trigger the FCM to default, either to the DCO (if it is a clearing member) or to another FCM that is itself a clearing member, with potentially cascading consequences for the clearing FCM (if applicable) or the DCO and the wider financial system. The Margin Adequacy Requirement of regulation § 1.44(b) advances those purposes directly. The final amendments permitting separate account treatment reflect the Commission's conclusion that the conditions of CFTC Letter No. 19-17, as codified herein, are sufficient and appropriate to guard against such risks for purposes of the Margin Adequacy Requirement.
In CFTC Letter No. 19-17, the Commission staff highlighted market participants' concerns that the Commission should recognize “diverse practices among FCMs and their customers with respect to the handling of separate accounts of the same beneficial owner” as consistent with regulation § 39.13(g)(8)(iii). FIA, in particular, outlined several business cases in which a customer may want to apply separate account treatment, and each of SIFMA-AMG, FIA, and CME outlined controls that clearing FCMs could apply to ensure that, in instances in which separate account treatment is desired, such treatment can be applied in a manner that effectively prevents systemic risk.
Section 15(a)(2)(C) of the CEA requires the Commission to evaluate the costs and benefits of its action in light of price discovery considerations. The Commission believes that the final amendments will not have a significant impact on price discovery.
Section 15(a)(2)(D) of the CEA requires the Commission to evaluate the costs and benefits of its action in light of sound risk management practices. As discussed above, the CEA sets forth requirements providing that an FCM may not use one customer's funds to cover another customer's margin shortfall. The Margin Adequacy Requirement of regulation § 1.44(b) serves these purposes by further ensuring that FCMs do not allow customers to create or increase undermargining in their accounts through withdrawals of funds. While, as discussed above, clearing FCMs are already subject to this requirement as a result of DCO rules adopted under regulation § 39.13(g)(8)(iii), the final rule also applies this requirement to non-clearing FCMs, and creates another avenue to monitoring and enforcement of this requirement for clearing FCMs.
Additionally, the Commission believes that the final rule will ensure that application of the requirements for separate account treatment occurs in a manner that continues to be consistent with the CEA's customer fund protection and risk mitigation objectives. As discussed above, the no-action position has been successfully used to allow clearing FCMs to engage in separate account treatment in a manner that is consistent with the protection of customer funds and the mitigation of systemic risk, including by requiring the application of separate account treatment in a consistent manner, and requiring regulatory notifications and the cessation of disbursements on a separate account basis in certain instances of operational or financial distress. The Commission believes codification of the no-action conditions, and the Margin Adequacy Requirement they address, applied directly to all FCMs, promotes sound FCM risk management practices.
Section 15(a)(2)(e) of the CEA requires the Commission to evaluate the costs and benefits of its action in light of other public interest considerations. The Commission is identifying a public interest benefit in codifying the Divisions' no-action position, where the efficacy of that position has been demonstrated. In such a situation, the Commission believes it serves the public interest and, in particular, the interests of market participants, to engage in notice-and-comment rulemaking, where it seeks and considers the views of the public in amending its regulations, rather than for market participants to continue to rely on a time-limited no-action position that can be easily withdrawn, provides less long-term certainty for market participants, and offers a more limited opportunity for public input. In promulgating this final rule, the Commission sought and considered public comment both as to the proposed regulation generally and as to specific aspects of the proposal (including costs and benefits).
As Question 14, the Commission requested comment, including any available quantifiable data and analysis, concerning its analysis of the section 15(a) factors. No commenters responded to this question.
Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA in issuing any order or adopting any Commission rule or regulation.
The Commission believes that the public interest to be protected by the antitrust laws is generally to protect competition. The Commission did not identify any anti-competitive effects in the NPRM. The Commission requested comment on whether the proposed regulation implicates any other specific public interest to be protected by the antitrust laws, as well as on whether the proposed regulation is anticompetitive and, if it is, what the anticompetitive effects are. The Commission did not receive any comments in response to these requests.
The Commission confirms its determination that this final rule is not anti-competitive and has no anti-competitive effects. Given this determination, the Commission has not identified any less anti-competitive means of achieving the purposes of the CEA.
The Regulatory Flexibility Act (RFA) requires agencies to consider whether their rules have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis with respect to such impact.
The Paperwork Reduction Act of 1995 (PRA)
The PRA is intended, in part, to minimize the paperwork burden created for individuals, business, and other persons as a result of the collection of information by Federal agencies, and to ensure the greatest possible benefit and utility of information created, collected, maintained, used, shared, and disseminated by or for the Federal government. The PRA applies to all information, regardless of form or format, whenever the Federal government is obtaining, causing to be obtained, or soliciting information, and includes required disclosure to third parties or the public, of facts or opinions, when the information collection calls for answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed on, ten or more persons.
This final rule will result in a new collection of information within the meaning of the PRA, as discussed below. Responses to this collection of information would be required to obtain a benefit. Specifically, FCMs would be required to respond to the collection in order to obtain the benefit of engaging in separate account treatment for purposes of regulation § 1.44.
The Commission will protect proprietary information it may receive according to the Freedom of Information Act and 17 CFR part 145, “Commission Records and Information.” In addition, section 8(a)(1) of the CEA strictly prohibits the Commission, unless specifically authorized by the CEA, from making public “data and information that would separately disclose the business transactions or market positions of any person and trade secrets or names of customers.”
The final rule applies directly to FCMs. All FCMs that engage in separate account treatment, both those that are clearing members of DCOs and those that are not, would be subject to certain reporting, disclosure, and recordkeeping requirements to comply with the requirements for separate account treatment specified in regulation § 1.44.
While the Commission staff estimates burden hours and costs using current part 1 and regulation § 39.13(g)(8)(iii) as a baseline, the Commission notes that FCMs that are clearing members of DCOs are already effectively subject to the Margin Adequacy Requirement, in order to comply with rules that their DCOs have established in order to in turn comply with the DCO's obligations under regulation § 39.13(g)(8)(iii). Thus, the Commission notes that many clearing FCMs already are subject to the conditions of the no-action position, which are substantially similar to the requirements for separate account treatment under this final rule. For these clearing FCMs, the Commission expects that any additional cost or administrative burden associated with complying with the final rule would be reduced.
The final rule contains two reporting requirements that could result in a collection of information from ten or more persons over a 12-month period.
There are currently approximately 60 registered FCMs.
First, regulation § 1.44(d)(2) provides that, to the extent an FCM elects to treat the separate accounts of a customer as accounts of separate entities pursuant to the terms of regulation § 1.44, the FCM must provide a one-time notification to its DSRO and to the Commission that it will apply such treatment. The Commission staff estimates this would result in a total of one response per respondent on a one-time basis, and that
Second, regulation § 1.44(e)(3) requires an FCM engaging in separate account treatment to communicate promptly in writing to its DSRO and to the Commission the occurrence of certain enumerated “non-ordinary course of business” events. The Commission staff estimates that each such FCM may experience two non-ordinary course of business events per year, either with respect to themselves, or a customer. For purposes of determining the number of responses, the Commission staff anticipates that additional notifications of substantially the same information, and at substantially the same time, by means of electronic communication to both the DSRO and the Commission would not materially increase the time and cost burden for such FCM. Therefore, for purposes of these estimates, the Commission staff treats a set of notifications sent to the DSRO and to the Commission as a single response.
The aggregate information collection burden estimate associated with the reporting requirements is as follows:
The final rule contains three disclosure requirements that could affect ten or more persons in a 12-month period.
First, regulation § 1.44(h)(3)(i) requires an FCM to provide each customer using separate accounts with a disclosure that, pursuant to part 190 of the Commission's regulations, all separate accounts of the customer will be combined in the event of the FCM's bankruptcy. The Commission staff estimates that this would result in a total of 1 response per respondent on a one-time basis, and that each respondent is likely to spend one hour to comply with this requirement for a total of 1 annual burden hour and up to $268 annually, based on an hourly rate of $268.
Second, regulation § 1.44(h)(3)(iii) requires that an FCM engaging in separate account treatment include the disclosure statement required by regulation § 1.44(h)(3) on its website or within its Disclosure Document required by regulation § 1.55(i). If the FCM opts to update its Disclosure Document, the Commission staff estimates that this requirement would result in a total of one response on a one-time basis, and that each respondent could expend up to $608 annually, based on an hourly rate of $608,
Third, regulation § 1.44(h)(4) requires an FCM that has made an election pursuant to regulation § 1.44(d) to treat the separate accounts of a customer as accounts of separate entities for purposes of regulation § 1.44(b), to disclose in the Disclosure Document required under regulation § 1.55(i) that it permits the separate treatment of accounts for the same customer under the requirements of regulation § 1.44. The Commission staff estimates that this would result in a total of one response per respondent on a one-time basis, and
The aggregate information collection burden estimate associated with the disclosure requirements is as follows:
The final rule contains four recordkeeping requirements that could affect ten or more persons in a 12-month period.
First, regulation § 1.44(d)(1) provides that, to elect to treat the separate accounts of a customer as accounts of separate entities, for purposes of the Margin Adequacy Requirement, the FCM shall include the customer on a list of separate account customers receiving such treatment maintained in its books and records. The Commission staff estimates that this would result in a total of 125 responses per respondent on a one-time basis at a rate of 15 minutes per response,
Second, regulation § 1.44(e)(4) provides that an FCM that has ceased permitting disbursements on a separate account basis to a separate account customer due to the occurrence of a non-ordinary course of business event may resume permitting disbursements on a separate account basis if the FCM reasonably believes, based on new information, that the circumstances leading to cessation of disbursements on a separate account basis have been cured, and the FCM documents in writing the factual basis and rationale for its conclusion that such circumstances have been cured. Where the Commission staff have estimated above that an FCM may experience two non-ordinary course of business events per year, the Commission staff conservatively estimate that in each case the conditions leading to cessation of disbursements on a separate account basis would be cured. Accordingly, the Commission staff estimates that documenting the cure of each non-ordinary course of business event would require two recordkeeping responses per respondent on an annual basis, resulting in a total of 60 annual responses, and that respondents are likely to spend two hours to complete the required recordkeeping tasks.
Third, regulation § 1.44(h)(2) provides that where a separate accounts customer has appointed a third-party as the primary contact to the FCM, the FCM must obtain and maintain current contact information of an authorized representative(s) at the customer and take reasonable steps to verify that such contact information is and remains accurate and that such person is in fact an authorized representative of the customer. The Commission staff estimates this would result in a total of 125 responses per respondent on an annual basis at one hour per response,
Fourth, regulation § 1.44(h)(3)(ii) requires that an FCM maintain documentation demonstrating that the part 190 disclosure statement required by regulation § 1.44(h)(3)(i) was delivered directly to the customer. The Commission staff estimates that this would result in a total of 125 responses per respondent on a one-time basis at an estimated six minutes per response, and that respondents could expend up to $2,025 annually, based on an hourly rate of $162, to comply with regulation § 1.44(h)(3)(ii). This would result in an estimated 375 burden hours annually (125 responses × 6 minutes/response × 30 respondents) and an aggregated cost of $60,750 (30 respondents × $2,025). This estimate reflects initial recordkeeping of documentation that the disclosure was delivered to existing customers subject to separate account treatment. The Commission staff estimates that, once such recordkeeping is complete, the recordkeeping required by regulation § 1.44(h)(3)(ii) would be required only with respect to new customers who receive disclosures pursuant to regulation § 1.44(h)(3)(ii), and the costs and burden hours associated with regulation § 1.44(h)(3)(ii) would be reduced accordingly.
Lastly, to the extent FCMs treat pending non-USD transfers as received, consistent with JAC guidance, for certain purposes,
The aggregate information collection burden estimate associated with the recordkeeping requirements is as follows:
The Commission invited, but did not receive, any public comments related to the proposed information collection requirements.
Pursuant to the Congressional Review Act (5 U.S.C. 801
Brokers, Commodity futures, Consumer protection, Reporting and recordkeeping requirements.
Brokers, Clearing, Consumer protection, Reporting and recordkeeping, Swaps.
Consumer protection.
Clearing, Clearing organizations, Commodity futures, Consumer protection.
For the reasons set forth in the preamble, the Commodity Futures Trading Commission amends 17 CFR chapter I as follows:
7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6l, 6m, 6n, 6o, 6p, 6r, 6s, 7, 7a-1, 7a-2, 7b, 7b-3, 8, 9, 10a, 12, 12a, 12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24 (2012).
The republications, revisions, and additions read as follows:
(b) For the purposes of this section:
(6)
(8)
(v) If a futures commission merchant carries separate accounts for separate account customers pursuant to § 1.44, the futures commission merchant shall calculate the risk margin pursuant to this section as if the separate accounts are owned by separate entities.
(c) Definitions: For the purposes of this section:
(2) The term
(i) Exclude any unsecured commodity futures, options, cleared swaps, or other Commission regulated account containing a ledger balance and open trades, the combination of which liquidates to a deficit or containing a debit ledger balance only. For purposes
(4) The term
(ii) Excludes, in the case of a futures commission merchant, the amount of money, securities and property due to customers which is held in segregated accounts in compliance with the requirements of the Act and these regulations. For purposes of this paragraph (c)(4)(ii), a futures commission merchant that carries separate accounts of a separate account customer pursuant to § 1.44 shall compute the amount of money, securities and property due to the separate account customer as if the separate accounts were accounts of separate entities. A futures commission merchant may exclude money, securities and property due to customers, including separate account customers, only if such money, securities and property held in segregated accounts have been excluded from current assets in computing net capital;
(5) The term
(viii)(A) In the case of a futures commission merchant, for undermargined customer accounts, the amount of funds required in each such account to meet maintenance margin requirements of the applicable board of trade, or if there are no such maintenance margin requirements, clearing organization margin requirements applicable to such positions, after application of calls for margin or other required deposits which are outstanding no more than one business day. If there are no such maintenance margin requirements or clearing organization margin requirements, then the amount of funds required to provide margin equal to the amount necessary, after application of calls for margin or other required deposits outstanding no more than one business day, to restore original margin when the original margin has been depleted by 50 percent or more. If, however, a call for margin or other required deposits for an undermargined customer account is outstanding for more than one business day, then no such call for that undermargined customer account shall be applied until all such calls for margin have been met in full.
(B) If a futures commission merchant carries separate accounts for one or more separate account customers pursuant to § 1.44, the futures commission merchant shall compute the amount of funds required under paragraph (c)(5)(viii)(A) of this section to meet maintenance margin requirements for each separate account as if the account is owned by a separate entity, after application of calls for margin or other required deposits which are outstanding no more than one business day. If, however, a call for margin or other required deposits for any separate account of a particular separate account customer is outstanding for more than one business day, then all outstanding margin calls for that separate account shall be treated as if the margin calls are outstanding for more than one business day, and shall be deducted from net capital until all such calls have been met in full.
(C) If a customer account or a customer separate account deficit or debit ledger balance is excluded from current assets in accordance with paragraph (c)(2)(i) of this section, such deficit or debit ledger balance amount shall not also be deducted from current assets under this paragraph (c)(5)(viii).
(D) In the event that an owner of a customer account, or a customer separate account pursuant to § 1.44, has deposited an asset other than cash to margin, guarantee or secure the account, the value attributable to such asset for purposes of this paragraph (c)(5)(viii) shall be the lesser of:
(
(
(i) * * *
(4) The futures commission merchant must, at all times, maintain in segregation an amount equal to the sum of any credit and debit balances that the futures customers of the futures commission merchant have in their accounts. Notwithstanding the preceding sentence, a futures commission merchant must add back to the total amount of funds required to be maintained in segregation any futures customer accounts with debit balances in the amounts calculated in accordance with paragraph (i)(5) of this section.
(5) The futures commission merchant, in calculating the total amount of funds required to be maintained in segregation pursuant to paragraph (i)(4) of this section, must include any debit balance, as calculated pursuant to this paragraph (i)(5), that a futures customer has in its account, to the extent that such debit balance is not secured by “readily marketable securities” that the particular futures customer deposited with the futures commission merchant.
(i) For purposes of calculating the amount of a futures account's debit balance that the futures commission merchant is required to include in its calculation of its total segregation requirement pursuant to this paragraph (i)(5), the futures commission merchant shall calculate the net liquidating equity of each futures account in accordance with paragraph (i)(2) of this section, except that the futures commission merchant shall exclude from the calculation any noncash collateral held in the futures customer account as margin collateral. The futures commission merchant may offset the debit balance computed under this paragraph (i)(5) to the extent of any “readily marketable securities,” subject
(ii) For purposes of this section, “readily marketable” shall be defined as having a “ready market” as such latter term is defined in Rule 15c3-1(c)(11) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(11)).
(iii) In order for a debit balance to be deemed secured by “readily marketable securities,” the futures commission merchant must maintain a security interest in such securities, and must hold a written authorization to liquidate the securities at the discretion of the futures commission merchant.
(iv) To determine the amount of such debit balance secured by “readily marketable securities,” the futures commission merchant shall:
(A) Determine the market value of such securities; and
(B) Reduce such market value by applicable percentage deductions (
The addition reads as follows:
(l) A futures commission merchant that carries futures accounts for futures customers as separate accounts for separate account customers pursuant to § 1.44 shall:
(1) Calculate the total amount of futures customer funds on deposit in segregated accounts carried as separate accounts of separate account customers on behalf of such futures customers pursuant to paragraph (a)(1) of this section and the total amount of futures customer funds required to be on deposit in segregated accounts carried as separate accounts of separate account customers on behalf of such futures customers pursuant to paragraph (a)(2) of this section by including the separate accounts of the separate account customers as if the separate accounts were accounts of separate entities;
(2) Offset a net deficit in a particular futures account carried as a separate account of a separate account customer in accordance with paragraph (b) of this section against the current market value of readily marketable securities held only for the particular separate account of such separate account customer; and
(3) Document its segregation computation in the Statement of Segregation Requirements and Funds in Segregation of Customers Trading on U.S. Commodity Exchanges required by paragraph (c) of this section by incorporating and reflecting the futures accounts carried as separate accounts of separate account customers as accounts of separate entities.
(a)
(b)
(2) For the purposes of paragraph (b)(1) of this section, where the previous day (excluding Saturdays and Sundays) is a holiday, as defined in paragraph (a) of this section, where any designated contract market or other board of trade on which the futures commission merchant trades is open for trading, and where an account of any of the futures commission merchant's customers includes positions traded on such a market, the net liquidating value for such an account should instead be calculated as of the close of business on such holiday.
(c)
(d)
(2) The first time that the futures commission merchant includes a customer on the list of separate account customers, it shall, within one business day, provide notification of the election to allow separate account treatment for customers to its designated self-regulatory organization and to the Commission. The notice shall be provided in accordance with the process specified in § 1.12(n)(3).
(e)
(i) The separate account customer, including any separate account of such customer, fails to deposit initial margin or maintain maintenance margin or make payment of variation margin or option premium as specified in paragraph (f) of this section.
(ii) The occurrence and declaration by the futures commission merchant of an event of default as defined in the account documentation executed between the futures commission merchant and the separate account customer.
(iii) A good faith determination by the futures commission merchant's chief compliance officer, one of its senior risk managers, or other senior manager, following such futures commission merchant's own internal escalation procedures, that the separate account customer is in financial distress, or there is significant and bona fide risk that the separate account customer will be unable promptly to perform its financial obligations to the futures commission merchant, whether due to operational reasons or otherwise.
(iv) The insolvency or bankruptcy of the separate account customer or a parent company of such customer.
(v) The futures commission merchant receives notification that a board of trade, a derivatives clearing organization, a self-regulatory organization as defined in § 1.3 or section 3(a)(26) of the Securities Exchange Act of 1934, the Commission, or another regulator with jurisdiction over the separate account customer, has initiated an action with respect to such customer based on an allegation that the customer is in financial distress.
(vi) The futures commission merchant is directed to cease permitting disbursements on a separate account basis, with respect to the separate account customer, by a board of trade, a derivatives clearing organization, a self-regulatory organization, the Commission, or another regulator with jurisdiction over the futures commission merchant, pursuant to, as applicable, board of trade, derivatives clearing organization or self-regulatory organization rules, government regulations, or law.
(2) The following events are inconsistent with the ordinary course of business with respect to the separate accounts of all separate account customers of the futures commission merchant, and the occurrence of any such event would require the futures commission merchant to cease permitting disbursements on a separate account basis with respect to any of its customers:
(i) The futures commission merchant is notified by a board of trade, a derivatives clearing organization, a self-regulatory organization, the Commission, or another regulator with jurisdiction over the futures commission merchant, that the board of trade, the derivatives clearing organization, the self-regulatory organization, the Commission, or other regulator, as applicable, believes the futures commission merchant is in financial or other distress.
(ii) The futures commission merchant is under financial or other distress as determined in good faith by its chief compliance officer, senior risk managers, or other senior management.
(iii) The insolvency or bankruptcy of the futures commission merchant or a parent company of the futures commission merchant.
(3) The futures commission merchant must provide notice to its designated self-regulatory organization and to the Commission of the occurrence of any of the events enumerated in paragraph (e)(1) or (2) of this section. The notice must identify the event and (if applicable) the customer, and be provided promptly in writing, and in any case no later than the next business day following the date on which the futures commission merchant identifies or has been informed that such event has occurred. Such notice must be provided in accordance with the process specified in § 1.12(n)(3).
(4) A futures commission merchant that has ceased permitting disbursements on a separate account basis to a separate account customer due to the occurrence of any of the events enumerated in paragraph (e)(1) of this section with respect to a specific separate account customer (or in paragraph (e)(2) with respect to all of its separate account customers) may resume permitting disbursements on a separate account basis to that customer (or, respectively, all customers) if such futures commission merchant reasonably believes, based on new information, that those circumstances have been cured, and such futures commission merchant documents in writing the factual basis and rationale for that conclusion. If the circumstances triggering cessation of disbursements on a separate account basis were an action or direction by one of the entities described in paragraph (e)(1)(v) or (vi) or (e)(2)(i) of this section, then the cure of those circumstances would require the withdrawal or other appropriate termination of such action or direction by that entity.
(f)
(1) Except as explicitly provided in this paragraph (f), if, as a result of market movements or changes in positions on the previous business day, a separate account is undermargined (
(2) Payment of margin in currencies listed in appendix A to this part shall be considered in compliance with the requirements of this paragraph (f) if received by the applicable futures
(3) Payment of margin in fiat currencies other than U.S. Dollars, Canadian Dollars, or currencies listed in Appendix A to this part shall be considered in compliance with the requirements of this paragraph (f) if received by the applicable futures commission merchant no later than the end of the business day after the day on which the margin call is issued.
(4) The relevant deadline for payment of margin in fiat currencies other than U.S. Dollars may be extended to the next business day following any banking holiday in the jurisdiction of issue of the currency, and still be considered in compliance with the requirements of this paragraph (f) if payment is delayed due to such banking holiday.
(5) A failure with respect to a specific separate account to deposit, maintain, or pay margin or option premium that was called pursuant to this paragraph (f), due to administrative error or operational constraints, does not constitute a failure to comply with the requirements of this paragraph (f). For these purposes, a futures commission merchant's determination that the failure to deposit, maintain, or pay margin or option premium is due to such administrative error or operational constraints must be based on the futures commission merchant's reasonable belief in light of information known to the futures commission merchant at the time the futures commission merchant learns of the relevant administrative error or operational constraint.
(6) A futures commission merchant would not be in compliance with the requirements of this paragraph (f) if it contractually agrees to provide separate account customers with periods of time to meet margin calls that extend beyond the time periods specified in this paragraph (f), or engages in practices that are designed to circumvent this paragraph (f).
(7) In the case of a holiday where any designated contract market or other board of trade on which the futures commission merchant trades is open for trading, or any derivatives clearing organization that clears the Cleared Swaps of such futures commission merchant's Cleared Swaps Customers is open for clearing such swaps, and where a separate account of any of the futures commission merchant's separate account customers includes positions traded on such a market or cleared at such a derivatives clearing organization, then for any such separate account:
(i) If, as a result of market movements or changes in positions on the business day before the holiday, a separate account is undermargined, the futures commission merchant shall issue a margin call for the separate account for at least the undermargined amount, and that call must be met by the applicable separate account customer no later than the close of the Fedwire Funds Service on the next business day after the holiday, and,
(ii) If, as a result of market movements or changes in positions on the holiday, a separate account is undermargined by an amount greater than the amount it was undermargined as a result of market movements or changes in positions on the business day before the holiday, the futures commission merchant shall issue a margin call for the separate account for at least the incremental undermargined amount, and that call must be met by the applicable separate account customer no later than the close of the Fedwire Funds Service on the next business day after the holiday.
(8) Any person may submit to the Commission any currency that such person proposes should be added to or removed from appendix A to this part.
(i) A submission pursuant to this paragraph (f)(8) shall include:
(A) A statement that margin payments in the relevant currency cannot, in the case of a proposed addition, or can, in the case of a proposed removal, practicably be received by the futures commission merchant issuing a margin call no later than the end of the first business day after the day on which the margin call is issued;
(B) Documentation or other information sufficient to support the statement contemplated by paragraph (f)(8)(i)(A) of this section; and
(C) Any additional information specifically requested by the Commission.
(ii) A submitter pursuant to paragraph (f)(8)(i) of this section that wishes to request confidential treatment for portions of its submission may do so in accordance with the procedures set out in § 145.9(d).
(iii) The Commission shall review a submission made pursuant to this paragraph (f)(8) and determine whether to propose to add the relevant currency to, or remove the relevant currency from, appendix A to this part.
(iv) If the Commission proposes to add a currency to or remove a currency from appendix A to this part, the Commission shall issue such determination through notice and comment rulemaking, and shall provide a public comment period of no less than thirty days.
(v) The Commission may, of its own accord and absent a submission pursuant to this paragraph (f)(8), propose to issue a determination to add a currency to or remove a currency from appendix A to this part pursuant to the procedure set forth in paragraph (f)(8)(iv) of this section.
(g)
(2) A futures commission merchant shall calculate the margin requirement for each separate account of a separate account customer independently from such margin requirement for all other separate accounts of the same customer with no offsets or spreads recognized across the separate accounts.
(3) A futures commission merchant shall, in computing its adjusted net capital for purposes of § 1.17, record each separate account of a separate account customer in the books and records of the futures commission merchant as a distinct account of a customer. This includes recording each separate account with a net debit balance or a deficit as a receivable from the separate account customer, with no offsets between the other separate accounts of the same separate account customer.
(4) A futures commission merchant shall, in calculating the amount of its own funds it is required to maintain in segregated accounts to cover deficits or debit ledger balances pursuant to § 1.20(i), § 22.2(f), or § 30.7(f)(2) of this chapter in any futures customer accounts, Cleared Swaps Customer Accounts, or 30.7 accounts, respectively, include any deficits or debit ledger balances of any separate accounts as if the accounts are accounts of separate entities.
(5) For purposes of its residual interest and legally segregated operationally commingled compliance calculations, as applicable under §§ 1.22(c), 22.2(f)(6), and 30.7(f)(1)(ii) of this chapter, a futures commission merchant shall treat the separate accounts of a separate account customer as if the accounts were accounts of separate entities and include the undermargined amount of each separate account, and cover such undermargined amount with its own funds.
(6) In determining its residual interest target for purposes of §§ 1.11(e)(3)(i)(D) and 1.23(c), the futures commission merchant must consider the impact of calculating customer receivables for separate account customers on a separate account basis.
(h)
(i) Assess the value of the assets dedicated to such separate account; and
(ii) Identify the direct or indirect parent company of the separate account customer, as applicable, if such customer has a direct or indirect parent company.
(2) Where a separate account customer has appointed a third-party as the primary contact to the futures commission merchant, the futures commission merchant must obtain and maintain current contact information of an authorized representative of the customer, and take reasonable steps to verify that such contact information is and remains accurate, and that the person is in fact an authorized representative of the customer.
(3) A futures commission merchant must provide each separate account customer a disclosure that, pursuant to part 190 of the Commission's regulations (17 CFR part 190), all separate accounts of the customer in each account class will be combined in the event of the futures commission merchant's bankruptcy.
(i) The disclosure statement required by this paragraph (h)(3) must be delivered directly to the customer via electronic means, in writing or in such other manner as the futures commission merchant customarily delivers disclosures pursuant to applicable Commission regulations, and as permissible under the futures commission merchant's customer documentation.
(ii) The futures commission merchant must maintain documentation demonstrating that the disclosure statement required by this paragraph (h)(3) was delivered directly to the customer.
(iii) The futures commission merchant must include the disclosure statement required by this paragraph (h)(3) on its website or within its Disclosure Document required by paragraph 1.55(i).
(4) A futures commission merchant that has made an election pursuant to paragraph (d) of this section shall disclose in the Disclosure Document required under § 1.55(i) that it permits the separate treatment of accounts for the same customer pursuant to the requirements of this section and that, in the event that separate account treatment for some customers were to contribute to a loss that exceeds the futures commission merchant's ability to cover, that loss may affect the segregated funds of all of the futures commission merchant's customers in one or more account classes.
(i) A futures commission merchant that applies separate account treatment pursuant to this section shall apply such treatment in a consistent manner over time.
(a) Each futures commission merchant which carries a futures, options on futures, or Cleared Swaps position for another futures commission merchant or for a foreign broker on an omnibus basis must collect, and each futures commission merchant and foreign broker for which an omnibus account is being carried must deposit, initial and maintenance margin on each position so carried at a level no less than that established for customer accounts by the rules of the applicable contract market or other board of trade. If the contract market or other board of trade does not specify any such margin level, the level required will be that specified by the relevant clearing organization.
(b) If the futures commission merchant which carries a futures, options on futures, or Cleared Swaps position for another futures commission merchant or for a foreign broker on an omnibus basis allows a position to be margined as a spread position or as a hedged position in accordance with the rules of the applicable contract market, the carrying futures commission merchant must obtain and retain a written representation from the futures commission merchant or from the foreign broker for which the omnibus account is being carried that each such position is entitled to be so margined.
(c) Where a futures commission merchant has established an omnibus account that is carried by another futures commission merchant, and the depositing futures commission merchant has elected to treat the separate accounts of a futures customer or a Cleared Swaps Customer as accounts of separate entities for purposes of § 1.44, the depositing futures commission merchant shall calculate the required initial and maintenance margin for purposes of paragraph (a) of this section separately for each such separate account.
(c) A futures commission merchant that is not a clearing member of a derivatives clearing organization, but that treats the separate accounts of a customer as accounts of separate entities for purposes of § 1.44, shall comply with paragraphs (a) and (b) of this section with respect to the accounts and separate accounts of separate account customers as if it were a clearing member of a derivatives clearing organization.
Payment of margin in currencies listed in this Appendix A shall be considered in compliance with the requirements of Regulation 1.44(f) of Part 1 of the Commission's regulations (17 CFR 1.44(f)) if received by the applicable futures commission merchant no later than the end of the second business day after the day on which the margin call is issued.
7 U.S.C. 1a, 6d, 7a-1 as amended by Pub. L. 111-203, 124 Stat 1376.
The republications, revisions, and addition to read as follows:
(f)
(4) The futures commission merchant must, at all times, maintain in
(5) The futures commission merchant, in calculating the total amount of funds required to be maintained in segregation pursuant to paragraph (f)(4) of this section, must include any debit balance, as calculated pursuant to this paragraph (f)(5), that a Cleared Swaps Customer has in its account, to the extent that such debit balance is not secured by “readily marketable securities” that the particular Cleared Swaps Customer deposited with the futures commission merchant.
(i) For purposes of calculating the amount of a Cleared Swaps Customer Account's debit balance that the futures commission merchant is required to include in its calculation of its total segregation requirement pursuant to this paragraph (f)(5), the futures commission merchant shall calculate the net liquidating equity of each Cleared Swaps Customer Account in accordance with paragraph (f)(2) of this section, except that the futures commission merchant shall exclude from the calculation any noncash collateral held in the Cleared Swaps Customer Account as margin collateral. The futures commission merchant may offset the debit balance computed under this paragraph (f)(5) to the extent of any “readily marketable securities,” subject to percentage deductions (
(ii) For purposes of this section, “readily marketable” shall be defined as having a “ready market” as such latter term is defined in Rule 15c3-1(c)(11) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(11)).
(iii) In order for a debit balance to be deemed secured by “readily marketable securities,” the futures commission merchant must maintain a security interest in such securities, and must hold a written authorization to liquidate the securities at the discretion of the futures commission merchant.
(iv) To determine the amount of such debit balance secured by “readily marketable securities,” the futures commission merchant shall:
(A) Determine the market value of such securities; and
(B) Reduce such market value by applicable percentage deductions (
(g)
(11) A futures commission merchant that carries Cleared Swaps Accounts for Cleared Swaps Customers as separate accounts for separate account customers pursuant to § 1.44 of this chapter shall:
(i) Calculate the total amount of Cleared Swaps Customer Collateral on deposit in segregated accounts on behalf of Cleared Swaps Customers pursuant to paragraph (g)(1)(i) of this section and the total amount of Cleared Swaps Customer Collateral required to be on deposit in segregated accounts on behalf of Cleared Swaps Customers pursuant to paragraph (g)(1)(ii) of this section by including the separate accounts of the separate account customers as if the separate accounts were accounts of separate entities;
(ii) Offset a net deficit in a particular Cleared Swaps Customer Account carried as a separate account of a separate account customer in accordance with paragraphs (f)(4) and (5) and (g)(1)(ii) of this section against the current market value of readily marketable securities held only for the particular separate account of such separate account customer; and
(iii) Document its segregation computation in the Statement of Cleared Swaps Customer Segregation Requirements and Funds in Cleared Swaps Customer Accounts under 4d(f) of the CEA required by paragraph (g)(2) of this section by incorporating and reflecting the Cleared Swaps Customer Accounts carried as separate accounts of separate account customers as accounts of separate entities.
7 U.S.C. 1a, 2, 6, 6c, and 12a, unless otherwise noted.
(b) The provisions of §§ 1.20 through 1.30, 1.32, 1.35(a)(2) through (4) and (c) through (i), 1.36(b), 1.38, 1.39, 1.40, 1.45 through 1.51, 1.53, 1.54, 1.55, 1.58, 1.59, 33.2 through 33.6, and parts 15 through 20 of this chapter shall not be applicable to the persons and transactions that are subject to the requirements of this part.
The republications, revisions, and additions read as follows:
(f)
(2)
(iv) The futures commission merchant must, at all times, maintain in segregation an amount equal to the sum of any credit and debit balances that 30.7 customers of the futures commission merchant have in their accounts. Notwithstanding the preceding sentence, a futures commission merchant must add back to the total amount of funds required to be maintained in segregation any 30.7 accounts with debit balances in the amounts calculated in accordance with paragraph (f)(2)(v) of this section.
(v) The futures commission merchant, in calculating the total amount of funds required to be maintained in segregation pursuant to paragraph (f)(2)(iv) of this section, must include any debit balance, as calculated pursuant to this paragraph (f)(2)(v), that a 30.7 customer has in its account, to the extent that such debit balance is not secured by “readily marketable securities” that the particular 30.7 customer deposited with the futures commission merchant.
(A) For purposes of calculating the amount of a 30.7 account's debit balance that the futures commission merchant is required to include in its calculation of
(B) For purposes of this section, “readily marketable” shall be defined as having a “ready market” as such latter term is defined in Rule 15c3-1(c)(11) of the Securities and Exchange Commission (17 CFR 240.15c3-1(c)(11)).
(C) In order for a debit balance to be deemed secured by “readily marketable securities,” the futures commission merchant must maintain a security interest in such securities, and must hold a written authorization to liquidate the securities at the discretion of the futures commission merchant.
(D) To determine the amount of such debit balance secured by “readily marketable securities.” To do so, the futures commission merchant shall:
(
(
(l)
(11) A futures commission merchant that carries 30.7 accounts for 30.7 customers as separate accounts for separate account customers pursuant to § 1.44 of this chapter shall:
(i) Calculate the total amount of 30.7 customer funds on deposit in 30.7 accounts on behalf of 30.7 customers pursuant to paragraph (l)(1) of this section and the total amount of 30.7 customer funds required to be on deposit in segregated accounts on behalf of 30.7 customers pursuant to paragraph (l)(1) of this section by including the separate accounts of the separate account customers as if the separate accounts were accounts of separate entities;
(ii) Offset a net deficit in a particular 30.7 account carried as a separate account of a separate account customer in accordance with this paragraph (l) against the current market value of readily marketable securities held only for the particular separate account of such separate account customer; and
(iii) Document its segregation computation in the Statement of Secured Amounts and Funds Held in Separate Accounts for 30.7 Customers pursuant to Commission Regulation 30.7 required by paragraph (l)(3) of this section by incorporating and reflecting the 30.7 accounts carried as separate accounts of separate account customers as accounts of separate entities.
7 U.S.C. 2, 6(c), 7a-1, and 12a(5); 12 U.S.C. 5464; 15 U.S.C. 8325; section 752 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, title VII, sec. 752, July 21, 2010, 124 Stat. 1749.
The republications, addition, and revision read as follows:
(g)
(8)
(i) * * *
(E) For purposes of this paragraph (g)(8)(i), each separate account of a separate account customer (as such terms are defined in § 1.44 of this chapter) shall be treated as an account of a separate individual customer.
(iii)
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Behnam and Commissioner Goldsmith Romero voted in the affirmative. Commissioners Johnson and Pham voted to concur. Commissioner Mersinger voted in the negative.
Since 2019, derivatives clearing organizations (DCOs) and futures commission merchants (FCMs) faithfully relied on guidance and a no-action position issued through CFTC Staff Letter 19-17
I fully support the final rule which protects customer funds, promotes effective DCO and FCM risk management, and balances risk management with practicability. To ensure that the final rule was workable, there were numerous discussions and extensive engagement between staff and industry, in addition to two notices of proposed rulemaking.
I thank Alicia Lewis in my office, and staff in the Division of Clearing and Risk, Market Participants Division, Office of the General Counsel, and the Office of the Chief Economist for their work on the final rule.
I respectfully concur on the Regulations to Address Margin Adequacy and to Account for the Treatment of Separate Accounts by Futures Commission Merchants (FCMs) (Separate Accounts Final Rule). I am pleased that the Separate Accounts Final Rule has resolved two critical issues with the proposed rule that were unworkable because of (1) conflicts of law under U.S. banking and securities regulation and foreign banking law, and operational realities regarding the cross-border movement of funds, and (2) lack of regulatory clarity for the handling of administrative errors and operational constraints. In particular, the significant changes in the proposed rule from existing regulatory requirements under CFTC Letter No. 19-17, which FCMs have implemented and complied with for the past 5 years, were not supported by robust cost-benefit analysis to justify imposing overly burdensome new rules. I greatly appreciate the support of Chairman Behnam and the efforts by CFTC staff to address my concerns, and the engagement with my fellow Commissioners.
I would like to thank Daniel O'Connell, Bob Wasserman, and Clark Hutchison in the Division of Clearing and Risk for their work on the Separate Accounts Final Rule and the significant time and effort spent working with my office, especially to reconsider the requirements for a one business day margin call and circumstances involving banking holidays in the eurozone, and “unusual” administrative errors and operational constraints.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to establish a new area source category to address chemical manufacturing process units (CMPUs) using ethylene oxide (EtO). The EPA is proposing to list EtO in table 1 to the National Emission Standards for Hazardous Air Pollutants (NESHAP) for Chemical Manufacturing Area Sources (referred to as the CMAS NESHAP in this document) and to add EtO-specific requirements to the CMAS NESHAP. The EPA is also proposing to add a fenceline monitoring program for EtO. In addition, the EPA is proposing new requirements for pressure vessels and pressure relief devices (PRDs). This proposal also presents the results of the EPA's technology review of the CMAS NESHAP as required under the Clean Air Act (CAA). As part of this technology review, the EPA is proposing to add new leak detection and repair (LDAR) requirements to the CMAS NESHAP for equipment leaks in organic HAP service and heat exchange systems. The EPA is also proposing performance testing once every 5 years and to add provisions for electronic reporting. We estimate that the proposed amendments to the CMAS NESHAP, excluding the proposed EtO emission standards, would reduce hazardous air pollutant (HAP) emissions from emission sources by approximately 158 tons per year (tpy). Additionally, the proposed EtO emission standards are expected to reduce EtO emissions by approximately 4.6 tpy.
You may send comments, identified by Docket ID No. EPA-HQ-OAR-2024-0303, by any of the following methods:
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For questions about this proposed action, contact U.S. EPA, Attn: Mr. William Gallagher, Mail Drop: E143-01, 109 T.W. Alexander Drive, P.O. Box 12055, RTP, North Carolina 27711; telephone number: (919) 541-2336; and email address:
The EPA will begin pre-registering speakers for the hearing no later than 1 business day after a request has been received. To register to speak at the virtual hearing, please use the online registration form available at
The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearings to run either ahead of schedule or behind schedule.
Each commenter will have 4 minutes to provide oral testimony. The EPA encourages commenters to submit a copy of their oral testimony as written comments to the rulemaking docket.
The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral testimony and supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing will be posted online at
If you require the services of a translator or a special accommodation such as audio description, please pre-register for the hearing with the public hearing team and describe your needs by January 29, 2025. The EPA may not be able to arrange accommodations without advanced notice.
The EPA may publish any comment received to its public docket. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (
The
Our preferred method to receive CBI is for it to be transmitted electronically using email attachments, File Transfer Protocol (FTP), or other online file sharing services (
The source categories that are the subject of this proposal are Agricultural Chemicals and Pesticides Manufacturing, Chemical Manufacturing with Ethylene Oxide, Cyclic Crude and Intermediate Production, Industrial Inorganic Chemical Manufacturing, Industrial Organic Chemical Manufacturing, Inorganic Pigments Manufacturing, Miscellaneous Organic Chemical Manufacturing, Plastic Materials and Resins Manufacturing, Pharmaceutical Production, and Synthetic Rubber Manufacturing, regulated under 40 CFR part 63, subpart VVVVVV. The North American Industry Classification System (NAICS) code for the chemical manufacturing operations at any of the ten chemical manufacturing area source (CMAS) categories is 325. This list of categories and NAICS codes is not intended to be exhaustive, but rather provides a guide for readers regarding the entities that this proposed action is likely to affect. The proposed standards, once promulgated, will be directly applicable to the affected sources. Federal, state, local, and Tribal government entities would not be affected by this proposed action. We listed Cyclic Crude and Intermediate Production, Industrial Inorganic Chemical Manufacturing, Industrial Organic Chemical Manufacturing, Plastic Materials and Resins Manufacturing, and Synthetic Rubber Manufacturing as area source categories under CAA section 112(c)(3) as part of the 1999 Integrated Urban Air Toxics Strategy (64 FR 38721, July 19, 1999). On June 26, 2002, we amended the area source category list by adding source categories, including Agricultural Chemicals and Pesticides Manufacturing, Miscellaneous Organic Chemical Manufacturing, and Pharmaceutical Production (67 FR 43112, 43113). On November 22, 2002, we added Inorganic Pigments Manufacturing to the area source category list (67 FR 70427, 70428). In this action, we are proposing to amend the area source category list by adding Chemical Manufacturing with Ethylene Oxide (see section II.A.1 of this preamble). The other nine CMAS categories are discussed further in section II.B of this preamble.
In addition to being available in the docket, an electronic copy of this action is available on the internet. In accordance with 5 U.S.C. 553(b)(4), a summary of this rulemaking may be found at
A memorandum showing the edits that would be necessary to incorporate the changes to the CMAS NESHAP (40 CFR part 63, subpart VVVVVV) proposed in this action is available in the docket (Docket ID No. EPA-HQ-OAR-2024-0303). Following signature by the EPA Administrator, the EPA also will post a copy of this document to
The statutory authority for this action is provided by sections 112 and 301 of the CAA, as amended (42 U.S.C. 7401
CAA section 112(c)(5) provides that “the Administrator may at any time list additional categories and subcategories of sources of hazardous air pollutants according to the same criteria for listing applicable under [CAA section 112(c)(1) and (3)].” CAA 112(c)(3), in turn, provides in part that “[t]he Administrator shall list . . . each category or subcategory of area sources which the Administrator finds presents a threat of adverse effects to human health or the environment (by such sources individually or in the aggregate) warranting regulation under this section.”
In 2016, the EPA updated the integrated risk information system (IRIS) value for EtO to reflect new science related to the pollutant.
EtO is not one of the fifteen urban HAP currently regulated by the CMAS NESHAP. Therefore, to fully assess whether a source category including EtO emissions from area source chemical manufacturing operations presents an adverse effect to human health or the environment, facilities not currently part of the nine regulated source categories were considered. To that end, we conducted a risk assessment evaluating all reported HAP emissions from sources currently subject to the CMAS NESHAP as well as sources that we believe would become subject to the CMAS NESHAP if EtO were to be added to table 1 to 40 CFR part 63, subpart VVVVVV. The results of the risk assessment are summarized in section II.E of this preamble. Based on the assessment, seven area source chemical manufacturing facilities were estimated to have maximum cancer risks greater than 100-in-1 million, all of which were driven primarily (greater than 90 percent) by EtO emissions.
Given these estimates of risk, we propose that an area source category associated with EtO emissions from area source chemical manufacturers presents a threat of adverse effect on human health. Accordingly, consistent with CAA section 112(c)(3) and (5), we are proposing to list a new area source category. This area source category, Chemical Manufacturing with Ethylene Oxide, would encompass processes that produce a material or family of materials described by NAICS code 325 where EtO is used as a feedstock, generated as a byproduct, or is the material produced. This proposed source category matches the scope of the nine source categories currently regulated by the CMAS NESHAP, as described in section II.B of this preamble. Since the existing CMAS NESHAP currently regulates these nine area source categories collectively, we are proposing to also regulate the new Chemical Manufacturing with Ethylene Oxide area source category under the CMAS NESHAP at 40 CFR part 63, subpart VVVVVV. Alongside the listing of this new area source category, the EPA is proposing to add EtO specific applicability requirements at 40 CFR 63.11494(a)(2)(v) and to list EtO in table 1 to 40 CFR part 63, subpart VVVVVV.
In conjunction with proposing to establish a new area source category for Chemical Manufacturing with Ethylene Oxide, the EPA must establish the level of control for the source category. Section II.A.2 provides details on our authority to establish GACT standards pursuant to CAA section 112(d)(5) in lieu of maximum achievable control
Under CAA section 112(d)(5), the EPA may elect to promulgate standards or requirements for area sources “which provide for the use of generally available control technologies or management practices by such sources to reduce emissions of hazardous air pollutants.” Additional information on GACT or management practices is found in the Senate report on the legislation (Senate report Number 101-228, December 20, 1989), which describes GACT as “. . . methods, practices and techniques which are commercially available and appropriate for application by the sources in the category considering economic impacts and the technical capabilities of the firms to operate and maintain the emissions control systems.”
Consistent with the legislative history, we can consider costs and economic impacts in determining GACT. Determining what constitutes GACT involves considering the control technologies and management practices that are generally available to the area sources in the source category. As previously mentioned, GACT standards were set for the CMAS categories in 2009. These GACT standards are discussed in section IV.C of this preamble. See section II.B of this preamble for details about each of the nine currently regulated CMAS categories.
In this action, we are proposing to set additional GACT standards for the CMAS categories that would apply to certain emission sources (
GACT differs from MACT in that cost can be considered in the first instance when establishing a GACT standard. By contrast, when establishing MACT standards pursuant to CAA section 112(d)(3), the EPA must determine the average emission limitation achieved by the best performing 12 percent of existing sources (or average emission limitation achieved by the best performing 5 sources for existing sources with fewer than 30 sources) and the emission limitation achieved by the best controlled similar source for new sources, without regard to cost.
As explained in greater detail in sections IV.A and IV.B of this preamble, we determined that the GACT standards we are proposing for sources emitting EtO (
We note that if standards for EtO are finalized, the EPA has committed to the Office of the Inspector General (OIG) to assess the risk posed from EtO emission sources subject to the CMAS NESHAP. Specifically, the EPA committed to assess risk within four years of promulgation of standards. At that time, the EPA would determine if it is appropriate to review the standards prior to the date required by CAA section 112(d)(6) (
CAA section 112(d)(6) requires the EPA to review standards promulgated under CAA section 112(d) and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less often than every 8 years following promulgation of those standards. This is referred to as a “technology review” and is required for all standards established under CAA section 112(d) including GACT standards that apply to area sources.
As previously mentioned, GACT standards were set for the CMAS categories in 2009. Although in this action we are proposing additional GACT standards for these categories, this proposed action also presents the required CAA 112(d)(6) technology review of the 2009 GACT standards for these source categories.
The EPA promulgated the CMAS NESHAP on October 29, 2009 (74 FR 56008), and codified the NESHAP at 40 CFR part 63, subpart VVVVVV. As promulgated in 2009, and further amended on December 21, 2012 (77 FR 75740), the CMAS NESHAP regulates HAP emissions from chemical manufacturing process units at an area source of HAP emissions if HAP listed in table 1 to 40 CFR part 63, subpart VVVVVV are present in the CMPU. A CMPU includes all process vessels, equipment, and activities necessary to
The CMAS NESHAP currently applies to chemical manufacturing operations at nine area source categories: (1) Agricultural Chemicals and Pesticides Manufacturing; (2) Cyclic Crude and Intermediate Production; (3) Industrial Inorganic Chemical Manufacturing; (4) Industrial Organic Chemical Manufacturing; (5) Inorganic Pigments Manufacturing; (6) Miscellaneous Organic Chemical Manufacturing; (7) Plastic Materials and Resins Manufacturing; (8) Pharmaceutical Production; and (9) Synthetic Rubber Manufacturing. These nine CMAS categories encompass facilities that use as feedstocks,
The HAP emission sources at facilities subject to the CMAS NESHAP include process vents, storage tanks, equipment leaks, transfer operations, and wastewater. Additionally, some facilities have cooling towers or other heat exchangers. The GACT standards for CMAS include emission standards in the form of management practices for each CMPU as well as emission limits for certain emission sources including process vents and storage tanks. The rule also establishes management practices and other emission reduction requirements for wastewater systems and heat exchange systems.
As of May 1, 2024, the EPA identified 251 facilities in operation that are subject to the CMAS NESHAP. In addition, we are aware of 29 more facilities that would become subject to the CMAS NESHAP if EtO were to be added to table 1 to the CMAS NESHAP, as proposed (see section II.A.1 of this preamble)
The EPA used several data sources to determine the facilities that are subject to the CMAS NESHAP discussed in section II.B of this preamble. We began with the facility list from the original rulemaking for the CMAS NESHAP (74 FR 56008, October 29, 2009). This list was supplemented with information from the Office of Enforcement and Compliance Assurance's Enforcement and Compliance History Online tool (
We also collected and considered facility specific information from the regions and/or states, if the information had not already been captured by the previous steps. For example, we obtained title V air permits from publicly available online state databases (where available). In cases where an online database was incomplete or did not exist, the EPA contacted the region and/or state for help in obtaining the air permits or determining whether a facility was subject to the CMAS NESHAP or may become subject to the CMAS NESHAP if EtO were to be added to table 1 to 40 CFR part 63, subpart VVVVVV. The EPA also conducted internet searches to determine the status of the facility (
The EPA solicits comment on the assumptions used to estimate the number of facilities anticipated to be impacted by this action.
For each facility subject to the CMAS NESHAP, we gathered emissions data from the most recent version of the 2017 National Emissions Inventory (NEI), published in January 2021. Apart from the 2020 NEI (which was the first year of the COVID-19 pandemic), the 2017 NEI was the most vetted and recent publicly available data set at the time EPA began gathering information for this proposed rulemaking.
We consulted with state agencies, EPA regions, air permits, and facilities to determine whether any EtO records in the CMAS emissions inventory needed to be updated (beyond the 2017 NEI).
To inform our reviews of the Agency's emission standards, we reviewed the EPA's Reasonably Available Control Technology (RACT)/Best Available Control Technology (BACT)/Lowest Achievable Emission Rate (LAER) Clearinghouse and regulatory development efforts for similar sources published after the CMAS NESHAP was developed.
In January 2022, the EPA issued requests, pursuant to CAA section 114, to collect information from HON facilities (nine being also subject to the PEPO NESHAP) owned and operated by eight entities (
In proposing these amendments, we relied on certain technical reports and memoranda that the EPA developed for flares used as air pollution control devices (APCDs) in the Petroleum Refinery Sector risk and technology review (RTR) and new source performance standards (NSPS) rulemaking (80 FR 75178, December 1, 2015). The Petroleum Refinery Sector rulemaking docket is at Docket ID No. EPA-HQ-OAR-2010-0682. For completeness of the rulemaking record for this action and for ease of reference in finding these items in the publicly available Petroleum Refinery Sector rulemaking docket, we are including the most relevant flare-related technical support documents in the docket for this proposed action (Docket ID No. EPA-HQ-OAR-2024-0303) and including a list of all documents used to inform the 2015 flare provisions in the Petroleum Refinery Sector RTR and NSPS rulemaking in the document titled
We are also relying on data gathered to support the rulemakings for the EMACT standards, HON, and MON, as well as memoranda documenting the technology reviews for those processes. Many of the emission sources for ethylene production facilities, HON facilities, and MON facilities are similar to CMAS facilities, and the EPA analyzed several of the control options for the CMAS NESHAP that the Agency also analyzed for the rulemakings for the EMACT standards, HON, and MON. The memoranda and background technical information can be found in the Ethylene Production RTR rulemaking docket (Docket ID No. EPA-HQ-OAR-2017-0357), the HON rulemaking docket (Docket ID No. EPA-HQ-OAR-2022-0730), and the MON RTR rulemaking docket (Docket ID No. EPA-HQ-OAR-2018-0746). Additional information related to the promulgation and subsequent amendments of the CMAS NESHAP is available in Docket ID No. EPA-HQ-OAR-2008-0334.
As discussed in section II.A.1, the EPA conducted a human health risk assessment to determine if EtO emissions from CMAS present a threat of adverse effects to human health (
The EPA often conducts risk assessments at both the facility and source category level when investigating human health concerns and uses standard methodology for all risk assessments. However, we note that this risk assessment was completed using the emissions inventory described in section II.C.2 of this preamble. As such, there are uncertainties with the results of the risk assessment engendered by the uncertainties associated with the emissions inventory. However, given the information available, we believe the risk assessment supports our conclusion that these sources present a threat of an adverse impact on human health. Additional details on the risk assessment and exact methodology are presented in the document titled,
As discussed in section II.A.1 of this preamble, the MIR posed by the evaluated sources is 800-in-1 million, driven primarily (greater than 90 percent) by EtO emissions from process vents (97 percent). Approximately 4.4 million people within 50 kilometers (km) of the evaluated CMAS are estimated to have cancer risks above 1-in-1 million and 3,600 people are estimated to have cancer risks above 100-in-1 million due to emissions from the sources. The people with risks above 100-in-1 million all reside within 10 km of the sources. The sources are estimated to result in 0.4 additional cancer cases per year, or 1 cancer case every 2.5 years. Emissions from the evaluated CMAS drive cancer risk attributable to whole facility emissions, such that the risk posed by all HAP emissions from the facilities are generally the same as the risk posed by the evaluated sources, except that emissions from whole facility emissions increase the population with risk greater than 1-in-1 million living within 50 km by 200,000 people.
The maximum chronic noncancer target organ-specific hazard index (TOSHI) for the evaluated CMAS is estimated to be 3 (for respiratory and immunological effects) at two facilities due to nickel compounds emissions from process vents at one facility and equipment leaks and fugitive emissions at the other facility. The same nickel emissions also drive the estimated maximum facility-wide TOSHI of 3. Approximately 1,500 people are estimated to have a TOSHI greater than 1 due to emissions from the evaluated CMAS.
The estimated reasonable worst-case off-site acute inhalation exposures to emissions from the CMAS categories results in an estimated maximum modeled acute noncancer HQ of 20 based on CalEPA's Chronic Reference Exposure Level for acrolein. It is important to note that when assessing acute inhalation exposures, the EPA makes conservative assumptions about emission rates, meteorology, and exposure location. We assume that an individual is present at the location of maximum exposure at the exact same hour that peak emissions occur (using a default factor of 10 from average actual annual emissions rates) and the exact same hour the reasonable worst-case air dispersion conditions (
We also conducted a community-based risk assessment for facilities currently subject to the CMAS NESHAP or who would become subject to the CMAS NESHAP with the proposal of the new area source category (see section II.C.1 of this preamble for details on how the facility list was developed). The goal of this assessment was to estimate cancer risk from HAP emitted from all local stationary point sources for which we have emissions data. We estimated the overall inhalation cancer risk due to emissions from all stationary point sources impacting census blocks within 10 km of the CMAS facilities. Specifically, we combined the modeled impacts from category and non-category HAP sources at CMAS facilities, as well as other stationary point source HAP emissions. The results indicate that the community-level maximum individual cancer risk is 5,000-in-1 million, with all risk attributable to chromium VI emissions from an area source iron foundry. The Agency will investigate these emissions to determine if follow-up action is necessary. We note that the 2020 NEI data (the baseline for the community-level assessment) for the facility driving the community-level MIR present an anomalously high year of chromium VI emissions compared to other years. Also, the default speciation of chromium emissions to chromium III and chromium VI emissions done by the NEI is a conservative estimate of emissions and may not be representative of the actual emissions. In addition, we note that there is additional uncertainty in non-CMAS categories emissions because they were not reviewed to the same extent as emissions from CMAS facilities. Within 10 km, the population exposed to cancer risks greater than 100-in-1 million from all nearby emissions is approximately 5,600. For comparison, approximately 3,600 people have cancer risks greater than 100-in-1 million due to emissions from the evaluated CMAS NESHAP (see table 1 of this preamble).
After the controls proposed in this action are implemented for the CMAS categories (see sections IV.A through IV.C of this preamble), including the contribution from all non-EtO HAP, the maximum individual cancer risk is estimated to be 100-in-1 million and no facilities are estimated to pose cancer risk greater than 100-in-1 million. The number of people living within 50 km of CMAS facilities with risk greater than 1-in-1 million due to emissions from the CMAS categories will decrease from 4.4 million to 2.3 million. Chronic and acute noncancer risk is not estimated to change, although our proposal to remove the 50 parts per million by volume (ppmv) criteria as part of the definition of “metal HAP process vent” (see section IV.C.3 of this preamble) is anticipated to reduce emissions of nickel that drive the chronic noncancer risk. After implementation of the proposed controls, the community-level maximum individual cancer risk will remain unchanged at 5,000-in-1 million. The population (within 10 km of CMAS facilities) exposed to cancer risks greater than 100-in-1 million from all nearby emissions will be reduced from 5,600 people to 1,900 people; a 66 percent reduction from the baseline. The increased cancer risk for most of these 1,900 people is driven largely by emissions of chromium VI from non-CMAS facilities within 10 km of CMAS facilities.
See table 1 of this preamble for a summary of the CMAS NESHAP inhalation risk assessment results. We present the full results and methods of the risk assessment in more detail, in the document titled
As provided in CAA section 112(d)(5), we are proposing standards representing GACT to regulate EtO emissions from equipment leaks, heat exchange systems, process vents, storage tanks, wastewater, and transfer operations located at CMAS. The statute does not set any condition precedent for issuing standards under CAA section 112(d)(5) other than that the area source category or subcategory at issue must be one that EPA listed pursuant to CAA section 112(c), which is the case here. In determining what constitutes GACT for this proposed rule, we considered the control technologies and management practices that are generally available to EtO emission sources at CMAS by examining relevant data and information, including information collected from the Synthetic Organic Chemical Manufacturing Industry (SOCMI) and PEPO Production major source categories. We also considered the standards for major chemical manufacturing sources subject to the MON and HON (see 85 FR 49084, August 12, 2020, and 89 FR 42932, May 16, 2024, respectively) to determine if the control technologies and work practice standards for the major sources are generally available to area sources as well. Finally, we considered the costs of available control technologies and management practices on area sources.
From the information that we have collected to date in conjunction with this rulemaking, which includes information about process equipment, control technologies, point and fugitive emissions, and other aspects of facility operations at major chemical manufacturing sources, we know that area sources have the same types of emissions, emission sources, and controls as major sources. Equipment leaks, heat exchange systems, process vents, storage tanks, wastewater, and transfer operations at major and area sources are using the same control technologies. There are generally no discernible differences between the processes at area and major chemical manufacturing sources excepting size. In fact, major and area sources use similar, if not identical, control technologies and practices to manage process emissions. Therefore, the control technologies used by chemical manufacturing major sources are generally available for CMAS.
For the NESHAP area source GACT standard, our technology review primarily focuses on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the standards were promulgated. Where we identify such developments, we analyze their technical feasibility, estimated costs, energy implications, and non-air environmental impacts. We also consider the emission reductions associated with applying each development. This analysis informs our decision of whether it is “necessary” to revise the emissions standards. In addition, we consider the appropriateness of applying controls to new sources versus retrofitting existing sources. For this exercise, we consider any of the following to be a “development”:
• Any add-on control technology or other equipment that was not identified and considered during development of the original GACT standards;
• Any improvements in add-on control technology or other equipment (that were identified and considered during development of the original GACT standards) that could result in additional emissions reduction;
• Any work practice, management practice, or operational procedure that was not identified or considered during development of the original GACT standards;
• Any process change or pollution prevention alternative that could be broadly applied to the industry and that was not identified or considered during development of the original GACT standards; and
• Any significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original GACT standards).
In addition to reviewing the practices, processes, and control technologies that were considered at the time we originally developed (or last updated) the CMAS NESHAP, we review a variety of data sources in our investigation of potential practices, processes, or controls to consider. See sections II.C and II.D of this preamble for information on the specific data sources that were reviewed as part of the technology review.
As discussed in section II.A.1 of this preamble, the EPA is proposing, pursuant to CAA section 112(c)(3) and (5), to create an area source category describing chemical manufacturing operations using EtO. Specifically, we are proposing at 40 CFR 63.11494(a)(2)(v) that you are subject to the CMAS NESHAP if you own or operate a CMPU that is located at an area source of HAP and EtO is used as a feedstock at an individual concentration greater than 0.1 percent by weight; generated as a byproduct and is present in the CMPU in any liquid stream (process or waste) at a concentration of greater than or equal to 1 part per million by weight (ppmw); generated as a byproduct and is present in the CMPU in any continuous process vent or batch process vent at a concentration greater than 1 ppmv; or is produced as a product of the CMPU. The EPA is also proposing amendments to the CMAS NESHAP pursuant to CAA section 112(d)(5) to include:
• New monitoring requirements for leaks from equipment in EtO service;
• New monitoring requirements for leaks from heat exchange systems in EtO service;
• A new emissions standard for batch and continuous process vents in EtO service;
• A new emissions standard for storage tanks in EtO service;
• New control requirements for wastewater streams in EtO service;
• Improved operational and monitoring requirements for flares that emit EtO;
• A new fenceline monitoring standard related to EtO emissions; and
• A requirement that any release event from a PRD in EtO service is a deviation.
The data, analyses, results, and proposed decisions pursuant to CAA section 112(d)(5) are presented for each
The EPA considers multiple factors in assessing the costs of emission reductions.
Emissions from equipment leaks occur in the form of gases or liquids that escape to the atmosphere through connection points (
As such, given the transferability of major source work practice standards to CMAS management practices due to the minimal differences between performing instrument monitoring at a major source compared to an area source, we evaluated the following option to represent GACT for equipment “in ethylene oxide service” that are located at CMAS:
• Control Option 1 (if EtO was added to table 1 to 40 CFR part 63, subpart VVVVVV): conduct monthly EPA Method 21 monitoring at a leak definition of 100 ppmv for connectors and valves in EtO service and 500 ppmv for pumps in EtO service.
We find this Control Option and the associated technologies to be “generally available” per the language of CAA section 112(d)(5). While it was not proposed in the original CMAS rulemaking, an instrument monitoring program similar to the MON was evaluated as part of the original CMAS rulemaking in 2008. In addition, conducting EPA Method 21 monitoring has been an option for the CMAS management practices since promulgation (
We estimated the cost and emissions reductions of Control Option 1 for 33 CMAS EtO facilities. Using background information available to the EPA (including air permits and information received from various EPA regional offices), it was determined that 10 CMAS EtO facilities are already conducting instrument monitoring as part of an LDAR program for their equipment in EtO service. Based on this, there are two types of facilities for purposes of identifying their baseline LDAR program for equipment in EtO service: those that do not have an LDAR program of any kind; and those that already conduct EPA Method 21 instrument monitoring. When evaluating the cost and emissions reductions for each facility, we calculated the incremental cost and reductions to meet Control Option 1 compared to a facility's baseline LDAR program. The memorandum
Table 2 of this preamble presents the nationwide impacts for requiring owners and operators of equipment in EtO service to perform EPA Method 21 monitoring in accordance with Control Option 1. Based on the costs and emission reductions, we are proposing to revise the CMAS NESHAP for equipment in EtO service to reflect Control Option 1 pursuant to CAA section 112(d)(5).
The EPA is proposing to define equipment leaks “in ethylene oxide service” at 40 CFR 63.11502(b), by reference to the HON (40 CFR 63.101). We are proposing Control Option 1 for equipment leaks in EtO service at 40 CFR 63.11495(a)(7). These proposed requirements would apply to all new and existing affected sources and specify that:
• All connectors in EtO service be monitored monthly at a leak definition of 100 ppmv with no skip period, and delay of repair is not allowed unless the equipment can be isolated such that it is no longer in EtO service (see 40 CFR 63.174(a)(3), (b)(3)(vi), and (g)(3), and 40 CFR 63.171(f)).
• All gas/vapor and light liquid valves in EtO service be monitored monthly at a leak definition of 100 ppmv with no skip period, and delay of repair is not allowed unless the equipment can be isolated such that it is no longer in EtO service (see 40 CFR 63.168(b)(2)(iv) and (d)(5), and 40 CFR 63.171(f)).
• All light liquid pumps in EtO service be monitored monthly at a leak definition of 500 ppmv, and delay of repair is not allowed unless the equipment can be isolated such that it is no longer in EtO service (see 40 CFR 63.163(a)(1)(iii), (b)(2)(iv), (c)(4), and (e)(7), and 40 CFR 63.171(f)).
Emissions of EtO from heat exchange systems occur when a heat exchanger's internal tubing material corrodes or cracks, allowing some process fluids to mix or become entrained with the cooling water. Pollutants (
To assess what GACT standards may be appropriate if EtO is added to table 1 to 40 CFR part 63, subpart VVVVVV, we reviewed other rulemakings to identify the level of control required for heat exchange systems emitting EtO. As part of that review, we identified one rule requiring monitoring of heat exchange systems “in ethylene oxide service.” The EPA recently added EtO-specific requirements into the HON for heat exchange systems in EtO service that require more stringent monitoring frequency (weekly instead of quarterly) and repair of leaks within 15 days from the sampling date (in lieu of the current 45-day repair requirement after receiving results of monitoring indicating a leak) (see 89 FR 42932, May 16, 2024). Additionally, delay of repair is not allowed unless there is no longer an active EtO leak once the heat exchange system is isolated and not in EtO service. A heat exchange system in EtO service means any heat exchange system in a process that cools process fluids (liquid or gas) that are 0.1 percent or greater by weight of EtO. If knowledge exists that suggests EtO could be present in a heat exchange system, then the heat exchange system is considered to be “in ethylene oxide service” unless the procedures specified in the HON at 40 CFR 63.109 are performed to demonstrate that the heat exchange system does not meet the definition of being “in ethylene oxide service.” Examples of information that could suggest EtO could be present in a heat exchange system include calculations based on safety data sheets, material balances, process stoichiometry, or previous test results provided the results are still relevant to the current operating conditions.
Given the EtO specific requirements in the HON for heat exchange systems in EtO service and minimal operational differences between heat exchange systems operating at SOCMI and CMAS facilities, we evaluated the following options in the selection of GACT for all heat exchange systems “in ethylene oxide service” that are located at CMAS:
• Control Option 1: quarterly monitoring (after an initial six months of monthly monitoring) with the Modified El Paso Method, using a leak action level defined as a total strippable hydrocarbon concentration (as methane) in the stripping gas of 6.2 ppmv; reduce the allowed amount of repair time from 45 days after finding a leak to 15 days from the sampling date; and prohibit delay of repair.
• Control Option 2: same as Control Option 1, except monthly monitoring with the Modified El Paso Method instead of quarterly monitoring.
• Control Option 3: same as Control Option 1, except weekly monitoring with the Modified El Paso Method instead of quarterly monitoring. This option is required in the HON.
The Modified El Paso Method is required and in use by sources regulated under other rulemakings including, but not limited to the MON, the HON, and the Petroleum Refineries NESHAP. The method works via air stripping and use of a flame ionization detector (FID), both of which are well understood
We estimated the impacts of these Control Options using information from the original CMAS rulemaking.
Table 3 of this preamble presents the nationwide impacts for requiring owners and operators of heat exchange systems in EtO service to use the Modified El Paso Method and repair leaks of total strippable hydrocarbon concentration (as methane) in accordance with Control Options 1 through 3. See the document titled
While all Control Options were identified as cost effective based on values accepted as part of other recent rulemakings regulating EtO emissions (see 89 FR 24090, April 5, 2024, for the commercial sterilizer rulemaking), the potency of EtO as a carcinogen, and historic cost-effectiveness values accepted for highly toxic HAP (such as hexavalent chromium), there are no records in the emissions inventory from heat exchangers in EtO service. We note that leaks from heat exchange systems handling EtO can still occur, even if there are no specific emissions records in the inventory. This absence of records is likely because most facilities emitting EtO have not been required to monitor leaks in their heat exchange systems. Consequently, the impacts associated with controlling these emissions are less certain due to the lack of records. In addition, there are concerns that monthly or weekly monitoring of heat exchangers in EtO service would be significantly more burdensome for area sources than major sources. Major sources may have additional capital and personnel bandwidth to accommodate installation and operation of a stripping column and lab equipment (such as a gas chromatograph/mass spectroscopy unit) necessary for in-house analysis compared to area sources who may not have previously been subject to any monitoring of heat exchange systems. As such, based on the costs, emissions reductions, and uncertainties, we are proposing that Control Option 1 represents GACT for heat exchange systems in EtO service. However, we are soliciting comments and data on whether more frequent monitoring (
The EPA is proposing to define a heat exchange system “in ethylene oxide service” at 40 CFR 63.11502(b), by reference to the HON (40 CFR 63.101). We are proposing Control Option 1 at 40 CFR 63.11499(e) and item 2 of table 8 to the CMAS NESHAP, by reference to the HON (40 CFR 63.104(a), (f) through (i), and (k)), to specify quarterly monitoring (after an initial six months of monthly monitoring) for leaks for all new and existing affected sources with heat exchange systems in EtO service using the Modified El Paso Method, and if a leak is found, we are proposing owners and operators must repair the leak to below the applicable leak action level as soon as practicable, but no later than 15 days after the sample was collected with no delay of repair allowed (see 40 CFR 63.104(h)(6)).
Emissions of EtO can occur from several types of gas streams associated with CMAS processes, such as distillation columns, evaporator vents, and vacuum operations, as well as during vapor displacements and heating losses. CMAS storage tanks are used to store liquid and gaseous feedstocks for use in a process, as well as to store
To assess what GACT standards may be appropriate, we reviewed other rulemakings to identify the level of control required for process vents and storage vessels emitting EtO. As part of that review, we identified two rules requiring stringent control of emissions from vents and process tanks “in ethylene oxide service.” The EPA recently added EtO-specific requirements into the MON and HON for process vents and storage vessels in EtO service (see 85 FR 49084, August 12, 2020, and 89 FR 42932, May 16, 2024, respectively). We note that the MON and HON use the term “storage vessel” in lieu of “storage tank” which is used in the CMAS NESHAP. According to the MON and HON, a process vent in EtO service is a process vent that contains a concentration of greater than or equal to 1 ppmv undiluted EtO when uncontrolled, and when all process vents within the process are combined, the sum of uncontrolled EtO emissions are greater than or equal to 5 pounds per year (lb/yr) (2.27 kilogram per year, kg/yr). A storage vessel in EtO service means a storage vessel of any capacity and vapor pressure storing a liquid that is at least 0.1 percent by weight of EtO. The EtO-specific standards established for the Miscellaneous Organic Chemical Manufacturing and SOCMI source categories are as follows:
• Requirements that owners and operators must reduce emissions of EtO from process vents in EtO service by either: (1) venting emissions through a closed vent system to a control device that reduces EtO by greater than or equal to 99.9 percent by weight, to a concentration less than 1 ppmv for each process vent, or to less than 5 lb/yr for all combined process vents per CMPU; or (2) venting emissions through a closed vent system to a flare meeting certain new operating and monitoring requirements for flares; and
• Requirements that owners and operators must reduce emissions of EtO from storage tanks in EtO service by either: (1) venting emissions through a closed vent system to a control device that reduces EtO by greater than or equal to 99.9 percent by weight or to a concentration less than 1 ppmv for each storage tank vent; or (2) venting emissions through a closed vent system to a flare meeting certain new operating and monitoring requirements for flares.
Given the EtO specific requirements in the MON and HON for process vents and storage vessels in EtO service and minimal operational differences between an APCD controlling emissions from process vents or storage vessels/tanks at MON, SOCMI, and CMAS facilities, we evaluated a Control Option to represent GACT for process vents and storage tanks that are “in ethylene oxide service” that would require owners and operators at certain CMAS (
We find this Control Option to be “generally available” per the language of CAA section 112(d)(5). Control devices include a wide array of potential technologies and so a facility may use whatever methods are available to achieve the 99.9 percent by weight reduction in EtO emissions. Thermal oxidizers, which we assumed will be installed by facilities needing to meet the proposed standards, are used to control emissions from process vents and storage tanks at sources regulated under other rulemakings including, but not limited to, the MON and the HON and have been in use in industry for decades. In addition, the CMAS NESHAP already allows for the venting of emissions through a closed vent system to a flare for both process vents and storage tanks. Given the widespread use of a readily available control technology such as a thermal oxidizer in other, similar chemical manufacturing facilities, we consider this Control Option of proposing a 99.9 percent by weight reduction of EtO emissions from process vents and storage tanks to be “generally available.”
To determine which emission points at facilities would need additional control of EtO emissions, we reviewed the CMAS emissions inventory data (see section II.C.2 of this preamble). For each process vent and storage tank emission point record with EtO emissions in the CMAS emissions inventory, we determined whether it was controlled by a non-flare combustion device, a non-combustion control device, a non-combustion control device able to achieve 99.9 percent emissions reduction, or was uncontrolled. There are no process vent or storage tank emission point records associated with a non-flare combustion device; however, for emission point records that are controlled by a non-combustion control device, our impacts analyses assumed that none of the facilities with existing non-combustion controls would be able to achieve 99.9 percent control of EtO, unless a stack test or data provided by a state agency confirmed otherwise. Therefore, we treated non-combustion control devices unable to achieve 99.9 percent control and uncontrolled emission point records in the same manner and assumed that each would need to be controlled by a thermal oxidizer. Some facilities that would need to install a thermal oxidizer to control EtO have multiple process vent and/or storage tank emission points with EtO emissions. Rather than costing out multiple thermal oxidizers for these facilities, we assumed they would combine the streams together and install a single thermal oxidizer (to control all EtO emissions), as is commonly done at chemical plants. We also recognize that some emission points could possibly achieve a 99.9 percent reduction in EtO emissions by upgrading or installing a
The EPA is proposing to define a process vent “in ethylene oxide service” at 40 CFR 63.11502(b), by reference to the HON (40 CFR 63.101). We are proposing Control Option 1 for all new and existing affected sources with process vents in EtO service at 40 CFR 63.11496(j), item 4 of table 2 to the CMAS NESHAP (for batch process vents), and item 4 of table 3 to the CMAS NESHAP (for continuous process vents), by reference to the HON. These proposed requirements specify that owners and operators of process vents in EtO service must reduce emissions of EtO by venting emissions through a closed vent system to a flare in accordance with the requirements in 40 CFR 63.108 and 40 CFR 63.124 (see section IV.A.6 of this preamble for additional details regarding our proposed requirements for flares that emit EtO), or to a control device that reduces EtO by greater than or equal to 99.9 percent by weight, or to a concentration less than 1 ppmv for each process vent or to less than 5 lb/yr for all combined process vents within the process in accordance with the requirements in 40 CFR 63.124.
The EPA is proposing to define a storage tank (vessel) “in ethylene oxide service” at 40 CFR 63.11502(b), by reference to the HON (40 CFR 63.101). We are also proposing that the exemption for “tanks storing organic liquids containing HAP only as impurities” listed in the definition of “storage tank” at 40 CFR 63.11502(b) does not apply for storage tanks in EtO service. We are also proposing Control Option 1 for storage tanks in EtO service at 40 CFR 63.11497(e) and item 5 of table 5 to the CMAS NESHAP, by reference to the HON. These proposed requirements specify that owners and operators of storage tanks in EtO service must reduce emissions of EtO by venting emissions through a closed vent system to a flare in accordance with the requirements in 40 CFR 63.108 and 40 CFR 63.124 (see section IV.A.6 of this preamble for additional details regarding our proposed requirements for flares that emit EtO), or to a control device that reduces EtO by greater than or equal to 99.9 percent by weight, or to a concentration less than 1 ppmv for each storage tank vent in accordance with the requirements in 40 CFR 63.124.
In addition, given that 40 CFR 63.124 requires owners and operators to comply with the HON leak inspection requirements in 40 CFR 63.148 and the delay of repair provisions associated with these inspection requirements (
Finally, we are also proposing to remove the option to allow use of a design evaluation in lieu of performance testing to demonstrate compliance for controlling process vents and storage tanks that are in EtO service. In addition, owners or operators that choose to control emissions with a non-flare control device would be required to conduct an initial performance test on each control device in EtO service to verify performance at the required level of control, and would also be required to conduct periodic performance testing on non-flare control devices in EtO service every 5 years (see proposed 40 CFR 63.11496(j) and 40 CFR 63.11497(e) by reference to 40 CFR 63.124).
EtO is emitted into the air from wastewater collection, storage, and treatment systems that are uncovered or open to the atmosphere through volatilization of the compound at the liquid surface. The rate of volatilization is related directly to the speed of the air flow over the water surface. We provide more details about wastewater streams, including how the CMAS NESHAP regulates them, in our technology review discussion (see section IV.C.5 of this preamble).
To assess what GACT standards may be appropriate for wastewater in EtO service, we reviewed other rulemakings to identify the level of control required for wastewater emitting EtO. As part of that review, we identified one rule requiring control of emissions from wastewater “in ethylene oxide service.” In the HON rulemaking, the EPA recently added EtO-specific requirements for wastewater streams in EtO service (see 89 FR 42932, May 16, 2024). These standards require owners and operators to manage and treat existing and new wastewater streams with total annual average concentration of EtO greater than or equal to 1 ppmw at any flow rate. As such, we evaluated a Control Option to represent GACT for wastewater streams that are “in ethylene oxide service” that would require owners and operators at certain CMAS (those that would either become subject to the CMAS NESHAP if EtO is added to table 1 to 40 CFR part 63, subpart VVVVVV, as proposed, or are already subject to the CMAS NESHAP and emit EtO) to comply with the HON Group 1 wastewater requirements for wastewater streams that are “in ethylene oxide service” as defined by the HON (
The HON specifies performance standards for treatment processes managing Group 1 wastewater streams including performance standards for open or closed biological treatment systems or a design steam stripper with vent control. For APCDs (
We find Control Option 1 to be “generally available” per the language of CAA section 112(d)(5). Steam strippers are used to control emissions from wastewater streams at sources regulated under other rulemakings including, but not limited to, the MON and the HON. In addition, steam stripping was evaluated as part of the original rulemaking and is currently a method of compliance for controlling certain CMPU wastewater streams. Given the widespread use of this control technology in other, similar chemical manufacturing facilities, and current applicability of the technology to certain CMAS wastewater streams, we consider this Control Option of proposing the use of steam strippers to control EtO emissions from wastewater to be “generally available.”
We reviewed the CMAS emissions inventory data (see section II.C.2 of this preamble) as well as air permits and determined that there are 4 CMAS facilities that have wastewater processes that use and emit EtO and therefore would be impacted by Control Option 1. To evaluate the impacts of requiring these facilities to meet Control Option 1, we used PEPO-specific wastewater data submitted in response to the EPA's 2022 CAA section 114 request (see section II.C.3 of this preamble). We used the PEPO-specific wastewater data rather than HON-specific data because for EtO processes, CMAS CMPUs are more like PEPO PMPUs given that both CMAS CMPUs and PEPO PMPUs use EtO as a reactant (often in batch reactions to make a product), whereas HON CMPUs produce EtO and are continuous. In addition, we removed all PEPO-specific wastewater data that could not be representative of an area source (based on the amount of HAP emissions that could potentially be emitted to the atmosphere from the wastewater streams); and therefore, not representative of a CMAS facility. We estimated costs to install a steam stripper using the cost algorithm for wastewater stripper steam requirements used for the development of the HON.
The EPA is proposing to define a wastewater stream “in ethylene oxide service” at 40 CFR 63.11502(b), by reference to the HON (40 CFR 63.101). We are proposing Control Option 1 for all new and existing affected sources with wastewater streams in EtO service at 40 CFR 63.11498(c) and item 3 of table 6 to the CMAS NESHAP, by reference to the HON. These proposed requirements specify that owners and operators of wastewater in EtO service must reduce, by removal or destruction, the concentration of ethylene oxide in existing and new wastewater streams (
The EPA includes transfer operations as part of the equipment collection that makes up a CMPU (see 40 CFR 63.11494(b)). According to the CMAS NESHAP, transfer operations involve loading liquid containing organic HAP into tank trucks and rail cars from a transfer rack. This does not include loading into other containers like cans, drums, and totes.
The CMAS NESHAP defines a transfer rack as the system used to load organic liquids into tank trucks and railcars at a single location. This system includes all necessary loading arms, pumps, meters, shutoff valves, relief valves, and other piping and equipment. Transfer equipment that do not share common piping, valves, and other equipment are considered separate transfer racks.
The CMAS NESHAP regulates transfer operations through specific management practices. According to 40 CFR 63.11495(a)(2), owners and operators must use one of the following methods to control total organic HAP emissions when transferring certain liquids (those containing any organic HAP listed in table 1 to 40 CFR part 63, subpart VVVVVV) to tank trucks or railcars: (1) submerged loading or bottom loading; (2) routing emissions to a fuel gas system or process; (3) vapor balancing back to the storage tank or another storage tank connected by a common header; or (4) venting through a closed vent system to a control device.
Since we are proposing to add EtO to table 1 to 40 CFR part 63, subpart VVVVVV, owners and operators of new and existing affected sources with transferring liquids containing EtO to tank trucks or railcars would be subject to these same management practices. We are proposing that these management practices reflect GACT for these transfer operations. We anticipate that all facilities that may become subject to the CMAS NESHAP if EtO were to be added to table 1 to 40 CFR part 63, subpart VVVVVV already use at least one of these management practices when transferring liquids containing EtO to tank trucks or railcars. Therefore, we do not expect any additional costs from this proposed GACT standard.
The EPA is soliciting comments and data on the proposed transfer operation practices.
As previously discussed in section IV.A.3 of this preamble, the EPA is proposing to add specific requirements for EtO to the CMAS NESHAP for batch process vents, continuous process vents, and storage tanks in EtO service. Each of these requirements mandates 99.9 percent control, reduction in concentration to less than 1 ppmw, or the use of a flare. These requirements are based on EtO-specific requirements in the MON and HON. If a flare is used to meet the MON and HON standards for process vents and storage tanks in EtO service, the owner or operator must comply with several operational and monitoring requirements that are reflective of requirements for petroleum refinery flares which address: (1) the presence of a pilot flame; (2) visible emissions; (3) flare tip velocity; (4) net heating value of flare combustion zone gas; and (5) net heating value dilution parameter (if the flare actively receives perimeter assist air). More details about these requirements are provided in our
Control Option 1 requires various monitoring equipment (
Using information from the CMAS emissions inventory data (see section II.C.2 of this preamble), we estimated there are only two flares at two different facilities that would be impacted by Control Option 1 (one of the facilities is already subject to the CMAS NESHAP and the other facility would become subject to the CMAS NESHAP if EtO is added to table 1 to 40 CFR part 63, subpart VVVVVV, as proposed). We estimated costs for each flare for a given facility, considering current monitoring systems already installed on each individual flare. Given that the same type of equipment is used for flares in the CMAS categories and for the petroleum refinery sector, we estimated costs for any additional monitoring systems needed based on installed costs received from petroleum refineries. If those installed costs were unavailable, we estimated costs based on vendor-purchased equipment. The baseline emission estimate and the emission reductions achieved by Control Option 1 were estimated based on the CMAS emissions inventory data (see section II.C.2 of this preamble) and current vent gas and steam flow data submitted by industry representatives.
We are proposing Control Option 1 for flares at new and existing affected sources that are used to comply with the proposed GACT standards for process vents and storage tanks in EtO service at item 4.a of table 2 to the CMAS NESHAP, item 4.a of table 3 to the CMAS NESHAP, item 5.a of table 5 to the CMAS NESHAP, and 40 CFR 63.11497(f)(5), all by reference to the HON (40 CFR 63.108 and 40 CFR 63.124). These proposed requirements specify that owners and operators that choose to use a flare to comply with the proposed standards for process vents and storage tanks in EtO service as described in section IV.A.3 of this preamble must vent emissions through a closed vent system and meet the applicable requirements for flares as specified in 40 CFR 63.670 and 63.671, including the provisions in tables 12 and 13 to 40 CFR part 63, subpart CC (
We also note that we are proposing an LDAR program for equipment leaks at 40 CFR 63.11495(a)(6) and (7) (see sections IV.A.1 and IV.C.1 of this preamble). Part of this LDAR program requires owners and operators that vent equipment leak emissions through a closed vent system to a flare used to control equipment leaks in EtO service, to comply with the same suite of operational and monitoring requirements for flares as we are proposing for flares used to comply with the proposed GACT standards for process vents and storage tanks in EtO service (see proposed 40 CFR 63.11495(a)(7)). Given that we only identified two flares in the CMAS emissions inventory data that emit EtO and we have already estimated impacts for these flares to comply with Control
As discussed in section IV.C.7 of this preamble as well, fenceline monitoring is the practice by which monitors are placed around the perimeter of a facility to measure the concentration of certain pollutants. When required in conjunction with root cause analysis and corrective action, fenceline monitoring can reduce uncertainties associated with fugitive emissions estimation and characterization. This section of the preamble is limited to the discussion of fenceline monitoring for EtO. Section IV.C.7 of this preamble provides details on why we are not proposing fenceline monitoring for CMPUs using, producing, storing, or emitting other table 1 HAP.
In the promulgated amendments to the HON, the EPA finalized a new EPA method (EPA Method 327 of 40 CFR part 63, appendix A) to monitor the concentration of EtO at facility fenceline locations. EPA Method 327 provides procedures for canister sampling and analysis for measuring trace levels of targeted VOC (including organic HAP) in air. EPA Method 327 collects ambient air samples using specially prepared and pre-cleaned evacuated stainless-steel canisters. For analysis, the method specifies procedures for concentrating the target VOC (
As part of the HON, fenceline monitoring in combination with root cause analysis and corrective action was required for affected sources using, producing, storing, or emitting EtO. The program requires a cannister sample to be collected in accordance with EPA Method 327 for one 24-hour period every five days. This monitoring frequency is necessary to ensure that all onsite processes are monitored regularly while maintaining the cost effectiveness of implementing a canister monitoring network. A sampling frequency of every 5 days also ensures that the annual average concentration derived from the fenceline data are indicative of the actual average emissions from the site by reducing the possibility that sampling occurs only during emission spikes. Once samples are analyzed, the lowest sample value for EtO is subtracted from the highest sample value for EtO, generating a Δc. This approach subtracts the estimated contributions from background emissions that do not originate from the facility. The owner or operator would average the Δc for the most recent year of samples (73 sampling periods) to calculate an annual average Δc on a rolling basis (
If the annual average Δc for a facility exceeds the action level, then root cause analysis and corrective action must be performed. Root cause analysis is an assessment conducted through a process of investigation to determine the primary underlying cause and other contributing causes of an exceedance of the action level. If the underlying causes of the action level exceedance are deemed to be from sources under the control of the owner or operator, the owner or operator is required to take corrective action to address the underlying cause of the exceedance and to bring the annual average Δc back below the action level as expeditiously as possible. Completion of the root cause analysis and initial corrective action is required within 45 days of determining that the annual average Δc exceeded the action level. If the owner or operator requires longer than 45 days to implement the corrective actions identified by the root cause analysis, the owner or operator is required to submit a corrective action plan no later than 60 days after completion of the root cause analysis.
After completion of the initial corrective action, if the Δc for the next three sampling periods for samples collected by EPA Method 327 are below the action level, then the corrective action is assumed to have fixed the problem, and the owner and/or operator has no further obligation for additional corrective action. However, if the Δc for the subsequent sampling periods after initial corrective action is greater than the action level, then the owner or operator must submit a corrective action plan and schedule for implementing design, operation, and maintenance changes to eliminate as quickly as possible and prevent recurrence of the primary cause and other contributing causes to the exceedance of the action level, to reduce annual average concentrations below the action level. If the owner or operator cannot determine the root cause of the exceedance within 30 days of determining that there was an exceedance of an action level, the proposed revisions require use of real-time sampling techniques (
Given the similarities between certain sources subject to the HON and CMAS CMPUs in EtO service, the threat of adverse effect on human health (as discussed in section II.A.1 of this preamble), and the observed inconsistency between modeling the fenceline concentrations of sources subject to the HON and actual fenceline concentration measurements,
For the 33 facilities within the proposed source category, Chemical Manufacturing with Ethylene Oxide, EtO is ubiquitous and should be present in most streams associated with CMPUs in EtO service. As such, for these facilities, EtO can act as a surrogate pollutant to track and limit overall fugitive emissions of HAP at the fenceline. Therefore, using information from the CMAS emissions inventory (see section II.C.2 of this preamble), we modeled what the fenceline concentrations for EtO would be for the 33 facilities identified to use, produce, store, or emit EtO based on whole facility emissions when considering those options proposed in sections IV.A.1 through IV.A.6 and section IV.A.8. The modeling showed that 32 of the 33 facilities had EtO fenceline concentrations at or below 0.2 µg/m
The cost of the fenceline monitoring program is shown in table 7 of this preamble. We estimated the cost required for each impacted facility to build the necessary housing for the cannisters, purchase and install the cannisters, and continually monitor the fenceline concentration of EtO. See the document titled
Based on the costs and need to monitor for fugitive emissions of EtO, we are proposing to revise the CMAS NESHAP to require fenceline monitoring for EtO if a new or existing affected source uses, produces, stores, or emits EtO pursuant to CAA section 112(d)(5).
We are soliciting comment on the proposed fenceline monitoring program and the supporting analysis including the costs, benefits, and underlying assumptions.
We are proposing to require fenceline monitoring for CMAS using, producing, storing, or emitting EtO at 40 CFR 63.11495(a)(8) by reference to the HON (40 CFR 63.184).
A primary requirement for a fenceline monitoring system is that it provides adequate spatial coverage for determination of representative pollutant concentrations at the boundary of the facility. In an ideal scenario, owners or operators would place fenceline monitors so that any fugitive plume originating within the facility would have a high probability of intersecting one or more monitors, regardless of wind direction. Therefore, by referencing 40 CFR 63.184(b)(3) via 40 CFR 63.11495(a)(8) we propose that each facility would place eight canisters evenly spaced on the monitoring perimeter. The monitoring perimeter may be the facility fenceline or may be inside the facility fenceline, provided all sources of EtO are contained within the perimeter. The EPA is also proposing to require that facilities move the canister sampling locations with alternating sampling periods to ensure complete spatial coverage of the facility. For facilities with perimeters less than or equal to 5,000 meters, all eight sampling points would be monitored during each sampling period. For facilities with perimeters greater than 5,000 meters but less than or equal to 10,000 meters, 16 sampling points would be required; for facilities with perimeters greater than 10,000 meters, 24 sampling points would be required. For facilities with EtO emission sources that are not contained within one contiguous area, the EPA is proposing monitoring of these secondary areas as well, with the size of the secondary area dictating the number of canisters.
In addition, we are proposing to allow the subtraction of offsite interfering sources (as they are not within the control of the owner or operator) through site-specific monitoring plans, but we are not providing this option for onsite, non-source category emissions. We based the action level on facility-wide emissions; therefore, we considered these non-source category sources in its development. Applying the fenceline standard to the whole facility will also limit emissions of EtO from all sources and provide more certainty in decisions being made as to whether the entire facility emissions align with what is expected from the EPA's analysis. It will also provide assurance to fenceline communities that emission reductions are achieved and maintained.
The EPA is also proposing, by reference to the HON at 40 CFR 63.182(e), that owners or operators report fenceline data on a quarterly basis. Each report would contain the results for each sample where the field portion of sampling is completed by the end of the quarter, as well as for associated field and method blanks (
The CMAS NESHAP regulates PRDs through equipment leak management practices. These practices require owners and operators to conduct quarterly sensory-based inspections (using sight, sound, or smell) to ensure that equipment (including PRDs) is “sound and free of leaks.” However, these provisions do not apply to an emissions release from a PRD (see section IV.B.2 of this preamble for more detail).
The EPA is proposing an LDAR program (using EPA Method 21) for all equipment in organic HAP service (see section IV.C.1 of this preamble). Additionally, management practices for PRD releases are being proposed (see section IV.B.2 of the preamble). A 2023 study at an area source chemical manufacturing facility indicated that EtO PRD releases because of railcar switchover contributed to elevated levels of EtO at the facility's fenceline.
To assess appropriate GACT standards for EtO releases from PRDs, we reviewed other rulemakings and identified two rules with requirements for PRDs “in ethylene oxide service.” The EPA recently added requirements to the MON and HON making any release event from a PRD in EtO service a deviation
Given these EtO specific requirements in the MON and HON for PRDs in EtO service, the minimal operational differences between PRDs at MON, SOCMI, and CMAS facilities, and to ensure that EtO is not released to atmosphere from a PRD, we are also proposing at 40 CFR 63.11495(a)(7), by reference to the HON (40 CFR 63.165(e)(3)(v)(D)), that any release event from a PRD in EtO service at a new or existing affected source is a deviation of the standard. We do not expect any additional costs from this proposed GACT standard.
In addition to the GACT standards we are proposing for certain emission sources that emit EtO as discussed in section IV.A of this preamble, we are also proposing GACT standards for pressure vessels and PRDs as described in sections IV.B.1 and IV.B.2 of this preamble, respectively. In addition, we are proposing in section IV.B.3 of this preamble to clarify regulatory provisions for vent control bypasses for closed vent systems containing bypass lines.
Pursuant to CAA section 112(d)(5), we are proposing new requirements for pressure vessels that are associated with processes subject to the CMAS NESHAP. The EPA is proposing to define pressure vessel at 40 CFR 63.11502(a), by reference to the HON (40 CFR 63.101), to mean “a storage vessel that is used to store liquids or gases and is designed not to vent to the atmosphere as a result of compression of the vapor headspace in the pressure vessel during filling of the pressure vessel to its design capacity.” To eliminate any ambiguity in applicability or control requirements, the EPA is also proposing at 40 CFR 63.11502(b) to remove the exemption for “pressure vessels designed to operate in excess of 204.9 kilopascals (kPa) and without emissions to the atmosphere” from the definition of storage tank. This long-standing exemption is ambiguous with respect to what “without emissions to the atmosphere” means. For example, most pressure vessels have relief devices that allow for venting when pressure exceeds setpoints. In many cases, these vents are routed to control devices; however, control devices are not completely effective (
We estimate a pressure vessel is located at 15 of the 247 CMAS facilities given that these 15 facilities reported 1,3-butadiene emissions from processes subject to the CMAS NESHAP, and this chemical is stored in pressure vessels. We excluded CMAS facilities that may have pressure vessels storing EtO given that we are proposing more stringent standards for connectors in EtO service, gas/vapor and light liquid valves in EtO service, and light liquid pumps in EtO service (see section IV.A.1 of this preamble). Using information from a 2012 analysis that identified developments for storage vessels at chemical manufacturing facilities and petroleum refineries,
Based on the costs and emission reductions, we are proposing LDAR requirements at 40 CFR 63.11497(f) and items 6 and 7 of table 5 to the CMAS NESHAP that are based on similar no-detectable emission requirements required for closed vent systems in most chemical sector NESHAP, including but not limited to the HON and MON. We
See the document titled
The CMAS NESHAP regulates PRDs through equipment leak management practices. These practices require owners and operators to conduct quarterly sensory-based inspections (using sight, sound, or smell) to ensure that a PRD is “sound and free of leaks” (see 40 CFR 63.11495(a)(3)). These inspections typically occur when the PRD is seated, as PRDs are designed to open only during a pressure release (
The CMAS NESHAP does not explicitly regulate atmospheric pressure releases, regardless of whether they are single or multiple releases over time. Consequently, no CMAS facility is subject to numeric emission limits for PRDs that vent to the atmosphere. It is impractical to measure emissions from PRDs that release to the atmosphere, making numeric emission limits inappropriate. However, the EPA has included work practice standards that regulate atmospheric pressure releases from PRDs in other chemical sector NESHAP, such as the EMACT standards (85 FR 40386, July 6, 2020; see 40 CFR 63.1107(h)(3)), the MON (85 FR 49084, August 20, 2020; see 40 CFR 63.2480(e)(3)), and the HON and Group I Polymers and Resins Industry (P&R I) NESHAP (89 FR 42932, May 16, 2024; see 40 CFR 63.165(e)(3)). The EPA also added PRD work practice standards to the petroleum refinery NESHAP for similar reasons (81 FR 45241, December 1, 2015; see 40 CFR 63.648(j)(3)). These PRD work practice standards (in all these listed NESHAP) require owners and operators to: (1) implement at least three prevention measures;
We assessed whether the same PRD work practice standards, already included in the previously mentioned NESHAPs, represent GACT (
The cost for CMAS facilities to implement a management practice identical to the work practice standard in the HON and MON and install monitors for PRDs that vent to the atmosphere is based on the number of PRDs at each facility. However, we do not have actual equipment counts for CMAS facilities. To estimate the number of PRDs at CMAS facilities nationwide, we used HON-specific PRD data that was submitted in response to the EPA's 2022 CAA section 114 request (see section II.C.3 of this preamble). We calculated an average of 14 atmospheric PRDs in organic HAP service per CMAS CMPU. Multiplying this average by the total CMAS processes nationwide (247, assuming one CMPU per CMAS facility), we estimated there are 3,458 atmospheric PRDs in organic HAP service nationwide. We excluded 33 facilities
As such, pursuant to CAA section 112(d)(5), we are proposing new requirements for PRDs that are associated with processes subject to the CMAS NESHAP. We are proposing PRD management practices for all new and existing affected sources at 40 CFR 63.11495(a)(6), by reference to the HON (40 CFR 63.165(e)(1) through (8)), that require owners and operators to: (1) operate each PRD in organic HAP gas or vapor service with an instrument reading of less than 500 ppm above background as measured by the method specified in 40 CFR 63.180(c); (2) conduct instrument monitoring no later than 5 calendar days after the PRD returns to organic HAP gas or vapor service following a pressure release to verify that the PRD is operating with an instrument reading of less than 500 ppm, or if applicable, install a replacement disk as soon as practicable after a pressure release, but no later than 5 calendar days after the pressure release; (3) implement at least three prevention measures; (4) perform root cause analysis and corrective action if a PRD releases emissions directly to the atmosphere; and (5) monitor PRDs using a system that can identify and record the time and duration of each pressure release and notify operators when a pressure release occurs. The EPA is also proposing to define “pressure relief device or valve” at 40 CFR 63.11502(a), by reference to the HON (40 CFR 63.101), to mean “a valve, rupture disk, or similar device used only to release an unplanned, nonroutine discharge of gas from process equipment in order to avoid safety hazards or equipment damage. A PRD discharge can result from an operator error, a malfunction such as a power failure or equipment failure, or other unexpected cause. Such devices include conventional, spring-actuated relief valves, balanced bellows relief valves, pilot-operated relief valves, rupture disks, and breaking, buckling, or shearing pin devices. Devices that are actuated either by a pressure of less than or equal to 2.5 pounds per square inch gauge or by a vacuum are not pressure relief devices.” In addition, the EPA is proposing to define “pressure release” at 40 CFR 63.11502(a), by reference to the HON (40 CFR 63.101), to mean “the emission of materials resulting from the system pressure being greater than the set pressure of the pressure relief device. This release can be one release or a series of releases over a short time period.”
See the document titled
For a closed vent system containing bypass lines that can divert the stream away from the APCD to the atmosphere, the CMAS NESHAP requires the owner or operator to either: (1) install, maintain, and operate a continuous parametric monitoring system for flow on the bypass line that is capable of detecting whether a vent stream flow is present at least once every hour, or (2) secure the bypass line valve in the non-diverting position with a car-seal or a lock-and-key type configuration. Under option 2, the CMAS NESHAP also requires owners or operators to inspect the seal or closure mechanism at least once per month to verify the valve is maintained in the non-diverting position (
In addition, we are proposing to remove the 40 CFR 63.107(h)(9) exemption for “a gas stream exiting an analyzer” from the definition of continuous process vent at 40 CFR 63.11502(b) and we are proposing at 40 CFR 63.11495(e) to not exempt analyzer vents from the bypass requirements. As such, we are proposing to require that these kinds of vents meet the standards applicable to process vents at all times. Analyzer vents, or “onstream analyzers,” generally refer to sampling systems that directly feed to an analyzer located at a process unit and venting is expected to be routine (continuous or daily intermittent venting). We also note that sampling connection systems for CMPUs will be required to be part of a closed loop, closed purge, or closed vent system under our proposed equipment leak standards (
As described in section III.B of this preamble, the technology review for the CMAS NESHAP focused on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the NESHAP was promulgated in 2009. In conducting the technology review, we reviewed various sources of information related to the emissions from chemical manufacturing operations and other relevant information such as control technologies applied, management practices used, processes, and monitoring approaches. Through searches of these data sources, we identified, evaluated, and considered several developments in practices, processes, or control technologies. As discussed below, these include developments and improvements that could result in the addition of emission limits, management practices, and other emission reduction requirements, as well as revised compliance assurance measures. We analyzed costs and emissions reductions for each emission source and determined cost-effectiveness (annualized cost per ton of emissions reduction) on a HAP basis. The data, analyses, results, and proposed decisions pursuant to CAA section 112(d)(6) are presented for each emission source in sections IV.C.1 through IV.C.7 of this preamble.
Based on this review, the EPA is proposing amendments to the CMAS NESHAP pursuant to CAA section 112(d)(6) that improve monitoring of leaks from equipment and heat exchange systems and revises the definition of “metal HAP process vent.” We are not proposing any changes to the CMAS NESHAP for storage tanks and wastewater based on our technology review given that we did not identify any cost-effective developments in practices, processes, or control technologies for these emission sources that achieve a greater HAP emission reduction beyond the emission reduction already required by the CMAS NESHAP.
Emissions from equipment leaks occur in the form of gases or liquids that escape to the atmosphere through connection points (
The CMAS NESHAP requires that facilities conduct quarterly inspections of process vessels and equipment for each CMPU in organic HAP service or metal HAP service. Equipment is defined as “each pump, compressor, agitator, pressure relief device, sampling connection system, open-ended valve or line, valve, connector, and instrumentation system in or associated with a CMPU.” The inspections rely on AVO detection methods to determine whether process vessels and equipment are free of leaks. The CMAS NESHAP also allows instrument monitoring (
To identify developments in practices, processes, and control technologies since the GACT standards were established, we reviewed subsequent regulatory efforts. After reviewing multiple regulations, we identified developments in LDAR program practices in the form of specific leak definitions and monitoring frequencies for LDAR programs that use EPA Method 21 monitoring that are different than those evaluated during the original CMAS rulemaking. We used the HON and MON as initial points of reference to identify developments, since these rules apply to major source chemical manufacturing facilities which are similar to CMAS facilities. The HON and MON require EPA Method 21 monitoring for specific components at varying leak definitions (from 500 ppmv to 10,000 ppmv) and frequencies (monthly monitoring to monitoring every 4 years if few leaks are identified). We also reviewed the Gasoline Distribution area source rule, which recently undertook a similar technology review for equipment leaks where the EPA finalized an LDAR program that requires annual monitoring using EPA Method 21 at a leak definition of 10,000 ppmv in lieu of only AVO methods. We used the Gasoline Distribution LDAR program, which requires annual monitoring at a leak definition of 10,000 ppmv, as the starting option (
• Control Option 1 (for connectors in gas and vapor (G/V) service or in light liquid (LL) service, valves in G/V or LL service, and pumps in LL service): monitor all components annually using EPA Method 21 and a leak definition of 10,000 ppmv.
• Control Option 2 (for connectors in G/V or LL service, valves in G/V or LL service, and pumps in LL service): monitor all components semiannually using EPA Method 21 and a leak definition of 10,000 ppmv.
• Control Option 3 (for connectors in G/V or LL service, valves in G/V or LL service, and pumps in LL service): monitor all components annually using EPA Method 21 and a leak definition of 500 ppmv.
To estimate the costs and emission reductions, we assumed that 247 CMAS facilities currently follow the CMAS requirement of performing quarterly AVO inspections and are impacted by this technology review. For simplicity, we excluded 4 other CMAS facilities from our analysis that may have equipment leaks in EtO service; and instead, we included them in our GACT analysis discussed in section IV.A.1 of this preamble. To get the nationwide impacts of each Control Option, we estimated the cost and reductions for a model CMAS facility to implement each of the three control options and multiplied the model facility results by 247. The memorandum
Table 8 of this preamble presents the nationwide impacts for requiring owners and operators to perform EPA Method 21 monitoring in accordance with Control Options 1-3. Based on the costs and emission reductions, we are proposing to revise the CMAS NESHAP for equipment in HAP service to reflect Control Option 1 pursuant to CAA section 112(d)(6). Control Options 2 and 3 have incremental costs and emission reductions (
We are proposing Control Option 1 for equipment leaks at 40 CFR 63.11495(a)(6). To effectively incorporate Control Option 1 into the CMAS NESHAP, we specify at proposed 40 CFR 63.11495(a)(6) that owners and operators of new and existing affected sources with equipment in organic HAP service must conduct annual leak detection monitoring of all pumps in light liquid service, valves in gas/vapor service and in light liquid service, and connectors in gas/vapor service and in light liquid service by the method specified in 40 CFR 63.180(b)(1) through (3), with certain exceptions (
Heat exchangers are devices or collections of devices used to transfer heat from process fluids to another process fluid (typically water) without intentional direct contact of the process fluid with the cooling fluid (
The CMAS NESHAP at 40 CFR 63.11502(a), by reference to the HON (40 CFR 63.101), defines a heat exchange system as “a device or collection of devices used to transfer heat from process fluids to water without intentional direct contact of the process fluid with the water (
The current CMAS NESHAP requirements for heat exchange systems at 40 CFR 63.11499, by reference to the HON (40 CFR 63.104), includes an LDAR program for owners or operators of certain heat exchange systems (
For heat exchange systems at CMAS CMPUs with a cooling water flow rate less than 8,000 gpm that are not meeting one or more of the conditions in 40 CFR 63.104(a), owners and operators must develop and operate in accordance with a heat exchange system inspection plan that describes the inspections to be performed at least once per quarter. Inspections must provide evidence of hydrocarbons in the cooling water and may include checks for visible floating hydrocarbon on the water, hydrocarbon odor, discolored water, and/or chemical addition rates. Owners and operators of these heat exchange systems must also perform repairs to eliminate the leak within 45 calendar days after indications of the leak are identified but may delay the repair if a reason is documented in the next semiannual compliance report. As an alternative to the requirements described in this paragraph, owners and operators of heat exchange systems at CMAS CMPUs with a cooling water flow rate less than 8,000 gpm can choose to comply with the LDAR monitoring options specified for heat exchange systems with a cooling water flow rate equal to or greater than 8,000 gpm.
As part of our technology review, we reviewed the criteria in 40 CFR 63.11495(b) and 40 CFR 63.11499(a) (
Our technology review also identified one development in LDAR practices and processes for heat exchange systems: the use of the Modified El Paso Method
To identify an appropriate Modified El Paso Method leak definition for facilities subject to the CMAS NESHAP, we identified five rules (
The TCEQ HRVOC rule, the HON, the MON, EMACT standards, and the
We also considered more stringent monitoring frequencies. Both the Petroleum Refinery Sector rule, which includes monthly monitoring for existing sources under certain circumstances, and the TCEQ HRVOC rule, which includes continuous monitoring provisions for existing and new sources, have more stringent monitoring frequencies.
Based on this technology review, we identified the following two Control Options as developments in practices for heat exchanger systems at CMAS facilities:
• Control Option 1 (for heat exchange systems with a cooling water flow rate equal to or greater than 8,000 gpm): quarterly monitoring with the Modified El Paso Method, using a leak action level defined as a total strippable hydrocarbon concentration (as methane) in the stripping gas of 6.2 ppmv (with the requirement to repair a leak no later than 45 days after first identifying the leak, and allow delay of repair up to 120 days except no more than 30 days where a total strippable hydrocarbon concentration (as methane) in the stripping gas of 62 ppmv or higher is found). This option would also require re-monitoring at the monitoring location where the leak was identified to ensure that any leaks found are fixed.
• Control Option 2: same as Control Option 1, except monthly monitoring with the Modified El Paso Method instead of quarterly monitoring.
We then estimated the impacts of these Control Options. Using information from the original CMAS rulemaking,
Table 9 of this preamble presents the nationwide impacts for requiring owners and operators to use the Modified El Paso Method and repair leaks of total strippable hydrocarbon concentration (as methane) in accordance to Control Options 1 and 2. See the document titled
We are proposing Control Option 1 at 40 CFR 63.11499(d) and item 1.c of table 8 to the CMAS NESHAP, by reference to the HON (40 CFR 63.104(a) and (f) through (l)), to specify quarterly monitoring for existing and new heat exchange systems (after an initial 6 months of monthly monitoring) using the Modified El Paso Method and a leak definition of 6.2 ppmv of total strippable hydrocarbon concentration (as methane) in the stripping gas. Owners and operators of new and existing affected sources would be required to repair the leak to reduce the concentration or mass emissions rate to below the leak action level as soon as practicable, but no later than 45 days after identifying the leak. We are also proposing at 40 CFR 63.11499(d) and item 1.c of table 8 to the CMAS NESHAP, by reference to the HON, a delay of repair action level of total strippable hydrocarbon concentration (as methane) in the stripping gas of 62 ppmv, that if exceeded during leak monitoring, would require immediate repair (
A process vent is a gas stream that is discharged during the operation of a particular unit operation (
The CMAS NESHAP defines batch process vents as a vent from a CMPU or vents from multiple CMPUs within a process that are manifolded together into a common header, through which a HAP-containing gas stream is, or has the potential to be, released to the atmosphere. Batch process vents include vents from batch operations and vents with intermittent flow from continuous operations that are not combined with any stream that originated as a continuous gas stream from the same continuous process. Batch process vents at existing affected sources are subject to controls if the total organic HAP emissions from all batch process vents combined are greater than or equal to 10,000 lb/yr. Owners and operators have three options for controlling batch process vents meeting the criteria: (1) reduce collective uncontrolled total organic HAP emissions from the sum of all batch process vents by greater than or equal to 85 percent by weight or to less than or equal to 20 ppmv by routing emissions through a closed vent system to any combination of control devices (except a flare); (2) route emissions from batch process vents containing greater than or equal to 85 percent of the uncontrolled total organic HAP through a closed vent system to a flare; or (3) comply with the alternative standard specified in 40 CFR 63.2505, which requires owners and operators to achieve specified outlet concentrations for TOC and total hydrogen halides and halogens on a continuous basis (both emission limits are 20 ppmv for combustion devices, and 50 ppmv for non-combustion devices). The requirements for batch process vents at new affected sources are the same, except instead of 85 percent control, the CMAS NESHAP requires 90 percent control.
The CMAS NESHAP currently defines “continuous process vents” using the definition of “process vent” in the HON (40 CFR part 63, subpart F), but includes a few caveats that address any references to the HON. In other words, a “continuous process vent” is the point of discharge to the atmosphere (or the point of entry into a control device, if any) of a gas stream if the gas stream has the characteristics specified in 40 CFR 63.107(b) through (h), or meets the criteria specified in 40 CFR 63.107(i). Additionally, any references to “air oxidation reactors, distillation units, or reactors” in the HON process vent definition, instead mean “any continuous operation” within the context of the “continuous process vent” definition in the CMAS NESHAP. The definition of “continuous process vent” in the CMAS NESHAP also requires a separate determination for the emissions from each CMPU, even if emission streams from two or more CMPUs are combined prior to discharge to the atmosphere or to a control device. Continuous process vents at both existing and new affected sources with a total resource effectiveness (TRE) index value
Additionally, both batch and continuous process vents have different requirements under the CMAS NESHAP if the process vent stream is halogenated. Halogenated batch and continuous process vent streams at new or existing sources that are controlled through combustion must also use halogen scrubbers to: (1) reduce overall emissions of hydrogen halide and halogen HAP after the combustion device by greater than or equal to 95-percent, to less than or equal to 0.45 kilogram per hour (kg/hr), or to a concentration less than or equal to 20 ppmv; or (2) reduce the halogen atom mass emission rate before the combustion device to less than or equal to 0.45 kg/hr or to a concentration less than or equal to 20 ppmv.
The CMAS NESHAP also defines metal HAP process vents as the point of discharge to the atmosphere (or inlet to a control device, if any) of a metal HAP-containing gas stream from any CMPU at an affected source containing at least 50 ppmv metal HAP (see 40 CFR 63.11502(b)). The metal HAP concentration may be determined using any of the following: process knowledge, an engineering assessment, or test data. For purposes of the CMAS NESHAP, metal HAP are the compounds containing metals listed as HAP in section 112(b) of the CAA. Metal HAP process vents at both existing and new affected sources with total metal HAP emissions greater than or equal to 400 lb/yr are subject to controls. Owners and operators must reduce collective uncontrolled emissions of total metal HAP emissions by greater than or equal to 95 percent by weight by routing emissions from a sufficient number of the metal process vents through a closed vent system to any combination of control devices.
We are proposing to make a change to the definition of “metal HAP process vent” at 40 CFR 63.11502(b). In 2012, as part of a response to a petition for reconsideration, the EPA added the 50 ppmv threshold to the definition of “metal HAP process vent” at 40 CFR 63.11502(b).
We are now proposing to remove the 50 ppmv threshold from the definition of “metal HAP process vent” at 40 CFR 63.11502(b). We believe this concentration-based threshold is unnecessary because the CMAS NESHAP already has a mass-based metal HAP threshold. Specifically, if the total uncontrolled metal HAP emissions from all metal HAP process vents from a CMPU are less than 400 lb/yr, then owners and operators are only subject to recordkeeping requirements, not the metal HAP process vent standards in table 4 of the CMAS NESHAP.
In addition to being a necessary revision made as part of CAA section 112(d)(6), the standards were originally promulgated as part of the Area Source Program under the Urban Air Toxics Strategy to ensure greater than 90 percent of emissions of the 30 urban HAP were subject to regulation. In setting the 50 ppmv threshold, vents that were previously subject to regulation may have been improperly exempted from the standards that were established to address those emissions. By proposing to remove the 50 ppmv threshold and returning the definition to its originally promulgated state, the standards will once again apply to those metal HAP vents previously subject as part of the original rulemaking.
As part of our technology review, we also examined subsequent regulatory development efforts and found that the EPA recently evaluated emission reduction options for continuous process vents subject to the HON, including the removal of the TRE concept in its entirety from the NESHAP or revising the TRE index value threshold from 1.0 to 5.0. The EPA determined that removing the TRE concept in its entirety from the HON was cost effective and finalized this in that rule (see 89 FR 42932, May 16, 2024). It is reasonable to consider removing the TRE concept in its entirety from the CMAS NESHAP given that CMPU sources subject to the CMAS NESHAP are similar to CMPU sources that are subject to the HON; however, we do not have data representative of CMAS continuous process vents to evaluate this option. In other words, none of the continuous process vent data that the EPA used in the HON rulemaking are representative of an area source; and therefore, not representative of a CMAS facility. For further information, see the document titled
Except for the proposed change to the definition of `metal HAP process vent' and the TRE options we could not evaluate due to insufficient data on CMAS continuous process vents, we found no additional practices, processes, or control technologies beyond those already required by the CMAS NESHAP for process vents. Our review did not reveal any other developments in emissions reduction practices for CMAS process vents that are any more stringent than the GACT standards in the CMAS NESHAP.
Storage tanks are used to store liquid and gaseous feedstocks for use in a process, as well as to store liquid and gaseous products from a process. Most CMAS storage tanks are designed for operation at atmospheric or near atmospheric pressures; pressure vessels are used to store compressed gases and liquefied gases. Atmospheric storage tanks are typically cylindrical with a vertical orientation, and they are constructed with either a fixed roof or a floating roof. Some, generally small, atmospheric storage tanks are oriented horizontally. Pressure vessels are either spherical or horizontal cylinders. As discussed in section IV.B.1 of this preamble, we are proposing new GACT standards for pressure vessels.
The CMAS NESHAP requires owners and operators to control emissions from storage tanks with: (1) capacities greater than or equal to 40,000 gallons storing a liquid with a maximum true vapor pressure (MTVP) greater than or equal to 5.2 kPa but less than 76.6 kPa; (2) capacities greater than or equal to 20,000 gallons and less than 40,000 gallons storing a liquid with a MTVP greater than or equal to 27.6 kPa and less than 76.6 kPa; and (3) capacities greater than or equal to 20,000 gallons storing a liquid with a MTVP greater than or equal to 76.6 kPa. Owners and operators of storage tanks meeting any of these criteria are required to reduce total organic HAP emissions by greater than or equal to 95 percent by weight by operating and maintaining a closed vent system and control device (other than a flare), reduce total HAP emissions by operating and maintaining a closed vent system and a flare, vapor balance, or route emissions to a fuel gas system or process. Owners and operators of storage tanks meeting the first two sets of capacity and MTVP criterion can also comply with the requirements of 40 CFR part 63, subpart WW which requires owners and operators to operate and maintain an external floating roof (EFR) or internal floating roof (IFR) according to specific monitoring, recordkeeping, and reporting standards.
Additionally, storage tanks within the capacity and MTVP thresholds listed in the preceding paragraph have different requirements under the CMAS NESHAP if the storage tank emits a halogenated vent stream. Halogenated storage tank vent streams at new or existing sources that are controlled through a combustion device must also use a halogen reduction device to: (1) reduce emissions of hydrogen halide and halogen HAP after the combustion device by greater than or equal to 95-percent, to less than or equal to 0.45 kg/hr, or to a concentration less than or equal to 20 ppmv; or (2) reduce the halogen atom mass emission rate before the combustion device to less than or equal to 0.45 kg/hr or to a concentration less than or equal to 20 ppmv.
We did not identify any practices, processes, or control technologies beyond those already required by the CMAS NESHAP for storage tanks. Our review did not reveal any developments in emissions reduction practices for CMAS storage tanks that are any more stringent than the GACT standards in the CMAS NESHAP. Therefore, we are not proposing any changes to the CMAS NESHAP for storage tanks pursuant to CAA section 112(d)(6). As part of our technology review, we examined subsequent regulatory development efforts and found that the EPA recently evaluated emission reduction options for storage vessels
HAP are emitted into the air from wastewater collection, storage, and treatment systems that are uncovered or open to the atmosphere through volatilization of the compound at the liquid surface. Emissions occur by diffusive or convective means, or both. Diffusion occurs when organic pollutant concentrations at the water surface are much higher than ambient concentrations. The organic pollutants volatilize, or diffuse into the air, to reach equilibrium between the aqueous and vapor phases. Convection occurs when air flows over the water surface, sweeping organic vapors from the water surface into the air. The rate of volatilization is related directly to the speed of the air flow over the water surface.
The CMAS NESHAP defines wastewater to mean water that is discarded from a CMPU or control device and that contains at least 5 ppmw of any HAP listed in table 9 to 40 CFR part 63, subpart G and has an annual average flow rate of 0.02 liters per minute (lpm). Wastewater means both process wastewater
For each wastewater stream containing partially soluble HAP at a concentration greater than or equal to
As part of our technology review, we found that many of the NESHAP for different chemical manufacturing source categories (
The CMAS NESHAP allows for the use of a flare to control emissions (except halogenated emissions) from batch process vents, continuous process vents, and/or storage tanks. The CMAS NESHAP points to the flare requirements specified in 40 CFR part 63, subpart SS which requires owners and operators to conduct a flare compliance assessment to demonstrate initial compliance, and continuously monitor applicable operating parameters in accordance with 40 CFR 63.11 to demonstrate continuous compliance. Although GACT for batch process vents is emission reductions of 85 percent by weight (for existing) and 90 percent by weight (for new); for continuous process vents is 95 percent by weight (except 85 percent by weight for startup and shutdown); and for storage tanks is 95 percent by weight, the available data at the time the CMAS NESHAP was promulgated suggested that flares meeting these design and operating requirements of 40 CFR 63.11 would achieve a minimum destruction efficiency of no less than 98 percent by weight emissions control. However, more recent studies on flare performance
We acknowledge that none of the performance standards in the CMAS NESHAP are as stringent as 98 percent by weight emissions control; however, under CAA section 112(d)(6), we still evaluated the option (
Using information from the CMAS emissions inventory data (see section II.C.2 of this preamble), we estimated there are 22 flares at 20 CMAS facilities that would be affected by Control Option 1 (we did not identify any other flares in the CMAS emissions inventory). To avoid double counting, we excluded two of the 22 flares from our analysis that emit EtO; and instead, we included them in our GACT analysis discussed in section IV.A.6 of this preamble. We estimated costs for each flare for a given facility, considering current monitoring systems already installed on each individual flare. Given that the same type of equipment is used for flares in the CMAS categories and for the petroleum refinery sector, we estimated costs for any additional monitoring systems needed based on installed costs received from petroleum refineries and, if installed costs were unavailable, we estimated costs based on vendor-purchased equipment. The baseline emission estimate and the emission reductions achieved by Control Option 1 were estimated based on the CMAS emissions inventory data (see section II.C.2 of this preamble) and current vent gas and steam flow data submitted by industry representatives.
Fenceline monitoring refers to the placement of monitors along the perimeter of a facility to measure pollutant concentrations. Coupled with requirements for root cause analysis and corrective action upon triggering an actionable level, this management practice is a development in practices considered under CAA section 112(d)(6) for the purposes of managing fugitive emissions. The measurement of pollutant concentrations and comparison to concentrations estimated from mass emissions via dispersion modeling is used to verify emission estimates from a facility's emissions inventory. If concentrations at the fenceline are greater than expected, potential causes may include underreported or unknown emissions, leaking equipment, or other issues, usually related to ground-level fugitive emissions. Fenceline monitoring also provides information on the location of potential emissions sources because it provides complete spatial coverage of a facility. Further, when used with a mitigation strategy, such as root cause analysis and corrective action upon exceedance of an action level, fenceline monitoring can be effective in reducing emissions and reducing the uncertainty associated with emissions estimation and characterization. Finally, public reporting of fenceline monitoring data provides public transparency and greater visibility, leading to more focus and effort in reducing emissions.
The EPA has successfully applied fenceline monitoring to the petroleum refineries source category as a technique to manage and reduce benzene emissions from fugitive emissions sources such as storage vessels, wastewater treatment systems, and leaking equipment. In 2015, the EPA promulgated the RTR for the petroleum refineries source category and required that refineries install and operate fenceline monitors following EPA Method 325 A/B to monitor benzene emissions. Additionally, the 2015 rule required that refineries conduct a root cause analysis to identify sources of high fenceline monitoring readings (
Additionally, in 2024, the EPA promulgated amendments to the HON (40 CFR part 63, subpart H) and the P&R I NESHAP (40 CFR part 63, subpart U) that included work practice standards requiring owners and operators to conduct fenceline monitoring for any of six specific HAP (
Given the similarities between CMAS CMPUs and sources subject to the HON or P&R I NESHAP, we evaluated the application of fenceline monitoring as a development in practices, processes, and control technologies pursuant to CAA section 112(d)(6). Non-EtO pollutants for which there are established EPA Methods to measure fenceline concentrations and which are one of the fifteen urban HAP regulated as part of the CMAS NESHAP include 1,3-butadiene, 1,3-dichloropropene, ethylene dichloride, and chloroform. We reviewed the 2017 NEI to determine whether CMAS facilities reported emissions of 1,3-butadiene, chloroform 1,3-dichloropropene, and ethylene dichloride. Based on this review, we determined that at most CMAS facilities that emit 1,3-butadiene, chloroform, 1,3-dichloropropene, and ethylene dichloride, small amounts of these HAP are emitted from fugitive sources. Most of the reported emissions are attributed to non-source category emission sources. Based on this information, the EPA is not proposing to implement a fenceline monitoring program for non-EtO pollutants under CAA section 112(d)(6). However, we are proposing a
In addition to the proposed GACT standards pursuant to CAA 112(d)(5) (see sections IV.A and IV.B of this preamble) and our proposed actions on the CAA 112(d)(6) review (see section IV.C of this preamble), we are also proposing other changes to the CMAS NESHAP, including: revisions to the recordkeeping and reporting requirements to require the use of electronic reporting of certain reports; performance testing once every 5 years for batch and continuous process vents to demonstrate compliance with emission limits; and corrections to section reference errors and other minor editorial revisions. Our rationale and proposed changes related to these issues are discussed below.
The EPA is proposing that owners and operators subject to the CMAS NESHAP submit electronic copies of required notification of compliance status reports, performance test reports, flare management plans, and periodic reports (including fenceline monitoring reports) through the EPA's Central Data Exchange using the Compliance and Emissions Data Reporting Interface (CEDRI) (see proposed edits to 40 CFR 63.11496(f)(3)(ii) for notification of compliance status reports associated with the HAP metals emissions limit, proposed 40 CFR 63.11501(b) for notification of compliance status reports, 40 CFR 63.11496(g)(1)(iv) for performance test reports, 40 CFR 63.11501(d) for semiannual compliance reports, and references to flare requirements which include flare management plans in proposed entries 4.a to tables 2 and 3 to subpart VVVVVV of part 63 and proposed entry 5.a to table 5 to subpart VVVVVV of part 63). A description of the electronic data submission process is provided in the document titled
The proposed rule requires that performance test results collected using test methods that are supported by the EPA's Electronic Reporting Tool (ERT) as listed on the ERT website
For semiannual compliance reports (including fenceline monitoring reports), the proposed rules require that owners and operators use an appropriate spreadsheet template to submit information to CEDRI. A draft version of the proposed templates for these reports is included in the docket for this action.
The electronic submittal of the reports addressed in these proposed rulemakings will increase the usefulness of the data contained in those reports, is in keeping with current trends in data availability and transparency, will further assist in the protection of public health and the environment, will improve compliance by facilitating the ability of regulated facilities to demonstrate compliance with requirements and by facilitating the ability of delegated state, local, Tribal, and territorial air agencies and the EPA to assess and determine compliance, and will ultimately reduce burden on regulated facilities, delegated air agencies, and the EPA.
As part of the December 21, 2012, CMAS NESHAP final rule (see 77 FR 75740), the EPA included the ability to assert an affirmative defense to civil penalties for violations caused by malfunctions (see 40 CFR 63.11501(e)) in an effort to create a system that incorporated some flexibility, recognizing that there is a tension, inherent in many types of air regulation, to ensure adequate compliance while simultaneously recognizing that despite the most diligent of efforts, emission standards may be violated under circumstances entirely beyond the control of the source. Although the EPA recognized that its case-by-case enforcement discretion provides sufficient flexibility in these circumstances, it included the affirmative defense provision to provide a more formalized approach and more regulatory clarity. See
The EPA previously proposed to remove the affirmative defense provisions from the CMAS NESHAP as part of the Removal of Affirmative Defense Provisions from Specified New Source Performance Standards and National Emissions Standards for Hazardous Air Pollutants action (see 89 FR 52425, June 24, 2024). We now propose the removal of these provisions as part of this action. We are soliciting comment on our proposal to remove the affirmative defense provisions from the CMAS NESHAP as part of this rulemaking. Comments previously submitted on the Removal of Affirmative Defense Provisions from Specified New Source Performance Standards and National Emissions Standards for Hazardous Air Pollutants proposal will not be considered as part of this action and must be submitted to the docket for this action (Docket ID No. EPA-HQ-OAR-2024-0303) in order to be considered.
We are proposing several technical amendments and definition revisions to improve the clarity and enforceability of certain provisions in the CMAS NESHAP. This section of the preamble described these additional proposed revisions and our rationale.
We note that to remove redundancy and improve consistency, the EPA recently finalized moving all of the definitions from NESHAP subpart G (
The EPA is proposing at 40 CFR 63.11496(g)(1)(iii) and 40 CFR 63.11497(g)(1)(iii) performance testing once every 5 years to demonstrate compliance with organic HAP emission limits for batch and continuous process vents and storage tanks (for owners and operators that route emissions to a control device other than a flare). Similarly, we are also proposing at 40 CFR 63.11496(f)(3)(iv), (4), and (5) performance testing once every 5 years to demonstrate compliance with the metal HAP emission limit for batch and continuous process vents. We determined that periodic emission testing should be required to help ensure continuous compliance. Currently, facilities conduct a one-time performance test, engineering assessment, or design evaluation and then monitor operating parameters. A design evaluation (in lieu of performance testing) is currently allowed at 40 CFR 63.11496(g)(2) for determining initial compliance with a percent reduction or outlet concentration process vent organic HAP emission limit. A design evaluation (in lieu of performance testing) is also currently allowed at 40 CFR 63.985(b)(1)(i) (via items 1.b, 2.a, and 3.a of table 5 to the CMAS NESHAP) for determining initial compliance with a percent reduction or outlet concentration storage tank organic HAP emission limit. An engineering assessment (in lieu of performance testing) is currently allowed at 40 CFR 63.11496(f)(3)(ii) for determining initial compliance with the percent reduction process vent metal HAP emission limit. However, we are proposing to remove the design evaluation option at 40 CFR 63.11496(g)(2) and table 5 to the CMAS NESHAP, and the engineering assessment option at 40 CFR 63.11496(f)(3)(ii), and instead, require on-going performance tests at proposed 40 CFR 63.11496(f)(3)(iv), (4), and (5), and 40 CFR 63.11496(g)(1)(iii) (for owners and operators using a control device other than a flare to comply with the emission limits and other requirements for batch and continuous process vents) and 40 CFR 63.11497(g)(1)(iii) (for owners and operators using a control device other than a flare to comply with the emission limits and other requirements for storage tanks). We are proposing that the on-going performance tests be conducted at a minimum frequency of once every 5 years to supplement the parameter monitoring and to ensure that emission controls continue to operate as demonstrated during the initial performance test. We are soliciting comment and data on whether design evaluations and engineering assessments are appropriate for demonstrating compliance for certain APCDs.
We are also proposing to add a performance testing requirement at 40 CFR 63.11496(g)(1)(iii) and 40 CFR 63.11497(g)(1)(iii) intended to replace a
The EPA is proposing additional changes that address technical and editorial corrections for the CMAS NESHAP. The most significant of these corrections are summarized in table 11 of this preamble. Please see the document
The proposed amendments in this rulemaking for adoption under CAA section 112(d)(5) and (6) (see sections IV.A through IV.C of this preamble) are subject to the compliance deadlines outlined in the CAA under section 112(i). For all the EtO requirements we are proposing under CAA section 112(d)(5) (see section IV.A of this preamble), we are proposing at 40 CFR 63.11494(l) that existing affected sources and affected sources that were new sources under the current CMAS NESHAP (
For fenceline monitoring (see section IV.A.7 of this preamble), we are proposing at 40 CFR 63.11494(m) that owners and operators of all existing affected sources and all affected sources that were new under the current rule (
For existing sources, CAA section 112(i) provides that the compliance date shall be as expeditious as practicable, but no later than 3 years after the effective date of the standard (“Section 112(i)(3)'s three-year maximum compliance period applies generally to any emission standard . . . promulgated under [section 112].”
Many of the GACT requirements that we are proposing under CAA section 112(d)(5) address emissions of EtO from equipment leaks, heat exchange systems, process vents, storage tanks, and wastewater at CMAS processes (see sections IV.A.1 through IV.A.4 of this
Compliance dates for the fenceline monitoring provisions proposed under CAA section 112(d)(5) consider the amount of time that it will take owners and operators to develop their siting plans and secure the capabilities to conduct the monitoring and analyze the results. For fenceline monitoring, the compliance timeline also must consider time to allow commercial labs to conduct the needed method development, expand capacity, and develop the logistics needed to meet the requirements in the final rule. In addition, time is needed to read and assess the new fenceline monitoring requirements; prepare sampling and analysis plans; develop and submit site-specific monitoring plans; identify representative, accessible, and secure monitoring locations for offsite monitors and obtain permission from the property owner to both place and routinely access the monitors; make any necessary physical improvements to fencelines to be able to site monitors, including construction of access roads, physical fencing, and potential drainage improvements; and obtain approval of any necessary capital expenditures. Therefore, we are proposing that owners and operators of all existing sources and all new affected sources under the current rules that commenced construction or reconstruction after October 6, 2008, and on or before January 22, 2025 must begin fenceline monitoring 2 years after the publication date of the final rule and must perform root cause analysis and apply corrective action requirements upon exceedance of an annual average concentration action level starting 3 years after the publication date of the final rule. For all new affected sources that commence construction or reconstruction after January 22, 2025, we are proposing that owners or operators begin fenceline monitoring upon the effective date of the final rule or upon startup, whichever is later. We are also proposing to require quarterly reporting of fenceline results beginning 1 year after monitoring begins for such sources.
For PRDs, we are establishing management practices in the CMAS NESHAP under CAA section 112(d)(5) that require a process hazard analysis and implementation of a minimum of three redundant measures to prevent atmospheric releases (see section IV.B.2 of this preamble). Alternately, owners or operators may elect to install closed vent systems to route these PRDs to a flare, drain (for liquid thermal relief valves), or other control system. We anticipate that sources will need to identify the most appropriate preventive measures or control approach; design, install, and test the system; install necessary process instrumentation and safety systems; and may need to time installations with equipment shutdown or maintenance outages. Therefore, for all existing affected sources, and all new affected sources under the current CMAS NESHAP that commenced construction or reconstruction after October 6, 2008, and on or before January 22, 2025, we are proposing a compliance date of 3 years from the publication date of the final rule (or upon startup, whichever is later) for owners or operators to comply with the management practices for atmospheric PRD releases. For all new affected sources that commence construction or reconstruction after January 22, 2025, we are proposing owners or operators comply with the management practices for atmospheric PRD releases upon the effective date of the final rule or upon startup, whichever is later.
Other amendments we are proposing under CAA section 112(d)(5) include LDAR requirements for pressure vessels (see section IV.B.1 of this preamble). We are also proposing new LDAR requirements under CAA section 112(d)(6) for equipment leaks in organic HAP service and heat exchange systems with cooling water flow rates greater than 8,000 gpm (see section IV.C.1 of this preamble). We project some owners and operators would require engineering evaluations, solicitation and review of vendor quotes, contracting and installation of monitoring equipment, and operator training. In addition, facilities will need time to read and understand the amended rule requirements and update standard operating procedures. Also, any of these proposed provisions may require additional time to plan, purchase, and install equipment for emissions control; and even if not, the EPA recognizes the confusion that multiple different compliance dates for individual requirements would create and the additional burden such an assortment of dates would impose. Lastly, other recent rulemakings are requiring updates to LDAR provisions for hundreds of sources not previously required to do EPA Method 21 monitoring (see the Gasoline Distribution NESHAP, 89 FR 39304 May 8, 2024). As such, the demand on contractor support may be greater than can be immediately accommodated. Therefore, for all existing affected sources, and all new affected sources under the current rules that commenced construction or reconstruction after October 6, 2008, and on or before January 22, 2025, we are proposing a compliance date of 3 years from the publication date of the final rule (or upon startup, whichever is
We are proposing electronic reporting requirements (see section IV.D.1 of this preamble), and we anticipate that facilities would need some time to successfully accomplish these reporting revisions including time to read and understand the amended rule requirements, to make any necessary adjustments (including adjusting standard operating procedures), and to convert reporting mechanisms and install necessary hardware and software. From our assessment of the timeframe needed for compliance with the new proposed electronic reporting requirements for flare management plans and periodic reports, the EPA considers a period of 3 years after the publication date of the final rule to be the most expeditious compliance period practicable. Thus, we are proposing that all existing affected sources, and all new affected sources under the current rule that commenced construction or reconstruction after October 6, 2008, and on or before January 22, 2025 be in compliance with these revised requirements upon initial startup or within 3 years of the publication date of the final rule, whichever is later. For all new affected sources that commence construction or reconstruction after January 22, 2025, we are proposing owners or operators comply with these revised requirements upon the effective date of the final rule or upon startup, whichever is later. However, we are proposing at 40 CFR 63.11496(g)(1)(iv) to provide 60 days after the publication date of the final rule (or upon startup, whichever is later) for owners or operators of all affected sources to comply with the requirement to submit performance test reports electronically following the procedure specified in 40 CFR 63.9(k). We are also proposing at 40 CFR 63.11501(b) to provide 60 days after the publication date of the final rule (or upon startup, whichever is later) for owners or operators of all affected sources to submit all subsequent Notification of Compliance Status reports in PDF format electronically following the procedure specified in 40 CFR 63.9(k).
We estimate that there are 251 facilities subject to the CMAS NESHAP. There are another 29 facilities that would become subject to the rule if EtO were to be added to table 1 to 40 CFR part 63, subpart VVVVVV, as proposed. The list of facilities is available in the document titled
This proposed action would reduce HAP and VOC emissions from CMAS emission sources. We estimate that the proposed amendments to the NESHAP would reduce overall HAP emissions, not including EtO emission reductions, from CMAS by approximately 158 tpy. In addition, the EPA estimates reductions of approximately 4.6 tpy of EtO emissions based on the emissions inventories. With respect to secondary impacts on non-HAP pollutants, the EPA estimates that the proposed amendments would reduce VOC emissions by 1,557 tpy and on net would reduce emissions of methane by 251 tpy.
The EPA also estimates that the proposed action would result in secondary impacts for greenhouse gas emissions and criteria air pollutant emissions. The increased electricity and natural gas use to power some of the proposed controls would increase emissions of several pollutants, including an estimated increase of 36 tpy of carbon monoxide (CO), 57,000 tpy of carbon dioxide (CO
The EPA estimates the cost of the requirements in this proposed action would be approximately $37.6 million (in 2022 dollars for the entire period of analysis) in total capital costs and $36.4 million in total annual costs (including product recovery), based on our analyses of the proposed actions described in sections IV.A through IV.C of this preamble. The `total annual costs' are the sum of the annualized capital costs and other annual costs (
The economic impacts of this proposal, including the small entity impact analysis, are discussed in greater detail in the document titled
As part of fulfilling the analytical requirements of Executive Orders 12866 as amended by Executive Order 14094, the EPA presents estimates of the present value (PV) of the costs over the 15-year analytical period from 2027 to 2041. Costs are in 2022 dollars and discounted to 2027 at a two percent discount rate per the recommendation in OMB Circular A-4. The EPA also presents the equivalent annualized value (EAV) at a two percent discount rate. The EAV takes the non-uniform stream of costs (
The PV of the costs over the 15-year period from 2027 to 2041 without including the value of product recovery is estimated to be $495 million at a two percent discount rate and the EAV is $38.5 million. The PV of the costs including the value of product recovery is estimated to be $474 million at a two percent discount rate and the EAV is $37 million.
This proposed action impacts 58 small entities, which own a total of 64 CMAS facilities. The EPA evaluates economic impacts of rulemakings on
The EPA estimates the average cost-to-sales ratio for small entities impacted by the proposal will be 0.3 percent with a maximum cost-to-sales ratio estimated at 5.5 percent, not considering the value of product recovery due to compliance (
It is important to note that the small entities that own facilities affected by the proposed EtO standards have relatively higher estimated cost-to-sales ratios, with an average cost-to-sales ratio of 3 percent for the three EtO facilities that are owned by small entities. The small entity with the maximum cost-to-sales ratio of 5.5 percent owns a facility affected by the proposed EtO standards. These three small entities also have smaller average annual revenues compared to the whole population of small entities, averaging $47 million in annual revenues compared to $230 million for all small entities. For additional details on the costs of this proposed rulemaking, please see the document titled
The EPA did not monetize the benefits from the estimated emission reductions of HAP associated with this proposed action. The EPA currently does not have sufficient methods to monetize benefits associated with HAP reductions and risk reductions for this rulemaking. However, we estimate that the final rule amendments would reduce EtO emissions by 4.6 tpy and expect that these reductions will lower the risk of adverse health effects, including cancer, for individuals in communities near CMAS facilities. For additional information on the nonmonetized benefits of this rulemaking and a qualitative discussion of the health risks associated with exposure to EtO and several other HAP, please see the document titled
The secondary emissions impacts estimated for this proposed action include net reductions in VOC and methane emissions, and increases in emissions of PM
The EPA provided monetized estimates of the impacts associated with the methane emissions reductions and the net increases in CO
For purposes of analyzing regulatory impacts, the EPA relies upon its June 2016 “Technical Guidance for Assessing Environmental Justice in Regulatory Analysis,” which provides recommendations that encourage analysts to conduct the highest quality analysis feasible, recognizing that data limitations, time, resource constraints, and analytical challenges will vary by media and circumstance. The Technical Guidance states that a regulatory action may involve potential environmental justice (EJ) concerns if it could: (1) create new disproportionate impacts on communities with EJ concerns; (2) exacerbate existing disproportionate impacts on communities with EJ concerns; or (3) present opportunities to address existing disproportionate impacts on communities with EJ concerns through this action under development.
The EPA's EJ technical guidance states that “[t]he analysis of potential EJ concerns for regulatory actions should address three questions: (1) Are there potential EJ concerns associated with environmental stressors affected by the regulatory action for population groups of concern in the baseline? (2) Are there potential EJ concerns associated with environmental stressors affected by the regulatory action for population groups of concern for the regulatory option(s) under consideration? (3) For the regulatory option(s) under consideration, are potential EJ concerns created or mitigated compared to the baseline?”
The EJ analysis is presented for the purpose of providing the public with as full as possible an understanding of the potential impacts of this proposed action. The EPA notes that analysis of such impacts is distinct from the determinations proposed in this action under CAA section 112, which are based solely on the statutory factors the EPA is required to consider under that section.
To examine the potential for EJ concerns, the EPA conducted three different demographic analyses: a proximity analysis, a baseline cancer risk-based analysis (
For the CMAS categories, the EPA examined the potential for the 247 CMAS facilities (for which the EPA had HAP emissions inventories for emissions from the CMAS categories) to pose concerns to communities living in proximity to facilities, both in the baseline and under the control option established in this proposed action. Specifically, to examine the potential for EJ concerns, the EPA conducted three different demographic analyses of the populations living within 10 km and 50 km of the CMAS facilities: a proximity analysis, baseline cancer and noncancer risk-based analyses (
For all three demographic analyses, the affected populations (
The results of the proximity analysis indicate that a total of 33.7 million people live within 10 km of the 247 CMAS facilities analyzed.
The baseline cancer risk-based demographic analysis focuses on populations that have higher cancer risks. The baseline risk-based demographic analysis results are shown in the “baseline” column of tables 11 through 13 of this preamble. This analysis focused on the populations living within 10 km (~6.2 miles) of the CMAS facilities with estimated cancer risks greater than or equal to 1-in-1 million resulting from emissions from CMAS categories (table 11 of this preamble), greater than or equal to 50-in-1 million (table 12 of this preamble), and greater than 100-in-1 million (table 13 of this preamble).
The results of the cancer risk-based demographic analysis indicate that a total of 2 million people living within 10 km of 76 of the CMAS facilities analyzed have a cancer risk greater than or equal to 1-in-1 million from CMAS HAP emissions. The percent of the population living within 10 km of these CMAS facilities with cancer risks greater than or equal to 1-in-1 million is above the corresponding national average for the following demographic groups: Black, Hispanic or Latino, people living below the poverty level, people living below two times the poverty level, people over 25 without a high school diploma, and linguistic isolation. The percent of the population with cancer risks greater than or equal to 1-in-1 million that are Black (25 percent) is higher than in the proximity analysis (19 percent) and is approximately two times higher than the national average (12 percent). The percent of the population with cancer risks greater than or equal to 1-in-1 million that are Hispanic/Latino (25 percent) is higher than in the proximity analysis (21 percent) and the national average (19 percent).
The results of the cancer risk-based demographic analysis indicate that a total of 36,100 people living within 10 km of 15 of the CMAS facilities analyzed have cancer risks greater than or equal to 50-in-1 million from CMAS HAP emissions. The percent of the population living within 10 km of these CMAS facilities with cancer risks greater than or equal to 50-in-1 million is above the corresponding national average for the following demographic groups: Hispanic or Latino, people living below the poverty level, people living below two times the poverty level, people over 25 without a high school diploma, and linguistic isolation. The percent of the population with cancer risks greater than or equal to 50-in-1 million that are Black is at the national average (12 percent), which is a lower percentage than for the proximity analysis (19 percent). The percent of the population with cancer risks greater than or equal to 50-in-1 million that are Hispanic/Latino (40 percent) is about two times that in the proximity analysis (21 percent) and the national average (19 percent).
The results of the cancer risk-based demographic analysis indicate that a total of 3,600 people living within 10 km of 4 of the CMAS facilities analyzed have a cancer risk greater than 100-in-1 million from CMAS HAP emissions. The percent of the population living within 10 km of these CMAS facilities with cancer risks greater than 100-in-1 million is above the corresponding national average for the following demographic groups: Hispanic or Latino, people living below the poverty
The results of the noncancer risk-based demographic analysis indicate that a total of 1,500 people living within 10 km of 2 CMAS facilities analyzed have a respiratory hazard index greater than 1 from CMAS HAP emissions. The percent of the population living within 10 km of these CMAS facilities with respiratory hazard index greater than 1 is above the corresponding national average for the following demographic groups: Hispanic or Latino (90 percent for the source categories compared to 19 percent nationwide), people living in linguistic isolation (15 percent for the source categories compared to 5 percent nationwide), people 25 years old and older without a high school diploma (33 percent for the source categories compared to 12 percent nationwide), people living below twice the poverty level (44 percent for the source categories compared to 29 percent nationwide), and people living below the poverty level (24 percent for the source categories compared to 13 percent nationwide).
The results of the noncancer risk-based demographic analysis indicate that a total of 1,300 people living within 10 km of 2 CMAS facilities analyzed have an immunological hazard index greater than 1 from CMAS HAP emissions. The demographic results indicate that the percentage of the population potentially impacted by CMAS emissions is greater than its corresponding nationwide percentage for the following demographic groups: Hispanic or Latino (90 percent for the source category compared to 19 percent nationwide), people living in linguistic isolation (16 percent for the source category compared to 5 percent nationwide), people 25 years old and older without a high school diploma (33 percent for the source category compared to 12 percent nationwide), people living below twice the poverty level (44 percent for the source category compared to 29 percent nationwide), and people living below the poverty level (24 percent for the source category compared to 13 percent nationwide).
The post-control risk-based demographic analysis shows that the controls required by this proposed action will notably reduce the number of people who are exposed to cancer risks resulting from emissions from the CMAS categories at all risk levels. The results of the post-control risk-based demographics analysis are in the columns titled “Post-Control” of tables 11 through 13 of this preamble. At greater than or equal to a cancer risk of 1-in-1 million, the number of individuals exposed will decrease from 2.1 million to 1.4 million. The demographic composition of those individuals exposed to cancer risk greater than or equal to 1-in-1 million post-control is similar to the demographic composition of the individuals exposed to a cancer risk of 1-in-1 million at baseline. The number of individuals exposed to cancer risk greater than or equal to 50-in-1 million will decrease from 36,100 to 4,400.
The percent of the population living within 10 km of these CMAS facilities with post-control cancer risks greater than or equal to 50-in-1 million is above the corresponding national average for the following demographic groups: Hispanic or Latino, Age 0-17, people living below poverty, people living below two times poverty, those over 25 without a high school diploma, and linguistic isolation. The percent of the population with post-control cancer risks greater than or equal to 50-in-1 million that are Hispanic or Latino (66 percent) is over three times the national average (19 percent), with 98 percent of this Hispanic or Latino population living around two CMAS facilities (one in Illinois and one in Kansas).
After control is implemented, the number of people who are exposed to cancer risks greater than 100-in-1 million resulting from emissions from the CMAS categories will decrease from 3,600 to zero. Therefore, there are no disparities among demographic groups at this risk level. The actions of this proposed rulemaking will improve human health of current and future populations that live near these facilities.
The post-control noncancer risk demographic results are the same as those for the baseline scenario because the controls being proposed in this action do not directly reduce the nickel emissions that drive the noncancer risk.
As described in section II.E of this preamble and the document titled
The whole-facility demographic analysis is an assessment of individual demographic groups in the total population living within 10 km (~6.2 miles) and 50 km (~31 miles) of the facilities. In this preamble, we focus on the results from the demographic analyses using a 10 km radius because this area captures the majority of the population with higher cancer and noncancer risks due to HAP emissions from CMAS facilities. Specifically, 100 percent of the population with baseline cancer risks greater than or equal to 50-in-1 million and with noncancer hazard indices greater than 1 from emissions from the CMAS categories live within 10 km of the CMAS facilities. The results of the whole-facility demographic analysis for populations living within 10 km and 50 km of CMAS facilities are included in the document titled
The whole-facility demographic analysis post-control results are shown in table 14 of this preamble. This analysis focused on the populations living within 10 km of the CMAS facilities with estimated whole-facility post-control cancer risks greater than or equal to 1-in-1 million, greater than or equal to 50-in-1 million, and greater than 100-in-1 million, as well as with estimated whole-facility post-control noncancer hazard indices greater than 1. The risk analysis indicated that all emissions from the CMAS facilities, after the reductions imposed by the proposed rule, expose a total of about 1.65 million people living around 80 facilities to a cancer risk greater than or equal to 1-in-1 million, 5,600 people living around 10 facilities to a cancer risk greater than or equal to 50-in-1 million, and zero people to a cancer risk greater than 100-in-1 million. The risk analysis indicated that all emissions from the CMAS facilities, after the reductions imposed by the proposed rule, expose a total of about 1,700 people to a respiratory hazard index greater than 1 and about 1,700 people to an immunological hazard index greater than 1 (both values unchanged from baseline).
When the CMAS whole-facility populations are compared to the CMAS categories populations in the post-control scenarios, we see 250,000 additional people with risks greater than or equal to 1-in-1 million, 1,200 additional people with risks greater than or equal to 50-in-1 million, zero additional people with risks greater than 100-in-1 million, 200 additional people with respiratory hazard indices greater than 1, and 200 additional people with immunological hazard indices greater than 1.
The demographic distribution of the whole-facility population with post-control cancer risks greater than or equal to 1-in-1 million is almost identical to the distribution of the source category population with post-control cancer risks greater than or equal to 1-in-1 million. Therefore, the whole-facility population with post-control cancer risks greater than or equal to 1-in-1 million has disproportionately high representation from Blacks, Hispanics and Latinos, people living below the poverty level, people living below two times the poverty level, those over 25 without a high school diploma, and those that are linguistically isolated.
The population with post-control cancer risks greater than or equal to 50-in-1 million in the whole-facility analysis is almost identical to the distribution of the source category population with post-control cancer risks greater than or equal to 50-in-1 million. Therefore, the whole-facility population with post-control cancer risks greater than or equal to 50-in-1 million has disproportionately high representation from Hispanics and Latinos, people living below the poverty level, people living below two times the poverty level, those over 25 without a high school diploma, and those that are linguistically isolated. As such, the Hispanic and Latino population is still disproportionately represented at 69 percent, which is well above the national average of 19 percent.
Based on results from the whole-facility emissions analysis, there are zero people with post-control risks greater than 100-in-1 million.
The population with post-control respiratory hazard indices greater than 1 in the whole-facility analysis is almost identical to the distribution of the source category population with baseline and post-control respiratory hazard indices greater than 1. Therefore, the whole-facility population with post-control respiratory hazard indices greater than 1 has disproportionately high representation from Hispanics or Latinos, people living below the poverty level, people living below two times the poverty level, those over 25 without a high school diploma, and those who are linguistically isolated. As such, the Hispanic and Latino population is disproportionately represented at 90 percent, which is well above the national average of 19 percent, and people living below the poverty level are disproportionately represented at 24 percent, which is nearly twice the national average of 13 percent.
The population with post-control immunological hazard indices greater than 1 in the whole-facility analysis is almost identical to the distribution of the source category population with baseline and post-control immunological hazard indices greater than 1. Therefore, the whole-facility population with post-control immunological hazard indices greater than 1 has disproportionately high representation from Hispanics or Latinos, people living below the poverty level, people living below two times the poverty level, those over 25 without a high school diploma, and those who are linguistically isolated. As such, the Hispanic and Latino population is disproportionately represented at 90 percent, which is well above the national average of 19 percent, and people living below the poverty level are disproportionately represented at 24 percent, which is nearly twice the national average of 13 percent.
As described in section II.E of this preamble and the document titled
The community demographic analysis is an assessment of individual demographic groups in the total population living within 10 km (~6.2 miles) of the CMAS facilities. The community risk assessment and demographics were only conducted at the 10 km radius because, based on emissions from the CMAS categories, this distance includes 100 percent of the population with cancer risks greater than or equal to 50-in-1 million. The full results of the community demographic analysis are in the document titled
The community demographic analysis post-control results are shown in table 15 of this preamble. The following discussion of the community demographic analysis is focused on the populations living within 10 km of the CMAS facilities with estimated community post-control cancer risks greater than or equal to 1-in-1 million, greater than or equal to 50-in-1 million, and greater than 100-in-1 million. The risk analysis indicated that all emissions from all facilities within 10 km of the CMAS facilities, after the reductions imposed by the proposed rule, expose a total of about 8 million people living around 242 facilities to a cancer risk greater than or equal to 1-in-1 million, 65,000 people living around 66 facilities to a cancer risk greater than or equal to 50-in-1 million, and about 1,900 people living around nine facilities to a cancer risk greater than 100-in-1 million.
When the CMAS community populations are compared to the CMAS categories populations in the post-control scenarios, we see 6.6 million additional people with cancer risks greater than or equal to 1-in-1 million, 61,000 additional people with cancer risks greater than or equal to 50-in-1 million, and 1,900 additional people with cancer risks greater than 100-in-1 million.
The demographic distribution of the community population with cancer risks greater than or equal to 1-in-1 million is similar to the category population and the whole-facility population with cancer risks greater than or equal to 1-in-1 million in the post-control scenario. Therefore, the community population with post-control cancer risks greater than or equal to 1-in-1 million has disproportionately high representation from Blacks, Hispanics and Latinos, people living below the poverty level, people living below two times the poverty level, those over 25 without a high school diploma, and those living in linguistic isolation.
The population with cancer risks greater than or equal to 50-in-1 million in the community analysis has a different demographic distribution than the source category population with cancer risks greater than or equal to 50-in-1 million in the post-control scenario. The percent of the population that is Black with risks greater than or equal to 50-in-1 million is lower for the community post-control analysis (19 percent) versus the category and whole-facility post-control analyses (26 percent). For the community post-control assessment, the percentage of the population with cancer risks greater than or equal to 50-in-1 million that is below the poverty level (13 percent) and below two times the poverty level (27 percent) is equal to or below their corresponding national averages (13 percent and 30 percent, respectively).
Based on results from the community emissions analysis, there are about 1,900 people with post-control cancer risks greater than 100-in-1 million. The CMAS categories emissions analysis indicated that there are no people with post-control cancer risks greater than 100-in-1 million. The increased cancer risk for most of these 1,900 people is driven largely by emissions of chromium VI from non-CMAS facilities within 10 km of CMAS facilities.
The percent of the population in the community analysis with post-control cancer risks greater than 100-in-1 million that is Black (15 percent) and Hispanic or Latino (21 percent) are above their corresponding national averages (12 percent and 19 percent, respectively). The percent of the population in the community analysis with a post control cancer risk greater than 100-in-1 million that is below the poverty level (14 percent) and below two times the poverty level (36 percent) are above their corresponding national averages (13 percent and 30 percent, respectively). The percent of the population in the community analysis with a post control cancer risk greater than 100-in-1 million that is over 25 years old without a high school diploma (21 percent) is above the national average (12 percent).
This action proposes to reduce HAP emissions including those emissions from EtO. In addition, the EPA's policy on Children's Health
Because EtO is mutagenic (
We solicit comments on all aspects of this proposed action. In addition to general comments on this proposed action, we are also interested in additional data that may improve the risk assessments, economic impact analysis, and other analyses including our assumptions and estimates discussed in sections IV.A through IV.C of this preamble. We are specifically interested in receiving any information and data regarding developments, limitations, or related general considerations in practices, processes, and control technologies that reduce HAP emissions. We solicit comment on the effectiveness of these proposed requirements on reducing ethylene oxide emissions, any capital and annual costs that we did not account for, the time that is needed to come into compliance with the proposed requirements, or any other potential barriers to or impacts of imposing these requirements. We request comment on additional information on costs, emissions, product recovery, and potential broader impacts to markets including impacts small businesses and entities. We request comment on how to address the non-monetized costs and benefits of the proposed rule. We request estimates of any potential loss of production while bringing facilities into compliance and forgone returns due to displaced investment.
We are requesting comments and data on risks and impacts (both direct and indirect) of these proposed requirements on specific critical industries such as production of active pharmaceutical ingredients. We are interested in comments and data around the extent of the costs of compliance with the proposed rule to manufacturers of pharmaceuticals or other critical medical products, including any potential impacts to the public health industrial base, drug shortages, or other supply chain issues. We are also interested in proposals for alternative mitigation strategies or technologies.
We request comment on data, methods, and approaches to monetize non-fatal cancer, non-cancer health effects, and other benefits of reducing exposure to ethylene oxide and other table 1 HAP.
In addition, we are requesting comment and data on if more frequent heat exchange system monitoring periods, namely continued monthly monitoring and/or weekly monitoring, are appropriate for CMAS (see section IV.A.2 of this preamble). As mentioned in section IV.C.3 of this preamble, we also request comment and data on whether the removal of the TRE concept is feasible for CMAS facilities. With respect to design evaluations and engineering assessments, we are soliciting comment and data on whether they are appropriate for demonstrating compliance for certain APCDs. Also, we are soliciting comment on whether an alternative compliance timeline for the EtO requirements, as discussed in section IV.E.1 of this preamble is appropriate.
Additional information about these statutes and Executive Orders can be found at
This action is a “significant regulatory action” as defined in Executive Order 12866, as amended by Executive Order 14094. Accordingly, the EPA submitted this action to the OMB for Executive Order 12866 review. Documentation of any changes made in response to the Executive Order 12866 review is available in the docket. The EPA conducted an economic impact analysis for this proposal in a document titled
The information collection activities in this proposed rule have been submitted for approval to the OMB under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 2323.09. You can find a copy of the ICR in the docket for this rulemaking, and it is briefly summarized here.
The EPA is proposing amendments to the CMAS NESHAP that revise provisions pertaining to emissions from PRDs, pressure vessels, heat exchange systems, and equipment leaks. The EPA is also proposing requirements pertaining to EtO emissions from process vents, storage vessels, heat exchange systems, equipment leaks, and wastewater. In addition, the EPA is proposing amendments to the NESHAP for CMAS that revise provisions pertaining to emissions during periods of SSM, add requirements for electronic reporting of periodic reports and performance test results, fenceline monitoring, and make other minor clarifications and corrections. This information will be collected to ensure compliance with the CMAS NESHAP.
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 OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rulemaking. The EPA will respond to any ICR-related comments in the final rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs using the interface at
I certify that the proposed rule in this action will not have a significant economic impact on a substantial number of small entities under the RFA. The small entities subject to the requirements of this action are small businesses within the CMAS categories. The Agency has determined that the 58 small entities affected by this action may experience an average impact of total annual costs being 0.32 percent of their annual revenues, not including product recovery, or 0.29 percent on average when product recovery from compliance is included. Five of these 58 small entities are estimated to experience total annual costs above one percent of annual revenues when not including product recovery (three small entities when product recovery is included), and one small entity had estimated annual costs exceeding three percent of annual revenues regardless of whether product recovery is included. The percentage of impacted small entities estimated to experience total annual costs greater than one or three percent of their annual revenues is small and therefore this action will not have significant impacts on a substantial number of small entities. Details of the analysis for the proposed rule are presented in the document titled
This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The costs involved in this action are estimated not to exceed $183 million in 2023$ ($100 million in 1995$ adjusted for inflation using the GDP implicit price deflator) or more in any one year.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action has tribal implications. However, it will neither impose substantial direct compliance costs on federally recognized Tribal governments, nor preempt tribal law. We have identified two facilities located on Tribal lands that will potentially be impacted by this rulemaking, one of which emits EtO. Consistent with the EPA Policy on Coordination and Consultation with Indian Tribes, the EPA will provide tribal officials the opportunity to provide meaningful and timely input early in the development of this action through multiple outreach activities such as Tribal partnership calls, webinars, and offers for government-to-government consultation with potentially impacted Tribes and other Tribes as requested.
Executive Order 13045 directs federal agencies to include an evaluation of the health and safety effects of the planned regulation on children in federal health and safety standards and explain why the regulation is preferable to potentially effective and reasonably feasible alternatives. This action is not subject to Executive Order 13045 because it is not a significant regulatory action under section 3(f)(1) of Executive Order 12866, though the EPA believes the safety risks addressed by this action do present a disproportionate risk to children. This action's assessments of potential impacts to human health are contained in section II.E of this preamble and in greater detail in the document titled
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The overall economic impact of this proposed rule should be minimal for CMAS and their parent companies (which are engaged in the energy sector).
This proposed action involves technical standards. Therefore, the EPA conducted searches for the CMAS NESHAP through the Enhanced National Standards Systems Network Database managed by the American National Standards Institute. We also conducted a review of voluntary consensus standards (VCS) organizations and accessed and searched their databases. We conducted searches for EPA Methods 5, 5D, 21, and 29 of 40 CFR part 60, appendix A. During the EPA's VCS search, if the title or abstract (if provided) of the VCS described technical sampling and analytical procedures that are similar to the EPA's reference method, the EPA ordered a copy of the standard and reviewed it as a potential equivalent method. We reviewed all potential standards to determine the practicality of the VCS for this rulemaking. This review requires significant method validation data that meet the requirements of EPA Method 301 for accepting alternative methods or scientific, engineering, and policy equivalence to procedures in the EPA reference methods. The EPA may reconsider determinations of impracticality when additional information is available for particular VCS.
We did not identify any applicable voluntary consensus standards for EPA Methods 5D and 21. However, the EPA proposes to incorporate by reference VCS ASTM D6784-24, “Standard Test Method for Elemental, Oxidized, Particle-Bound and Total Mercury Gas Generated from Coal-Fired Stationary
While the EPA identified 7 other VCS as being potentially applicable, the Agency decided not to use them because these methods are impractical as alternatives because of the lack of equivalency, documentation, validation data and other important technical and policy considerations. The EPA documented the search and review results in the document titled
The EPA believes that the human health or environmental conditions that exist prior to this action result in or have the potential to result in disproportionate and adverse human health or environmental effects on communities with EJ concerns. For this rulemaking, we conducted a proximity demographic analysis as well as baseline and post-control demographic risk analyses for the source category and whole facility. The analysis identified that 33.7 million people live within 10 km of the 247 CMAS facilities analyzed. The percent of the population living within 10 km of the CMAS facilities is above the corresponding national average for the following demographic groups: Black, Hispanic or Latino, Other/Multiracial, people living below the poverty level, people living below two times the poverty level, people over the age of 25 without a high school diploma, and linguistic isolation. More details on this analysis are provided in section V.F.1 of this preamble.
For existing sources, the EPA believes that this action is likely to reduce existing disproportionate and adverse effects on communities with EJ concerns. Groups experiencing baseline disparities are expected to see reduced exposures due to the proposed level of control for those processes emitting EtO and proposed management practices to control fugitive emissions from sources of HAP. In addition, this action proposes fenceline monitoring for EtO to ensure proper function of those management practices. If the proposed changes are implemented, we expect no people would be exposed to cancer risk levels greater than 100-in-1 million due to emissions from the CMAS categories. However, for individuals exposed to cancer risk less than 100-in-1 million, disparities remain in the proportion of different groups facing elevated risk. The controls proposed for this action do not reduce the risk of noncancer health impacts and thus the disparities remain the same. For more information on the controls proposed in this action, please refer to sections IV.A through IV.D of this preamble.
For new sources, the EPA believes that it is not practicable to assess whether this action is likely to result in new disproportionate and adverse effects on communities with EJ concerns, because it is not possible to know the location of any future new sources.
The information supporting this Executive Order review is contained in section V.F of this preamble.
Environmental protection, Air pollution control, Hazardous substances, Incorporation by reference, Reporting and recordkeeping requirements.